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Top 10 Tips for 1st Time Community Association Board Members – A Primer for the Board President, Secretary and Treasurer
And the board of directors of each community association have a vast amount of decision-making authority. Furthermore, a homeowner’s community living experience is mostly dictated by the actions of the board of directors. As a result, it is ideal that the homeowners that volunteer have some prior experience serving on a community association board and have a fair amount of business management experience.
However, that is not always the case. In some cases, associations have veteran board members. These are homeowners that have lived in the association for 10 to 20 years and have served on the board for the entire time or have served off and on the board for several terms during their time as a homeowner of the association. Eventually, the veteran board members move out or simply do not want to volunteer anymore. What happens in that situation? Often in these situations, the only homeowners willing to fill the open positions and serve on the board are first-time board members. These are homeowners that have never served on the board and may or may not have a fair amount of business management experience.
When homeowners serve on the board for the first time, it is imperative that they are aware of certain actions that are critical for their success as a volunteer board member. Here are the top tips for all first-time board members:
10. Review the management agreement. This should be the first action taken by a board member and especially by board members that do not have experience serving on the board. In addition, make sure to write down all the questions after reviewing the agreement. Lastly, make sure you make note of the cancellation terms of the agreement. This is probably one of the most important sections of the management agreement.
9. Setup a board training session with the management company and create a good working environment between the board and management. Welcome to the board of directors. If you have never served on the board, you will need to learn your duties and responsibilities rather quickly. Arrange a training session with your management company. Another way to learn about your role is to visit the Community Association Institute website, www.caionline.org, and check their library of articles. It is very important that you understand your role as the President, Secretary, Treasurer or Member at Large and fulfill those duties to the best of your ability.
8. Give management the benefit of the doubt. If you are new to the board, I encourage you to give the management company the benefit of the doubt if something goes wrong. In some cases, what you think is wrong might not be wrong. In other cases, it might be wrong but not the fault of the management company. There are cases where the management company will be at fault but make sure to not assume that right off the bat.
7. Review the capital plan and/or reserve study. One of the most important actions to take as a new board member is to investigate whether or not the association has a reserve study and/or a capital plan. If so, make sure to read and familiarize yourself with this important information. If the association does not have any of these items, make sure to recommend that the board obtain these items.
6. Confirm dates for the upcoming board meetings and the subsequent annual meeting. How does the association conduct business? All board business ideally takes place through a board meeting. There are some circumstances where that is impractical like where there is an emergency flood or leak, and a plumber needs to be called. Regardless, all board members need to be aware of the upcoming board meetings and their attendance should be considered mandatory. Furthermore, make sure to understand your duties and responsibilities at the board meetings before you show up at the next board meeting.
5. Review service provider contracts. What vendors does the association have? Are you happy with these vendors? Make sure to set reasonable expectations before simply saying the vendors need to be replaced. What are the terms of the agreements? Meet with the vendors if there are any service issues and make sure the vendors are aware of your “reasonable” expectations before making any sudden rash decisions on vendor changes.
4. Review the operations plan. The day-to-day 12-month operations plan is very important for the association. This is the plan that indicates what services are going to take place and when. For example, is the association going to have carpet cleaning and window washing this year? If yes, what month will these services take place? What about dryer vent cleaning or hydro-jetting of the main plumbing line?
3. Review the rules and regulations. First, check to ensure your association has rules and regulations. There are associations that do not have any. If you do not have any, you need to adopt them soon. If you do have them, review them, and compare them to industry best practices and modify your rules at an upcoming board meeting. This is extremely important to avoid future headaches.
2. Review the last 12 months of financial statements. One of your first acts as a board member should be to read the financial statements. If you have any questions, make a list and check with the other board members and then go back to the management company and ask them to review the statements with you and also review all your questions.
1. Switch management companies if you are unhappy after a 6 month “trial” period. Are you still unhappy with the management company after the six-month “trial period”? Maybe it is time to switch companies. Make sure you keep in touch with the other board members and see their thoughts on the situation. You will need a consensus, but it is better to switch than to stay unhappy and remain afraid of changing simply because you want to avoid the fear of change.
SUMMARY
Serving on the board is critical to the success of your association’s health and wellbeing. Some homeowners enjoy serving many terms while others like to serve one term and stop. Regardless of whether you are a veteran board member of a first-time board member, there are certain actions and behaviors that are essential to ensure you fulfill your fiduciary duty. Follow these essential tips and you will avoid many headaches over the long haul and you will create a much more enjoyable community living environment for all of your fellow homeowners.
