My community is in the process of exchanging power from the builder to the community. I’ve thought about participating, but I would like to hear from some that are currently serving on their HOA board and offer some examples of current issues typically handled by the board.
Discussion Forum
Discussion Forum
Up Next
Video Shorts
Featured Story
Fine Homebuilding's editorial director has some fun news to share.
Featured Video
Highlights
"I have learned so much thanks to the searchable articles on the FHB website. I can confidently say that I expect to be a life-long subscriber." - M.K.
Replies
Hey Nuke,
Well, I served on the HOA board for a small condo development. Thirty-six units, in four buildings, brand new when we moved in. I was on the Board (as an officer) for nine of the twelve years we lived there. This was about 14 years ago.
My experience is based on this situation, four buildings with no clubhouse or pool, and very little in the way of grounds to maintain. The CCRs said owner-occupied only, no rentals.
My advice, if it's a HOA in a development with clubhouse, large common areas, etc, don't even think about serving on the Board unless the HOA has budgeted for a professional management company to collect dues, deal with maintenance and resident confilcts, and manage the budget.
Typical stuff I dealt with:
1. Of the 36 units we usually had one or two with total ####/idiot owners. Would be very loud and obnoxious to immediate neighbors, park and block other's driveways, not pay HOA dues, allow ivy to climb onto the building or erect awnings or other stuff attached to the building that didn't meet the guidelines of the HOA. One or two rented out their unit in violation of the CCRs.
Having a professional management company meant we on the board didn't have to confront these people on every issue. But eventually, the board had to confront a few of these jerks and threaten to fine or lein their property.
2. Most people just didn't get the fact that they had to pay dues to build adequate reserves for roof replacement, repainting, fence repair, and contingencies.
And special assessments--those are cause for near murder. We had to levy one, with the assent of the residents, of course. About ten years into the life of the buildings, there were areas of the exterior that clearly needed repainting.
The developer didn't fund adequate reserves the first couple of years, and the management company that they recommended (and the board used for the next couple of years) didn't do a good job of calculating the reserves needed. So about 4-5 years in, we realized that dues needed to go up quite a bit. People just wouldn't go for it. So when the building needed repainting, we needed a special assessment. Don't expect to be popular if you're on the board and propose a special assessment. Yet as an association officer, you have a fudiciary responsibility to work to ensure that the HOA is adequately funded.
3. Some other board members. Occasionally you're going to find someone who wants on the board to be a bully. Since no one generally wants to serve, anyone who volunteers is usually elected. As board secretary, I once had to convince the board pres. not to fine a homeowner for having potted plants on her balcony. The concern was that water overfolw would rot the redwood deck and affect the roof of attached garage below. The pres was ready to fine her and lein her place and forclose, because whe was ignoring the board. Way out of proportion to the issue.
4. Construction defects. If there's any construction defect found, the boardmembers are going to have to spend their tome to represent the interests of the association. We had a couple of construction defects, and it took a LOT of my time and the other board members to get things resolved.
All in all, it was a lot of work and very rewarding. Funny how those things tend to go together.
Good luck,
Cliff
Hey Cliff, thanks for relating your experience and the advice. It is unfortunate that we humans cannot seem to separate what we sign up for from what we felt we are owed. Rational, logical, sensible discourse has always been a blind concept to the human species. :)
Nuke-
I serve on the board of an assn of 81 single family homes. Our main operation is a pool area with tennis courts. Most of the heavy lifting is hired out (pool maintenance, etc.) A couple thoughts:
> My wife and I participate, because we believe this is important for our quality of life. We are willing to volunteer to make our family life better and to help our neighbors. However, we have been disappointed in how many other neighbors take a free ride, never volunteer for the board, or don't even show up at once-a-year clean up days. Some of this is typical free-rider attitude, some is just a reflection of the times: people are busier than ever, both spouses working, kids doing too many activities, etc.
> HOA board seats are volunteer jobs, but the non-volunteers treat the board as if they are hired help. Perhaps this is human nature, but be ready for it. When someone calls with an "idea", be ready to "empower" them to take the lead on it. Don't let them dump their ideas in your lap to execute. We also get called to address issues that otherwise would be standard neighbor to neighbor affairs (Mr. Smith isn't putting his trash cans away, Mrs. Jones isn't cleaning up after her dog...) Not my job man! Tell them yourself!
I don't mean to be negative, and I'm glad we have our assn and will continue to volunteer. The other people who care are involved, and those tend to be the ones whose values we share. I just think it's helpful to set expectations. You might be surprised at the calls you will get.
I think you might also find that lifecycle is on your side. When our assn was brand new (30 years ago) there was great enthusiasm. We had run-off elections for some of the board seats, and lots of activity. Today, we struggle to fill open seats.
Overall, the board position takes little time and gives me a real chance to affect the immediate environment in which my kids are being raised.
Good luck with it.
Rick, I think you mentioned something about difficulty currently filling seats. Current email communications going about for initial meeting to exchange powers includes myself, a rep for the builder, at least one individual from the current management company, and seven other email addresses. This means at most only eight people in my community have shown interest and provided an email address for communication.
