Management Articles
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"Used with permission from Regenesis.net"

Consistent Maintenance    One of the greatest benefits of a professional manager is consistent maintenance of the facilities. A facilities evaluation identifies and prioritizes maintenance needs. Needs that are creating damage are top priority followed by deferred maintenance then by long range capital repairs and replacements (like roofing, painting, etc.). A manager brings a fresh perspective integrating both association and individual needs. By systematically reviewing the property, little things like sprinkler over spray that damages siding is corrected quickly before substantial damage results.

Mediator   One of the board’s biggest challenges is dealing with people that refuse to follow reasonable rules or to pay fees on time. Depending on the severity of the violation, the board may lose its objectivity inviting lawsuits or worse, avoid wanting to deal with the matter at all. In either case, the association suffers as problems compound. A good manager has no personal ax to grind and executes a systematic plan to bring offenders back in line. The manager can also intervene between the board and a homeowner to defuse an escalating or longstanding conflict.

Continuity   Since associations are typically run by volunteers, consistency is a HUGE problem. Volunteers like to go on vacation and to sleep once in a while. Interestingly enough, most do not enjoy late night irate phone calls. Board and committee members come and go, often viewing their terms more like a sentence than a privilege. A good manager links these well meaning volunteer efforts together, filling the gaps where volunteerism falls short. The manager often provides centralized record keeping instead of the all too frequent box-of-files-in-the-coat-closet approach. The manager can educate new directors on their roles to maximize their effectiveness.

Traffic Cop   The manager understands the overall association objectives and can direct requests efficiently. Many management companies offer a 24 hour emergency service that can react quickly to minimize damage or disaster.

Cost of Professional Management    Costs depends on the range of services and the size of the association. There are three main factors to consider...monthly management fee that cover basic duties, hourly management rate for extras and hourly maintenance rate. The basic management duties should be broad enough to include routine association business like attending regular meetings, maintaining records, bookkeeping duties, responding to information requests and maintenance coordination. Most companies do, however, charge extra for duties not considered "routine". Also keep in mind that maintenance income is often the profit center of a management company so scrutinize those costs carefully.

Qualifications   Look for a management company that specializes in community association management not just a willingness to manager. (Typically, only a small percentage of property management companies qualify). Besides the organization and effectiveness expected of the traditional property manager, a good community association manager must be patient, diplomatic, respectful and caring. A willingness to understand each association’s needs and philosophy is paramount. Call references, including both current and former clients. It’s fundamental to finding the right match.

As with any contractor, it is important to provide a list of duties (specifications) to each potential manager. This way the board can reasonably compare the players. Easing the Board’s responsibilities and protecting the association’s valuable investments make considering a professional manager a prudent course of action. Explore the possibilities. BACK

Self Control
Whether due to rugged individualism or lack of viable alternatives, most community associations are self-managed.  One might suspect that most self-directed associations are small or lacking in common area amenities. Actually, many are quite large, complex and the kind that would typically have professional management. What are some of the dynamics of self managed communities?

According to The Owner’s and Manager’s Guide to Condominium Management: "For self-management to be successful, unit owners must have plenty of time and experience, and a professional attitude toward their work for the association. For example, the treasurer must understand accounting and be willing to devote a significant amount of time to the maintenance of proper financial records and timely collections. The chair of the landscape committee should have gardening experience so that either a landscape contractor or a gardener can be properly supervised. If the association is fortunate enough to have members who have the three main attributes--talent, time and concern--self-management may be the best choice.

Size of the development is an important factor. Although it should not be the ultimate factor in deciding to self-manage, a sound case can be made for limiting self-management to associations of fewer than 100 units with limited common area space and no recreational facilities.

The main advantage of self-management, especially for small associations, is cost. However, if the motivation for adopting self-management is purely economic, the board should scrutinize that decision closely. It makes little sense to save each unit owner a few dollars a month in management fees when the value of their property many decrease by thousands of dollars as a result of that decision.

Equally important is the question of who directs contractors, employees and volunteers. Super-vision cannot come from a unit owner who simply wants to be the boss. Supervision should come only from one person, and that person must have adequate authority to oversee and control work performance.

