The Hierarchy Of HOA Documents: Which Takes Precedence?

HOAs are governed by many rules and regulations — to a point where it may get confusing for both board members and homeowners alike. To avoid any kind of misunderstanding, it’s important to have a clear understanding of homeowners association documents, as well as which HOA documents take precedence in your community.

 

The Hierarchy of HOA Documents Explained

As an HOA board member, you have a responsibility to uphold and follow the association’s governing documents. However, these documents were written by people, and people aren’t perfect. Conflicts in provisions happen all the time. It’s also possible that some board members may have different interpretations of the rules and regulations that govern the community. So, what do you do in these instances? How do you ensure that the proper course of action is followed?

The answer is to simply look at the hierarchy of HOA governing documents within your association. Some HOA documents take precedence over others. If you don’t know which one supersedes the others, take a look at the list below:

 

1. Federal and State Laws and Statutes

The laws of the land take precedence over all other HOA documents. State laws come before local laws, while federal laws outweigh everything else. Whether you’re drafting your governing documents or deciding which one to follow, it’s important to always check the law first. This way, you’re not acting against the laws of the land.

So if your HOA CC&R documents have restrictions on things like sex and religion when it comes to potential homeowners, that would be in conflict with the Fair Housing Act. In this case, the related provisions in your CC&Rs violate federal law, which makes them unenforceable.

 

2. Recorded Map, Plan, or Plat

Next up on the HOA documents hierarchy is the map or plat that your association recorded with the county office. It’s simply the recorded plan of your entire subdivision or community. This document establishes maintenance responsibility and property location. It also shows the exact dimensions of each unit, easements, and setback requirements. Other items of note include:

  • Trash enclosures specifications
  • Restrictions on vehicular access
  • Handicapped parking spaces and parking restrictions
  • Landscaping restrictions
  • Lighting requirements and prohibitions
  • Areas for future development
  • Lighting and other requirements/restrictions

 

3. CC&Rs

The Declaration of Covenants, Conditions, and Restrictions (CC&Rs) take the third spot on the HOA documents hierarchy. This document details the rights of homeowners and the responsibilities of the HOA board members.

Typically, the CC&Rs also contain stipulations associated with assessment obligations, maintenance responsibilities, and enforcement authority. This is also where you’ll find specific procedures on how to handle various issues such as disputes and violations.

Others know the CC&Rs as the rules of the community. This document guides homeowners on what they can and can’t do, particularly when it comes to property use and other aspects of HOA living. Before purchasing your home in an HOA community, you’ll be informed of the CC&Rs and asked to agree to them. You may even need to sign something as proof of agreement.

When a homeowner violates a covenant, certain consequences take place. Most associations send out a notice of warning on the first offense. Fines and the suspension of privileges are typical courses of action for future violations. Failure to settle these fines can eventually lead to legal action.

 

4. Articles of Incorporation

The Articles of Incorporation includes essential information such as the legal name of the HOA, address, and the association’s corporate status. Some articles also contain a few basic functions of the HOA. This document, while necessary, doesn’t consist of much. It’s filed with the state upon the formation of the association.

Coming in fourth on the HOA documents hierarchy means the Articles of Incorporation supersede the HOA bylaws and the operating rules. However, they don’t take seniority over the state laws or the CC&Rs. So, if something in your Articles of Incorporation comes into conflict with a provision in your CC&Rs, the latter takes precedence.

 

5. HOA Bylaws

The HOA bylaws consist of important information related to how the association is run. Like a business, a board of directors oversees the workings of an HOA. The bylaws simply state the particulars of how to operate the HOA, such as how often to conduct meetings, the process of holding meetings, and voting rights. This document also includes how many board members there should be as well as the functions of each of those board members.

As fifth on the list, the only document the HOA bylaws prevail over is the operating rules and regulations. So, if your bylaws clash with, say, your Articles of Incorporation, you must follow the latter document. If you wish to see your HOA bylaws or any other governing document, you can request a copy from your HOA board or with the county recorder’s office.

 

6. Rules, Regulations, and Resolutions

hoa governing documents hierarchyWhereas the CC&Rs and bylaws determine the procedures and responsibilities of the HOA board, the rules and regulations focus on the day-to-day aspect of operations. This can include rules regarding clubhouse use, pets, and even architectural or landscaping specifications.

These rules can change from time to time, though the board must ensure that new rules or amendments don’t come into conflict with other governing documents. Moreover, it’s a good idea to have the association’s attorney look over these policy changes to make sure the board is acting within its scope.

On the other hand, if you’re a homeowner who disagrees with one or some of the operating rules, you’re not entirely powerless. Make sure to let the board know why you (and/or others) oppose the rule. You can also check your local laws or reference other governing documents to see what else you can do. After all, every state and association is different, so what may work for one HOA might not work for another.

 

Other HOA Documents

Apart from the governing documents, HOAs also have many other official documents. Though these documents do not have a direct bearing on how the association is run, they are nevertheless official records of the HOA. They can provide further insight into an HOA’s operations, which can be helpful if you are a current or potential member of the community. Here are other HOA documents you need to know:

  • Board Meeting Notices, Agendas, Minutes, and Committees
  • HOA Board Election Notices, Ballots, Minutes
  • HOA Membership List or Directory
  • Insurance Policies and Records
  • Vendor Bid Proposals, Contracts, Third-Party Agreements
  • Rental Documents — If your HOA is leasing property, rental documents will include tenant application forms, rental agreements, and rental restrictions.
  • Legal Documents — Includes judgments, liens, and other legal records that are not subject to confidentiality agreements
  • Financial Documents — Documents that establish the financial status of an HOA include account ledgers, balance sheets, annual budgets, financial statement reviews, annual audits, invoices, reserve studies, tax returns, and bank statements

 

Who Can Access HOA Documents?

Homeowners

Most states have laws that establish a homeowner’s right to inspect HOA documents. Based on the hierarchy, these laws will take precedence over any stipulation that you may have in your governing documents. As such, homeowners can request copies of official records for whatever purpose they may have. It may be because they are selling their property or they have concerns about how a certain covenant is being implemented in the community.

However, there is usually a procedure for requesting HOA documents — which you’ll also find in your governing documents. For instance, the association may require a written request from the homeowner. The governing documents may also include expected costs for reproducing HOA documents and a minimum number of days for the association to prepare the requested records.

Prospective Homeowners

For prospective homeowners, accessing HOA documents before buying is a must. You need to review these documents to see how the community operates and how life will be like when you join. For instance, there may be rules and regulations that would potentially restrict your personal lifestyle such as commercial vehicle restrictions, pet policies, parking rules, short-term rentals, and aesthetic standards.

