Improving an HOA's Management Style

It is far easier to find published articles about HOAs that are nightmares for members than it is to find those that are managed well. This is especially true for self-managed HOAs. The reason should be obvious if the Board’s directors are volunteers because the accounting responsibilities alone could easily cost $5,000 per month for an HOA’s membership of less than 400. Therefore, based on the amount of volunteer time a member has to serve on a Board of Directors, quality of the management can be poor depending on the Board’s management style. However, a number of steps can be taken to improve the management style which improves members’ satisfaction with their HOAs.

Clarifying Responsibilities - The Board cannot understand its responsibilities until the Directors have carefully read the HOA’s governing documents or those sections of these documents that cover their responsibilities. In some cases, this will require extra reading because the Board’s activities cannot conflict with state laws and city or county ordinances which can be amended or repealed over time.

Resetting Responsibilities - A Board must elect officers, and the other directors on the Board will usually

be assigned other responsibilities that they handle independently. However, some responsibilities can, and probably should, be assigned to more than one director in order to share the workload. An even better solution would be to activate committees of 3-5 members who are not serving on the Board because they can assist directors with handling certain aspects of the directors’ assigned responsibilities.

Promoting Transparency – Most problems start out small when they are easier to solve. All Boards of Directors of HOAs must conduct business only at Board’s scheduled meetings. The Board should post the agenda, time, date and location for each meeting in advance, and the Board must post or mail the Minutes of their meetings to members. (Effective July 1, 2018, if this is not an HOA's requirement, it is one in Washington).The Minutes must usually be written in accordance with Roberts Rules. Copies of Roberts Rules are posted online for free articles about preparing the minutes of meetings are also posted online. The Minutes should follow an agenda. All discussions that require a decision should start with a director's stated “motion”, that must be “seconded” by a different director. A discussion may follow and if no one wants to vote on the motion, then it ends or set aside for another meeting. If a vote is taken, the number of members who voted for, or against the motion,must be stated, a well as, the number of abstentions.

As a practical matter, the Minutes of every meeting should be concise; but if a member who attends a meeting reads the Minutes of the Meeting later, and an important decision at a Meeting has been omitted, then Minutes were not prepared properly. The member may actually object to the exclusion of important matters. Therefore, the Minutes should be posted prior to the next meeting so that the objection can be made in a timely manner before the Board approves the minutes from the previous meeting.

Improving Cross-Communication-Minutes are a form of one-way communication. Of course, an HOA’s members are neighbors who can share concerns about their HOAs; but in order to elevate the concerns so that the Board of Directors becomes aware of them requires a different form of communication. Having assisted HOAs improve their methods of cross-communication, it is amazing how many Boards overlook it. But consider the impact of overlooking cross-communication as a style of management. Who would run a business that way? Andy Groves, probably Intel's best former CEO, was known for actually reading the performance reviews of his employees because he was concerned about them and knew they were important to Intel's success. So, how will an HOA's Board of Directors create a successful HOA? It cannot restrict its communication to the Directors' neighbors and more than Groves could restrict his conversations to his Vice-Presidents.So, perhaps the HOA's Board can begin by setting up a twitter account. Even the President of the United States does that. Technology today makes is easy engage in cross-communication. To find out more...contact us!

HOA-Consulting-Services Can Help. HOA-Consulting-Services is an independent company providing consulting, direction, and project management services to your HOA Board of Directors. We are not a management company, nor a replacement for the management company. HOA Consulting works with the Board of Directors to identify and address items that are the responsibility of the Board and the community as well as items that may be beyond the scope of the management company agreement with the HOA. Some of the common items include:

  • Changing or updating community documents.

  • Surveying members to identify their priorities.

  • Finding grants or programs available for your community

  • Developing strategies to cut expenses without cutting services

  • Planning and Funding for Capital Improvements or Repairs

  • Reviewing reserve study report with Board and provide recommendations for long term financial goals.

  • Working closely with the Board of Directors on the annual budgeting process.

  • Providing recommendations to Board of Directors on financial reporting and spending trends.