The board must consider the legal implications of self-management, since the board itself is liable for its decisions or indecision. The board’s responsibility is to both fellow unit owners and the general public. Although many governing documents contain a hold harmless clause that seeks to protect board members from legal repercussions for their actions, this does not prevent their being sued for mismanagement...

If condominium residents consider self-management to be an adventure, enthusiasm may be high enough to be successful. However, that initial enthusiasm may decrease as the demands on volunteers increase. Consider the implica-tions of volunteers who fail to perform their duties. A breakdown in the system can spell disaster for the entire community." Volunteerism often has a problem with continuity. Today’s "house-afire" is tomorrow’s "burn-out".

Consider the really nasty aspects of self-management like having to enforce rules or collection on your neighbors. Suddenly, a level playing field becomes a master-servant relationship and neither party enjoys the new role it must play.

Controlling one’s own destiny in a community association is a sea fraught with both storms and serenity. Under the right set of circumstances, self-management can work well. As long as the approach is professional and business-like with a positive, affirming attitude, it can click. If it isn’t clicking, consider the alternatives that professionals can offer.   BACK

Manager’s Baker’s Dozen
Managing a community association, whether you are a board member or property manager is no piece of cake. It takes a special breed that loves challenge, has persistence of iron and the will to succeed. Oren Harari of the University of San Francisco conducts research on professional success and innovation. He singled out winning behaviors of successful managers... wannabees, take heed.

1) Embrace change. Recognize that change is fact of community association management. Are you energized by change? Would you find a predictable work environment uninteresting? Successful community association managers display these traits. Less effective managers prefer order, status and predictability.

2) Attend to external realities. Remember to keep in contact with the clients. Refrain from focusing too much on internal issues like paper work and politics.

3) Create power. Recognize the difference between formal authority and power. Managers who believe their power to resolve issues is limited and rely others for such decisions are less than effective. Managers have formal authority, but power is earned, like respect.

4) Promote a coaching style. Outline the fundamental do's and don'ts, then get out of the way. Coaching is helping others devise new ways to do things. Support ideas that improve efficiency, reduce costs and enhance revenues. Avoid "delegation"... assigning tasks then carefully monitoring behaviors.

5) Expand responsibilities. Envision new opportunities and accomplishments. Think about how to make things better; this step alone can continually recreate your job.

6) Create expertise. Encourage education, reading and seminar attendance. Promote the development of specific skills and talents. Less effective managers discourage curiosity under the guise of keeping "focused" by giving others only what they need to do their job.

7) Drive out fear. Have you ever worked under someone who believed that fear was the best motivator? Phrases such as "These times separate the men from the boys" promote intimidation, rudeness and broken promises. Don't practice this corrosive management style. Adopt an open-door policy, the willingness to hear new ideas and supportive feedback.

8) Exhibit readiness for an entrepreneurial environment. Encourage others to take risks based on sound information and reward them for their efforts. It's the difference between people being treated as an "associate" versus an "employee."

9) Maintain balance. Wannabees "play it safe." Don't be afraid to venture into unfamiliar territory and recognize the periodic need for change.

10) Demonstrate emotional maturity. Maintain composure during stressful situations. Learn how to work with everyone and offer to help whenever you detect a need.

11) The long view. Develop a "big picture" for your community and invite discussions regarding changes.

12) Take a Stand. Identify the ideas you stand for. Be consist in decision making.

13) Ask for Help. Not only is asking for help a sign of maturity, it demonstrates respect for the talents of others. It’s a great team building philosophy.

Consider these baker’s dozen of the successful manager... Being a community association board member or property manager isn’t for everyone. It takes creativity, flexibility, assertiveness, thoroughness, compassion and focus. Being a "people person" is a given. If you are one of the lucky few who was born that way, great! Most successful managers, however, take life’s lessons and turn them into powerful assets. You can too!  Adapted from an article by Karen Conlon   BACK

Adopting Appearance Standards
One of the important proactive policies a community association board can enact involves acceptable appearance standards. These are particularly important in condos, townhouses and rowhouses where uniform appearance underscores market value.

