Management Articles

The Role of the Board
Homeowner associations are unique entities, and the boards that lead them fill unique roles. Directors are elected to represent and protect the best interests of their constituents. One of the most important tasks is to maintain the value of a jointly owned assets. The board is also charged with preserving and improving the quality of life by enforcing the governing documents.

So what constitutes a good board member? While any member is qualified to run for election, there are certain character traits or life experiences that benefit the HOA while some definitely do the HOA harm. In a nutshell:

Traits of A Strong Board Member
Good character
Strong integrity
Calm thoughtful judgment
Willing to serve
Strong communicator
Committed to the HOA’s best interests
Relevant experience or background
Strong "people skills"

Traits of a Weak Board Member
Unwilling to put the HOA’s welfare first
Undermines board decisions or policies
Impulsive and quick tempered
Has a personal or hidden agenda
Little experience in management, leadership or service
Unwilling to work with others
Ineffective communicator

How does a member of the board succeed with such a challenging assignment? Put your personal preferences and circumstances aside. When you make decisions as a board member, you have an obligation to work in the best interest of the entire community, regardless of how it affects you personally.

Educate yourself. Part of learning how to be a good board member will come from trial and error; but, you can reduce the errors and the time it takes you to get up to speed by attending seminars, reading books, networking with HOA board members, asking questions of your manager, accountant or attorney and getting free materials from the internet.

Know the difference between the board and the manager. Boards set policy and make policy decisions. Managers implement the board’s directives and take care of operations.

Stand united. Once the board makes a decision, stand behind that decision even if you voted against it. Don’t try to undermine board decisions.

Don’t allow personality differences to interfere. Be cooperative, positive, and make every effort to stay focused on the needs of the community.

Be reasonable. Boards have a big responsibility and should avoid being over zealous or inflexible. Avoid snap decisions, act rather than react, and deal with real problems, not nuisance situations.

The role of the board is as much about building the social and civic well-being of the community as it is about maintaining common areas or enforcing rules. To do this, a board must:

Provide leadership and inspiration.
Instill a sense of caring, civic pride, and shared responsibility.
Position the homeowner association as a wellspring of volunteerism both inside and outside the HOA’s boundaries.
Help transform the HOA into a vibrant neighborhood.

By placing an emphasis on community, boards transcend the legalistic nature of their governing documents. Happy communities have fewer rules violations and delinquent assessments.

In the final analysis, board members should be community builders. Each director should set a tone that is light-hearted and should strive to collaborate with HOA members, bringing worthy ideas to the board table and leaving the weak ones at home. Those that are able to step outside themselves and serve will shine.

From The Board Member Toolkit by Community Associations Institute. BACK

The Role of the President
Homeowner association presidents are required to fulfill many roles, but the primary roles are leader and manager. Different situations will determine which role the president assumes. Sometimes the president must set aside other roles, such as neighbor or friend, to accomplish a task or make a decision.

HOA presidents gain their authority to lead from state law as well as the HOA’s governing documents also called the Covenants, Conditions, and Restrictions or CC&Rs, declaration, bylaws, rules and regulations. Therefore, presidents must understand the HOA is both a community which should operate as a representative democracy form of government as well as a business that often manages and maintains millions of dollars of member assets.

Other important tasks assigned to the president include:

Oversee Operations. Presidents must adhere to budgets, formulate and enforce rules and policies, conduct meetings, prepare agendas, and work with committees.

Speak for the Board & HOA. The president is the official spokesperson for the board, to the members, the manager, vendors, press and the greater community.

Seek Knowledge. Learning how to be president of an HOA often comes from on-the-job training. However, educational resources are available in books, seminars, periodicals, and networking offered by groups that serve common-interest communities, such as Community Associations Institute and its chapters.

Works With Volunteers. The president is the leader of the board, a body that typically includes:
The vice president, who substitutes for the president in her absence
The secretary, the official recorder of the HOA’s business activities
The treasurer, the chief financial officer

It’s in the president’s best interest to encourage the officers’ participation in HOA affairs and to develop their skills as team members. The president should also attempt to identify and train potential leaders, encourage them to join the board, and orient them to their new responsibilities.

