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Passing the torch: Why succession planning is essential for community association professionals

Do you know what happens to your company once you’re no longer able to work? Have you determined who will take charge after you’re gone? For any business today, the importance of having a succession plan is critical for a company’s long-term success.

Succession planning involves creating an arrangement for someone to either own or run your business after you retire, become disabled, or die.

The need for a strategic succession plan was the leading topic discussed by more than 200 community association management company CEOs and executives at the 2019 CEO-MC Retreat hosted by the Community Associations Institute (CAI) in La Quinta, Calif.

As the growing industry is witnessing a changing of the guard, its pioneers—those who spent the past 40 years building thriving management companies and businesses that support community associations—are looking for ways to successfully pass the torch to the next generation of leaders.

Today, there are more than 7,000 community association management companies and nearly 55,000 community association managers, according to the Foundation for Community Association Research’s 2018-2019 National and State Statistical Review for Community Association Data. Acquiring the next generation of talent to manage and lead these companies is no easy task.

When asked if their company has a succession plan, more than half (54%) of the CEO-MC Retreat attendees reported that their firm does; 43% do not.

CAI President Cat Carmichael, CMCA, PCAM, challenges executives to avoid the expectation that a family member will be the one to step up and lead the business in the event of an absence, a dangerous assumption many business owners share today. Carmichael added that it’s essential to think of current employees and the value they bring to the company’s future.

“Developing succession plans helps to ensure business continuity if and when an executive or a key employee leaves. Every business should be thinking about its ‘transferable value’—that’s the value of the company when the executive no longer works in it full-time,” says Carmichael. “Elevating current staff value will not only add business value because of the quality and reliability of the workforce, but it will assure that monthly recurring revenue continues.”

Carmichael adds that there’s no better time than the present to deal with the unexpected and protect the businesses that have been built over the decades. A strategic succession plan will ensure the company’s culture is maintained and reduces stress on staff during the transition. It also means the company retains knowledge, history, and business relationships.

Learn more about building a succession plan from the Small Business Administration.

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Now hiring: Employment growth projected for community managers

Community association management is becoming a sought-out career for those entering the job market for the first time or those considering a change late in their professional lives. The role is expected to see growth for new hires in the coming decade, according to recent data from the U.S. Bureau of Labor Statistics.

There were about 363,000 property, real estate, and community association managers working in 2018 with employment forecast to grow 7% through 2028, faster than the average for all occupations. BLS attributes this growth to more people choosing to live in condominiums, cooperatives, planned communities, and senior housing.

“Community associations are a true economic engine, and there’s a need for talent at all levels,” says CAI’s 2019 President Cat Carmichael, CMCA, PCAM, who has made it her mission to open channels that can bring in talented individuals to common-interest communities. “We are striving to find new talent where the talent is and increase awareness of the benefits of community association service.”

Employers typically prefer to hire college graduates with a degree in finance, accounting, real estate, or public administration, but workers with a high school diploma and less than five years of relevant experience also can be considered for entry-level positions, according to BLS.

Employers also may require that community managers participate in training programs or workshops from professional trade associations (like CAI’s Professional Management Development Program) to develop their management skills and expand their knowledge on topics such as insurance and risk management, governance, homeowner relations, personnel management, and reserve funding.

BLS calculated the median pay for a community manager in May 2018 at $58,340 per year. This amount is higher than the median compensation reported by assistant community managers ($43,340) and portfolio managers ($52,500) in the Foundation for Community Association Research’s 2017 Community Association Manager Compensation and Salary Survey. Compensation increases significantly as managers gain more experience and responsibility. According to the Foundation’s research, on-site managers earn an average of $71,560, high-rise managers earn $86,500, and large-scale managers earn $100,000.

Community managers oversee the daily operation of residential properties. In addition, BLS lists some important skills that community managers should have to excel in their role:

  • Communication. Managers must understand contracts and real-estate documents to clearly explain the materials and answer questions raised by residents or board members.
  • Customer service. Managers must provide excellent customer service to keep homeowners happy and expand their business with new clients.
  • Interpersonal. Because community association managers interact with people every day, they must have excellent interpersonal skills.
  • Listening. Managers must listen to and understand residents to meet their needs.
  • Organizational. Managers must be able to plan, coordinate, and direct multiple contractors at the same time, often for multiple properties.
  • Problem-solving. Community association managers must be able to mediate disputes or legal issues between residents, homeowners, and board members.

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Talent wanted: How to hire and retain skilled community association managers

Recruiting and retaining skilled managers can be challenging for community associations and management companies, especially in a very competitive labor market and with communities limited by tight budgets.