Many current owners formerly lived in detached housing where they were free to express themselves with flowers, pink flamingos and lawn jockeys. Some folks feel the further need for personalized fences, trellises, decks, light fixtures, security doors, security bars, awnings and other structural modifications. The ways owners are driven to "customize" the common area are limitless. The Board can never be prepared for some of the more creative ways. However, it helps to establish an appearance philosophy with guidelines. Here’s a sample:

Community Appearance Philosophy: The Association has responsibility to maintain the grounds and building exteriors. To accomplish that objective, guidelines have been established to standardize appearance to sustain high home resale values plus maintenance efficiency and cost effectiveness. In the spirit of cooperation, we encourage all owners to follow these guidelines:

• Only Acme Brand Model 123 storm doors with bronze finish are permitted.
• Only Acme Brand Model 567 patio roofs with bronze finish are permitted on upper decks.
• Common area landscape is to be altered, supplemented and maintained by the landscape contractor only.
• Light fixtures and address numbers are standardized by brand, color and type and must remain so.
• Only barbeques and suitable outdoor furniture are permitted on decks/decks.
• To avoid the "prison look", security bars are not appropriate.
• Please restrict window signage displayed to "For Sale" or "For Rent"
• For safety reasons, no plant pots should be set on upper deck rails
• All unit structural modifications must be approved by the Board.

Most of the conflicts Boards experience are largely avoidable by establishing clear, reasonable policies and communicating them regularly to the owners. Consider enacting appearance standards for your community.   BACK

Community Association 101
Prior to the mid 60s, the typical family American home was usually a single-family detached house located in a neatly arranged subdivision. Construction costs were moderate and stable. The sidewalks, streets, lighting, other basic services, and parks or recreational facilities in the neighborhood were provided and maintained by the local government through taxes.

In recent years, land in desirable areas for home building has become much scarcer and, consequently, more expensive. Construction costs have continued to rise along with everything else. Government can no longer afford to provide the same level of service and variety of amenities to enhance the quality of life as it has in the past.

In order to continue to produce affordable housing and maintain an adequate housing supply for the population, land use became more efficient and construction methods more economical. Ways to relieve local government of the burdening costs of infrastructure were discovered. Various forms of cluster housing with shared ownership of the land were developed which collectively are referred to as "community associations" (CA). It is estimated that at least 20% of Americans live in this form of housing.

CAs represent both a form of home ownership and a life style that is becoming more common in America. They come in a variety of types and styles, such as single-family detached houses, townhouses, garden apartments with shared "party walls," and apartment-like, multi-storied high rises.

CAs range in size from a simple two-unit development up to a large complex having thousands of units, many commonly owned facilities, and multiple associations under the auspices of one master association. Despite the wide range of differences, all allow individual owners the use of common property and facilities, and they provide for a system of self-governance and some degree of service for the benefit of the homeowners.

CAs have distinct legal characteristics that distinguish them from other forms of home ownership. One important feature is that the ownership in a community association combines the right of exclusive occupancy of a residential unit with the shared ownership of the common area. Another distinguishing trait is that owners are automatically members of an association that is responsible for the operation and maintenance of the common area and a system of self-governance. To pay the costs of the operation, owners are assessed fees to cover their fair share of association expenses.

The three forms of associations are condominiums, planned developments and cooperatives. Condominiums and planned developments are similar in that both provide the owner with title to a unit and the right to use the common area. The main difference between condominium and planned development ownership lies in the way title to the common area is held. In a condominium, all owners have an undivided interest in the common area, whereas, in a planned development, the association usually owns the common area. In cooperatives, owners own shares of stock in a corporation that owns the structures and land. The owner has the exclusive right to use a specific unit. 

A community association developer should provide an effective structure for financial, administrative and maintenance operations. The structure includes levying assessments, member and board meetings, voting and elections, board duties, and rights and responsibilities of the association which all must adhere to state statute.

The Declaration, By-laws and Articles of Incorporation are the documents used to establish the framework and legal basis for the "government" of homeowners that is created. These documents are generally enforceable in a court of law, if the need ever arises. The developer is required to operate the association in the best interest of the homeowners throughout the marketing phase until the control of the association passes to the homeowners and their elected representatives. Once this turnover or transition of power takes place, the association becomes a totally independent entity answerable to its membership.

Membership The homeowners' association is unique and each owner in a CA automatically becomes a member of the association on taking title to property. Membership automatically terminates on the transfer of title. Only owners are association members and all owners must be members. Generally, each member of the association has one vote for each piece of property. While the votes are usually of equal value, weighted or percentage votes can occur if there is a substantial size or value difference between properties.