Works with Professionals. Many HOAs employ a professional manager who directs HOA operations based on policy set by the board. The president acts as liaison between the manager and the board. Seeking the services of professionals like attorneys, architects, engineers and reserve study providers is in the best interests of the HOA. Experts provide information and expertise that board members don’t normally have. For example:

Reviewing legal contracts requires advice from an attorney.
Managing reserve funds requires guidance from an investment advisor.
Correcting design defects requires an architect or engineer.

Protects the Assets. The president has a fiduciary obligation to protect the HOA by:

Preparing and adhering to the annual budget that protects and enhances the members’ property.
Adequately funding reserve accounts and educating members about the importance of reserve planning.
Collecting fees from homeowners.
Seeking the advice of a insurance specialists and protecting the assets with appropriate levels of insurance.

The position of a homeowner association president is not for everyone, but the president has a board from which he can draw support. As long as the members recognize and support the board that works on their HOA’s behalf, the role of president can be very satisfying.

From The Board Member Tool Kit. BACK

Rules Enforcement Guide
One of the functions of a homeowner association (HOA) is to enforce certain rules and covenants. It's good to periodically review old practices to confirm that your HOA runs an effective rules enforcement program.

Generally, it is the board's fiduciary duty to enforce the rules. But the board has some latitude when and what to enforce based on judgment. The key is for the board not to be capricious, selective or arbitrary in how it handles enforcement. It is impractical to expect that a board can maintain absolute vigilance and catch every rule violation. Instead, the board should react appropriately when informed of a violation by a reliable source.

Here is a list of the typical remedies available to enforce rules:

1. Impose a Fine. This power is typically derived from the governing documents. A fine can be monetary or a suspension of privileges (like pool or clubhouse). Monetary fines can be escalating (like $5/day until cured). Suspension of privileges is only effective if the member actually uses the amenities.

2. Impose a Lien. If a fine is not paid, the HOA usually has the right to file a lien against a member’s HOA property. This may not immediately get the fine paid but in most cases, the threat of filing a lien alone will. The HOA is entitled to attorney, collection and related fees as well which will increase the amount owed. This is also a great incentive to getting the fine paid early.

3. Use the Court. The HOA is always represented by an attorney since these courts have rules and procedures which only lawyers understand. Court litigation is expensive and should not be undertaken lightly. Make sure the expense and effort fits the crime. We’ve all read about emotion and money squandered on "matters of principle". The board has the power to compromise when it’s in the financial interest of the HOA.

4. Self-Help. The HOA can often self-help by correcting the violation directly. Examples include hauling a junk vehicle and cleaning up an overgrown lot. Rather than ratcheting up collection costs, it sometimes makes sense to take action and bill the offender. Collecting the bill may require legal action but at least the offending issue is dealt with. If self-help is contemplated, make sure to keep copies of all correspondence that warns of remedies available to the HOA and take photos for the record.

5. Mediation. Mediation can be very cost effective and less confrontational way to cure a violation when a member has dug in their heels. Mediators are trained in the art of compromise. Many jurisdications provide mediation services in the public interest that is free or inexpensive.

6. Use the Police. All municipalities have ordinances against nuisance conduct, inoperable vehicles, disorderly conduct, disturbing the peace, etc. The HOA is not responsible for every violation. Sometimes the police are better able to deal with it, especially when violence and substance abuse is involved. Let your tax dollars work for you.

7. Use a Manager. Enforcing rules on neighbors is one of the two best reasons to hire a property manager who does this professionally (the other reason is collecting money from neighbors). Managers are granted authority to identify, notify and fine. Being a third party helps since managers are less prone to favoritism.

Rules, either hate them or love them but they’re with us to stay. Figure out which ones you really need, get rid of the rest and enforce the ones that remain. BACK