In this reality, it becomes even more important for associations and management companies to highlight their strengths and address organizational shortcomings, says business speaker and author Peter Sheahan.

The founder and CEO of Karrikins Group, a Denver-based business growth strategy consulting firm, Sheahan has been an innovative business thinker for more than 20 years. He has advised leaders at companies such as Apple, Microsoft, Hyundai, IBM, and Wells Fargo. He’s also authored seven books, including the recently released Matter: Move Beyond the Competition, Create More Value, and Become the Obvious Choice and Generation Y, a book about the millennial workforce.

Peter Sheahan

Generation Y came about due to Sheahan’s experience as manager of a hotel in Sydney, Australia. “I noticed there was a very big disconnect between what the young people that I was hiring wanted from their experience of work and what I needed from them at work, as their employer,” he says.

Since that formative experience, Sheahan and his team have strived to help company leaders understand ways to attract talented workers.

“People think that the secret to attracting and retaining talent is little things like, ‘Let’s give them free lunch’ or ‘What perks can we offer?’ or ‘What are our benefits compared to the benefits down the road?’ But at the end of the day, it really comes down to the quality of the organization,” Sheahan says. “Is it successful? Is it high performing? Because good, smart people want to work in those environments.”

Sheahan recommends a few best practices for community associations and management companies for recruiting and retaining talent:

    1. Stop thinking about tactics, and start thinking about the performance of the organization. The focus should be on building an organization that is robust and resilient. “Great organizations have no trouble attracting and retaining talent,” says Sheahan.
    2. Build a culture that people want to work in. The perks and benefits can’t be the only lure for bringing in talented workers. Sheahan warns that if the culture doesn’t reflect what was promised to the manager when hired, “You’ll find yourself in bigger trouble.”
    3. Be courageous. It’s important to brave a tight labor market to find talented people, says Sheahan. It’s also about having the courage to build a high-performing team. “A team is only as strong as its weakest link, so we need to be capable of managing the performance of the underperformers or, at times, even having the courage to move people on,” he says.

Sheahan will be one of the keynote speakers at the 2019 CAI Annual Conference and Exposition: Community NOW, May 15-18, in Orlando.

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Turnaround leader: How a board president revitalized a community in financial disarray

When Michael Shucart took the helm as president of Leisure Town Home Association’s board more than five years ago, financial disarray and outdated amenities plagued the 1,150-home community in Vacaville, Calif. Now, the retired banker is credited with putting Leisure Town back on a path to success.

Development of the 55-and-older community first began in the early 1960s, and the association had gone without a professional community manager for more than 50 years. There had been little resolve from the board to raise assessments and make improvements. “The community was left deferring maintenance with little in the reserves for replacement or repairs,” says Shucart.

Undoing decades of neglect, Shucart developed a list of priorities “to help define our vision” after consulting with the community’s 1,800 residents. The board developed a plan to overcome years of deferred maintenance.

Michael Shucart

Drawing from his experience as a banker specializing in wholesale mortgages, Shucart also reviewed each line in the association’s budget for cost-saving measures. He saw that the reserve study replacement costs were unrealistic and that vendor contracts could be improved.

“I realized all of our vendors were friends of friends. As a result, most of them were not giving us favorable conditions,” says Shucart.

In addition, after more than five decades without a manager, the board decided to hire a full-time, on-site manager to fill the void in day-to-day operations.

Through these steps and a few others, the community recently unveiled updated amenities including a new bocce court, a lawn bowling field, a remodeled swimming pool, and a new fitness center for residents. 

Because of the contributions that have improved Leisure Town’s financial standing and infrastructure, Shucart was named Homeowner Leader of the Year by CAI’s Northern California Chapter in 2018.

Shucart credits the success of Leisure Town’s turnaround to the collaboration with the other members of the board. He also points out that effective leadership “starts with identifying the concerns of membership, putting a plan together that addresses those issues, and working together in the best interests of the association toward a solution.”

But the work is far from over. Shucart has already set future goals to address at Leisure Town. “We are figuring out how to deal with the closure of our golf course, trying to bring in recycled water to use for the roughly 17 acres of green space, and installing new solar panels to offset the cost of electric usage,” he says.

April is National Volunteer Month. Read our articles about preparing for a volunteer role and five steps for effective community leadership. And stay tuned for another look at inspiring work done by a homeowner leader.

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A nice approach: Finding success in your community and in business

Disputes and disagreements between board members, residents, community managers, staff members, and business partners are an inevitable part of living in a community association. While generating an atmosphere of kindness and respect might seem easier said than done, it can make for a more collaborative and positive environment for all, says advertising leader and best-selling author Linda Kaplan Thaler.

