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Mistakes that Self-Managed Boards Make

Abstract - Homeowners’ Associations and Condominium Associations that are self-managed provide many opportunities for their Boards to create a virtual Dual- Class system of the have and have-not members. Boards can create this system accidentally, or by choice, by misinterpreting Associations' state laws or governing documents.

The E-Book, Crushing the Dual Class System of Some Self Managed HOAs, that can be purchased on our Website, refers to a Dual Class form of membership that usually evolves over time for two different reasons: (a) the initial Board 's intentions were self-serving or (b) the Members passively allowed the Board to become self-serving. In other words, the System is a Process that usually unfolds slowly over time.

The E-Book takes the position that members should be more involved in the process for selecting their Boards and for monitoring their Board's activities carefully so that they can protect their rights to obtain services, repairs and improvements that should benefit all of the members. In fact, there are many Self-Managed Associations with Boards that unintentionally become self-serving which the Board can probably prevent from occurring by reading the E-Book. For example, if a Board does not advise members of a Board's decision to amend an Association's governing documents, the Board may have overstepped its authority without realizing it was doing so; and sometimes these decisions are irreversible.

Therefore, Boards should read their governing documents carefully if they are considering the adoption of an amendment to a governing document because Boards are typically given more freedom to make operational decisions without members' approval; and members are usually given the authority to amend their governing documents. Apparently this has been a problem in Washington because in 2018, the Washington Legislature enacted RCW64.90 for all new HOAs created as of July 2018 which differs from RCW64.38 that applies to preexisting HOAs. Two new sections were added to RCW64.90 because of Boards have overstepped their authority to amend governing documents. One of these new sections to RCW64.90 defines the word "Association" which I thought was obvious; but some Boards assume they have the right to "act on behalf of the Association" which is true for rule-making; but not necessarily true for amending governing documents, unless the governing documents specifically state the Board is allowed to amend a particular document. The other new section of RCW64.90 states that if an amendment will grant special rights to a subset of members, the vote to approve it may require as much as a 90 percent vote from all of the lots in the Association. Therefore, both members and their Board must be especially observant of the Boards' decisions if their Associations are governed by RCW64.38, instead of RCW64.90 because a self-serving Board could modify practically every feature of the HOA to suit the Board's preferences; and sometimes these changes are irreversible and adversely impact the other members.

In closing, I assume that only a small percentage of HOAs and Condominium Associations have Boards that intentionally abuse their authority for self-serving reasons. But, a much larger percentage end up being self-serving for reasons presented in the E-Book, Crushing the Dual Class System of Some Self Managed HOAs . Therefore, I recommend it for both members and their Boards because it is a cost effective approach to avoiding a lawsuit and costs for improvements that the majority of members did not approve.

E-Book can be purchased for $5.99 exclusively from our website, Simply select the PayPal icon from the main page of our website and PayPal will handle your secure transaction. You will be asked to list your email address which is sent to our email address, Upon receipt of your email about your order through PayPal, your E-book will be sent to your email address.

senjoyment of every member.

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