Community Association Board Mistakes: How to Avoid Them
Community association boards are bound to face many difficult decisions in the course of their work. Conflicts between individual owners and the board, financial hardships, unexpected disasters: there are many points where decisions need to be made, and a good board want to make choices that will benefit the entire community, not just a few owners or influential board members. When an HOA board gets it wrong, it can take time and hard work to build back trust and community commitment.
Here are a few examples of mistakes that community association boards can make, and some tips on how to avoid them in your board.
1. Inaction on important issues
Whether it's refusing to take action against a board member who committed a wrong, or ignoring a troubling budget issue on the horizon, it's never a good idea for a board to put off taking action. Serious issues won't just resolve themselves, and odds are that the board will find itself dealing with the same issue in the future. It might also snowball into a worse problem.
Not only does inaction risk a larger problem down the road, it sets a bad precedent for community members and future board members. To avoid this mistake:
- Recognize issues that are serious or might become serious.
- Don't be afraid to take action against any owner or board member if it's really necessary, no matter how important or vocal they are.
- If the board can't come to an agreement about a difficult decision, don't just abandon it. Call in outside experts and stick with it until something is done.
2. Making policy exceptions for just one or two owners
As illustrated in this example, if your board makes a hasty decision that benefits just one or two community members, it could come back to hurt the entire association in the future. Not only can those decisions be called into question by new boards in the future, they may often be made without proper documentation, budget changes, or policy changes.
While you might genuinely want to help a community member who's in a tough spot, you need to take a step back and look at what is best for the association as a whole. In the example cited above, waiving fees for members who were hit by a natural disaster caused a budget shortfall for the HOA, and created a tangle of legal and policy issues for a new board. To avoid this mistake:
- Consider any individual's request in the context of the association as a whole.
- Look at existing policies for ways to help them that don't require special treatment.
- If you do decide to change policies or make an exception, definitely be sure to document everything in meeting minutes and memos so that future boards are less likely to retaliate.
3. Being "penny wise and pound foolish"
Many community association board mistakes revolve around budgeting, a challenging issue for any board. It can be very tempting to defer maintenance, make inexpensive choices when having work done, or make other decisions intended to reduce expenses. But putting off maintenance now can lead to larger, more costly issues down the line. Doing "band-aid" repairs or maintenance rather than investing in upgrades can also end up costing more over time.
To make good financial choices while staying within the association's budget:
- Look at the long-term impact of any maintenance issue that you want to delay - what will it cost if the system breaks in a few months?
- If you're considering a "band-aid" type of repair, price out the cost of several such repairs compared to the cost of doing a full repair or replacement.
- Consider increasing assessments or implementing a special assessment to make necessary repairs and perform maintenance.
To avoid these and other community association board mistakes, consider using a property management company who can improve board decision-making and communication. Contact RealManage today to learn more about our services.