Owners’ Associations: A Simple Guide to Setting One Up
When a block of flats, apartments – homes – are allowed to deteriorate, it will have a detrimental effect on everyone who lives there. The formation of an owners’ association is potentially the most worthwhile action that any flat owner can do for the benefit of their mental health and sense of wellbeing. As well as taking care of their investment.
But we know from speaking to our clients and from our discussions with industry leaders on the Blocktalk Podcast, that setting up an owners’ association is hard work and there are a multitude of barriers that need to be overcome.
So how do we solve this? We had a look around for a definitive guide on how to set up an owners’ association, and we found some information that we will reference at the end of this article but what we haven’t found is something simple – an easy, succinct step-by-step guide on how to get started and how to keep things moving. Because once the ball is rolling, it’s easier to tackle the bigger things…
Let’s dive in…
Setting up a homeowners’ association can perhaps feel a bit like having a mountain to climb, particularly when a lot of the information that’s out there involves a lot of legal jargon, admin and paperwork. There’s so much to tackle. But the crucial part of it involves bringing people together – a difficult task even when it’s a small number, but when those numbers get bigger and bigger, the task becomes even more daunting. But it’s doable, and those who do engage reap the benefits which far outweigh any barriers.
So how does it start? It all starts with one or two people taking one step forward.
Step 1 – Making the first move – all it takes is one brave soul
Like any relationship, someone has to make a move. This is the single most important step as without it, nothing else can or will happen.
Communication is key when forming and continuing the formation of an owners’ association. This means that just one owner or landlord needs to step up and take action.
What might this look like?
- It could be a friendly chat whilst hanging out the washing, or bumping into each other on the stairs about work that needs done, or wanting to be more organised;
- It could be a text message to one or two others in the building with the benefits of forming an owners’ association (see references at the end);
- It might be a note through doors with a mobile number for people to get in touch about taking action and protecting their home – again showing the benefits of the association;
- There may also be a discussion on appointing a property management company (if you don’t already have one) to look after the building for you as not having one can be the cause of repairs and maintenance failing to happen.
Step 2 – Choosing work that needs to (or should) be done
This might go hand-in-hand with the first step as it could act as a catalyst for getting something off the ground. If you are lucky enough to have a building that doesn’t need any major work done (like the roof, or fabric of the building etc), then it could be worth starting small. Choose something that doesn’t cost a lot of money but will have a positive impact on the building – inside or outside.
It could be having the stairwell cleaned monthly, getting the garden spruced up, the gutters cleaned, or perhaps it’s maintenance work that, if it’s not done, will only get worse and end up costing more. This latter point could be a crucial benefit for everyone to realise and be made aware of, as no one wants the benefit of hindsight when it comes to their home.
**Before moving on to the next step, you need to have enough people interested based on the size of your building. As a rule of thumb, if setting up a formal constitution you will need three people to take up the formal posts of Chair, Secretary and Treasurer. Or if doing things a little less formally, or completely informally to begin with (whilst still agreeing formally on the financial side), you are looking for the minimal majority – as this shows there is enough interest and engagement to make decisions moving forward.
Step 3 – Setting up the formalities
Now that you have made the first move and gathered together enough people, it’s time to start formalising matters so that everyone is in agreement with what is going on and what their responsibilities are.
In short, this will make sure everyone knows what they are paying and when, how work will be proposed and agreed, and whether or not a property management company will be brought on board to manage everything on your behalf.
You can do this by organising a meeting, or you can do it by group text, or email, do whatever works for you and your building! Of course, a face-to-face meeting is the ultimate option as nothing will beat human interaction and the opportunity to bond and get to know each other.
This is where the paperwork will come in and once you have reached this point, there is a wealth of templates to use – we’ve included some handy links in the notes at the end.
If you haven’t even started yet, don’t be daunted by this step. Just go back to Step 1 and take things one step at a time.
Step 4 – Distributing the formalities
Give everyone in the building an update on where things are – hopefully the more people that are involved, the more others will want to become involved.
What information should you share?
- Let people know how many and who is involved;
- When you had your last meeting (or how you have communicated together) and how you will communicate going forward, giving an option to get involved;
- What the formalities are – loose or rigid;
- What work has been agreed upon and what this means;
- Discussions about advising the property management company of the formation of the owners’ association or appointing a property management company if you don’t yet have one, and what this means for everyone involved going forward;
- The date, time and place (if there is one) of the next meeting.
Step 5 – Keep moving forward
Now that your owners’ association is formed, it’s important to keep it moving and progressing.
This element will be different for everyone and you need to decide what suits your own needs.
What might be involved?
- If a property management company already manages your building, it would be advisable to plan quarterly meetings with them or;
- opening a bank account (if you have agreed a formal constitution);
- continuing to involve those who are hesitant.
Many tenements and blocks of flats are deteriorating and the people who can do something about it, aren’t. It’s such a complex situation that very much depends on the individuals and their circumstances, which makes it an emotive process too. We hope this simple guide helps break down the process into a smaller, more manageable project. At the end of the day, your home is worth looking after, and setting up an owners’ association is an effective and worthwhile thing to do.
For more detailed information (these are not endorsements and we are not associated with these organisations).
For further detail and sample constitutions, and templates: