Acting Ethically

Boards of Directors are always interested in concrete details on how to conduct their duties.  One crucial aspect of governance is ethics.  While this seems like a fuzzy subject, there are universal norms, according to the Josephson Institute of Ethics. Below you will find six values that define ethical behavior. Most of them seem like common sense - but a reminder never hurts! And by modeling the behaviors identified below, a Board member would definitely be on the right path to achieving ethical behavior.

• Trustworthiness - Like they always say in those police procedurals, “Tell the truth, the whole truth, and nothing but the truth”.  Speak straight and direct.  Don’t betray a trust. Demonstrate integrity—stand up for what you believe, walk the walk and talk the talk.  Show commitment and courage.  Be loyal.  Be discreet with Board information.  Don’t spread rumors or engage in gossip.  Don’t violate your principles just to win approval.  Don’t ask someone to do something wrong. Keep promises—keep your word, honor your commitments, and pay your debts.

• Respect - Judge by the content of character, not appearance.  Be courteous and accepting of differences.  Accept others’ right to decide about their own lives.  Don’t abuse or demean.  Don’t exploit others.

• Responsibility - Consider the impact on yourself and others before you act.  Claim the consequences of your choices.  Set a good example.  Don’t take credit for other people’s work.  Be reliable.  Do your best, don’t quit easily, make all you do worthy of pride. There is a difference between what you have ‘a right to do’ and ‘what is right to do’.
  

• Fairness - Be open-minded, listening and considering opposing viewpoints.  Be consistent in your actions.  Use only appropriate considerations.  Don’t let personal feelings improperly interfere with decisions.  Don’t take unfair advantage of mistakes.  Don’t take more than your fair share.

• Caring - Show kindness, sharing, compassion, and empathy.  Live the Golden Rule.  Don’t be selfish, mean, or insensitive to others’ feelings.

• Citizenship - Play by the rules, obey laws, respect authority.  Stay informed, vote, protect your neighbors' interests, pay your assessments.  Be charitable, help your community, and conserve resources.

Psychological and organizational factors pressure people to not act ethically.  For Boards, one concern is that ethics can cost the Association money, at least in the short term.  Doing the most ethical thing often appears at odds with your short term goals, or may not have an obvious immediate benefit.  Focus on the results over the long-term, whether you are setting precedence for future Boards, or preventing a deferred maintenance disaster.

CAM - Friend or Foe?

In today’s world of association management this is what homeowners and board members generally ask themselves.  The answer will even change depending on the situation.  Much like any other relationship, when a positive interaction occurs - the answer is “Friend”, and on the other side - if it’s negative, the result is “Foe”. 

In the association management industry, community association managers (or CAMs) are battling this issue on a daily basis.  Often the reality of the law and personal opinion conflict.  As a strong service-oriented person, we want to follow the rule of ‘the customer is always right’.  Unfortunately, that is not always true.  A board member going against the association-governed documents, based on his own personal feelings, will lead the Association down a path that not only could be legally incorrect but also costly in the litigious society in which we live.

A recent example:  a few long term board members wanted to waive assessments for owners that had hit hard times but had never been late in over 15 years.  While the thought was understandable, the manager had to make them aware this could not be done.  If allowed, it would have to be offered to the entire membership, setting a precedence that the association could not afford, nor legally could do. 

The manager (with legal explanation in hand) presented to the Board at the next meeting.  Those Board members who strongly wanted to offer the waiver felt that the manager was not being a partner and had now become the enemy against the community, the Board and the membership.  Of course this was not the case. From that point on, the manager was met with hostile, argumentative behavior.

Once this occurs, it is very difficult to move forward.   The broken relationship will need to be repaired first.   By further explaining the legal point and offering other ways to accomplish this goal - the manager can work to achieve common ground. 

To not take it personal, but yet care personally, is a fine line to walk.  Managers are the complaint department and not friend or foe, but the neutral mediator.  A manager is a partner to all.  The ground could be full of land mines or beautiful wild flowers and on occasion both.  No matter the land, we must walk confident whether or not we are liked or disliked on any particular day. 

We are service minded experts and those that truly get this ideal are successful. Doing what’s right for all is right!

Your Duty to Serve

As a member of a Board of Directors, you are charged with several duties. You might be familiar with your duty of care and duty of loyalty, however, have you ever pondered your duty to serve? What is your approach to service within your community association’s Board?  How often do you think about the duty you have to serve your association’s membership without fail? Did you educate yourself regarding the requirements and expectations to serve and give your very best?

Let’s talk about the Access Management Group approach to the HOA industry.  Looking back over the last decade, perhaps the most profound evolution when it comes to any company and it's workplace culture is the makeup of the individuals - who are essentially the company.  At AMG, our essence is providing client communities access to the best management professionals! Without you, we would not exist and without a community association management company, you would not have the tools necessary to be a truly successful and effective board, organization, or association. We LOVE to work with quality Board members who WANT to serve and who take their duties seriously.