What to look for when reviewing HOA documents? Aside from the governing documents, it’s important to inspect the financial documents of an HOA. Are the HOA fees reasonable? Do they have enough funds and reserves? These official records can help you foresee if there could be fee increases or special assessments in the future. As such, make sure to ask the current owner how to request HOA financial statements, apart from the standard governing documents.

In addition, homebuyers should also look into official records involving the property you are planning to buy. Is there a history of violations, unpaid assessments, and judgment liens? Whether or not these HOA documents will affect your decision to buy, what’s important is that you know about them before making a huge financial decision.

 

Frequently Asked Questions About HOA Documents

Here are the answers to some questions that you may have about HOA documents.

How to Get HOA Documents?

If you are a homeowner, you can send a written request to your association for the specific HOA documents that you want to inspect. However, there are other ways to obtain these records. You can go to your homeowners’ portal and access online copies of the documents. You can also ask your neighbors if they already have a copy of the document that you need. Meanwhile, if you are a potential homebuyer, the current homeowner is typically the one that provides you with the HOA governing documents.

 

How to Find CC&Rs for a Property?

If other ways to get HOA documents are not possible, you can also search the public records at the county recorder’s office. An HOA’s CC&Rs is a legally-binding document so they must be recorded with the county to become enforceable. HOA covenants that are not recorded with the county are not and should not be enforced within the association.

 

Are HOA Bylaws Public Record?

Unlike CC&Rs, HOA bylaws do not need to be recorded at the county recorder’s office. However, an HOA may choose to include them in public records should they want to.

 

Who Pays for HOA Documents?

The person requesting HOA documents also shoulders the costs. These fees will usually cover printing, manpower, and other costs associated with preparing the documents. However, most governing documents will have a cap on how much the HOA can charge for HOA documents.

 

How Long Does It Take to Get HOA Documents?

It will depend on your HOA so make sure to check your governing documents. Typically, though, upon receipt of the request for HOA documents, an association will have about 10 business days to produce the requested copies.

 

The Importance of Homeowner Association Documents

hoa governing documentsHOA documents are clearly essential for all homeowners associations, no matter the size. They define what HOAs can and can’t do, how to do them, and when to do them. Every organization needs a set of documents governing its operations. Without these documents, an association would fall into anarchy.

Consistency is important when it comes to HOA documents. So, whether you’re just beginning to draft your governing documents or considering amending them, make sure they’re in line with the laws and provisions that precede them. This way, you won’t run into conflict or, worse yet, legal trouble.

For further assistance with your HOA documents, consider the benefits of hiring an HOA management company. Can’t find one? Feel free to check out the HOA Management online directory for the best HOA management companies and vendor services in your area!

Want an instant summary of important rules at your HOA? Run an Eli Report

 

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How to Increase Annual HOA Meeting Attendance

One of the most difficult aspects of the HOA annual meeting is getting homeowners to attend it. A lot of homeowners just don’t seem concerned about association matters, leading to bad attendance numbers. But, believe it or not, there are ways you can adopt to improve your HOA annual meeting attendance.

 

Why You Need to Improve HOA Annual Meeting Attendance

What is an HOA annual meeting? One thing that remains consistent across a majority of homeowners associations is the annual meeting. The HOA annual meeting takes place once every fiscal year, usually at the beginning, and sets the tone for the coming year’s activities.

At this meeting, board members discuss critical issues such as the annual budget, dues amounts, major projects, and homeowner concerns. The annual meeting is also when elections take place. Considering some of the most important matters are tackled during the HOA annual meeting, it only makes sense that homeowners attend it.

Additionally, meetings usually require a quorum to proceed. A quorum is the minimum number of members that must be present to conduct association business. Poor attendance means you might not meet the required quorum. If you fail to establish a quorum, you can’t present the budget, vote on issues, or hold the elections. Quorum requirements can vary depending on your state laws and governing documents.

 

How to Increase Attendance at Meetings in HOAs

It’s clear that homeowner attendance and participation are critical at annual meetings. But, many associations consistently find trouble getting homeowners to attend these meetings. After all, attendance is often not an obligation homeowners are expected to fulfill. There are some strategies you can use, though, to improve HOA annual meeting attendance.

 

1. Provide Ample Notice

How many times have you made plans with friends only to receive a delayed invitation for another event taking place on the same day?

Far too often, homeowners fail to show up at annual meetings because of their busy schedules. By providing them with ample notice, though, they can save the date in their calendars.

Notice requirements for the HOA annual meeting will depend on state laws and your governing documents. For instance, in California, associations must provide at least 10 days’ notice but not more than 90 days’ notice.

 

2. Advertise Everywhere

improve hoa annual meetingsState laws and governing documents will tell you the methods you can use to send notice of the annual meeting to homeowners. Normally, associations can send notice personally, electronically, or via mail. But, you don’t have to stop there.

You can also use other means of communication to advertise your annual meeting. This includes posting signs on bulletin boards, inserting the date in your HOA website’s calendar, and dedicating a section of your newsletter to it. You can even promote the annual meeting on your association’s social media pages if you have any.

Make sure to include start and end times in your announcements as well. Homeowners are more likely to attend the meeting if they know it will be done in time for dinner or their favorite show.

 

3. Set a Convenient Time and Place

Some associations’ governing documents tell them exactly when annual meetings should take place. But, if no such provisions exist for your community, find a date that works well for most people. Evenings are usually the best, especially if your membership consists of young professionals and parents. It might also work to schedule it on a weekday.

Apart from the date and time, the venue also plays a significant role in improving HOA annual meeting attendance. You need a place big enough to accommodate all of your members but also close enough so that people don’t need to travel far. If you have a function hall in your community’s clubhouse, that may work. A basketball court also works great.

 

4. Share the Annual Meeting Agenda

One way to improve HOA annual meetings — and, by extension, homeowner attendance — is to create and share your meeting agenda. In fact, many states and governing documents actually require you to distribute the agenda to all members prior to the meeting.

Beyond it being a requirement, though, sharing the meeting agenda will allow homeowners to set their expectations. When they know what topics will be discussed, they are more inclined to go, especially if they’re interested in a particular one. Your agenda should break down every item and, if possible, include time limits for the discussion of each one.

 

5. Don’t Let the Meeting Drag On

Compared to board meetings, HOA annual meetings usually go on for much longer than an hour. This is mainly due to the long list of topics the association must tackle.

Still, try your best to shorten the length of the annual meeting. This is what your agenda is for. You should make sure to stick to your agenda and never let the discussion stray. If you must, consider adding break times so that homeowners get a chance to stretch or take in the information they just heard. The longer a meeting goes on, the more tempted people will feel to just stand up and leave.

 

6. Make Your Presentations Lively

Let’s face it — presentations can be boring, especially when homeowners aren’t interested in the topic in the first place. A good way to keep things lively, though, is to make your presentations interactive. Include photos, videos, and sound effects. Adding visual components like graphs and charts to financial presentations also makes it easier for homeowners to digest the information.

