Serving as an HOA board director can be a daunting task. The job comes with lots of responsibilities. Managing a homeowner association’s affairs often includes making tough financial decisions. Why do some homeowner association boards excel and others struggle? Many lessons can be gleaned from the best practices of successful HOA directors.
Experience as a condo board president and conversations with people involved with dozens of other condo and HOA boards suggests there are best practices that will help boards excel.
Here are my thoughts:
Introduce sound policies
Good governance begins with good policies. Every HOA board needs to have policies in place for governance, finances and communication.
Aim for a balance of director expertise
HOA boards don’t get to handpick their directors, but every board can strive for a balance of skills and expertise. For example, it can be helpful to have a director that understands the legal side of things and another with a background in financial management or accounting.
Add officers to bring in needed skill sets
Officers do not vote and are not elected, so there is much more freedom in their selection. Once the board is elected, the directors can appoint officers to fill any gaps in expertise. Being an officer for a year or so is also valuable training before becoming a director. Adding officers lightens the overall workload of the board and when specific skills are needed, their knowledge can be extremely valuable.
Anyone can be on a committee. Many condo boards have created committees for things such as organizing social events, looking after gardens, and writing newsletters. Because committee members don’t have to be official board members, this is also a fantastic way to get new people involved. It’s advisable to include a board member or officer on each committee, to liaise between the board and the committee. If this isn’t possible, consider asking the committee chair to attend board meetings whenever an update is required.
Successful HOA Directors have written job descriptions
Current or potential directors may not know what is required of a president or a treasurer. Giving every director a clearly defined role ensures board members understand their respective responsibilities.
Don’t leave positions vacant
Appointing a new director as soon as a position becomes vacant is a good practice. It’s not easy to find a new director, but the sooner a replacement is appointed, the better. There is always a concern that the remaining directors will be overworked (and then also leave the board) because too much is expected of them. Directors are volunteers and are already making a significant time commitment to serve on the board.
Make board documents available before being asked
Make all relevant documents available to everyone. Transparency is key.
Keep records organized and accessible
Records — such as meeting minutes and financial statements — are crucial to every homeowner association or condo corporation. These records must be organized, up-to-date and easily accessible to everyone who needs them. Successful HOA Directors start saving relevant records as soon as they join the board — if they wait until they leave the board, it will be too late. This includes emails.
Practice consistent and reasonable rule enforcement
HOAs and condos have lots and lots of rules. Enforcing all these rules is not so easy. Rule enforcement requires two key aspects: being consistent and being reasonable. Being consistent means that rules are applied equally to all owners. No one is granted special permission to ignore a rule. Being reasonable means that after an owner is informed of a rule violation, he or she is given a reasonable amount of time to fix the problem before the board takes the next step.
It pays to be proactive.
An ounce of prevention is worth a pound of cure.
Never put off until tomorrow what can be done today.
It is human nature to procrastinate. It is the same nature that HOA directors must fight against. Being proactive in maintaining building systems always pays off because small problems get identified and fixed before they become giant disasters. Conducting annual inspections of major building systems costs money in the short term but pays off in the long run.
Take, for example, the board of a high-rise tower that replaces all the unit furnace filters on an annual basis. The board could rely on the owners to complete this task (it would be cheaper to require the owners to do the work), but it is unlikely every owner will fulfill their obligation. It knowing human nature not all of the filters will be replaced in any given year. Replacing filters improves furnace efficiency and prevents damage to more expensive parts.
Commit to streamlining process & practice
The best boards and their directors continuously look for ways to save time, increase efficiency, and to do more with less. Today’s directors have access to technology that did not exist previously. Why not use them? No board can afford to be without up-to-date technology such as board and property management software. Incorporating software like BoardSpace into a board’s daily operating procedures transforms an ordinary HOA or condo board into a high-performance and modern 21st-century board.
Overall, boards should strive for balance, proactivity, and transparency. Having the proper balance of skills ensures that the board is knowledgeable and able to get the job done. Proactivity and transparency keep minor issues from becoming more significant. By implementing these practices, every HOA and condo board can be successful.
This article was originally published in Condo Business Magazine on Wednesday, July 31, 2019