Management Articles
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"Used with permission from Regenesis.net"

In some organizations, "retreats" are used as a way of getting groups to focus on important goals and issues. A retreat needs to be held apart from day to day activities that invariably interfere: ringing phones, the kids’ rap music and barking dogs make it impossible to focus on really tough issues. Consider gathering in a community meeting room. Libraries often have them available for little or no charge with the advantage of an available copier. Churches are also options. Retreats are designed to talk about philosophical issues and not to transact business. Business, as always, should be handled in a duly called board meeting open to the homeowners.

When it comes to having critical information at hand, the Board Manual fills the bill. The Board Manual is a collection of essential association information that can be easily and quickly accessed to respond to questions and emergencies such as:

• Governing Documents (Declaration, Bylaws, Articles of Incorporation)

• Rules & Regulations

• Current Operating Budget & Reserve Study

• Insurance Coverage Recap & Agent Contact Information

• Management Planning Calendar

• Maintenance & Insurance Areas of Responsibility

• Current Financial Report

• Meeting Minutes (last 12 months)

• Newsletters (last 12 months)

• List of Board Members, addresses, phone #s and email addresses

• Management key contact, phone #s, email address

• Utility Companies (trash, water, power, gas, cable, phone) phone #s

• List of Regular Contractors, key contact, phone#s (landscape, janitorial, etc.)

• Map showing streets, buildings, homes, utility meters, fire extinguishers, underground plumbing, equipment, etc.

• Security Information (keys, passwords, etc.)

• Tool and Equipment Inventory

• Equipment Information (elevator equipment, parking garage door, pool equipment, etc.)

Organize this information by subject in a three ring binder so updates can be easily made. Provide one to each board member. With this basic information on hand, most issues and crises can be addressed without scrambling.

Prepare for Meetings. All Board Meetings should have an agenda and related materials distributed to the directors at least a week in advance of the meeting. Review things like financial reports, owner requests and contract proposals in advance of the meeting so you’re not shooting from the "lip". At the meeting, stick to the agenda. Do not allow owners to spring complicated issues at the meeting and expect a decision. Architectural change requests and rules enforcement issues should only be considered after full and complete written request is received and calendared for the Board Meeting.

Get Good Advice. One area where Boards often stumble is failure to seek out competent advice. Use your insurance agent, an attorney specializing in homeowner association law, a CPA, reserve analyst, engineers and architects when the subject matter is clearly beyond the expertise of the Board. Do not "wing it" to save a few bucks. There is too much riding on the outcome and the owners are depending on you. 

The Board is not charged with knowing everything but to make informed decisions. Gather information indicated for a Board Operations Manual and assemble it now! And, give yourself time to reflect on the impact and consequences of the decisions you make. Those decisions directly affect the harmony of the community.   BACK

A Higher Calling
You’ve just been elected to the Board of Directors. The thought crosses your mind, "What now? What am I up against? Am I going to regret this?" There’s a common belief that serving on the Board of a homeowner association happens because "no-one-else-will-do-it-and-I’m-the-unlucky-sucker-who-got-stuck". Well, that’s one way of looking at it. But in reality, the Board has a much higher and noble calling.

Protector. The Board is entrusted with the single biggest asset most people have...their home. The Board often has direct control over how well maintained that asset is and, subsequently, whether it grows or declines in value. Sound planning and adequate budgeting will prolong the life of the assets. Spend a little to save a lot. Long term maintenance is called reserve planning: Systematically socking money away to pay for future repairs like roofing and painting. In these things, the Board has been given an important charge from the owners: Protect my assets today and in the future.

Peacemaker. The Board has influence over contentious issues like the Three P’s - Pets, People and Parking. Thoughtful policies can help reduce conflicts that happen when folks live in close proximity. By weaving a sense of cooperation, mutual respect and teamwork into those policies, the Board can promote community rather than a collection of moated castles. Eliminate the NO rules: NO pets, NO parking...NO people. In its place, preach a philosophy of mutual respect: "To achieve harmony requires mutual respect and caring. Do to your neighbor as you would for yourself. With your cooperation, this guiding principle will suffice."

Steward. As people hand over their hard earned pay, there is a reasonable expectation it will handled responsibly. Good stewards take this charge seriously by getting the best value for the money. This means using qualified contractors and tracking costs carefully. It means implementing cost savings programs to stretch dollars. It also means placing reserve funds in high yield investments to reduce owner contributions. The good steward understands the need to spend money, but with forethought and purpose. Spend, but spend wisely.