In addition to the presentations themselves, the presenters must also try their best to retain the members’ attention. Nothing can put a homeowner to sleep faster than speaking in a dull, monotonous voice at a snail’s pace.

 

7. Invite a Guest Speaker

If you can swing it, consider inviting a guest speaker to give a presentation at your annual meeting. Maybe you can ask your local police department to give pointers on how to keep their homes secure. It doesn’t even need to be related to homeowners associations. Having a guest talk about a fun topic for a few minutes can reinvigorate the entire room.

 

8. Survey Homeowners for Concerns

Homeowners usually go to meetings when they have something to look forward to. Sometimes, it’s just an opportunity to socialize. But, other times, they’re really interested in a particular topic of discussion.

Asking homeowners about their biggest issues with the community is a great way to keep homeowner satisfaction up and improve HOA annual meeting attendance at the same time. Before the meeting, conduct a short survey of homeowners and gather their questions and concerns. Then, let them know the board will address these issues at the annual meeting.

 

9. Offer Food and Beverages

how to increase attendance at meetingsYou can quickly improve HOA annual meeting attendance by offering food and beverages to attendees. A simple spread consisting of pizza and soda is one way to do it. But, you can also go big by booking a food truck, provided your budget allows.

Don’t keep it as a surprise, though. Remember, you’re trying to get people to attend the meeting, so make sure to advertise this added benefit. Homeowners aren’t going to say no to free food and drinks.

 

10. Hold a Raffle or Organize Games

If free food and drinks won’t entice homeowners to attend the meeting, then perhaps some fun games and the opportunity to win prizes will. Make sure to space out the games so that people don’t just stick around for them and leave afterward. Maybe hold a game every 30 to 60 minutes.

You can also go with a raffle with a big prize at the end of the meeting. Just make sure to let homeowners know that they should be present for the entire meeting to qualify for the raffle. This way, you won’t have members coming in late just in time for the raffle alone.

 

11. Consider the Kids

If your membership consists of families with kids, then it’s a good idea to designate a safe area for kids to play in. This way, parents don’t need to scramble to find a babysitter in time for the annual meeting. And, as a result, you will have more members in attendance.

 

A Successful Community Relies on Participation

There’s a tendency for homeowners in HOAs to feel disengaged or uninterested in community matters. This ultimately leads to a drop in HOA annual meeting attendance. Considering how important these meetings are, you must do your best to encourage homeowners to be present. Homeowner participation is also one of the elements of a successful HOA community.

If you need help sending out notices, preparing budgets, and conducting annual meetings, then start looking for an HOA management company. Use our online directory today to find the best one near you.

 

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Handling Short-Term Rentals in an HOA

HOA board members have many decisions to make that impact the association and those within it. As services offering short-term rentals have become more popular in recent years, HOAs have to be prepared for deciding how they’re going to handle these types of services. Make sure you are taking proper safety measures such as installing gates beechboro.

Let’s take a look at the pros, cons, and what your options are when offering short-term rentals in your association.

Pros of short-term rentals:

  • More tax revenue
  • More income for homeowners
  • Better chance of owners improving and/or maintaining their properties
  • Offers distinction in the community for a competitive market

Cons of short-term rentals:

  • More people in the common areas
  • Possible noise problems
  • Potential damage to property, which could decrease property value
  • More loitering
  • Concerns about security and safety of those in community

After going over the pros and cons of short-term renting for your community, you’ll want to think about additional actions you can take when making your decisions. Here are some things to consider:

 

Homeowners are responsible

Owners need to understand that everything that happens on their property is their responsibility — from minor noise issues to larger damages or parking violations. This can be low-risk but also just as easily open up the community to possible illegal activities if owners aren’t careful about renting.

 

Ask owners for their opinions

Have your HOA board or management company send out surveys to owners by mail or email to find out how they would feel about short-term rentals. Get a good understanding of their concerns and feelings around the idea. This will help you consider your residents first and foremost, no matter what you choose.

 

Your association still has power

If your local law allows short-term rentals in your HOA, the association might be able to add text to your CC&Rs for rules on these types of rentals. You might also be able to add language that completely prohibits them. Speak with your attorney to be sure any of these amendments are in line with your federal, state, and local laws.

 

Speak with your HOA management company

Your HOA manager can offer some expert advice on how to best manage short-term rentals. Speak with your management company to talk about the best ways to communicate with owners and residents on the subject, as well as train board members on handling any issues related to short-term rentals.

Why Is A HOA Management Contract So Important?

The Board of Directors is used to dealing with homeowner association contracts for any type of goods or services needed by the association. Contracts are a standard practice so that both parties understand their specific roles and duties. That’s why a legitimate contract between you and your HOA management company is important too. From daily duties to payment terms, you want everything in your HOA management contract to be clear and fair.

 

Why Do You Need an HOA Management Contract?

As an HOA board member, you might come across some management companies that offer “no contract services” but involve a signed agreement. These types of agreements most likely do not provide important terms, which can really hurt your community in the long run.

An HOA management contract is very important. It’s a legal document that states your expectations. The contract should have a clear outline of the services that you expect from the HOA management company.

HOA agreements also contain other important details such as the terms of service. It will specify the beginning and end of the contract, as well as provisions for continuing, exiting, or terminating the partnership between the association and management company.

A good HOA management agreement will also detail the number of visits, inspections, and meetings from the manager, as well as fees for additional services.

Should the HOA management company fail to deliver, the management contract will provide the association with protection. That’s why it’s important not only to have a well-written contract but for the HOA board to also carefully look over all the details before signing the contract.

 

HOA Management Contract: What Should Be Included?

hoa contract | hoa management agreementNow that you know the importance of an HOA agreement or a property management contract, it’s time to delve into the specific sections.

Keep in mind that contracts will vary substantially, but these are some key points to look out for:

 

Terms of Service

The HOA management contract should outline the terms of service. When does the contract take into effect and until when? This section should also include a termination policy applicable to both parties.

One party may choose to terminate services if there is a valid reason. The specific reasons should be detailed in the contract but may include negligence and failure to deliver services. There will be some restrictions, too, such as a termination fee and/or a 30-day written notice.

 

Services, Duties, and Fees

Any basic HOA management contract will have a section outlining the services and duties to be performed by an HOA manager and how much the association has to pay the management company annually and/or monthly.

HOA agreements will have a base management fee that corresponds to a list of services. Make sure to ask how much the management company will be charging for additional services.

Some companies will have a higher management fee but will provide more comprehensive services. Be wary of companies that offer lower fees but have hidden charges. These may end up costing you more in the long run. As such, make sure to cover all bases when it comes to services and fees before signing the contract.