Of course, even simple things can be difficult and grand in interpretation from one community member to the next. For instance, if I were ask each member what it means to be a good neighbor to those adjacent to them and then write it up and email it to me for an anonymous community editorial, I bet there would be colorful, strange, and differences in what it means. And the same wide-reaching variety of responses would be expected in anything asked. :)
And with the board members being in a voluntary role, I would hope the primary concern is protection of board members from anything legally and financially negative resulting from inexperienced decision-making. Next, promote information and communications to all through the use of modern communications. And finally ask the community what exactly they want, don't want, and everything in between once the builder is finished.
Nuke-Per your 3rd paragraph, our board carries Directors & Officers Liability insurance. Regardless of the level of "inexperienced decison making", I think this is a must. -Rick
In the February 11, 2006 issue of "The Washington Post" under "Mailbag" Real Estate Section, there was an article devoted to the condo changeover. I hope they still have it in their archive. Hope this helps.
MissD
As a current secretary, since 1998, of our townhouse condo assoc., I have found so much information from CAI.org. I print out what I think is useful information, pass it along to the current president, nothing happens.
I've discovered only the president had his agenda (we've never had a female president.) Hmmm, things could change?
Per your request, I tried to get the article that I mentioned in "The Washington Post" and couldn't find it. Iit is in the Real Estate Section. The column is "Mail Bag." I'm sorry you and I couldn't retrive it.
Unfortunately, for you, I read the paper and dispose of it the same day.
Edited 2/19/2006 11:01 pm ET by MissD
Update!
Last night we held an informal meeting of those interested in serving on an advisory board, which will get turned completely over at the end of the fiscal year (which is in sync with the calendar year). According to the builder, who was present, and the current HOA management company rep, letters were mail to all 78 residents, and from observation about 15 people showed up last night representing only about 8-9 homes (five couples, and five singles).
The discussion involved the process of migrating from builder-controlled to community-control, current budget, expectations at the time of full turnover, anticipated turnover time (April, June at the latest), etc., and the current management company's role currently and potentially was the transition takes place.
I was surprised to hear that at least a couple of residents were in the situation of being legally processed against by the builder (law suit). Seems that these folks have not been paying their respective HOA fees for four years, and the builder has been subsidizing the HOA accounts. He insists this will end in April, so he's going after them. Wow! Also, seems that someone has been throwing trash and or rocks (baseball size) into the pool. They have yet to identify the culprit as being an adult or someone's child. Boy, this is going to be fun (cynicism).
We are scheduling a formal 1st meeting in which those individuals wishing to be on the advisory board will also hold vote as to assigned preliminary responsibilities, and expectations of them therein. Funny thing is that my hermit-designation showed true as I only recognized a couple of faces and the rest were completely new to me. Time to get out there and meet the neighbors.
Anyway, we first have to find a good meeting place since this time we expect the 1st formal meeting to bring in about 40 people, instead of last night's ~15. Also, I think we need to consider the things mentioned here and also what other HOA management companies offer for the various levels of service for the first year. Thankfully, one of my good neighbors has previous HOA board experience.
RickGreg,
Our own HOA needs to get this D&O insurance as well. What company do you have yours with? I'd like to see what they can do for us.
Thanks,
doo
P.S. The New York Times published an article on Feb. 5, 2006 (Providing Insurance for Board Members) about the necessity/value of D&O insurance. Though the article was aimed at Co-op boards it clearly has value to all Homeowner's Associations.
I'm not certain which co. provides our D&O. It is part of a package of coverage our local agent handles for us. I suggest you talk to an insurance agent.. they will be able to tell you who offers such coverage in your state... and get you pricing.
HOAs are a wonderful glimpse into human interactions. Aside from the association's D&O policy, board members might consider adding a liability rider to their own home owner's policy covering any volunteer activity. The cost is usually quite low. Your insurance agent should provide guidance as to which is your primary policy and which is subservient. Every nonprofit board should include in their by-laws a means for removing a Board member. (And then only use the procedure as a last resort.) Individual states codify the legal responsibilities of members of the corporation. Once I was on a HOA Board that decided to hire a management company for the small complex to enable us to recruit the requisite Board members. Sadly, it turned out being a significant cost savings method as clearly there was an identified cost to suggested improvements or maintenance that some owners thought were free with volunteer decisionmakers. Your by-laws are an excellent tool as to what the HOA is and is not responsible to handle.
Nuke,
1. A great source of guidance is the Community Association Institute (http://www.cai.org). They offer information, training, publications and guidance on just about anything you would need to know about effectively and successfully operating a homeowner's association (Board and officer duties, meeting and election procedures, self-management-vs-professional management, legal issues, conflict resolution, architectural review board operation, reserves, etc.
2. Considering that a HOA is probably the most "local" government body you will possibly ever be subjected to, the board should be careful in selection/hiring of a association homeowner as the "resident manager". Just like any political organization, certain personalities can turn a neighborly community into "them vs us" cliques that are difficult-to-impossible to displace, considering the usual number of "inactive /I don't want to be bothered" residents.
Note: This link goes to a religious site. Could you recheck and post the one related to Community Organizations. That is the one I want to see on this issue. Thanks!
Update: I Googled Community Association Institute and the link is:
http://www.caionline.org/
I'm going to pass this on to our President. Thank you for the tip.
Edited 2/22/2006 6:30 pm ET by dtgardengirl