Thaler, who is CEO and president of Kaplan Thaler Productions, has carried the belief throughout her professional career that being nice pays off. Thaler’s advertising agency became famous for developing the Kodak Moments campaign, catapulting Clairol Herbal Essences into notoriety with a series of ads inspired by the iconic deli scene from “When Harry Met Sally,” and turning “I don’t want to grow up, I’m a Toys R Us kid” into one of the most recognizable jingles in the world.

Linda Kaplan Thaler

She says that her parents, especially her father, instilled the importance of being mindful and respectful of others. While working on a book that demonstrates this philosophy, The Power of Nice: How to Conquer the Business World with Kindness, she interviewed leaders and CEOs who noted their key to higher productivity and profit margins was practicing kindness.

“We don’t have enough people out there, enough leaders out there, who are really espousing this belief that being nice is really a tool for success. You are not filling people’s champagne glass. You are not a doormat,” Thaler emphasizes. “It is a fine strength when you can allow people in to collaborate. At the end of the day, people will work much harder if they feel acknowledged and if they feel like part of the process.”

The same applies to community associations. Thaler believes that codes of civility are a great way to get people toward a path of being nice to one another. “You can’t have a culture, or an association, or a group of homeowners who will feel comfortable with each other if incivility is allowed, if disrespect is allowed,” she explains.

But actions always go beyond words, and community associations can practice what they preach in simple ways. “Listening is such a huge part of creating a culture where people are nice to each other, where people are kind to each other, because they feel like they are being heard,” Thaler says, adding that listening is also critical to creating empathy and connecting with people.

“The other thing is that you can deflect a lot of tension with humor. When we make another person laugh, we are basically creating a bond,” she notes, saying that humor can be a tool before communicating decisions that may not sit well with many people. “I think it’s very important to use humor in a way that says, ‘It’s going to be OK.’ ”

Thaler will be one of the keynote speakers at the 2019 CAI Annual Conference and Exposition: Community NOW, May 15-18, in Orlando.

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Enforce, collect, and hire help: An association board’s biggest responsibilities

A community association board consists of volunteers elected to serve on behalf of residents to execute a wide variety of tasks. It’s a big job, but most board members are happy to serve and make the community a great place to call home.

The board’s biggest responsibilities include enforcing rules, collecting assessments, and hiring help.

Enforcing rules

One of the most important things the board does is enforce the association rules and regulations.

Rules and regulations help community associations maintain property values and protect a quality of life. These standards are typically described in detail in an association’s governing documents, which all homeowners should have an opportunity to review before purchasing a home in a common-interest community.

While some residents may not like being told what they can and can’t do, ultimately the board is looking out for the greater good. By enforcing the rules, the board is doing its best to keep property values up and conflicts down. Of course, the board wants to make sure the rules are beneficial for the majority—and hopefully all—residents.

You are welcome to raise concerns about the rules at open board meetings. Before you do, come prepared to discuss background information, causes, circumstances, desired solutions, and other considerations.

Collecting assessments

Another major responsibility of the board is to collect assessments from homeowners. Collecting this money is important for the financial stability of the association.

The assessments pay for the common elements enjoyed by all residents. Assessments also help to replenish the reserve funds, which pay for any major repairs the association may need.

The board is responsible for the association’s finances, and collecting assessments is how it ensures that the association remains solvent.

Hiring help

Finally, the board acts on behalf of the association by hiring managers, attorneys, contractors, and other professionals who help better the association. Board members also help conceive and lead many of the projects that will improve the community.

Learn more about what these volunteers do by talking to your board members, attending an open board meeting, or even running for a seat on the board during the next election. The more people we have looking out for our associations, the stronger they will be.

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A ‘kinder, gentler’ community starts with you

“Where is it written that we must act as if we do not care, as if we’re not moved? Well, I am moved. I want a kinder, gentler nation.”

That was the late George H.W. Bush as he accepted the Republican nomination for president in 1988. Bush, of course, would go on to serve in the Oval Office from 1989–1993. His call for civility rang true then and rings true today, perhaps even more so. It applies in politics, society in general, and in community associations.

Many association board members, managers, and business partners report dealing with disruptions at meetings, profane and threatening emails, and other behavior that most people would consider uncivil. In fact, some communities are moving to adopt codes that demand courteousness and respect, ban foul language, and prohibit threats of physical and psychological harm.

Read about these steps and a discussion about civility today in “A Civil Action,” the cover story in the January/February Common Ground TM magazine. 

For the article, we checked in with some experts on the subject, including Daniel Buccino, the current director of the Johns Hopkins Civility Project at Johns Hopkins University in Baltimore, Md.