 

Responsibilities of the Association

An HOA management company will not do everything for your association. In most cases, the HOA board will still retain some responsibilities.

Clearly outline the board’s responsibilities in the HOA management contract. This will prevent any misunderstandings or confusion as to who really is in charge of a specific task.

 

Liability

Liability is also a basic part of the HOA management contract. This section can also be called the Hold Harmless Clause. This protects the management company against liability, as long as they acted in the best interests of the association.

For example, they will not be held liable if the contractor they hire causes damage to association property. However, this clause will not protect HOA management in cases where they were negligent or fraudulent.

The HOA board should also make sure there is a Reasonable Care Clause. This means HOA management should still perform due diligence when carrying out their responsibilities like when hiring a third-party.

 

Litigation Expenses

The HOA management contract may also have a provision for litigation expenses. It states that the association will be responsible for legal expenses should HOA management become involved in a lawsuit. This assures HOA managers that they can do their duties without fear of getting sued.

 

Services Included in the HOA Management Contract

Management services will depend on the needs of your community as well as its resources. Nevertheless, here are some services that you can expect an HOA management company to perform:

 

1. Maintenance of Common Areas

HOA managers will regularly visit common areas, contract with vendors for maintenance and repairs of common areas, purchase parts/equipment needed for common areas, evaluable long-term maintenance needs, and recruit personnel.

 

2. Accounting and Financial Management

An HOA manager’s responsibilities may include assisting the board with the annual budget, obtaining a reserve study, collecting HOA dues and assessments, monitoring the association’s bank accounts and balances, sending HOA invoices and delinquency notices, preparing financial documents and vendor payments, and so on.

 

3. Insurance

The board can delegate insurance tasks to their HOA manager including recommending insurance companies, preparing insurance bid proposals, placing appropriate insurance coverages, and processing insurance claims.

 

4. Administrative Services

HOA managers also handle day-to-day administrative tasks such as answering phone calls and emails, following up on homeowner complaints and requests, enforcing HOA rules, scheduling HOA board meetings, and so on.

 

5. Conflict Resolution

An HOA manager is also helpful when it comes to resolving conflicts, especially if it’s between board members, or between a board member and homeowner. Having expertise such as conflict resolution skills means they will able to deescalate conflicts and preventing lawsuits.

 

Frequently Asked Questions About HOA Management Contracts

Litigation Expenses | property management contractSome associations only realize the importance of an HOA management contract after they’re stuck with a bad one.

Here are answers to questions that can help you avoid the pitfalls of a bad management contract:

 

How Much Should an HOA Pay a Management Company?

Though there is no standard fee for an HOA management contract, it’s good for board members to have a general idea of how much to pay an HOA management company. This is so that you don’t end up paying too much for very little service.

HOA management fees depend on several factors such as the size of your community, the type of HOA management, and the scope of services provided by the HOA manager. However, a general estimate would be $10 to $20 per unit, each month.

 

How to Get Out of an HOA Contract?

If you have unwittingly entered into a bad contract with an HOA management company, it’s understandable that you would want to get out of it. However, since an HOA management contract is a binding document, there may be legal consequences for breaking the agreement. Make sure to consult an HOA attorney; they will analyze your contract to see if there are ways to terminate the contract.

Meanwhile, if the HOA management company has breached the terms of the contract, the HOA attorney can help you get out of the agreement as per the termination policy.

 

Can HOA Sue Management Company?

HOAs can sue a management company if they have a valid reason for doing so. Again, this is why it’s important to have an HOA management contract. The document outlines the conditions where an HOA might be able to sue the management company.

Valid reasons include negligence, abuse of power, harassment or discrimination, embezzlement, or misappropriation of funds. Board members should also consult their HOA attorney on how to handle this case properly and legally.

Why Should an HOA Hire a Property Management Company?

Not all associations need an HOA management company. However, if the HOA has rental properties, they might consider hiring a property management company.

A property manager performs similar — and sometimes overlapping duties — with an HOA manager such as maintenance and collections, but they are still different professions. Your property manager will handle rental properties and tenants, but an HOA manager handles the overall community. If you decide to hire a property manager, remember that having a homeowners association property management contract is just as important.

 

Having an HOA Management Contract Is Just Good Business

They say that running a homeowners association is just like running a business. And so, if you want your HOA to be successful, you have to have good business practices such as having an HOA management contract.

An HOA management company is supposed to make the board’s lives much easier. But if you don’t have a contract or one that is unclear and fair, it will only lead to more problems for the association. Having a management contract means you’ll be able to cover all bases as well as protect the members of your community from costly mistakes and disappointments.

 

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HOA Budget Best Practices Every Board Member Should Know

Planning an HOA budget can be difficult work, especially if you’ve never done it before. With so many things to consider, it’s easy to lose track of the details. Luckily, adopting these HOA budget best practices can ensure a smooth preparation.

 

HOA Budget Best Practices to Live By

Creating an annual HOA budget is a critical aspect of managing any homeowners association. But, the laws surrounding the process are often poorly understood. This can lead to less-than-ideal practices, so we’re providing some HOA budget best practices for your board as you set your budget.

 

1. Know What the Budget Is For

What is the purpose of a budget for HOAs? Understanding HOA budgets and their purpose is one of the most critical best practices. An obvious reason is to facilitate smooth association management, but having a good budget can also preserve property values. The lack of a good budget can produce a domino effect that will ultimately end with reluctant lenders and fewer interested buyers.

When you know what your budget is for, you can anticipate the right expenses. For instance, if you’re budgeting for a special project, you must draft pro forma budgets.

If you’re planning the annual HOA budget, you must take everything into account. The annual budget sets the tone for the entire year and determines how much to charge homeowners in dues.

Some of the essential items you must include in your annual homeowners association budget are:

  • Utilities (like water, electricity, gas, and the like)
  • Insurance
  • Maintenance needs
  • Vendor services
  • HOA management fees
  • Reserve fund contributions

 

2. Make Conservative Projections

homeowners association budgetThe trick to HOA budgeting is to make conservative projections.

Due to the unpredictable nature of most expenses, it’s nearly impossible to plan for expected costs down to the decimal point. Therefore, you should take a conservative approach when planning your HOA budget.

Some of the ways you can do this are by adopting these conservative HOA budget best practices:

  • Anticipate income to purely come from dues.
  • Project expenses with the current conditions of the economy in mind.
  • Leftover operating funds should account for about 10 to 20 percent of your yearly dues.

 

3. Be Strategic

Apart from planning a 1-year budget, you should also create a 3- and 5-year financial plan. Determine any upcoming large projects your association may take on in the coming year and account for them.

Vendor services are a big part of your annual HOA budget, too. For this reason, it’s best to assess your contracts and send out requests for proposals ahead of time. This will help you allocate funds with better accuracy.