As a Board member of a community association, your calling is a bit higher than that of other homeowners. Being a part of the board sets you apart from other association members because of your duty to serve. You are not just thinking about your own individual home ownership, you are now thinking about maintaining and enhancing the value of the entire asset, and this requires a duty to serve the association with integrity. Also, there are many challenges for a new Board (and occasionally even for a seasoned one). There are new people within the community to meet, getting to know your community association manager, the learning curve of leading a non-profit organization and probably most importantly - becoming familiar with the community's Bylaws and covenants. There are lots of rules. Are you familiar with them?

For Boards of Directors who have already learned what it takes, consider your duty to serve as a contribution to the history of your community association. There are always homeowners who want to serve, but can’t, and homeowners who have the time to serve, but choose not to serve. No matter what, if you find that you no longer feel the gusto that comes with leading the community association, reflect on your duty to serve. It is with this service that you are making your community better than it was when you became a member of it and it is with this service that you have helped to create a future for your homeowner association. 

Board members, consider your service to your community.  Do you serve above self? What caused you to be interested in serving your community? Do you find your call to serve fulfilling?   When you ask these questions as a Board reflect on this “food for thought” - while an associations’ primary duty is to maintain community value, what are you doing to see it actually grow? 

We challenge you, both Board members and managers, to recommit to your duty to serve. Consider why you are in your position, and what ways you can tap into undiscovered strengths and abilities to create a clear vision for your community. 

Finally, know that serving your best makes you a better individual and makes those around you better - resulting in a more positive neighborhood culture. And last but not least, appreciate the growth you experience as a result of fulfilling your duty to serve your community and the HOA industry!

Re-framing Expectations

Alexander Hamilton, the guy on the $10 bill (for now at least), authored much of the U.S. federal system.  In one of his writings (March 18, 1788) he said (paraphrased):  The representatives of the people sometimes fancy themselves as representing themselves, and become impatient and disgusted with the least sign of opposition from others, as if the exercise of someone else's rights infringes on their privilege and insults their dignity.

Unfortunately, we see this same mindset among some HOA Boards, and among some community association managers.  While these agents are tasked with representing a corporation (the homeowners association), not individual homeowners, it is easy to 'take it personal' when a homeowner challenges them.  Perhaps the homeowner doesn't have all the facts, or perhaps he has facts the agent needs to know.  As long as the homeowner isn't being abusive or using strong language, Board members and managers should hear him out.

Time not taken now becomes time & money taken next, under mandated arbitration.    Also, the views of future challengers are colored by how they see you treating the current ones.   You can expect respect when first you have shown it.  Not every person understands or agrees with a governing decision, but shutting the door on discussion should be your second or third action, not your first.

By the same token, everyone (homeowners, Board members, and managers) should start from the assumption that there is some validity to each assertion.  After thoughtful deliberation, you may discover that a person's expectations can't be reconciled with those of the community.  That doesn't make his position wrong, only wrong for the community.
 Sometimes you will find yourself in an endless loop with an upset homeowner.  Your attempts to bridge the gap failed.  Time to redirect your efforts to more productive Association business:  It is okay to end the conversation.  Just be sure it ends in a way that you would be proud to see reported in the news.

Meeting on Common Ground

Recently, we were alerted to a group of homeowners planning a camp-out on their HOA's common area – without first clearing it with the community's Board of Directors.  When they were notified that it was not permitted due to liability concerns, the flood gate (of complaints) was opened.  Apparently this was not the first social event that had been conducted without the Board’s knowledge.

The homeowners then asked for clarification on which events (everything from water balloon fights to Easter Egg Hunts to impromptu concerts) required ‘permission’.

The common denominator is not the activity, but that it is occurring on common area, and therefore requires Board approval.  Think of it this way - you wouldn’t dream of setting up a social event in the lobby of the Coca Cola corporate office, without first obtaining permission.  The same holds true for common areas within a community, which is also a business corporation tasked with protecting property value.

While homeowners have an undivided common interest in theses spaces, the Board is the one charged with its oversight.  Anything amiss could potentially fall on their shoulders, and ultimately upon the Association itself.  The Board must be very mindful of the restrictions spelled out in the governing documents.

For this particular community, the disclaimer stated, “Owners, Occupants and their guests shall use the common areas maintained by the Association and all other Common Property and all portions of the Community not contained with a Lot at their own risk and shall assume sole responsibility for their personal belongings…”

When an insurer is drafting the policy for the community, such statements are used to carve out exceptions in coverage.  It is the Board’s discretion as to the level of risk and associated expenses it believes best benefits the Association. 

Yes, the Board does have the authority to close off access to portions of the common area, and also authorize special events in these spaces.  A frequent example:

“No garage sale, carport sale, or similar activity shall be conducted in any portion of the Community without the prior written consent of the Board of Directors.  If permitted, such activities shall be subject to all reasonable conditions that the Board may impose.”