Is strife becoming more common in American society? Public opinion polls show that most people believe that it is, yet Buccino notes that people have been concerned about civility for a long time, and many think it’s somebody else’s problem.

The university’s project was founded in 1997 by Pier Massimo Forni as an aggregation of academic and community outreach activities aimed at “assessing the significance of civility, manners and politeness in contemporary society.” Forni’s efforts inspired civility-based initiatives on college campuses and in communities around the country.

In his book Choosing Civility, published in 2003, Forni shares and examines 25 rules of considerate conduct. He writes about the need to be agreeable: “We need agreement in our lives because it is gratifying and healing, because human bonds could not be forged without it, and because it is the foundation of social harmony. Of course disagreement can be productive. ‘A little rebellion, now and then, is a good thing,’ observed Thomas Jefferson. In disagreement alone, however, we couldn’t survive.”

Sadly, like Bush, Forni also passed away at the end of 2018. As a new year begins, maybe we can learn to follow their advice. Maybe we can accept that incivility today is our problem. Maybe we all can be a little kinder, gentler, civil, and agreeable.

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What does a community association manager do?

Community associations today employ highly-qualified professional community association managers, and we think residents should know what the manager has—and has not—been hired to do.

Some residents expect the manager to perform certain tasks that just aren’t part of the job. When the manager doesn’t meet those expectations, residents are unhappy. In short, the manager has two primary responsibilities: Carry out policies set by the board and manage the association’s daily operations.

In practice, what does that mean for some common resident questions and concerns?

  • The manager is trained to deal with conflict, but he or she typically will not get involved in quarrels you might be having with your neighbor. However, if association rules are being violated, the manager is the right person to notify.
  • While the manager works closely with the board, he or she is an advisor—not a member of the board. Also, the manager is not your advocate with or conduit to the board. If you have a concern, send a letter or e-mail directly to the board.

  • Although the manager works for the board, he or she is available to residents. That doesn’t mean the manager will drop everything to take your call. If you need to see the manager, call and arrange a meeting.
  • The manager is always happy to answer questions, but he or she is not the information officer. For routine inquiries, like the date of the next meeting, read the newsletter or check the association website or bulletin board.
  • The manager is responsible for monitoring contractors’ performance but not supervising them. Contractors are responsible for supervising their own personnel. If you have a problem with a contractor, notify the manager, who will forward your concerns to the board. The board will decide how to proceed under the terms of the contract.
  • The manager inspects the community regularly but even an experienced manager won’t catch everything. Your help is essential. If you know about a potential maintenance issue, report it to the manager.
  • The manager does not set policy. If you disagree with a policy or rule, you’ll get better results sending a letter or e-mail to the board than arguing with the manager.
  • The manager has a broad range of expertise, but he or she is not a consultant to the residents. Neither is he or she typically an engineer, architect, attorney, or accountant. The manager may offer opinions but don’t expect technical advice in areas where he or she is not qualified.
  • Although the manager is a great resource to the association, he or she is not available 24 hours per day—except for emergencies. Getting locked out of your home may be an emergency to you, but it isn’t an association emergency. An association emergency is defined as a threat to life or property.

For more information on the community association manager’s role, visit www.caionline.org and search “community managers.”

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‘Twas the Night Before (the HOA’s) Christmas

[Apologies to Clement Clarke Moore or Henry Livingston Jr.]

‘Twas the night before the HOA’s Christmas, and through the community
Not a complaint was heard, there appeared just pure unity;
The thank-you notes were placed by the bulletin board with care,
In hopes that the board and manager would soon see them there;

The homeowners were nestled all snug in their beds,
No worries of paint or roofs bothering their heads,
And the Vice President in her condo, and I in mine too,
Had just settled down for a break from reviewing the dues,

When out in the courtyard there arose such a clatter,
I sprang to my balcony to see what was the matter.
Away to the railing I flew like a flash,
Only to see neighbors with gripes to rehash.

I couldn’t figure out in the dark of the night
Exactly what they thought gave them the right,
But I knew from my time on the homeowners board,
Our meetings these neighbors had always ignored,

Then in a flash I noticed a visitor,
Who tried to join that group of inquisitors
He wore a red fur coat over an ample belly, and
His hearty laugh made it shake as it were jelly,

His smile quickly faded as they all turned away,
They told him that tenants had nothing to say,
The jolly man disappeared as quickly as he came here,
Amid the sound of eight snorting… reindeer?

