5 Big HOA Board Mistakes to Avoid
Most folks who serve on community association boards have a strong commitment to their community and bring a sincere desire to serve their neighbors with integrity. What most board members don’t have, however, is significant experience with the often-complicated tasks involved in being stewards of their building, development, or neighborhood. That is why, despite the best of intentions, homeowners’ association boards frequently make mistakes that can be costly and frustrating.
If you are a member of a community association board, you and your colleagues should be vigilant about avoiding these five common HOA board mistakes:
- Slow collections. No one relishes the idea of being a bill collector, but it is one of the central responsibilities of a board to ensure that all property owners are pulling their weight and contributing their fair share of assessments and fees. The reluctance to come down on a friend or neighbor to pay what they owe can create cash flow problems and set a bad precedent going forward. Some delinquencies may ultimately require legal action. As fiduciaries of your community, your duty to ensure that rules are followed and bills are paid needs to trump your natural inclination to cut your friends some slack.
- Losing track of financials. In addition to ensuring that required assessments are being paid, your job is also to keep that money safe and use it appropriately and prudently once it is in the board’s hands. The only way to do that effectively, and to protect those funds from fraud, theft, or mismanagement, is to review the association’s financial statements and every transaction. Never allow one individual to have unlimited and unsupervised control of association funds, as that is a recipe for malfeasance.
- Lack of transparency. You are representatives of your community in the same way that other elected officials are. Like those officials, the business you conduct is your constituents’ business. That means they have a right to participate and be informed of the board’s activities. Meetings must be open to all community members, and proper notice needs to be provided before any meetings to allow owners the chance to attend. Secrecy and a lack of transparency in conducting board business creates suspicion and distrust which will only foster conflict and discord.
- Failing to learn. When new members join the board, they should take the time to fully understand the association’s controlling documents and speak with their new colleagues about their roles and responsibilities. You can only do a good job if you understand what the job is. Avoid the temptation to presume you know how things are or should work. Instead, get a complete picture and if there are issues and concerns, you will be better positioned to address them.
- Failing to get help. Very smart people serve on community association boards. Very smart people also seek professional assistance when it comes to the unique legal, financial, and practical issues that boards face on a regular basis. Boards should seek out trusted advisors who can answer questions, provide sound guidance, and keep association operations running smoothly.
McDonald Fleming Moorhead’s experienced community association lawyers provide seasoned representation for all forms of common ownership property throughout northwest Florida. This includes condominium associations, cooperative associations, commercial condominium associations, mobile park associations, and homeowners’ association attorneys.