Make sure you’re getting the best deal and don’t be afraid to negotiate with your current or new vendors. The first estimate doesn’t have to be accepted if you think changes should be made.

 

4. Analyze Every Expense

When planning your budget, it’s always a good idea to look at every line item from past data. After all, this is how projections are made. Compare the actual expenses the association incurred in the last 3 to 5 years. This way, you can get a rough grasp of what your upcoming year will have in store in terms of costs.

Keep in mind, though, that you shouldn’t just rely on past data for your projections. A lot of outside factors can influence your budget. For instance, an increase in wages can significantly change how much vendors charge for their services. Make sure to marry the past with anticipations of the future, as well.

 

5. Prioritize the Community

A homeowners association should always put the community’s needs first, and the decisions you make for your budget should reflect that. Leave any personal or special interest at the door. By keeping the community in mind at all times, you can make better and more informed financial decisions.

 

6. Look for Ways to Reduce Expenses

A good way to reduce costs in the long-term is to have a professional conduct an annual onsite insurance evaluation of your association’s properties. Preventing problems is infinitely cheaper than remedying them, and anticipating what those problems are is the first step.

Additionally, your board should think about energy efficiency and water conservation. Swap out outdated equipment with more energy-efficient ones where you can. Sure, you’ll pay for the cost of replacement now, but this solution will help you save more money in the long-term.

Giving owners ways to cut back in the new year will help everyone be more conscious, too. Send out emails or newsletters to the community with best practices for water usage, recycling, etc. This will not only cut down costs but can also be beneficial for the environment.

 

7. Account for Delinquencies

When you set HOA budgets, it’s important to keep in mind that not all homeowners might pay their dues on time or religiously. Some homeowners default on their payments. Make sure to account for delinquent homeowners when preparing your annual HOA budget.

If the number of delinquencies in your association accounts for more than 5 percent of yearly dues, then you should include a line item in your budget for bad debt. This way, you can offset some of the delinquencies and avoid ending up with a budget deficit.

 

8. Consider Your Reserve Fund

understanding hoa budgets Staying up-to-date on HOA reserve fund accounting is also important for understanding what will be needed in terms of future replacements and repairs for the community.

In fact, some states even require reserve studies on a regular basis, such as California and Washington.

A reserve study will let you know how much money is currently in the reserve fund versus the estimated life remaining and overall condition in certain elements on the property. This way, you better know what to expect.

Without a reserve study, you risk running out of money for future replacements or capital improvements. As a result, your HOA will have no choice but to raise dues or charge special assessments, which no resident will want.

 

9. Obey the Rules

To avoid problems (and potential legal trouble), your HOA board should make sure it follows the association’s governing documents and all state laws religiously. Failure to abide by the proper procedures can result in unsavory consequences for both the board and the HOA itself.

For instance, while you can transfer money from your reserve fund to your operating fund on a temporary basis, you should think about what state laws apply. In California, you need to provide notice of intent to do so in a board meeting.

 

10. Be Transparent

Lastly, communicate regularly. Homeowners trust their HOA board to make and use budgets with the utmost integrity. It’s also easier to get budgets passed if you’re open and honest, getting the community involved in understanding the numbers and taking responsibility for their part. Plus, you might be able to get input or ideas board members hadn’t thought about yet!

 

The Difference Between Operating Budgets and Reserve Budgets

Homeowners associations need both an operating budget and a reserve budget to remain in good financial condition. And it is equally essential to have a separate bank account for each of these funds. But, how exactly do these two budgets differ?

 

Operating Budgets

An association’s operating budget or fund covers a period of 2 to 3 years. Its purpose is to cover the usual monthly expenses that HOAs incur. This includes items like landscaping, routine maintenance, and management fees. Dues and expenses are factors that can affect an association’s operating budget.

Typically, your operating budget should be managed from a checking account. This makes it easy to deposit and withdraw money on a regular basis. If you have an HOA manager, you can provide them with access to your operating fund to pay vendors and staff members.

 

Reserve Budgets

In contrast, an association’s reserve fund covers a period of 5 to 30 years. It is allocated to cover the cost of major replacements and repairs down the line. Examples of such costs include a street repaving project or roof replacements. Loans and special assessments are factors that can influence your reserves.

How much should an HOA keep in reserves? Having an accountant conduct a reserve study will let you know how much your reserve fund should contain. Generally speaking, though, it is a good idea to maintain a 70 percent funded reserve.

Because reserve budgets aren’t typically used on a regular basis, they are usually kept in a savings or interest-bearing account. If you have an HOA manager, it is best not to give them full access to your reserve fund. Instead, require board member signatures to make a withdrawal.

 

How Do I Make an HOA Budget?

Your governing documents should include a description of how the HOA budget is to be adopted every year. Most of the time, the budget will be adopted by either the HOA board or by vote from homeowners. And, in some instances, you might need both, especially if you’re needing to adopt a budget that includes an increase in dues that will largely affect homeowners and would require their vote.

It’s important to check your governing documents first before you plan HOA budgets. By doing so, you can ensure you’re following the proper guidelines set forth by the association. Failure to abide by the governing documents can result in legal consequences for the board and the HOA.

 

HOA Budget Template

Here is an example of the HOA annual budget that you can use as a guide:

HOA Budget Best Practices | HOA Budget Template

Download Your HOA or Condo Association Budget Template Here

 

HOA Budgets Serve a Purpose

Many HOA boards shudder at the very mention of HOA budget preparation, but it doesn’t have to be that way. Armed with these HOA budget best practices, enough time, and a willing effort, you can set your budget without running into problems. Remember that an HOA exists to serve its community. Without budgets, there would be no dues. And, without dues, an HOA can’t fulfill its duties.

It’s not a bad idea to ask for professional assistance when drafting your HOA budget, especially if your board has little experience in this field of management. Several HOA management companies offer their services on a full-time or remote basis. HOA managers have the necessary expertise and experience to handle budget preparation.

Look for the best HOA management companies near you with help from our online directory.

 

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The Truth about HOAs: Involved Homeowners are Happier Homeowners

Article Link: http://blog.associaonline.com/the-truth-about-hoas-involved-homeowners-are-happier-homeowners

MYTH: HOMEOWNERS DON’T NEED TO ATTEND COMMUNITY ASSOCIATION BOARD MEETINGS.

Board members are community leaders. They volunteer their time to make decisions on the well-being and financial health of their association. Every homeowner has a right to know what’s going on in the community and the board should embrace that.

FACT: HOMEOWNERS CAN AND SHOULD ATTEND REGULAR BOARD MEETINGS TO KNOW WHAT’S GOING ON IN THEIR COMMUNITY.

However, it’s important for homeowners to understand the structure of board meetings and only participate at the designated time on the agenda. This usually happens once the board has conducted their board tasks and is referred to as a homeowner’s forum.