In a moment came another, without much ado,
He arrived with a viewpoint needed and new,
I knew in a flash it was manager, Nick.
He knew what was needed and he brought it quick,

He exclaimed “Now, Member! now, Neighbor! Now, Bylaws and Covenant,
Please read the rules before bringing your comment.
Now back to your homes, and back to your castles,
Please, just for today, have a cease to the hassles”

He said “you by choice bought in a community,
Which works at its best when all live in unity,
Remember that your board serves you for free,
and consider joining a committee – or three.

“You have no busy elves, and HOAs thrive when all work as a team,
If all think only of selves, a nightmare soon it will seem.
Your association is much like a large but rowed boat,
If each rows as a solo, not for long will it float.”

Amidst headshakes and handshakes the courtyard then cleared,
And I hoped that above still flew a sleigh and eight impatient reindeer.

No reindeer or jolly elf’s labors returned to the site,
But folks reached to their neighbors, and started treating them right.
A different air began to take hold in the complex
As the Golden Rule became our theme and our text.

Manager Nick surveyed the scene, pleased,
Knowing the group a happy future had it seized.
And laying his finger aside of his face,
He ran toward his car as if in a race;

He sprang to his auto, heading home in a dash,
And away he drove as quick as a flash.
But I heard him exclaim, ere he drove out of sight,
HAPPY CHRISTMAS TO ALL, AND TO ALL A GOOD-NIGHT!

[Readers: May peace and neighborliness permeate your communities in the coming year!]

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Different strokes, different folks: How community managers and property managers have distinct roles

A common mistake in state legislatures considering community association manager licensing—and among the general public—is to lump community association managers and property managers into the same bucket. While both are very important roles, they are distinctly different professions with functions, skill sets, and responsibilities specific to each.

A community association manager can manage every type of community: condominium associations, homeowner associations, resort communities, and commercial tenant associations. A community association manager works directly with property owners and homeowners.

Property managers oversee individual rental units or a group of rental units, such as an apartment complex. They’re responsible for managing the entire property, while community association managers are responsible for common areas—not individually owned properties.

“From a legislative standpoint, this incorrect categorization occurs because state legislators misunderstand the nature of community association management,” says Matthew Green, director of credentialing services for Community Association Managers International Certification Board (CAMICB). “They believe that community association management skills are identical to those of a property manager without recognizing the vastly different responsibilities of these two positions.”

This misunderstanding of the two professions often bleeds into more general conversations occurring in this space. Compounding this is the reality that there’s a slight overlap in a couple of the duties performed. For example, both property managers and community association managers supervise certain maintenance activities, such as swimming pool upkeep and trash removal. But it’s important to understand that community association managers oversee and direct all aspects of running the business operation. This means that they authorize payment for association services; develop budgets and present association financial reports to board members; direct the enforcement of restrictive covenants; perform site inspections; solicit, evaluate, and assist in insurance purchases; and even supervise the design and delivery of association recreational programs.

Property managers are responsible for managing the actual property and therefore handle the physical assets of the unit at the owner’s request. Property managers generally oversee rental units and leases. Their responsibilities might include finding or evicting tenants, collecting rent, and responding to tenant complaints or specific requests. If a property manager is responsible for a vacation or second home, he or she may arrange for services such as house-sitting or local sub-contracting necessary to maintain that property. Alternatively, an owner may opt to delegate specific tasks to a property manager and choose to handle other duties directly.

Stephanie Durner, CMCA, AMS, director of community management at River Landing, a gated golf course community in Wallace, N.C., views the distinction this way:

“While property managers are generally charged with overseeing physical structures that are used by people who are not the owners of the property, association managers represent the property owners themselves and are involved in just about every aspect of the overall community. For instance, if a garage door is broken at a rental house, the tenant would call a property manager or owner/landlord. But if there’s a pothole that needs repair or if a neighbor’s dog is running loose through the neighborhood, that’s a task for the community association manager who both maintains the common areas and upholds the governing rules. To me, community association management is a more holistic approach that contributes to the overall quality of life for all the owners in a community.”

Green emphasizes that while some job responsibilities are similar, community association managers have additional functions. “It’s critical that community association management be recognized as distinct from property management because association management requires a wider variety of knowledge and skills,” he says.

Because of these differences, community managers and property managers need different training and education.

CAMICB offers and maintains the Certified Manager of Community Associations (CMCA) credential, the only international certification program designed exclusively for managers of homeowner and condominium associations and cooperatives. The CMCA credential means an individual has taken and passed the rigorous CMCA examination, proving they have a solid understanding of the business operations involved in being a community association manager.

The post above originally was published on CAMICB’s CMCAcorner blog. Follow along for the latest on the essential credential for community managers.

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