Trustee. Someone that is entrusted with someone else’s property is called a "fiduciary". Having been given that trust, the Board should make all decisions based on the community’s interest, never self-interest. If there is a conflict, the community always wins. This is what being a fiduciary is all about.

Encourager. Encouragement of others by leaders is a fundamental calling. Encouragement promotes volunteerism and willingness to serve. To encourage, you must communicate and recognize the efforts of those that have stepped forward. Show others how satisfying and effective community service can be. Let others shine and warm the community.

Communicator. Bar none, frequent communications is the most effective way to build community. Let folks know how things are going, even if it’s bad news. Hard times can be very therapeutic in bringing strangers together to face a common problem. Don’t overlook this opportunity.

The Board’s Higher Calling has much to do with attitude. Belief that you’ve been called (and you have) will help guide your decisions and bolster your resolve. There is a lot at stake that requires dedication and compassion. You’ve stepped forward. Hold your head high and knuckle down. If you respond to the call, you’ll do just fine.   BACK

Board Under Attack!
From time to time, a homeowner will launch a take-no-prisoners war against the Board because of some deeply felt issue. To these folks, the Board represents the Devil Incarnate and is untrustworthy, domineering, irresponsible and worst of all, in control. This is intolerable to someone that wants what they want and they want it NOW! Sometimes, the individual is actually serving on the Board which makes matters considerably more onerous.

The blitzkrieg tactics can be relentless. They harangue at Board Meetings, are personally abusive, write poison pen letters to other owners which detail the Board’s "crimes" in great detail. They are unyielding and uncompromising. Their objective is clear: to get rid of the Board so that "something better" (them) will take its place.

Boards under such attack get understandably apprehensive. (Hey, I’m a volunteer...I don’t need this kind of grief!) Most folks so attacked either flee from confrontation, despair or react angrily. Since this is war and not a simple difference of opinion, there are a variety of retaliations Boards under attack may take:

Appeasement. Even though the attacker’s demands may be unreasonable, there may be an inclination to give him what he wants so he’ll go away. Remember when England and French gave Hitler Czechoslovakia’s Sudetenland to make him go away? It’s important to consider the consequences. Know who you’re dealing with and whether this is a one issue or a multi-pronged attack. By appeasement, the Board may well open the door for future assaults. Appeasement didn’t work for Hitler and won’t work in this situation either.

Concession. A concession is different than appeasement. It recognizes give and take within issues without running roughshod over principles. When conceding, the Board should get written agreement on the terms. An example would be allowing a special exception architectural change like a ramp for disability access. The concession is granted only until the resident moves.

Compromise. When an issue is viewed in extremes, there is room in the middle for both sides to "save face". Compromise may require professional dispute resolution when emotions are running high. Dispute resolution is also useful for defusing vendettas (revenge for a perceived wrong). Professional arbitrators can assist warring factions to "make nice". This is extremely important considering neighbors are involved. While you may not end up friends, establishing mutual respect is essential.

Don’t Return the Volley. One strategy is to refuse to fight. After trying reason, stop responding to inflammatory comments. Fight fire with silence or a statement like, "We obviously disagree on this matter but the Board has voted and we intend to move on to other matters. We hope you will as well" pretty much says it. Prepare to ride out the storm. Most typhoons blow themselves out.

Responding to Threats Depending on whether a threat is legal (I’m gonna sue) or physical (I’m gonna punch your lights out) the response is different. An owner or director suing the Board is like shooting yourself in the foot. Assuming that the association has Director & Officers Liability Insurance (which it should), the coverage will pay for a lawyer to defend the Board. The appropriate response might be, "Sue if you must, but insurance covers our legal defense. Who pays for yours?" When it comes to physical threats, waste no time. Call the police. This kind of behavior needs to be stopped cold.

Fire When Ready. Sometimes, reason "took the last train to the coast" and ain’t comin’ back. If the attack is coming from a Board director, the Board majority may need to consider stronger alternatives. A renegade director can virtually destroy the whole Board with ongoing strife and conflict. While all directors need not agree on every issue, it is important to yield to the majority opinion. If a director gets "stuck" and refuses to move on, he may need to be culled from the ranks. Once the deed is done, it’s important to communicate to the remaining owners about the reasons the action was taken.

