Tuesday, September 25, 2012

Consistency Creates Opportunity

Board service can, at times, be a challenging responsibility - and Board members can become easily frustrated at the lack of trust and respect from homeowners.  Even with a good communication program in place, showing how Board decisions and actions add value to the Association, the negative responses can continue to flow. This is one of the main reasons that prevent board members from wanting to serve additional years on an association Board.

It takes a lot of good memories to make the bad ones fade.  If your Board has a history of mediocrity or poor performance, it can take several years of solid operation to erase ill-will.  You will continue to be lumped in with past Boards until you have created an enduring narrative displaying otherwise.  Four or five years of positive leadership may be required before this occurs.

During this time, fresh faces are added to the community and some long-time residents experience life-altering events (retirement, children, health) - all providing the Board with a new chance to cultivate volunteerism.  Don’t let these be missed opportunities!  

If you are always “on message” and consistently act in a positive manner, the doors will open at unexpected moments, providing that edge to boost your Association to the next level. 

All things have different growing seasons, and while the time it takes to grow a productive neighborhood is measured in years, the rewards go beyond the month-to-month and year-to-year accomplishments you gain as Board volunteers.  Strive to establish a legacy of expecting only the best from future Boards!

Tuesday, September 18, 2012

Cease & Desist

In the U.S. Supreme Court case of American Society of Mechanical Engineers v. Hydrolevel, the justices concluded that a nonprofit association could be held liable for the actions of its officers, directors & volunteers - even when the association did not know about, approve or benefit (as long as the volunteer appeared to outsiders to be acting with authorization).  In this particular instance, a volunteer chairman issued written responses to another company, making assertions that were not supported or approved by the association. 

Community associations must take steps to outline the authority of each agent, regulate access and use of things such as letterhead, a community logo or community website, and immediately act when it sees unauthorized activity.  A typical example is that of a former Board member who continues to interact with vendors or government officials as if he were still on the Board, directing or influencing others based on this false perception.

Appropriate responses include:
  • Having the association’s legal counsel issue a cease & desist letter to the former member
  • Limiting access to proprietary information
  • Notifying vendors and all association members of the volunteers change to non-director status
  • Placing the insurance carrier on notice

Nefarious actions are not limited to former volunteers.  Disgruntled homeowners or vendors may choose to act on behalf of the association as a means of retaliation.  It is vital that social media and other forms of public communication be frequently reviewed to detect and respond to such activity, before the situation becomes expensive.

In this Supreme Court case, the Association ended up paying $6 million (in 1982) in damages and legal expenses because of one person’s unauthorized actions – be sure your community does not face the same exposure!

Tuesday, September 11, 2012

Education is Power

Those who volunteer to serve on a community Board or committee are truly the work horses, ensuring core activities of the Association are addressed:

·         Business – protecting the assets of the community

·         Governance – interpreting and enforcing the various regulations

·         Community – enhancing social harmony

Without these volunteers, consistency within the community would not be possible. This consistency is important, not only to ensure fairness between neighbors, but also to protect the investment that each homeowner has made within the community!

Unfortunately, most volunteers do not understand the full scope of their duties when first stepping up to serve. It is critically important that training is mandatory and that it occurs prior to or immediately upon joining a Board or committee.  Without a mandatory program, less than 5% of members tap educational opportunities to protect both themselves and their Association.  Whether someone is too busy with “real” work or is a “one-issue” candidate (i.e. they volunteer, but intend on walking once his/her pet project is addressed) the price for not being trained is too high to be ignored.

Some volunteers join the Board or committee knowing the work that the job will require. Others learn once they actually “get in to” their term. For either individual, as we have discussed above, training is vitally important. Most volunteers willing accept training, while others are not as interested – hence the need for mandatory training. Forcing unwilling individuals to attend training sessions can sometimes be a wasted effort. This leaves the Association only a few ways to insulate itself from poor decisions or actions.  Three “must-do” steps:

·         Obtain the best liability and directors & officers insurance possible

·         Require all volunteers to sign disclosure forms about risky actions and consequences

·         Keep the community well-informed on all actions and decisions

As in any elective governance, it is ultimately up to the individuals in the community to be aware and remain involved – a sort of checks and balances system. The price for incomplete or insincere leadership will be paid for by all.

Educational opportunities extend to homeowners, too.  For example, budget season is now in session. By providing the association membership with a comparison of what each home is paying (on an annual basis) for services, as compared to what it would cost if the homeowner lived in a single family residence outside of an association,  the Board or committees can provide perspective on the reasonableness of annual assessments.  In many instances, the savings via collective purchasing power gives owners a new appreciation for the benefits of community living. This is a reminder that doesn’t hurt to be reinforced every once in a while.

Ultimately, it is all about creating a culture and expectation of constant education in the community that will diffuse conflict and give rise to responsible volunteerism.

Tuesday, September 4, 2012

Association Oversight

New residents often ask about the oversight structure for their new Association.  It can be a little overwhelming to determine who does what.

At the top of the organization, commonly known as the Board of Directors, is the group of homeowners who have volunteered and been elected to handle the “big-vision” of the community.  Directors usually serve staggered two or three year terms, with a couple of positions vacated and filled each year.  This also ensures the continuity of institutional knowledge (so that future Boards learn from the experience of previous members).

The Board is tasked with maintaining a long-term outlook for the community – focusing on the forest rather than individual trees.  On behalf of the Association, they contract out with various specialists to implement this vision.

The primary agent utilized to coordinate day-to-day operations is the Association’s property manager, whose position is analogous to a city manager. This individual is answerable to the corporate entity (the Association) through the representatives serving on the Board.

Typical manager functions & duties:
  • Facilitating communications between homeowners and the Board / Vendors and the Board
  • Composing scope-of-work for projects and soliciting quotes
  • Identifying potential issues for Board consideration
  • Assisting with budgeting and financial monitoring and operations
  • Coordinating collections and making court appearances
  • Overseeing services provided by vendors
  •  Organizing community meetings
  • Educating real estate brokers along with potential and existing homeowners about items impacting value and viability of the community
Another way the Board stays focused on big picture items is through the creation of committees to focus on specific areas - such as pet issues, social events, architectural controls, etc. The Board and its committees are also tasked with distributing all this information (typically done via a newsletter). These committees periodically report to the Board with actions taken and recommendations on handling certain issues. Committees provide great strength to community - more involvement provides better and more flexible solutions by tapping into the interests and talents of our neighbors.

At the bottom of the structure is the Association itself, which is only as good as the combined efforts all the parties listed above. Contact your property manager today to make your community a better home for all!