Rights and Powers of the Association 
The association needs the authority to effectively manage, operate, and maintain the common area. That authority is provided in the governing documents. Common area typically includes landscaping, recreation facilities, private streets and driveways, outdoor lighting, structures, roofs, fences, and any other common area components.

The powers are delegated by the association to a board of directors elected by the membership at an annual or special meeting. The procedures for the election and removal of the board members are provided in the governing documents.

Although the board is given the power to act, if an action has significant impact on the rights of the owners, prior approval by at least a majority of the owners is sometimes required. and usually prudent. Examples of actions requiring a vote are:

Raising regular assessments significantly (like 10% or more, check governing documents)
Special assessments
Enacting a No Pets Policy
Enacting Rental Restrictions

The Board of Directors - Powers and Duties
Community associations are headed by a volunteer board which manage the business. The specific duties and powers detailed in the governing documents include: 

• Enforcement of the governing documents and management of the association;
• Assessment collection;
• Contracting for goods, services, and insurance on behalf of the association;
• Delegation to committees, officers, and employees to assist in association operation;
• Preparation of budgets and financial statements;
• Adoption and enforcement of rules;
• Power to take disciplinary action, including fining members who violate the rules or policies;
• Repair and maintenance of the common area.

Funding the Association
Regular Assessments Income for most associations is usually derived from monthly assessments levied on all owners. In some associations, those assessments may be disproportionate where owner unit sizes vary substantially or when some owners receive greater services or benefits. Regular assessments cover the day-to-day costs of maintaining recreational amenities like swimming pools, clubhouses and tennis courts, and services like landscape maintenance and window washing.

Special Assessments
The board usually has the authority to levy "special" assessments for major repairs or replacements or for a one-time, unanticipated expense which cannot be covered by the regular assessments like insurance premiums that unexpectedly skyrocket.

Other Charges
Some associations have special charges for special services such as an owner who wants to use the common area pool, club house, or tennis courts to entertain private guests. The fees are usually on a pay-as-you-go basis, and they generally cannot become a lien on the owner's unit or interest.

Lien Rights
Assessments, late charges, collection costs and interest charged become an owner debt and a lien on the owner's property when the association files a lien notice with the county recorder when the property is located. The lien can be enforced in any manner permitted by law, including foreclosure, in order to recover money owed the association. When the owner pays the debt, the association must record a lien release notice.

Budgeting Present and Future
Reserves are an important part of the association's budget. They fund future repair and replacement of major common area components and are best collected with the regular assessment and set aside in a separate reserve account. The goal should be to reserve for all major repair and replacement costs without the need for a special assessment. Special assessments are unfair to current owners that are paying for previous owners failure to contribute. They are often a financial burden for some, difficult to collect and politically unpopular. Associations that fail to fund reserves often defer maintenance to avoid conflict. Deferred maintenance deteriorates the property and the property values. In contrast, a well-funded reserve reinforces property values, eliminates the need for special assessments and spreads predictable costs over time.

A reserve study gives a current cost estimate of repairing and replacing major common area components with a useful lives of 3 to 30 years. It consists of a component inventory, the remaining useful life of each component and the repair or replacement cost for each at the predicted interval. A well prepared reserve study allows easy comparison of ideal to existing reserves.

Financial statements should be distributed to members at least annually to keep them informed of the association's financial position and preparedness which includes.

• An operating budget that estimates revenues and expenses
• A reserve study that includes current reserve funds and a statement regarding the possibility of special assessment during the coming year.   BACK

The Board’s Job
Homeowners who serve on the association’s board of directors typically have good intentions and want to make a meaningful contribution. However, many new directors are often not sure what is expected of them. A board orientation explains what directors are required to do, what they are allowed to do, and how to do it. Learn the language:

Association: The organization that manages the community. It is usually non-profit corporation.

Board of Directors: The policy-making body for the corporation. A group of elected owners who make policies and decisions for the association.

Directors: The individuals who are on the board.

