The Synergy Between the Association, the Developer and the Management Company

In seeking new business, many management companies work with developers to open new community associations. Whether these communities are single family homes, town homes, cooperatives or condos, there are several common factors involved in this process.

First, a great deal of effort is put forth by the management company to prepare for the opening of a new community. Working with the developer and sub-contractors on final construction issues, reviewing the governing documents, opening bank accounts, providing orientation to the homeowners, setting up each owner in the accounting system and basically ensuring that the community is opened in a manner that meets or exceeds the new owners’ expectations are all vital elements of a successful opening.

Secondly, as the community opens, it is vitally essential to provide factual and objective feedback to the developer as to “how things are going”. Weekly meetings and/or written reports to the developer detailing the inevitable operational challenges is a must. Whether it be updates on the MEP systems, building design flaws (there will always be some flaws!) or simply overall operations, management’s role is to objectively provide direct feedback to the developer. This will accomplish two tasks. It will assist the developer in providing a community that “works”, as well as establish documentation that management assisted in “holding the developer accountable” for providing building systems that function as designed.

Inevitably, homeowners will approach management with dissatisfaction regarding a new community. Whether it be “the sales team told us that mermaids jumped out of the pool every day at 5:00” to “ my wood floor is buckling because my plumbing leaks”, the management team must expect to be “pulled in the middle” of homeowner complaints. A system of reporting that allows management to be a “conduit” for such concerns, without taking on the responsibility of fixing developer deficiencies, is critical. This is also an opportunity to clearly communicate to homeowners that management is the “conduit”, but cannot perform repairs on warranty items. The association, thus the management company which represents the association, is not responsible for this task. This is a perfect time to begin to establish the separation between management and the developer.

It is essential to distinguish to homeowners that the developer built the community and is responsible for delivering the final product. The management company represents the association, not the developer, and management will serve the association for the long term. There is a potential of being “identified” with the developer, so a proactive approach to managing a new community must include enlightenment and education of the homeowners as to the distinction between the developer (the potential “bad guy”) and management (the definite “good guys”). A few key points to achieve this aspiration include:

1. Be Switzerland Management is neutral in terms of commenting on the aesthetics of the building, lack of mermaids jumping out of the pool, etc. Staff must be trained to avoid “throwing the developer under the bus” or from disagreeing with homeowners regarding the finish out of the common areas. Front line staff need to listen, smile and not engage!! Rumor, gossip and innuendo are the main fabrics of any community and the management team must remain distant from such activities.
   
   
2. Be factual. Management must be able to discern the difference between individual subjective homeowner complaints (“my marble countertop doesn’t look like what I saw in the model”) and true trending of building defects. Be empathetic to individual concerns, but be aggressive in communicating to the developer “real” issues.
   
   
3. Be transparent… Ongoing meetings, even before turnover to homeowner control, are extremely helpful and allow for homeowners to more clearly understand that management works for the association. Management must, with board/developer approval, provide and report on financial information, ongoing building improvements, explanation of the transition process, etc. This allows the homeowners to realize that management is here for the long term and has the well being of the association as their first priority.
   
   
4. Be prepared. Remember those weekly developer/management meetings or reports we talked about earlier? Well, when the homeowners take over the board and still have a “laundry list” of concerns, management must be able to demonstrate the fact that it has documented previous concerns, communicated those concerns to the developer and can show how many of the concerns have been resolved. This is key and will again demonstrate that the management company is working on behalf of the association, no matter who is on the board, to provide the life style each homeowner expects and deserves.

In summary, turnover to homeowner control can only lead to one of two things: terminating or retaining the management company. Retaining the management company means that its employees continually communicated with the homeowners, actively assisted the developer in fixing real problems, documented the efforts of the onsite team in getting problems fixed and stayed fair and objective to all parties involved. Professional commitment and loyalty to the association, not to particular homeowners or to the developer, will allow for a “win, win, win” situation!

Dustan Goodell, President
Somerset Association Management, Inc.
Dallas, TX