In the camping situation described above, the homeowners refused to seek permission, with the expected consequences.  A future Board may revisit this decision, hopefully consulting with legal and insurance experts while crafting community-authorized socials. 

To Tow or Not to Tow?

Towing is a drastic step used only after other options fail - or when life & safety are at stake.  Too often, an over-eager Board member quickly calls in a wrecker, with expensive consequences for the community.  Be sure the following steps are taken to close out loop-holes:

• Review the community's Declaration of Covenants for towing notification requirements
• Confirm the tow zones are owned by the Association, not public roadways
• Issue a community-wide 30-day notice (& post at the mail box if there is one) of parking regulations and the intent to start enforcement
• Chalk the tires of vehicles suspected of being stored, and check weekly for at least three weeks to see if they have been moved
• Compare vehicles with community registration forms and contact vehicle owner
• Tag vehicles and wait a couple of days.  Tag again if these are moved but still in violation
• Provide police with the make, model and tag of vehicles scheduled to be towed.  This prevents police interference during towing, and eliminates ‘stolen vehicle’ claims
• Keep handy a copy of the Georgia Supreme Court case of Reinertsen v. Porter, showing towing from private property is authorized
• Snap two photos of each vehicle before towing:  One at a distance to show placement, and one of the tag/rear of vehicle
• Tow only on Monday, Tuesday, Wednesday or Thursday, to cut down on weekend calls
• Notify all Board members and management of vehicles actually towed, so when the calls come in, everyone is in ‘the know’
• Maintain documentation to demonstrate fair and equal treatment
• If in doubt, call off a towing event.  There will be future opportunities to tow if the vehicle owner chronically violates the regulations

Often, it only takes one round of towing to send a message, but any Board embarking on this path must be prepared to consistently tow for many months.  Changing negative behavior takes time.  In extreme circumstances where large numbers of vehicles need to be removed, be sure to employ an off-duty police officer or sheriff to assist with confrontations.  Avoid premature towing.  Be thorough and measured in your approach when it comes to removing personal property.

Focusing on the Big Picture

When talking about Board leadership, we think of things like creating a 'vision' for the community - which is easier said than done!  Instead, the Board gets bogged down with daily challenges:  A common area sewer line needs replacement; a homeowner is upset about an architectural decision; not enough people can be found to fill spots on committees or even the Board itself.

Daily minutia eats up time that should be spent on long term planning and goals. Even communities relying on professional management often find their Board members focused on managing the manager.  Such 'blue-collar' Boards take on a lot of the day-to-day to save a buck.

This approach isn't sustainable. It ends in burn-out, neglected duties, or a dictatorship. The first step out of this is deciding what you're trying to accomplish, then looking to your governing documents and other resources to help you do it. Too often Boards do the reverse, setting themselves up for failure.

Don't look at your rules as a restriction on what you can do, but as tools to model whatever you're trying to do. For example: If a homeowner is complaining about a barking dog, but the documents clearly permit pets to be left in the backyard, the Board should focus on the overall goal, not a rule that seems to close off this issue.  Perhaps their vision is that no pet should be neglected or left unattended or potentially exposed to harm.  Clearly communicate this thinking in the community Rules & Regulations.

Even if dogs are permitted to roam the yard, the Board makes clear that food bowls are not to be left outside, to avoid attracting rodents and pests. A shelter from weather is required. A reasonable limit on how long and when a dog may bark (before animal control is contacted) is spelled out. Perhaps a periodic doggie play date is set up in the local common area.

When deciding to take on a community challenge, plan for what happens in the event that the effort fails. Another example: In a condominium there is a rise in complaints on second hand smoke. The Board puts forward an amendment to the governing documents, banning smoking completely both inside and outside the home. The Board needs to determine the outcome if the vote fails.

The worst thing to do is declare that nothing happens. Such an outcome only discourages the membership. Better to avoid holding the amendment vote than to fail to plan for alternate outcomes.

When a Board faces a failure, identify the circumstances that led to this.  Don’t place blame on people. Framing the blame on the circumstances permits you to suggest a new course of action and create forward momentum - rather than inserting a wedge between people. A lot of time is wasted when people get defensive. No one wants to be labeled a fool.

Some failures are just perceived failures, not actual ones. For example, a homeowner is upset about a neighbor’s new storage shed and demands quick action. Feeling pressure, the Board cuts corners to force the removal, and in the process creates trouble for the Association. Instead, the Board needs to manage homeowner expectations on how quickly resolution will take, to avoid feeling a false deadline.

Said another way, you need to control pacing. Especially for a newly minted Board, it is easy to come in with a list of twenty action items in the first month and expect immediate resolution on all of them.

Realistically three or five of these will be resolved over the next twelve months, because of factors outside of the Board's control. Vendor response times, required notification times, weather and unplanned absences are just some of the frustrations. Remind yourself that the slowness of the process actually acts as a safeguard, allowing the Board to be more deliberative and avoid costly mistakes. This is one of the harder lessons to learn for new Board members.  Don’t let an election "mandate" translate to haste!