HOA Property Management for First Time Board Members
Whether you’re thinking of running for a seat or you’ve recently been elected, serving on your HOA board is an important role. You’ll be tasked with making decisions that impact your neighbors, as well as guiding the financial path for your HOA. It’s a lot of responsibility for a group of volunteers who may have varying business background and may also have limited experience serving on the Board of what amounts to a multi-million-dollar nonprofit corporation.
Luckily, you have lots of resources at your disposal, all established to help you perform your duties better. In this article, we’ll demystify the process of serving on your HOA board.
Thinking of running for a seat? Talk to your management company.
Most people who decide they want to be a board member have no idea where to start. Don’t worry. Your HOA property management company is available to help. Talk to your manager about the fine details of campaigning for a seat on the board. This will include community-specific regulations like election dates, whether or not door-to-door campaigning is allowed, if you need to write a candidacy statement, etc. Every community is different, and you will need to follow election rules or risk disqualification.
Focus on the big picture.
Your role as an HOA board member is to always act in the best interest of the community as a whole. That means that personal projects, while they may be important, should not be the crux of your role. Think about how your pet project ladders up to reflect the current operations or future trajectory of your community. Streets in disrepair might be a symptom of maintenance standards that need updating. An unused clubhouse may indicate that your HOA lacks events that foster a sense of community. Your focus should extend beyond a single issue; it should be a comprehensive vision. Serving your community means being prepared to listen closely and carefully evaluate all sides of an issue. Approach all decisions with an open mind.
Know the importance of your fiduciary duty.
Board members have a fiduciary duty to the HOA, which involves directing the flow of millions of dollars annually. Fiduciary responsibility is “a legal obligation of one party to act in the best interest of another,” which means that you are required by law to make financial decisions that are in the best interest of the entire association.
In order to undertake this important responsibility, you’ll need to familiarize yourself with the financial health of your community. Examine your HOA’s reserve study and review the previous 6 months of financial statements and cash flow, paying attention to what comes in from assessments and how much the association spends on a monthly basis. If big (or expensive) projects are planned, make sure that the HOA is meeting the obligations for the community according to its reserve study. In plain terms: make sure that the community is setting aside sufficient funding for these projects.
Don’t worry if you’ve never read a financial statement before. Your management company can assist. At Keystone, we offer financial training to board members to help you understand the critical components of the financial statement, including a detailed understanding of the overall financial health of the association. As with any aspect of HOA management, if you have questions – speak up!
Get up to speed on HOA business.
Just because seats on the board turn over doesn’t mean that the association’s month-to-month operations pause during an election. Taking over a seat on the board is like jumping into a flowing river. Read your community’s governing documents, including Covenants, Conditions & Restrictions, Bylaws, Rules & Regulations and Architectural Guidelines. Then, take the time to learn about the status of all ongoing projects: their cost, the vendors involved, how far each is from completion, and any associated challenges. At Keystone, we provide board member orientations to get new members up to speed quickly on what serving on the board entails, how to make the best decisions for the community, and all of the association’s current projects. Knowing more about the current issues facing your association and your HOA’s structural operations will provide you with important information as you move forward.
Due to state regulations and each individual community’s bylaws, change in an HOA happens slowly. This is to ensure that careful thought is given to each decision and every party has a chance to be heard. Operations in a homeowners association mimic a parliamentary process, with lots of opportunities for checks and balances along the way. This is to protect the interests of the HOA and all individual members.
It’s okay to be eager to start on a new community improvement project. However, it’s important to recognize that all change must follow due process. Your HOA property management company is there to make sure that the association abides by all local and state laws as well as community management best practices.
Remember, serving on your HOA’s board of directors is an important commitment. Dealing with large sums of money and making decisions that will affect the trajectory of an entire community is something that deserves your full attention. Make sure that if you run for a seat on the board, you’ll be able to fulfill your entire term. Through your conscientious decision-making, you’ll be an important part of a team whose time and energy make your community a wonderful place to call home.
Want to know more about serving on your HOA’s board of directors? We’re here to help.Posted by on | Categories: HOA Board, HOA Management.