Management Articles
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Officer Responsibilities
President:

• Prepares meeting agenda
• Presides at all board and owner meetings
• Appoints and supervises all committees
• Supervises the manager
• Trains directors for future leadership positions
• Sets positive example

• Keep current on HOA business
• Be prepared to fill in for president (Only a "heartbeat" away)
• In training for future presidency

• Records minutes at all meetings
• Maintains book of minutes and resolutions
• Posts meeting notices
• Attests to the authenticity of corporate documents
• Certifies all meeting notices and election results
• Responsible for all official communications with members
• Timekeeper for all meetings

• Responsible for collection and expenditure of assessments
• Reviews and summarizes financial statements
• Approves/signs all checks
• Monitors reserve investments
• Monitors delinquencies

• Come to meetings prepared
• Maintain a professional demeanor
• Put personal agendas aside
• Encourage participation
• Be open and fair
• Maintain confidentiality when appropriate

Board meetings are designed to transact HOA business. All members should be welcome to attend and observe. To that end, provide a Member Forum at the beginning of the meeting for owner comments, questions and complaints (It’s the American way).

Motions & Voting. Business matters are considered when a motion is made, and seconded. Each motion should offer the opportunity for discussion prior to a vote. Votes, when taken, involve board members only.

Meeting Agenda. There may be an agenda format prescribed in your governing documents. If so, use it. If not, use an agenda like:

I. Call to Order - President says, "The meeting is called to order."
II. Minutes - Secretary reads the Minutes of the last meeting.
III. Officer's Reports - Usually a report from Treasurer, but others may report at this time.
IV. Committee Reports - First come reports from "standing" or permanent committees; then from "ad hoc," or special committees.
V. Unfinished Business - Business left over from previous meetings.
VI. New Business - Introduction of new topics.
VII. Adjournment - The meeting ends by a vote or by general consent.

Timed Agenda. To keep meetings on track, using a timed agenda is helpful. Two hours or less should be the goal of most meetings since concentration and productivity begins to fade. So, when composing the agenda, put actual time limits on each item, like Owner Forum (15 minutes), Minutes (5 minutes), Treasurer’s Report (10 minutes) and so on. Timing will help move business along and remind all present that time is a valuable commodity.

Action Agenda. Meetings should be action driven. To that end, all agenda items should be framed with a "review and approve" context to them. While discussion may be part of the plan, it is not the goal. Every item brought up at the meeting should have a motion and second. So, if a director states, "I’d like to talk about a parking poicy on commercial vehicles", the president’s response should be, "Do I hear a motion and second to establish a commercial vehicle parking policy?" If both aren’t forthcoming, time to move on to other business. Impromptu motions should usually be handled at a future meeting if they require research and study. The president should ask the proposer to present a proposal at the next meeting for the board’s consideration.

All members have the responsibility to serve the HOA in some way, whether it be on the board or committee. If you’ve recently been elected, congratulations! Welcome to the board and thanks for stepping up!  BACK

A Breed Apart
Homeowner association management is one of the most challenging forms of property management there is. In residential, commercial and industrial rental management, there is a revocable agreement that allows the property owner a fair amount of control over the tenant. If the tenant doesn’t live up to the agreement, the owner can terminate the agreement (and vice versa). This is not the case in HOAs which are controlled by the board, governing documents, HOA statutes and property rights.

HOA managers are called on to do everything that a rental property manager is supposed to do plus be an expert at public relations, mediation and human psychology. They are often called on to work a full day and then attend night meetings. It is demanding work and those that are good at it are a rare breed indeed.

HOA management companies typically work by contract for a monthly fee. But how is that amount computed? It generally is based on the estimated time it takes to accomplish the tasks outlined in the Management Agreement. There is often an hourly charge for tasks not deemed to be routine.

