Welcome new board members! Learn from my experience…and mistakes.
We just completed our 2013 annual homeowner association meeting, with the normal last-minute scramble for proxies, 2013 year in review, and 2014 budget presentation. I’m on the tail-end of my third two-year term, so I wasn’t up for election, but for the first time that I can remember there were more candidates than board positions. This was due to a strategy that we executed about a year ago, and it got me thinking about what else I’ve learned over the years as a board member and CPA for HOAs. Here goes…
Don’t join your HOA or Community Association board of directors – just kidding
Actually my advice is that you absolutely serve a term on your board. It’s a great way to meet your neighbors and support your neighborhood. Even if you pay a property management company, your community still requires volunteers to manage the neighborhood and represent the residents’ best interests.
Here is some information and advice that will help you take on your new board role.
- It’s more expensive that you can ever imagine. Running a community takes a lot of money. Common area upkeep, amenity maintenance, property management, activities, and even insurance all eat up what appears to be a decent amount of revenue.
- It doesn’t have to take that much time. Run your community like you would run a business. Set goals, prioritize activities, and limit debate. Purchase expertise when you need it, rather than learning how to be a civil engineer or CPA.
- Update and fund your Reserve account. The Reserve account is your savings account for future community needs, like replacing a pool, tennis courts, or parking lot. Ensure that you can maintain the same quality of community life 10+ years from now.
- Choose your fellow board members wisely. You’ll have to deal with them at least each month as issues arise. Make sure that they share your same focus, and can distance emotion from the business of the community. Your board meetings will be much shorter…
- Know the rules. Every community has some sort of covenants, bylaws, and/or standards. Take the time now to familiarize yourself with the rules. You’ll save yourself a lot of hassle and wasted time later. Covenants are a great sleeping aid, so try reading them before bed.
- Recruit, recruit, recruit. Never stop looking for volunteers for the board, committees, and project roles. Volunteers are always needed, and you never know when someone will resign. Be proactive rather than trying to play catch-up.
We’re all amateurs here, except me
While we were lucky to have board members last year with some property management experience, that’s more of the exception. Normally, it’s just a small set of neighbors trying to keep the community moving forward for the greater good. Whether you are on the board, or working with the board, have patience and follow the golden rule – treat others as you would like to be treated.
The CPAs at Bach, James, Mansour & Company provide tax and auditing services for a number of homeowner and community associations, so I’m not a typical board member. In Part 2, I’ll dispense some more advice specifically about finance and budgeting. Please contact us if you have any questions about your HOA or community association board, budget, or finances.