Officers: The "executives" who carry out the policies set by the board: typically President, Vice President, Secretary and Treasurer. The distinction between officers and directors can be confusing, particularly since the directors serve as officers. On a board of three, usually all will be officers. On larger boards of, say seven, three or four may be officers. All directors have the same voting rights when it comes to making policies. Officer positions are hierarchical, while director positions are not. In homeowner associations, the officer positions are usually used simply to designate responsibilities.

Parliamentary Procedure: This is the recommended process for conducting business meetings and a way to make ensure that everyone has a chance to voice their opinion. There is no particular parliamentary procedure that is required by law. While Robert’s Rules of Order is often used, simply asking for comments and then requesting a formal motion (a vote on an issue) is an adequate and effective "parliamentary procedure".

Board Meetings: These are the gatherings that the directors attend to discuss issues and make decisions. Legally, owners are allowed to attend.

Annual Meeting: A meeting of all the owners that usually takes place once a year. Board members who attend annual meetings do so as individual owners. They have no extra authority or voting power (except to vote on proxies that have been assigned to the Board to vote). Typically, the president presides at annual meetings.

Proxy A power of attorney granted by an owner to another person to vote at the Annual Meeting for elections and other business that may be brought before the owners.

CC&Rs - Covenant, Conditions and Restrictions. The generic term used for governing documents like the Declaration, Bylaws, Resolutions and other board policies.

What Is the Board Required to Do? Associations exist to protect the owners’ property values. The owners pool money to maintain the "common area" and to some extent regulate how individual property is used. The money is paid in the form of "assessments" and entrusted to the association to spend wisely. The board decides how to spend the association’s money in the best interests of the entire community. No personal agendas!

What Is the Board Allowed to Do? The board is allowed to do anything that is in the best interests of the entire community. (Notice the similarity between what’s required and what’s allowed!) Encouraging owners to attend meetings and participate is in the best interests of the community. So is using consultants about technical issues like engineering and financial planning.

What the board is allowed to do is much more flexible than what it’s required to do. The board is required to hire contractors to perform such tasks as landscaping, fence mending and street maintenance. Developing an association web site is an optional but practical use of the board’s authority.

How Does the Board Realize Its Objectives? Encouraging owner participation is the best way to accomplish objectives. Owner participation creates effective communication. Most people don’t like surprises and are skeptical about the motives for change. However, if owners understand the objectives and are given the opportunity to comment, there is an increased likelihood of their support.

Is That It? There are many other things that directors need to know and do. It is very important to read the governing documents and refer to them when questions and issues arise. Organizing documents and other information like rules and regulations, site plans, member and vendor directories, newsletters, meeting minutes and financial reports in a three ring binder helps keep the details sorted out and readily available. Be prepared!

Associations that hire a competent property manager and other consultants will usually have an easier go of it. Particularly distasteful tasks like collections and rules enforcement are executed by the manager and make being a neighbor/director more palatable.

If you are on the board or plan to run, remember: Directors who understand what they’re supposed to do, what they’re allowed to do and how to achieve objectives, will get the most accomplished and even have fun doing it.    BACK

Minding the Store Front
The Board has a duty to preserve, protect and enhance the Association and its owners’ property. This is done in part by an architectural control program which includes procedures, standards and enforcement provisions.

Without architectural controls, it is impossible to maintain common themes like compatible colors, designs and materials throughout the community. Without them, the resulting chaos degrades property values for all owners.

The Association is granted authority by its governing documents (CC&Rs) to establish and enforce architectural standards. The goal of effective architectural standards is to encourage compliance and not to harass and persecute violators. To achieve this, ongoing education as to the purpose, policy and procedures of the architectural control program is essential. Some basic guidelines include:

1. The community appearance philosophy
2. Design criteria, material type, color and brands, if applicable for things like decks, fences, awnings and screen doors
3. The formal application, approval and appeal process for architectural changes.

These provisions should not conflict with the governing documents but can amplify or provide control in areas in which the documents are silent.

The best means of enforcing the standards is to head off violations in the first place. Clear and reasonable standards and a fair, consistent and timely approval and enforcement process are important preventive measures.

Enforcement must always be even-handed, never arbitrary or capricious. Immediate enforcement action on violators is essential to avoid waiving the right to enforce. Should the association fail to zealously enforce its architectural standards, it could lose control entirely. In some states, courts have ruled that there must be continuous enforcement. For example, permitting some owners to violate standards for deck size could render a standard concerning fences unenforceable.