Transparency is key to neighborhood harmony. For boards, this is your chance to shine and show the amazing work you are doing for the community. Post the meeting minutes on a bulletin board or on the association website. This will allow all owners to quickly see what is being discussed. Make sure all topics of discussion are covered in the minutes, not just the ones that pass. (Download this meeting minutes template for your next board meeting!) Some projects take time to develop and some owners might have expertise in an area the board does not. Posting the projects the Board is considering might increase the chances for future Board members to step up and take a leadership role.

At a minimum send out a community newsletter or mailing twice a year. This should consist of seasonal information, neighborhood reminders, insurance information, budget updates, and include a letter from the board or the board president. Let the homeowners know what you are working on and what projects are up in the regular maintenance calendar. Informed homeowners rarely complain about receiving too much information about what’s going on in their Community. But, uninformed homeowners that are left out of the loop can create neighborhood discord if it seems like decisions are being made in secret that only benefit a few homes.

Finally, make the annual meeting an event worth attending. Talk about your accomplishments as a board since the last annual meeting. Brag about replacing the roofs on schedule without having to special assess because there are adequate reserves. Talk about your future goals and projects. Let the homeowners know next summer is the planned sealcoating of driveways to extend the life of the asphalt and save you all money in the long run. Express that you understand what a pain and a disruption these projects can be, but focus on the reason behind them. Thank the homeowners for electing you and let them know what an honor it is to serve by showing your passion for your community.

The difference between a happy and well-run community and a dysfunctional and bickering community is YOU! Be a positive contributor, educate yourself, enforce the governing documents fairly, set a realistic budget and be open and honest with everyone. Most importantly, lead by example. As a board member, it should go without saying that you should know and follow all association rules. The results will speak for themselves.

 

Thank you to our Corporate Partner Associa, Inc. for providing this educational article.  Associa is North America’s largest community management firm.  To access Associa’s free tips to help you bond with your fellow board members, click here.

The Truth about HOAs: Low Assessments Can Come at a High Price

Article Link: http://blog.associaonline.com/the-truth-about-hoas-low-assessments-can-come-at-a-high-price

MYTH: IT’S BEST TO LIVE IN AN ASSOCIATION WITH THE LOWEST ASSESSMENTS.

Another area of effective governance includes setting realistic budgets and funding the reserves. While no one likes

making the unpopular decision of raising the assessments, as a board member you are elected to make the tough decisions to promote, maintain, and enhance the community. The last thing anyone wants is a dreaded special assessment. These can be avoided through proper planning.

As your community ages you need to set realistic repairs and maintenance budgets to take care of the little things as they break down. By doing proactive maintenance such as caulking and roof inspections you will be able to catch problems when they are small before they turn into water damage inside a home. If this area is neglected it leads to deferred maintenance and more costly repairs.

FACT: THE ASSOCIATION THAT BUDGETS PROPERLY WILL AVOID COSTLY AND MORALE-KILLING SPECIAL ASSESSMENTS.

For major components you need to set proper reserves. The best thing to do is get a professional reserve study. These companies specialize in forecasting the cost of repairs and estimated life spans of the reserve items. By getting this study and funding appropriately to the recommendations of the study you will have the best chance of having the necessary funds available when major replacements or repairs are needed.

 

Thank you to our Corporate Partner Associa, Inc. for providing this educational article.  Associa is North America’s largest community management firm.  To access Associa’s free tips to help you bond with your fellow board members, click here.

The Truth about HOAs:Don’t Blame Governing Documents,Blame Inconsistent Enforcement

Article URL: http://blog.associaonline.com/the-truth-about-hoas-dont-blame-governing-documents-blame-inconsistent-enforcement

This is part one of a three-part series debunking common myths about living in community associations. Click here to read part two.

MYTH: ENFORCING YOUR COMMUNITY ASSOCIATION’S GOVERNING DOCUMENTS LEADS TO UNHAPPY HOMEOWNERS.

Most people believe that enforcing the Rules and Regulations and other restrictions in the Declaration leads to unhappy homeowners. It feels right, because no one likes to get a letter saying “You are in violation of a neighborhood covenant.” However, in my experience I find the exact opposite to be true. If an Association does NOT enforce the written R&Rs, it leads to far more unhappy homeowners than the few that get upset upon receiving a reminder letter.

For example, a very common rule in HOAs is to store your trash cans in the garage. Everyone forgets once in a while and they may get a reminder letter. We’ve received actual communications where owners apologize for violating the rule and thank us for pointing it out. These homeowners understand the value of the rule in keeping the neighborhood looking great, which leads to higher property values. They also know that the rules are being consistently enforced and can be assured that all the other rules are getting the same treatment.

Now imagine that instead of consistent and fair enforcement, the community checks for trash can violations only once a year, then sends out a bunch of violation letters, and doesn’t follow up until next year. Most homeowners upon receiving the letter will comply and follow the rules. But, when they see their neighbor across the street leave their trash cans out ALL YEAR and never receive a second letter, they’re going to think, “Why do I have to follow the rules and they don’t?” And they’d be right! Why indeed.

This experience can lead homeowners to wonder what else isn’t being done in the community and pretty soon you have a dysfunctional HOA.

This is just one example utilizing a simple trash can rule. Imagine all of the other R&Rs that a community association is responsible for enforcing and it’s easy to see how quickly and how widespread homeowner morale can plummet.

FACT: CONSISTENT AND FAIR ENFORCEMENT OF THE GOVERNING DOCUMENTS LEADS TO HAPPIER HOMEOWNERS.

Consistent enforcement takes fortitude. The homeowners who do receive letters might be upset in the moment and they may take it out on the Board or the Community Manager. However, once the reason for enforcement is explained most homeowners understand that the rules are in place for the greater good of the entire community. But, even if that homeowner just can’t stand following Association rules, as a board member, you can’t let the violations go unenforced because that is not in the best interest of the community as a whole. Many people specifically look for communities that have certain rules in place and they will have a legitimate reason to be upset if they are not being consistently and fairly enforced.

 

Thank you to our Corporate Partner Associa, Inc. for providing this educational article.  Associa is North America’s largest community management firm.  To access Associa’s free tips to help you bond with your fellow board members, click here.

How To Prevent Squatters In Foreclosed Homes In HOA Communities

Foreclosed homes are nothing new to homeowners associations, but they can become a real problem when squatters start making these homes their own. If that sounds all too familiar to you, read on to learn how to prevent squatters and how to remove them legally.

 

How to Prevent Squatters from Taking Over Your HOA

Believe it or not, squatters are everywhere. Between foreclosures brought on by unpaid mortgages and those initiated by homeowners associations for delinquent dues, squatting in foreclosed homes has become quite the phenomenon.

