Tuesday, February 24, 2015

Perspective Shift

Everyone has a custom currency.  An effective teacher taps into this to connect with what a student values most:  A child fascinated with Transformers toys more easily learns the alphabet if provided 'transformer' letters that twist into characters.  As we mature, these currencies become an overlooked language, but still shape our interactions.  In many ways, they are our native language.

When we talk about running a transparent organization, we are really attempting to overcome the confusion and conspiracy that crops up as these 'languages' muddy the translation.  It is not always easy bridging the gap into a universal language.

So, now on to how this relates to community management...

In the two months leading up to the annual meeting for a particular homeowners association, some owners along with the Board treasurer, were accusing other Board members of mismanagement.  The revolt crystallized due to renewed enforcement of leasing restrictions and regulating community access. 

The discontented shared a common currency of individualism and special distrust of authority.   When it came to determining terms of service for the election, this group challenged the validity of all meeting Minutes stretching several years.  At a special town hall meeting, the Board, management and legal counsel attempted to clarify using English.  The 'language' of the crowd overshadowed all reasoning.

One failed translation:  The term of service is not linked to the office title (president, secretary, treasurer) held by the person.  Over the past year, some Board members had been appointed into empty spots.  Afterward, the Board reassigned officer positions, but the original length of term for each Director remained unchanged.  To the homeowner group, this was a shell game.

If the leadership had addressed the crowd in the currency of individualism, not legalism, it might have looked like this:  No Board member joyfully inflicts misery on him or herself by coming up with rules that make mad neighbors.  Board members have to live under the same rules as their neighbors.  We all value the freedom enjoyed within the 'castle' of our home and don't want someone needlessly sticking his or her nose in our business. 

Communicating this, followed by the reasons for why the regulations were critically important, would have been more effective:  This particular community is in dire need of a million dollar bank loan to address safety issues - but banks will refuse to lend unless the leasing situation is reigned in.  In a way, it's the lending system that is infringing on our individualism.  They have the money and get to call the shots.  We homeowners may decide that giving up this freedom for a bank loan is not worth it.  But we then must be prepared for a huge special assessment.

Sharing the above information, not once, but seven times in several different ways to offset a misinformation campaign, was able to bring the crowd in for a soft landing at the annual meeting.  They were actually able to conduct all their crucial business within sixty minutes and get everyone out at a decent hour.

Leading up to the meeting, the rogue Board member had tried to worsen the situation by leaking inaccurate information about the finances.  But by the time of the annual meeting, every homeowner had a copy of the financials and could see that everything was in order.  It later came out that this Treasurer had never reviewed or understood any of the financials, despite coaching for her duties when she was first appointed.  

Although the election placed the 'crazy' homeowners on to the Board, they had learned enough in the final days to move cautiously with a broadened perspective.  It is now up to them to tap into their shared currency with those that elected them. 

Tuesday, February 17, 2015

Privacy Considerations

The following information is specific for the State of Georgia.  As always, consult with legal counsel, whether or not you are located within Georgia. 

On occasion, a homeowner attempts to record the proceedings of a Board meeting.  If the Board prohibits this, is that a violation of an open meetings act?   The confusion is over the nature of the meeting being conducted.  While the meeting is a governmental function, it is not a public governmental event.  It is a private proceeding for a private corporation, and not open to the public.  Members of the Association may attend, but not the general public.

Because of this, the open records act does not apply.  In a public setting, the use of a recording device only requires the consent of one of the parties directly involved.  In a private setting, everyone must agree to the recording.  The Board meeting often only involves conversation between Board members, with silent observation by homeowners.  If someone in the audience wishes to make a recording, assent needs to be obtained from every Board member present.  Out-of-state participation (via telephone, Skype, etc.) muddles the situation, since privacy laws from other States may be triggered. 

We must also weigh the privacy expectations of other homeowners in the audience.  Since the meeting is not considered a public event, anyone accidentally recorded in also has a potential claim against the recorder, and against the Association for permitting the recording.  Add to this the possible presence of an underage person, and you really have a mess. 

In the age of social media and the desire to accommodate busy schedules, caution is key.  Even the best intentions can result in distorted messaging that could lead to claims of slander.  Court cases have been lost because of unofficial recordings that embellished the official Minutes of Board meetings. 

The same privacy expectations translate over into the surveillance drone arena.  Georgia law prohibits a person from going on or about the premises of private property for the purpose of secretly observing activities.   If your community wishes to use drones as a means of compliance monitoring, it needs to be very open with the homeowners.  You may possibly need to gain consent before implementing this technology.   Rely heavily on third-party experts to navigate this sensitive and timely issue!

Tuesday, February 10, 2015

"I Am An Attorney"

Chilling words.  While not always sinister, all too often we run across 'that' person flashing this phrase to intimidate.  Even more often, s/he might be a really good attorney - but s/he might not have a clue when it comes to HOA (homeowner association) matters.  Most community volunteer Board members wince when they discover a delinquent homeowner is an attorney.  For us CAMs (community association managers), it is a time of celebration.

