How to Ensure You Are Making Good Choices, Meeting Roles & Taking On Responsibilities.
Serving on the HOA board can be a very rewarding experience, but it also comes with a lot of responsibility. Whether your community association is big or small, being an HOA board member is no easy task. There are meetings to attend, decisions to make, and duties to fulfill. As a board member, it’s important to follow best practices and keep the best interest of the community as a whole in mind.
The following are tips and best practices to consider:
Role/ Fiduciary Duty
Fiduciary duty simply means the Board has an ethical and legal obligation to make decisions in the best interest of the entire Association. That’s a small explanation for a very big responsibility. In a nutshell, when you are a board member for a community, you need to act for the good of the community as a whole and not for yourself. You have a duty to make decisions for the benefit of all instead of just your home or your friends’ homes nearby.
Authority
Remember that as an individual board member, you do not possess any individual authority to act on behalf of the Board of Directors. Rather, the Board members, as a unified whole, make decisions as a group that positively impact the community.
Governing Documents
The best way to quickly learn how your association works is to read your covenants, by-laws, and other governing documents. You’ll quickly find out the things you’re required to do and where you have some flexibility. It’s also easier to communicate with neighbors when you know the facts. Being familiar with all of the governing documents doesn’t mean you will know them inside and out by heart, but you should know the most common policies and procedures and where to find these documents for reference.
Financials
Understanding the association’s finances and expenses related to its operations is a crucial part of serving as a director. Almost all decisions made by the board of directors in one way or another comes back to budgeting, funding the reserve, and spending money. This is also particularly important because the scale of an association’s finances and operational scope is typically much more complicated than the personal finances of an individual volunteer board member. Directors should review the Association’s budget and obtain a basic understanding of what services the association provides and how those costs impact the association’s financial planning.
Meetings
When the board meets, it’s time to get things done. But a poorly run meeting can actually create more challenges than it solves. There’s an art and science to a productive meeting, but it boils down to a few simple processes.
First, make sure you’ve designated a meeting chair. This person drives the meeting and helps everyone stick to the agenda. It’s their job to stop irrelevant discussions before they derail the entire conversation. Everyone should assume responsibility for maintaining efficiency – that means keeping comments succinct and being prepared by reading the agenda and meeting materials before the meeting.
Also, remember proper parliamentary procedures. For instance, actions are determined by a board member making a “motion.” The chair should repeat the motion to make sure all attendees can hear it. Make sure you follow the voting procedures as they are outlined in your governing documents. Additionally, you should keep minutes of every meeting.
Finally, don’t tolerate disruptive behavior of any kind, and remember that you have the authority to expel any person exhibiting unruly behavior from the meeting.
Act as a business
Even though this is where you live, a community association is a business with revenues and expenses. You’re now on the leadership team – an integral part of that business. You should begin to think like a business owner; understanding the business judgement rule. The business judgement rule is defined as any valid action taken by directors of an HOA in good faith, within the powers of the association, and that reflect a reasonable and honest exercise of judgment.
Emails: protect yourself and your privacy
While the majority of HOA board members use email in some capacity, only a minority of board members have set up a separate email address such as happyneighborshoa@gmail.com. It is strongly recommended to not use your work and/or personal email address to communicate with fellow Board members or homeowners in an official capacity.
The Board should keep in mind that email discussions between Board members could potentially be construed as a “meeting”. Remember that formal actions unanimously agreed upon by the board must be ratified at the following board meeting and documented in the minutes.
Partner with the right management
A community manager can be your resident expert by providing continual education, making sure the Board is functioning smoothly, overseeing community operations, and improving the Association by helping Board members do their job well. It’s important to work effectively with the management company so you can maximize the resources it offers and make the biggest impact for your community.
At Ascent Community Partners, we would love the opportunity to partner with your community to give you the best management experience possible. Please reach out today to start your new management journey!
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