9 Mistakes New HOA Board Members Make–And How to Avoid Them – Article by HOALeader.com
There’s no shame in making mistakes. We’ve all made them when we’ve tried something new. There is shame, however, if you refuse to correct the error of your ways.
Here we list the nine most common mistakes new board members make and provide tips for turning those mistakes into successes.
Mistake # 1. Not learning how your association works.
Too many new board members try to wing it when they join the board. “New board members need to really learn about the association,” says David Regenbaum, founder, chairman, and CEO of Association Management Inc. in Houston, which manages 239 communities with about 62,000 units. “They should go to a course or get their managing agent to give them an overview of their roles and responsibilities and the management plan in existence at the association.”
Bill Worrall, vice president of The Continental Group, which is based in Hollywood, Fla., and manages 1,300 condominium and homeowner associations totaling 310,000 residential units, agrees. “As soon as a new board takes over, its members should sit down with the management company and do a new-member orientation,” he says. “The manager can say, ‘Here’s your financial statement. This is how we’ve been running board meetings. How would you like to do it?’ Establish a policy on how to run a board meeting and communicate that to the membership. Do that right at the beginning without waiting until the next meeting so the meeting doesn’t become discombobulated and you don’t accomplish anything.”
Mistake #2. Doing more than you’re permitted to do.
“Your authority as a board member stems from your association’s governing documents,” explains Robert DeNichilo, an attorney at Neuland & Whitney APC in Rancho Santa Margarita, Calif., who specializes in representing community associations. “If it’s not in the governing documents, you can’t do it. But I see new board members trying to do things outside the board’s authority. They’re very enthusiastic, and they want to take care of issues they care about. For example, a hot-button issue is parking. But if there’s nothing in the governing documents about regulating parking or your association has public streets, there’s little the board can do to regulate parking.”
Mistake #3. Changing the character of the association.
“One of the most egregious mistakes new board members make is coming into office and attempting to change the lifestyle the membership expects the association to provide,” says Regenbaum. “Maybe an association has an onsite manager, and the new board enters in a cost-saving mode and says, ‘We’re going to cut out the onsite manager.’ But the owners bought a Cadillac and were prepared to pay for a Cadillac, and the new board tries to force them into a Volkswagen. I’m not saying new boards shouldn’t try to save money. But be careful about changing the lifestyle that owners expected when they moved into the property without consulting with them.”
Mistake #4. Doing too much too soon.
“The biggest mistake I see is new board members being overzealous,” says Jenny Key, Austin, Texas-based vice president of RealManage, a San Rafael, Calif., association management firm that oversees properties in Arizona, California, Colorado, Florida, Louisiana, Nevada, and Texas. “Often they’ve got on the board for a reason, and they rush to make new policies without taking the time to examine the current policy, determining whether they can enforce the new policy, notifying the residents of a potential new policy, and getting them to buy into it. Any good decision should take some time to be made. Decisions shouldn’t be knee-jerk.”
Mistake #5. Not investigating why policies are the way they are.
New board members sometimes jump into their new roles without understanding why previous boards have implemented—or not implemented—past policies. Perhaps a previous board also wanted to make big changes, but it ran into resistance or learned it didn’t have the authority or funds to achieve those changes. “There’s often no effort to sit and observe rather than to bulldoze,” says Regenbaum. “New board members want to change things without realizing there were reasons for that practical process that’s been put in place. Act deliberately. Don’t shoot from the hip. Have full knowledge of the background on a policy and the reasons for it. Do your homework before you make change.”
Mistake #6. Changing vendors hastily.
“When a new board is taking over from a previous board, and you didn’t like the last board, avoid passing judgment on your hired professionals like your CPA, landscaper, and managing agent until you’ve had a chance to meet with them,” says Worrall. “If you didn’t like what they were doing before, understand that those contractors take direction from the board.”
Mistake #7. Not learning from previous boards.
“Some new members assume the last board did nothing right and don’t understand that making big changes affects everyone in the community,” says Key. “They don’t learn from their predecessors by reading all the minutes and doing all the hard work. That leads to boards creating a policy instead of saying, ‘Here’s a draft policy that we’d like feedback on.’ Then they get run out of office or burned out after a negative response because they didn’t take the time to understand the association’s history.”
Mistake #8. Thinking secrecy is permissible.
“Some new members don’t realize that transparency in an association is a good thing and goes a long way toward giving members the feeling that the board is doing the right thing,” says DeNichilo. “They don’t want to talk about issues publicly, and that leads them into trouble.”
Mistake #9. Not taking the long financial view.
“Some new boards spend money they don’t have,” says Key. “They think, ‘We need to do this,’ or ‘Homeowners have been asking for this.’ But they don’t take the time to look at their overall financial position in a 5- or 10-year span. Unless new board members are CPAs, many don’t understand how to look at association financial records, including accounts receivable, and understand how much money they really have to work with.”
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