To ensure a successful architectural control program, keep communication lines open between the Board and the owners. Distribute the architectural standards annually including a reminder that the program is a benefit, not a burden, to the community.  BACK

The Big Rocks
An expert in time management was speaking to a group of business students.  After his lecture he said, "Okay, time for a quiz." Then he pulled out a one-gallon, wide-mouthed mason jar and set it on a table in front of him. He produced a dozen fist-sized rocks and carefully placed them, one at a time, into the jar. When the jar was filled, he asked, "Is this jar full?" Everyone in the class said, "Yes."

He replied, "Really?" He reached under the table, pulled out a bucket of gravel, dumped some in and shook the jar causing it to work itself down into the spaces between the big rocks.

Then he smiled and asked the group once more, "Is the jar full?"  "Probably not," one of them answered. "Good!" he replied. And he reached under the table and brought out a bucket of sand. He poured the sand in and it went into all the spaces left between the rocks and the gravel. Once more he asked the question, "Is this jar full?"

"No!" the class shouted. Once again he said, "Good!" Then he grabbed a pitcher of water and began to pour it in until the jar was filled to the brim. Then he looked up at the class and asked, "What is the point of this illustration?"

One eager beaver raised his hand and said, "The point is, no matter how full your schedule is, if you try really hard, you can always fit some more things into it!"

"No," the speaker replied, "that's not the point. The truth this illustration teaches us is: If you don't put the big rocks in first, you'll never get them in at all."

What are the big rocks in your life? A project that YOU want to accomplish? Time with your loved ones? Your faith, your education, your finances? A cause? Teaching or mentoring others? Remember to put these big rocks in first or you'll never get them in at all. BACK

Planning to Win
There is an old saying that goes, "If you fail to plan, you plan to fail". Nothing is truer when it comes to a community associations. If your association does not already have one, forging an Annual Planning Calendar will be an enormous step toward solving many nagging maintenance and administrative problems.

What goes into an Annual Planning Calendar? All significant maintenance and administrative events should be included. Basic categories include:

Maintenance Deadlines like pool permit, elevator permit and backflow valve inspections

Non-routine Maintenance like carpet cleaning, window washing, gutter cleaning

Major Repairs & Replacement like roofing, painting, pool replastering

Administrative Events & Deadlines like board, homeowner and committee meetings plus filing deadlines for federal and state reporting. There are several major reasons to implement an Annual Planning Calendar:

Efficiency. It is important to spread the work load out as much as possible so that board volunteers are not stretched to the breaking point. First make a to do list and consider the amount of volunteer time will be involved. Distribute volunteer items over time to spread out the work. Oversight of contractor tasks can be divided up by committees like maintenance, budget, landscaping if you do not have a professional manager.

Conservation. The Annual Planning Calendar will help conserve your association’s money. By planning your major maintenance projects ahead and getting proposals early, you can often take advantage of off-season pricing. If nothing else, you may have first crack at the contractor’s schedule. More importantly, by doing preventive maintenance when it needs to be done, asset life can be extended to its fullest thereby conserving capital.

Communication. The Annual Planning Calendar sent to all members since they have the right to know how money is being spent. Since everyone will know when things will take place many phone call inquiries can be eliminated. If members are "in the know", they will be more willing to cooperate with its implementation. While there are similarities between associations, yours may have some special items that should be included. Meetings should include the date and place if the location is not usual.

What is the best time to prepare the calendar? Ideally, it should be put together in conjunction with your annual budget but it if you don’t already have one, the sooner the better. It is simple to put one together and it need only be one page in length.

Like a budget, once there is a history to look back at, the Annual Planning Calendar can be refined and improved. By planning ahead, the progressive Board of Directors can put an end to "squeeky wheel" maintenance and management by crisis. It is a powerful tool that the "pros" use and so can you. BACK

Appearance Standards Policy
"How does the Board effectively deal with homeowners that violate exterior appearance standards?"

There seems to be a tendency for apartment style communities to, over time, acquire unintended owner touches like custom mailboxes and address numbers, pink flamingos in the planting beds, bird feeders and a variety of others things. Some are arguably in good taste while others are not. What are reasonable guidelines?