If your HOA has a few abandoned homes in your neighborhood, it’s worth taking action to prevent squatters from occupying them. Putting up “no trespassing” signs is a step in the right direction, but a more effective way is to make sure the property remains secure from the outside. This way, squatters can’t gain entry into the foreclosed property.

If you live in a gated community, you might benefit from increased security controls. While this can prevent outsiders from potentially squatting in your HOA, it may not work against those who refuse to leave their former property after it has been foreclosed.

Preventing squatters is one thing, but removing them is another thing entirely. Once you already have squatters in your HOA community, it can quickly get complicated.

Homeowners associations generally have limited rights when it comes to dealing with squatters. You might ask, “Can you change locks on squatters?” While that may seem like an easy solution, HOAs normally don’t possess the authority to do so. When a home is in foreclosure, the banks own it. Therefore, they have the right to change the locks and secure the property.

 

Squatters vs Trespassers

how to get rid of squatters next doorBefore learning how to get rid of squatters next door, you must first understand the difference between squatting and trespassing. Squatting is the act of occupying a vacant property with the intention of living in it. It usually involves bringing personal belongings to make the place their own. In contrast, trespassing is the act of breaking into private property, usually a property with tenants, with no intention of living in it.

Can police remove squatters? If the act resembles trespassing more than squatting, then you can definitely call the police. Trespassing is a crime, so the police can help you remove the trespasser from the premises. If the person is squatting, though, the police may direct you to other means of resolving the matter since it’s more of a civil matter than a criminal matter.

 

Understanding Squatters’ Rights

What are squatters’ rights? When people talk about squatters’ rights, they are usually talking about adverse possession. Adverse possession refers to the principle wherein a person can come to legally own property after extended occupancy and use.

To qualify for adverse possession, squatters will usually need to live on the property for a minimum number of years. They must also use the property as if they were the real owner, such as paying property taxes and utilities as well as maintaining the property itself. Not all states allow adverse possession, though, and the criteria by which the second requirement is judged will depend on the jurisdiction.

Why do squatters have rights? At first glance, you might think squatters are, in essence, stealing property through adverse possession. But, this concept does serve a purpose — to prevent properties from going to waste as a result of owner abandonment or neglect. You should know, though, that adverse possession is extremely rare.

 

The Wrong Way to Remove Squatters in Your HOA

Beyond learning the proper way to get rid of squatters, you must also know how to remove squatters the wrong way. By knowing what you can’t do, you can protect your HOA from potential liability.

These are actions that you absolutely can’t do in an attempt to remove squatters living in foreclosed homes:

  • Cut power to the property;
  • Turn off utilities for the property;
  • Threaten, intimidate, or abuse the squatter/s in any way, shape, or form; and,
  • Use violence against the squatter/s.

All of these options are illegal and can land you as well as the association in trouble with the law. Tempting as it might be, you must remain calm and approach the situation with a level head.

 

How to Get Rid of Squatters in Foreclosed Homes

Homeowners associations are not totally powerless when it comes to squatting. Here’s how to get rid of squatters in your neighborhood in a legal manner:

 

1. Notify the Owner

While the HOA doesn’t have much authority over squatters, you can notify the property owner of the issue. Let them know that intruders have shacked up in their home. If the property is in foreclosure, let the banks know.

In some cases, after the foreclosed home has been purchased by a new owner, the former owner will remain in the house and refuse to leave. When this happens, the new owner can send a notice to quit to the former owner. That might work, but the new owner may also need to serve the former owner with a Summons and Complaint for Unlawful Detainer, depending on state law.

 

2. Amend Your Governing Documents

Condo associations, in particular, are generally afforded more options. Florida, for example, allows condo associations to enter units in the event of an emergency. Therefore, under Florida law, condo associations have the authority to change the locks to prevent squatters.

If your governing documents don’t already allow it, consider amending them to let your association secure abandoned homes in the neighborhood. You should also make sure that state laws allow you to do this.

As for homeowners associations, state laws and governing documents don’t usually give them the right to evict squatters living in foreclosed homes. But, you can try to amend your governing documents to grant the HOA that right. There’s just no guarantee that courts will find it enforceable.

 

3. Pay Them to Leave

This doesn’t really apply to homeowners association per se. But, it does apply to property owners with squatting problems.

Evicting someone can take time and money. Property owners might be able to skip the eviction process and remove squatters from the premises using a “cash for keys” setup. This means paying the squatter to leave the property. Though, if the squatter still refuses to leave even after getting paid, then property owners will need to initiate eviction procedures.

 

4. Talk to an Attorney

If your HOA encounters a squatter problem in your community, it’s best to seek legal counsel from an experienced attorney. Consulting your HOA attorney about what you can do is the safest way to make sure you don’t put the association at risk of liability.

 

A Real Problem

preventing squattersSquatters are never pleasant to deal with, but they do exist, and they might even be living within your HOA community. By far the best way to handle them is by learning how to prevent squatters from occupying abandoned or foreclosed homes in the first place. But, if you already have squatters in your neighborhood, then this article has hopefully helped you understand how you can remove them.

Many HOA management companies offer legal assistance to homeowners associations as part of their services. Start your search for the best HOA management companies in your area using our online directory.

 

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Managing HOA Politics The Smart Way As A Board Member

Homeowners association politics can be a confusing subject. But, it is necessary to familiarize yourself with the different board member roles, the process of conflict resolution, how to make decisions wisely, and how to deal with resignations or removals. Whether you are considering running for a position on the board or already are a board member, you must know how to navigate the HOA politics encompassing the role.

 

Understanding the HOA Politics of Board Member Roles

In a lot of ways, homeowners associations are like states or countries. Instead of a single individual holding most of the power, though, associations are governed by an HOA board of directors. But, what authority does an HOA have?

Every homeowners association has a set of governing documents that lay down what the HOA can and can’t do. These documents also state what obligations and limitations both the association and its members have toward each other. The HOA board is responsible for making sure these documents are followed, all in the name of the community’s best interest.

But, what positions make up the HOA board? It can vary from association to association, though it generally consists of four central roles. And, managing HOA politics requires an understanding of the duties of each of these roles.

 

President

The President leads the board and the community in all matters. Some HOA President duties include running meetings, executing contracts, and acting as the main point of contact between the board and the HOA management company.

 

Vice President

The Vice President assumes the role of President when the latter is, for any reason, unavailable. As such, the Vice President must know how to handle the responsibilities of the President.

When the President is present, though, the role of the Vice President can vary depending on the association. Some HOAs put the VP in charge of handling committees. Others have more specific duties outlined within their bylaws.

 

Secretary

The Secretary fulfills many HOA responsibilities, including setting meeting agendas (with the President), recording meeting minutes, and sending notices to homeowners. In addition, the Secretary maintains the association’s records and co-signs important documents with the President.