So what goes into the management fee? There are fixed costs like rent, phones, copier, insurance, computers and internet. Labor charges are based on the estimated time it will take to accomplish the prescribed work. Total fixed and labor costs plus profit margin equal the monthly management fee. It is common to divide this number by the total number of units/lots to derive the charge "per door". (In Oregon, the average is between $15-30/door for condominiums. Size matters: small HOAs pay more and larger ones pay less per door.

Typically, an HOA management company will assign a manager, a bookkeeper, a maintenance supervisor and possibly an administrative assistant to the account. All will handle multiple HOAs. The manager may handle 10-15 accounts.

The salary levels of the staff can have a major impact on the management fees. If an HOA wants experienced professionals, there is a price to pay. This is one of the most challenging forms of management there is and a jack-of-all-trades just won’t do. A qualified HOA manager attends seminars, has professional designations and credentials and focuses exclusively on HOA management. The HOA will benefit from this training and experience so expect to pay accordingly.

Managers spend a great deal of their time preparing for and following up on board meetings. For a typical board meeting, the manager gathers information and prepares a management report, reviews the financial statement, attaches relevant correspondence, puts board packets together and emails or mails them to individual directors.

Most board meetings are held on weekday evenings at the HOA so the manager is required to work after hours and travel, both of which costs the HOA money since it’s built into the contract. After the meeting, the manager usually has a laundry list to follow up on that occupies most the following week. A manager can easily spend many hours on board meeting related business.

What can you do to reduce management costs? Keep board meetings to 2 hours maximum and consider daytime meetings. Move the board meeting to the management office and hold them during normal business hours. Reduce monthly to quarterly meetings. With an approved budget, proper policies in place and a management planning calendar, the manager should be able to handle most issues with only occasional input from the president. Letting the manager manage without micro-management from the board may be the single biggest cost saver.

Another cost saving involves manager administration of insurance claims and damage reconstruction. Insurance matters can take many hours of a manager’s time. If the management agreement specifically states that insurance claim work is an extra cost to the HOA, the management company can bill the insurance claim for the time it takes to administrate a claim and renovation work. A similar principle involves time spent on collections or legal action against an owner. This management time should be billed to the delinquent owner.

How about the manager providing sale disclosure statements to owners who are selling their homes and buyers’ lenders? The management company should bill owners and buyers separately not have the homeowner association bear the cost.

These are but a few ways that management costs can be trimmed. Be sensitive to your manager’s time and don’t pile on unnecessary tasks that ultimately will raise the cost. While it’s important to get what you pay for it’s equally important to pay extra for extra services. The best approach is to forge a partnership with the management company and adjust as time and work load demands.

HOA managers are a breed apart and waiting to serve. Put them to work for your homeowner association and get back to living that carefree lifestyle advertised in the brochure.  BACK

Turnover Showtime
Homeowner association managers are a critical part of the turnover process from developer to elected homeowner board. But the devil is in the details and there are plenty of them to get this process right. Developers, in their role as pre-turnover board president often hire homeowner association management companies to handle HOA business like collecting fees, paying bills, processing maintenance requests, enforcing rules and architectural restrictions. These tasks will continue after turnover so getting the routine down as early as possible is in the best interest of the HOA.

But the management company is often also charged with guiding the turnover process. Pulling off a successful turnover takes advance planning. There is the meeting itself which needs to be noticed to the members according to the schedule in the governing documents. This is a Goldilocks notice...not to soon and not too late. To nail down a date, a suitable location needs to be found that has the capacity, parking and proximity to attract a goodly number. Offering food and beverages will entice some.

The turnover meeting notice generally includes a proxy so that those that can’t attend can assign their right to vote to another. Having enough proxies may be the deciding factor whether a legal quorum of members is present at the meeting. If there is no legal quorum (as defined by the governing documents), turnover elections and other business cannot be transacted and all the planning is for naught.

