Below
are five key points that will prove invaluable for both potential board members
and for those already serving their term.
Becoming
elected or appointed to serve on a Homeowner’s Association or Condominium
Association’s board of directors can be an exciting, rewarding and enriching
experience. It can be an opportunity to give back and contribute to the success
and future of a community. However you should also realize the responsibilities
that come with the posting, especially with some of the larger associations
where you will be at the helm of a potentially multi-million dollar company.
You could be accountable to several hundred homeowners, be responsible for
large budgets, and you may oversee the complexities that come along with
high-rise and/or multi-structure complexes.
1.
Know What You Don’t Know.
You
are not required to have all the necessary information memorized. The Florida
Statutes are constantly being amended and your own association rules and
regulations will be ever evolving. While you are not expected to know
everything, you are expected to engage the right people to advise you. The most
effective way to stay current and meticulously proficient is to engage the
appropriate experts – a specialized attorney, a qualified CPA, an efficient
manager, and a reputable insurance agent will ensure you have access to the
information and advice you need.
2.
Be Consistent and Abide by the Documents.
A
director on an association board must be consistent and enforce the
rules/restrictions as written. Admittedly, this is tough when the restrictions
for the community seem obsolete or misguided. Keep in mind though that as a
director, the restrictions are provided TO you to enforce. If you feel any part
of the restrictions no longer best serves the community, do not just ignore the
issue or pick and choose what you’re going to follow and ignore. If the
association does not want to follow a rule or restriction, then meet with your
attorney to figure out the process and language to change it. Otherwise,
consistently follow the rules as written.
3.
Be Transparent.
An
obligation of being a director is to promote transparency within the
association. The owners have a right to information and you’re making decisions
affecting their finances and property rights. Therefore, they have a right to
know what’s going on with the association. Ways to promote transparency
include ensuring the owners are receiving the correct notices, having regularly
scheduled board meetings, and making official records and financial statements
available. If your association does not have a user friendly, updated website
then this is great way to improve association/owner communication.
4.
Have a Plan for the Future.
There
are two reasons to have future plans for the Association: 1) it defines what
you want to accomplish, and 2) it makes for better meetings. First, you
likely ran for the board to have an impact on the community. However, how can
you have an impact if you don’t have a plan for what that impact is going to
be? Anytime you can define discrete goals you’re more likely to accomplish
them. Second, I have found that associations that don’t have a plan for the
future tend to focus on the past. This means discussions over past events
dominate the meetings. If you give your owners an outlook for the future and
define the priorities of the community over the next 1, 3, & 5 years, you
will be pleasantly surprised how much support you get from the owners, plus how
much more efficiently your meetings will run.
5.
Understand the Financials.
Association
financials can be extremely complex. Although you don’t need to be able to
translate every single document, we do recommend you form a basic understanding
of the balance sheet, the income statement, the annual budget and the accounts
receivable. You should also have a clear picture of the reserves – are you
adequately funded? If you can understand these documents you’ll get a baseline
picture of the financial health of your community. Then, engage a specialized
community association accountant or CPA who can answer any questions that you
might have.
If
you do those 5 things you will be a key asset to your association, improve your
community, and also likely enjoy your experience as a director.
For
more information on this issue or other association questions contact bburg@HSMcLaw.com.
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