Call the Bluff.   If the attack persists, call a special owner meeting to get it all out in the open. The purpose of the meeting should not be to humiliate or point fingers. Often the attacker is shown to be a Lone Ranger and not supported by a majority of owners. Ask for a vote of confidence.

Bailing Out. Boards under attack may feel the urge to cut and run...resigning "en masse". Sometimes this may be a strategic move to get an owner show of confidence. However, wholesale resignation generally plays right into the attacker’s hand and opens the door for all kinds of radicals to jump on the Board. The welfare of the association depends on level headed and concerned volunteers. Letting a tyrant take control is the last thing you want. Resist the temptation to take the easy way out. Remember your property is at stake. Hold the high ground.

Regardless how you respond, strive for compassion, as difficult as it may be. A compassionate attitude will usually lead to the best resolution for all concerned. Kill the attacker with kindness.  BACK

Where Am I?
The hot air balloonist was lost, so he yelled to a man on the ground, "Hey! Where am I?"

"You’re in a balloon," replied the man on the ground.

"You must be an engineer," the balloonist said.

"That’s right. How did you know?"

"Because what you said is technically correct, but of no use to me whatsoever."

"You must be the Board President of a homeowner association," countered the man on the ground.

"Amazing. How did you know that?"

"You don’t know where you are or where you’re going, but you expect me to be able to help. Nothing has changed since we met yet somehow now it’s my fault."

Knowing where you are and where you’re going is a basic axiom for all Boards to follow. Good planning takes time, forethought and caring. Your community is counting on you.  Don't float along aimlessly and at the whim of any ill wind that blows disaster.  Hire competent professionals like attorneys, accountants, managers and landscapers to execute your plans.  Let them do what they were trained to do. Then get back to that "care free" aspect of HOA living you heard so much about.  BACK

So Why Go Pro?
When it comes to self managing, a few homeowner associations (HOAs) do very well, some do okay and many stumble, trip and fall a lot. Regardless of effectiveness, for a variety of practical reasons, all should have professional management in one form or another. Before a cry is raised about "incompetent managers", let’s explore those practical reasons:

A. The concept of "carefree living" promises that "someone else" will take care of business. Remember, the Board was elected only to supervise but if they don’t hire a manager, that "someone" is "the Board". Why would a few volunteers work for free to benefit the many? Unless your name is Mother Teresa, this calling is not very appealing to most.

B. Strong arming delinquent neighbors for money is low on most folk’s To Do List. Yet, to keep association bills paid, it needs to be done. There are actually people that do this disagreeable task for a living. (Maybe you know a few if you’ve fallen behind on your bills.) They are pretty good at it and don’t charge all that much.

C. Enforcing the rules can be a physically threatening undertaking. Just try towing a red neck neighbor’s junk truck. Do you really need this kind of grief just for trying to keep the area neat and tidy?

D. Association business can be a 24/7 affair. It’s a fact of life: Bad news always happens in the middle of the night during a rain/snow storm or a wild party. Have you ever dreamed of a quiet night at home or a vacation? If you self manage, forget it!...ciao!...sayonara! Who’s going to mind the store while you recreate? Believe it or not, management companies offer 24/7 emergency response. Sounding better already, eh?

HOA managers offer a variety of services like bookkeeping, maintenance supervision, rules enforcement, delinquency collection, project bidding, information distribution and emergency response. There are numerous smaller but no less important functions. Full service management contracts include "routine" services for a flat monthly fee. Routine services are those that generally happen monthly as opposed to, for example, handling an extensive insurance claim. Special services often carry an additional charge. Many HOA managers offer "a la carte" services so you can limit the level of service and the cost. This usually applies to small associations that want bookkeeping services only. The advantage of a la carte management is that should another issue crop up, you already have an established relationship with a manager that has an understanding of the association.

Now that a convincing argument for professional management has been laid out, where can such relief be found? HOA management companies are a rare breed so looking in the Yellow Pages under Property Management won’t cut it. Be wary of contracting with apartment managers that have no HOA accounts. HOA management requires a very distinct set of skills. Many larger condominium complexes are professionally managed. If you know some in your area, knock on a few doors and ask who they use and if they’re satisfied.

Okay, for you bottom line people, how much does this pain relief actually cost? For full service management, In cities like Portland, it costs around $10-$20 per month per owner (usually called "per door") depending how many units/homes and amenities your HOA has.  You probably pay more than that to get your garbage hauled! Why would you not want to radically simplify your life for so little money? Going pro is the way to go. Get in the know and wait no mo’!  BACK