The savvy attorney fully appreciates the process he faces, and quickly resolves the debt or violation.  Too often, however, he has little experience or knowledge, or sadly counts on bully tactics to get his way. 

An offer to call the State Bar works wonders in reigning in the rowdy attitude.  Just as medical doctors specialize in various treatments, attorneys are specialists.  While they all know the same basics, such as contract law, the intricacies of HOA law can be just as foreign for both a lawyer and a layperson.  Knowing not only how the courts have ruled, but also how these rulings are customarily being applied, spells the difference between loss and success.

At a recent HOA citywide conference, one of the guest speakers was an attorney who presented himself as an expert in HOA law.   He was not.  It was obvious to those of us who daily eat, live and breathe HOA life, but unfortunately many in the crowd were mislead.  It didn't help that this attorney was playing to a 'siege mentality' shared by many in the room.  Homeowners only found their suspicions validated, rather than educated, by the attorney's rant. 

There is a silver lining.  Some of the more seasoned homeowners in the crowd spoke up and challenged what was being said.  This was far more effective than if any of the other guest speakers had debated the attorney.  The same is true for any community meeting you hold.  An argument between Board members, or between the Board and homeowners, only hardens positions.   Non-Board members arguing on behalf of a Board position are far more effective in getting their neighbors to reconsider a situation.

Sadly, our litigious society demands an ever-growing population of attorneys.  Just don't assume that they know everything about the law.  They face the same challenges and insecurities as the rest of us.  Attorneys are people too.

Tuesday, February 3, 2015

Imperfect Knowledge

Frustrations abound whenever homeowners do not have the full picture.  Despite the desire for Board transparency, unfortunately there are times when the details must be withheld.  Whether it is a lawsuit, employee reviews, or contract negotiations - the Board of Directors finds itself balancing competing rights and obligations.  The result is often a lot of unfair abuse dealt out by the homeowner toward management and the Board.  Here are four examples.

EXAMPLE #1:  A new client community discovered years of massive fraudulent billing by the onsite maintenance company.  The maintenance men lived in the community and had cultivated friendly relations with all the homeowners.  A quick phone call and ‘presto’, the maintenance man was at the door.  No one could understand why suddenly it was taking several days to have simple work completed (since a vendor was having to travel to the community), although the work was now being done at a third of the price.   To not jeopardize the ongoing investigation and eventual lawsuit, the new community association manager stoically endured the daily insults.
IDEAL RESPONSE:  In this particular situation, it is best to say very little until the investigation is completed. The manager can continue to apologize for delays and address the homeowner concerns on a case by case basis. The community could look at providing owners with alternative companies to complete the desired work.

EXAMPLE #2:  In another new community, the Board received a threat of litigation, and only then discovered it did not have Directors & Officers insurance coverage in place.  It could not go out and obtain this insurance after-the-fact and still rely on it for the pending lawsuit.  The suit stemmed from a landscape violation citation, and the Board made the business decision to back down on enforcement, as the community did not have the funds to endure a court battle.  Neighbors, unaware of this background, were rightfully angry about the violation not being pursued.
RECOMMENDED RESPONSE:  They can inform owners that the Association is aware that this violation exists, the owner has been addressed but as a matter of policy and privacy for individual owners the Association does not discuss the details of individual owner violations. They could also state that due to pending litigation this violation cannot be discussed.

EXAMPLE #3:  A Board is receiving numerous complaints from the ownership about the management company. However, the Board has only just begun the process of interviewing new management companies.
RECOMMENDED RESPONSE:  The Board should not begin informing these frustrated owners that they are shopping for other management companies. However, the Board should thank owners for their feedback and reassure them that these matters will be addressed with the management company.

EXAMPLE #4:  It is easy to see the management company as a policing agent for all community issues. While this may be true for violations of the CC&Rs (covenants, conditions & restrictions) such as home and lawn maintenance, there are often complaints to the Manager that may be beyond the HOA’s realm of authority or responsibility. In one large community of single family homes with hundreds of children, a homeowner complained multiple times that the kids in the neighborhood were “delinquent kids” that “do not have respect for other people's property” because they were running through her yard. She was surprised to hear there was little the HOA could do to prevent or deter this behavior.  She responded, “You can tell someone they can’t cut down a tree but you can't address kids out of control?”
RECOMMENDED RESPONSE:  Constant homeowner education is important. While no one wants to be “that neighbor,” the HOA is limited by the CC&Rs and By-Laws on what it can enforce. When advising homeowners on neighbor-to-neighbor disputes, the manager should offer possible solutions for the homeowner to solve neighborly problems. If these solutions are not acceptable, the owner may need to look elsewhere for advice.

Associations have varying levels of transparency depending on the leadership in place.  While owners are entitled to a certain amount of information, many times it is not appropriate for non-Board members to know the details surrounding the timeline or means of enforcing a particular issue.  When bad things happen in the community or a large expense is incurred, people want to know how this happened and what is being done about it.  It’s important for management and the Board to focus on the action steps that will be taken and to communicate what can be communicated without violating the law or Association regulations.