 

Treasurer

The Treasurer is in charge of all things financial. They oversee HOA finances, prepare budgets, and lead finance committees. Because the role involves specialized work, it is best to have a member with knowledge or experience in financial management fill the position. Accountants and business professionals are usually good choices.

 

Fiduciary Duties of the HOA Board

what to do if your hoa is not doing their jobIt is important to remember that the exact duties and responsibilities of each role can change depending on the association. But, what remains consistent is the HOA board’s fiduciary duties to the community. If you don’t know what your fiduciary obligations are, here is a crash course on all three:

  • Duty of Care. Board members have a fiduciary duty to make informed decisions for the community. That means doing their due diligence and proper research before voting on any issue related to the association.
  • Duty of Loyalty. This duty requires board members to act in good faith and in the interest of the association. Board members must exercise fair decision-making without personal bias or benefit.
  • Duty to Act Within the Scope of Authority. Lastly, board members have a fiduciary duty to act within their authority as expressed in state laws or the governing documents.

 

Resolving Conflicts Within Your Community

As with any other organization, homeowners associations are not impervious to conflict. Whether it is between board members, homeowners, or a combination of the two, conflicts can arise on a regular basis. When faced with such a challenge, you, as a board member, must know how to resolve it.

The first step towards effective conflict or dispute resolution is to recognize the other person’s concerns and opinions. Let them explain their side of the story and make sure they know that you understand what they are saying.

The next step is to apologize, even if that apology is not necessarily because you are admitting you are at fault. Oftentimes, people just need to hear “I’m sorry” from the other person to calm them down. Apologize for the misunderstanding or for the way they are feeling right now. Make sure to listen to what the other person has to say and really try to empathize with them.

If a homeowner is complaining to you about something, let them know that you have noted their concern. Tell them you will discuss the issue with your fellow board members at the soonest. Thank them for bringing the matter to your attention so that you can end the interaction on a positive note.

Then, include the concern in your agenda for the next board meeting. If the issue is urgent, perhaps you can meet earlier. Before coming to a decision, make sure to look at the matter from all sides. Think about the long-term effects of your decision.

Ideally, you should reach a decision that works for all parties involved but is still within the community’s best interest. That may not always happen, though, so you should also be prepared to make tough decisions that might not make you popular.

 

Decision-Making Guidelines to Help Your Board at Meetings

Most of the conflicts that arise in a community have to do with the decisions that HOA boards pass. Making tough decisions for the betterment of the HOA is one thing, but making unpopular decisions as a result of poor judgment is outright despicable for an HOA board to do. Here are some tips to make sure you practice good decision-making at board meetings:

 

1. Check and Follow Your Governing Documents and State Laws

First of all, you should always check your state laws and governing documents. Not only will this help you stick to the proper procedures, but it will also ensure your board stays out of legal trouble.

Your state laws and governing documents should consist of guidelines telling you how to do certain things such as giving appropriate notice of board meetings and establishing quorums. For instance, California law requires HOAs to provide notices of the time and place of board meetings at least four days prior (unless governing documents say longer). If you fail to uphold such guidelines, homeowners may have the ability to challenge the decisions you make at these meetings.

 

2. Prepare and Stick to an Agenda

A meeting agenda outlines the different topics you must talk about during the meeting itself. Make sure to create an agenda ahead of time so that homeowners will know what topics will be discussed. Many associations also need to include the agenda when sending out meeting notices.

During the meeting proper, see to it that you stick to the agenda as closely as you can. This will establish a sense of order and control so that none of your meetings fall victim to chaos. Agendas also ensure your meetings are kept short and streamlined.

 

3. Form and Seek Help from Committees

Committees can help lighten the load that board members must carry. They can handle smaller tasks and, since they usually have a more hands-on take on issues, offer more in-depth ideas as well. Of course, committees should not have the final say. The board will still need to make the final call on all association matters.

 

4. Allow Time for Comments

Aside from committee members, it is worth setting aside time for homeowners to speak their minds. Make sure to include a time for an open forum so that residents can voice their opinions on various agenda items. In doing so, you can open the floor to fresh ideas or perspectives that you would have otherwise neglected.

Open forums can sometimes be risky, though, since they take up time and give homeowners an opportunity to rant. To counteract this, provide each resident with a time limit and have rules that prohibit aggressive behavior.

 

5. Avoid Turning Meetings Into Social Gatherings

You may feel tempted to schedule meetings at a board member’s house, but this is a slippery slope. HOA boards must conduct meetings in a professional way, so it is best to avoid places that might turn them into social gatherings where the focus is divided. You should also avoid serving alcohol at meetings as that can impair your judgment.

 

How to Resign from the HOA Board

If you find that you need to remove yourself from the HOA board for whatever reason, you must follow the proper steps. You can’t just drop everything and leave without a word.

  1. Write an official notice of your resignation via email or a letter. This notice should include the effective date of your resignation but does not need to include your personal reasons for doing so. Maintain a professional tone throughout.
  2. Communicate your resignation with fellow board members and the community. You can do this by posting your notice of resignation on bulletin boards, the HOA website, or other communication channels. It is also worth delivering the notice via email or snail mail to all residents.
  3. If time permits — and, hopefully, it does — you should do whatever you can to make the transition process as smooth as possible. Provide training and valuable tips to the person who will replace you.

 

How to Remove Members from the HOA Board

what can you do if your hoa is not doing their jobSome board members resign, but others need to be removed. This usually happens when there is a problem member on your HOA board and is a natural part of HOA politics.

Your governing documents should tell you everything you need to know about the removal process. Usually, this will involve a vote from the membership.

Most bylaws don’t require HOAs to have a cause for removal. That means residents can just vote on the removal of a board member as they please. Your bylaws will also dictate whether or not you need to hold a special meeting for the vote to take place.

If your bylaws require a special meeting, you will typically need to petition for it. Make sure to let homeowners know that the special meeting is for the removal of a board member. Your bylaws should also state how many signatures you need for the petition to carry.

After securing the signatures you need, you will then need to inform all homeowners of the special meeting. This notice should include the time and place of the special meeting. Remember to follow your bylaws on the notice requirements such as how many days prior you should send the notice and the method of notice distribution.

Don’t forget to let the board member in question know about the upcoming vote. Inform them of the special meeting taking place to decide on their removal. You may find it difficult to write this letter, but it is a necessary step.

Finally, at the special meeting, make sure to give the problem board member an opportunity to defend themselves. The membership will then take a vote.

 

The HOA Board Is Essential

Being a board member is certainly hard because of the HOA politics involved. But, the board remains a crucial component of any homeowners association and, thus, plays an integral role in its success.

Do you need an HOA management company to make your job as a board member easier? Start with our online directory to help you find the right company in your area.

 

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