Condo Association Management: A Complete Guide for Board Members

The Short Answer

Condo association management is more complex than HOA management because the association is legally responsible for the building itself — not just shared amenities. Boards must maintain reserves for major capital expenditures, navigate a two-layer insurance system, and comply with state condominium act requirements that often exceed what HOA statutes require.

The Condo Board's Core Responsibilities

A condo association board is responsible for everything that falls outside the boundary of each individual unit. This includes:

Building maintenance and repairs:

• Roof, exterior walls, windows (in most states), and building envelope
• Common hallways, lobbies, mailrooms, and stairwells
• Elevators and mechanical systems
• Parking structures, garages, and driveways
• Landscaping and exterior lighting

Financial management:

• Collecting monthly dues from all unit owners
• Maintaining an operating budget for routine expenses
• Maintaining a reserve fund for long-term capital replacements
• Managing delinquent accounts and pursuing collections
• Producing accurate financial reports for the board and owners

Insurance management:

• Maintaining a master property insurance policy
• Maintaining liability insurance for common areas
• Ensuring unit owners understand their obligation to carry HO-6 policies
• Coordinating claims between the master policy and unit-owner policies

Governance and compliance:

• Holding required meetings (annual meetings, board meetings) per governing documents
• Enforcing community rules and architectural standards
• Maintaining governing documents (declaration, bylaws, rules and regulations)
• Complying with state condominium act requirements

Reserve Funds: The Most Important Financial Obligation for Condo Associations

Unlike single-family HOAs that primarily maintain landscaping and pools, condo associations are responsible for building systems that cost tens or hundreds of thousands of dollars to replace. A roof replacement on a mid-size condo building can run $200,000 to $800,000. An elevator modernization can cost $100,000 to $250,000 per elevator.

Without an adequate reserve fund, the association must levy a special assessment — an extra charge to unit owners — to cover the cost. Special assessments are unpopular, disruptive, and can trigger hardship for fixed-income owners.

Every condo association should:

• Commission a professional reserve study every 3-5 years
• Contribute the amount recommended by the reserve study each year
• Review and update the reserve plan when major repairs happen ahead of schedule

The Two-Layer Insurance System

Condo associations carry a master insurance policy. Unit owners carry individual HO-6 policies. Understanding where one ends and the other begins is critical.

The governing documents define the insurance boundary. Two common standards:

• **"Bare walls in" (studs-in):** The master policy covers the structure; the unit owner is responsible for everything inside the unit (drywall, fixtures, flooring, cabinets, appliances).
• **"Original specifications" or "all-in":** The master policy covers original fixtures and finishes; the unit owner is responsible only for improvements and personal property.

Boards should review their insurance boundary language annually with their insurance broker and ensure all unit owners understand their individual insurance obligations.

What to Look for in a Condo Association Management Company

• Experience specifically with condo associations (not just HOAs)
• Ability to coordinate large building maintenance and capital projects
• Financial management platform with reserve tracking and capital planning tools
• Insurance coordination expertise
• Strong communications tools for a multi-unit building environment

Association Property Managers has managed condo associations alongside HOAs and understands the additional complexity involved. Contact us for a proposal tailored to your building.

Frequently Asked Questions

What state laws apply to condo associations in Michigan?

Michigan condo associations are governed by the Michigan Condominium Act (MCL 559.101 et seq.), which requires specific disclosures, meeting procedures, and reserve funding practices. This is separate from the Michigan Nonprofit Corporation Act that governs the association as a legal entity.

How often should a condo association do a reserve study?

Most industry experts recommend a full reserve study every 3 to 5 years, with an annual update in the years between full studies. Some state laws and lender requirements mandate reserve studies on a specific schedule.

Can a condo association hire the same management company as an HOA?

Yes — but the management company should have demonstrated experience with condominium-specific requirements, particularly around reserve planning, building maintenance coordination, and the insurance two-layer system.