How to Run a Successful Capital Improvement Project for Community Associations – A Best Practices Primer for Board Members and Property Managers
The High Cost of Deferred Capital Repairs – A Primer for Community Association Board Members of Condos, Townhomes, HOA’s and Cooperatives
Community Association Best Practices – Fiduciary Responsibilities for Board Members of Condo, Townhome and Homeowner Associations
Volunteering to serve on the board of a community association is an opportunity to help in a way that can significantly improve the quality of life of all the homeowners. Board members have a significant amount of authority and can raise assessments, approve special assessments, improve the grounds and curb appeal of the association as well as make improvements and capital repairs to the interior elements of the association. Along with that authority comes the responsibility of serving on the board. In this article, I would like to share some of the important fiduciary responsibilities of board members and qualities that are demonstrated by highly effective board members.
- Duty of Loyalty (duty of good faith): As a volunteer board member, you must always act in the best interest of the association. This means that you should not act in a way that furthers your personal interests if they conflict with the interests of the association. Rather, you should focus on what is best for the association long term.
- Duty of care: In order to act in the best interest of the association, board members must make informed decisions. This requires the board members to have a good understanding of the governing documents of the association including the declaration, bylaws and rules and regulations. In addition, board members must understand that the rules and regulations should be applied evenly to all homeowners of the association and not in a random or biased manner.
- Duty to act within the scope of authority. Board members should understand that there are limitations to their authority. As a result, the board should only act in ways that are clearly permissible in accordance with the governing documents as well as the local and state laws that apply to the association. For example, the board cannot unilaterally decide to de-convert an association from condos to apartments without the approval of a certain minimum percent ownership of the association owners.
- Good Listener: One of the most important qualities of an effective board member is to have excellent listening skills. Although the president of the board is considered the leader of the association, all board members are leaders in a sense. As a result, all board members should have good leadership skills including good listening skills.
- Open Minded: Board members should be open to the suggestions of the homeowners. These suggestions might come during a board meeting or when in the elevator during a conversation. Regardless of how suggestions or opinions are brought to the attention of board members, these opinions should be taken seriously and considered carefully by the board of directors.
Knowledgeable: Every board member should take the time to understand the basic principles of running an association. As mentioned previously, this starts by understanding the governing documents first and foremost. It also means taking the time to understand basic concepts related to the maintenance and repair of the association elements. The more informed and knowledgeable the board members are, the more effective the board members can act as a team in the best interests of the association. - Good team leader/team player: Although each board member has the power of a vote, there should be good teamwork and camaraderie amongst the board members. The president should take the lead at the board meetings and take the initiative on matters when appropriate. In addition, the other board members should act in a way that creates an atmosphere of harmony and unity that results in an enjoyable living experience for all the homeowners.
- Consistent: Board members should understand that volunteering for the board requires consistent effort. This means spending a few hours a week or a month depending on how many board meetings take place at the association or how many pressing issues are at hand. In addition, consistency means showing up at every board meeting prepared to make good decisions.
- Prepared: As stated previously, it is essential that board members take the time to prepare for board meetings. Board meetings are probably the single most important occurrence in the management and operations of the association. Well prepared board members will result in more effective and efficient board meetings. This in turn will ensure business takes place, decisions are made, and the association is maintained in a way that ensures an enjoyable living environment for all the homeowners.
- Committed: Once a board member agrees to serve on the board and is elected, there needs to be a commitment. This means to spend the time necessary to learn about the association, to read and understand the governing documents, to prepare for board meetings, to attend all the board meetings and hearings, to listen to what the homeowners are saying and wanting and to do whatever else is necessary to properly administer the association.
SUMMARY
Volunteering to serve on the board of directors is an opportunity to develop leadership skills. The position also requires the volunteer board members to act in a certain way that furthers the interests of the association as a whole and not in a way that further individual interests. For those board member volunteers that are willing to spend the time to act in a proper way and to lead in an effective manner will result in a most enjoyable community living environments for all the homeowners.
