hoa board transition‘Tis the season for board transitions!

If you are reading this article, you’re most likely a newly elected HOA or community association board member who will be taking office in the near future. HOAs and community associations are real businesses with budgets in the hundreds of thousands or even millions of dollars, so you want to be prepared and confident as you take on your new volunteer role. Creating a detailed transition plan is the best way to quickly gather the information you’ll need to lead.

Start the transition process and set expectations as quickly as possible, especially when you have a lot of board members (and experience) transitioning out. If there is no documented transition plan, meet with current and new board members to document a plan that can be used for future board transitions as well. There are probably going to be two parts to your plan – documents to review and meetings to hold.

Build a list and check it twice

Let’s start with list of things you should review to learn more about community operations, the role of the board, and your responsibilities as a board member. Here are some items to consider including on your list.

  • Covenants and bylaws. You need to understand the rules so you can effectively govern your community. If you can’t sleep, just pull out the covenants and you’ll be out in no time…
  • Budget. Review the current budget, understand the reason behind any major variances, and ensure that accommodations have been made, if applicable, to next year’s budget.
  • Reserves. Get a copy of the reserve study and match the recommended balance to the reserve account balance. If you’re not familiar with reserves, click here to learn more.
  • Key vendor contracts. Understand details of major vendor contracts such as property management, landscaping, amenities management, etc. These are the companies that most impact the quality of life in your community!
  • Insurance policies. As a new board member, you should be most concerned with the Directors & Officers (D&O) policy, which covers your liability in the unlikely event of a lawsuit. You’ll also want to look at the association’s commercial policy.
  • Recent board meeting minutes. What are the current priorities and projects? Hopefully, minutes are posted on the website or in an easily accessible location.
  • Login credentials. You never know when you’ll need to access the website, email system, surveillance cameras, accounting system, etc. Make sure this information is documented.

Schedule meetings with key stakeholders

In addition to reading documents, you should also schedule a series of meetings with the people who are most actively involved in your community operations. Here are a few meeting ideas to get you started.

  • Property Manager. Where applicable, the property manager serves a critical role running day-to-day operations. Take the time to understand his/her tactical role vs. your strategic role.
  • Outgoing treasurer. How is your community’s financial health? If there’s no treasurer or person familiar with the financials other than the property manager, consider hiring an experienced CPA to review the financials with you, or conduct an audit.
  • Incumbent. The person who previously held your position is the best source of information on your role, expectations, issues, and opportunities.
  • Association attorney. Understand the collections process for delinquent neighbors as well as any current collection issues or other identified risks.

HOA board member boot camp

In addition to the information and meetings listed above, also consider going to a new board member seminar. Many property management companies and law firms offer these early in the year to help new board members get up to speed on their new roles, understand how boards operate, and deal with a wide variety of potential issues.

Promoting the orderly transfer of power

Well, maybe the Presidential Transition Act of 1963 doesn’t apply to an HOA board transition, but having a process to quickly transfer processes and knowledge is still important. Doing some advance planning will minimize disruptions and allow the outgoing board members to quickly step aside as the new board members take over. Documenting this process will help future boards more easily transition.

Neal Bach, CPA


Download our new Guide for Effective HOA and Community Association Financial Management