Aside from taste considerations, exterior appearance directly impacts market value. A great curb appeal can add thousands of dollars of value to each unit. The opposite is equally true. Often the bylaws are vague when it come to what is acceptable in the common area. This deficiency allows some owners to be overly creative.

If this is the case in your community, it may be time to develop an exterior appearance policy.

Some suggestions:
1. Include a statement in the policy that explains it is needed to protect all owners interests and property values.

2. Allow and encourage residents to exhibit potted flowers from patios, decks and entries. Common area plantings, however, should be forbidden. They rarely fit with the overall landscape design and are difficult for the landscaper to maintain.

3. Make the common area a No Man’s Land as far as personal decorations.

4. Uniform appearance of the units is desirable for maximizing market value. Approved standards which include brand, model and color should be established for add-on storm doors, patio roof covers and the like. Old installations can be grandfathered with the understanding that replacements must conform to the standard.

5. Don’t let the personal storage shed concept get started unless the association wants to install them for all owners.

6. The association should be responsible for replacing items like mail boxes, address numbers and exterior light fixtures as needed to better control the standards.

7. Invoke a preset fine if the offending object is not removed within a reasonable grace period of 7-10 days. A cumulative per day fine is more effective than a one time fine.

Form a committee to draft a policy and ask for member input. Without it, implementation and enforcement will be an uphill battle. When complete, deliver a written copy to all members and allow a reasonable feedback time. Next, schedule a special meeting where the policy will be discussed and revised according to input. Next, include the final draft as an agenda item for the next official Board of Directors meeting. Once approved, make sure it is clearly noted in the meeting minutes. Finally, deliver an "Approved" copy of the policy to all members.

As far as compliance is concerned, the board/committee should walk the property at least monthly. The sooner violators are notified, the easier it is to get compliance. The tone of the notice should be strong but not authoritarian. Even violation notices can be an opportunity to forge a better community. BACK

The Role of the Treasurer
A homeowner association treasurer is responsible for maintaining the finances and ensuring the financial stability of the HOA. She is the financial voice of the board and often the liaison to auditors, CPAs, brokers, agents and bankers. This role includes a number of duties and responsibilities.

The HOA’s documents and bylaws specify a number of financial responsibilities that the treasurer must oversee which often include:

• Maintaining adequate insurance coverage

• Keeping financial records

• Investing HOA funds

• Collecting assessments and delinquencies

• Reserving funds for future needs

• Filing income tax returns

The treasurer should understand the basic components of the financial statement including Assets, Liabilities and Equity (reserves and operating fund balance). In addition, it’s important that the treasurer understand the financial statement as it relates to Initial Working Capital (if a new HOA), Special Project Funds and Income & Expense statement.

The treasurer should report at board meetings on the state of the finances based on the following information, which may be provided by the manager or finance committee:

• Balance Sheet

• Income & Expense Statement

• Cash receipts and disbursements activity

• Delinquent member balances

• Schedule of accounts payable

• Bank statements and bank reconciliations

Reserves is a primary responsibility of the board of directors. The treasurer is charged with:

• Arranging for a reserve study.

• Arranging for the annual update of the reserve study.

• Implement a recommended reserve funding schedule.

• Fund the reserve accounts appropriately.

Ensuring that the homeowner association is working with a qualified CPA is one of the treasurer’s important duties. CPAs with HOA experience are trained to provide the financial expertise the board needs, to perform an audit when needed and to prepare the annual tax return. In smaller, self-managed HOAs, the treasurer’s duties may include bookkeeping.

The treasurer is the liaison between the board and finance committee, and between the board and the members on financial matters. In addition, the treasurer is the liaison to reserve study engineers, bankers, CPAs, insurance agents, investment brokers and auditors.

The treasurer should make sure that important financial records are safely maintained for an appropriate time. There are digital backup services that are ideal for this purpose.

Embezzlement is a very real possibility in any homeowner association. The treasurer needs to implement internal controls to prevent the theft of HOA funds. These include several officers receiving and reviewing bank statements, two signatures required checks and limit who have authority to sign contracts and charge to the HOA’s accounts.

An HOA treasurer is charged with the safekeeping of the HOA’s greatest asset: its money. The treasurer should have an attention to detail and comfort with financial reporting.

From the Board Member Toolkit   BACK