Here’s a list of the tasks HOA managers often assist with in the turnover process:

Develop Administrative Infrastructure
1. Help the developer to establish critical processes, policies and resolutions like:
  a. Collection Policy
  b. Architectural Review Process
  c. Establish Committees
  d. Insurance Resolution
  e. Move In/Move Out Policy
  f. Parking & Pet Rules
2. Establish protocols for:
  a. Phone
  b. Newsletters
  c. Correspondence
  d. Website
  e. Email
3. Establish maintenance schedules for common property
4. Interview contractors for regular maintenance contracts

Turnover Meeting Details
1. Find and reserve meeting location
2. Prepare and mail notices/proxies
3. Organize the nomination process and circulate candidate bios
4. Assist with meeting sign-in, quorum verification, meeting minutes, etc.
5. Collect and organize documents required for turnover (some state statutes have a specific list)
6. Prepare a Board Operations Manual for each director

After Turnover Meeting
1. Organize new board meeting schedule
2. Train new directors within manager’s expertise
3. Assist the new directors in selection of:
 a. CPA
 b. Insurance Agent
 c. Attorney
 d. Engineer/Architect
 e. Financial/Investment Advisor
 f. Reserve Study Provider

So you see, there is a lot to consider when pulling off a successful turnover process. A properly used homeowner association manager can be a real asset in making sure it is done right. Using one will help the HOA shine at showtime!

Article contains information provided by Cheryl Brendle of Community Management Inc.  BACK

Nest Feathering
When people are elected to positions of power, there is always the chance they may knowingly or unknowingly engage in a conflict of interest. Conflicts of interest come in several shapes and sizes. It is almost impossible to avoid them but how they are handled is critical.

For example, when it comes time for painting or roofing and your HOA has limited funds, whose buildings get done first? If the board president decides to paint his own unit first, there is an obvious conflict. Rather than be exposed to well earned criticism, why not ask a third party consultant to make the call in writing and share it with the owners? This technique can be used in many situations where limited resources cause some owners to benefit over others. Avoid the perception of self dealing. Get someone else to make the call.

Another technique is for a director to abstain from voting when the outcome is self-benefitting. And make sure the secretary records in the meeting minutes that "[director’s name] abstained from voting due to a conflict of interest". That way, the written record will show no intent to sway the vote.

Disclosure is another way of avoiding conflict of interest. The idea behind disclosure is that any possible conflict is brought to the attention of the board. But beware. If you advise the board that, for example, the HOA landscape contractor is giving you kick backs to influence the contract, you’ve provided disclosure. If the rest of the Board wants in on the action and makes it known, they’ve also provided disclosure. No foul, right? Hardly. The board fiddles while the owners burn. Disclosure can smooth over minor conflicts of interest but if there are significant implications, the disclosure should be made to owners in writing.

One of the best ways for the board to avoid self dealing is to deal openly. Board meetings should be open to all owners and minutes should be complete and quickly and easily available. Frequent newsletters should advise of upcoming events. If the board knows someone is watching, it’s less likely to engage in self serving activity.

Many homeowner association developers are shortsighted. Their primary goal seems to be to make a profit and get out as fast as possible. They provide little or no training for the new homeowner board. HOA fees are often set artificially low to make sales prices more attractive. This strategy starves the HOA of funds it desperately needs to properly take care of the assets. All this can and often does can come back to haunt the developer because of inadequate money to do regular maintenance which is diagnosed as construction defects.

Instead, wise developers seek out experts to assist them shape the new homeowner association. HOA attorneys write legal and readable governing documents and management consultants formulate viable budgets and maintenance plans. This makes the whole process "arm’s length" and more credible to owners. In a word, the developer should offer every possible resource to help ensure board success. With this approach, the chance for success are greatly enhanced, the owners are happier and less likely to blame (read "sue") the developer for shortcomings.

We’re all capable of feathering our own nest even when we don’t think we’re doing it. The best policy is to avoid any perception of wrong doing. Step outside the box and ask yourself if what you’re doing could be misconstrued by outsiders. Trust is a fragile thing. Treat it like fine crystal. Take precautions to avoid conflicting interests that can disharmonize your community.  BACK