The board is one of the most important aspects of a successful condo or homeowners' association. Learn how to assemble the right people for your board and what they should know.
Establishing a homeowners' association (HOA) or condo association involves many steps that can't be overlooked or circumvented. These include creating a business structure (like a nonprofit or an LLC), drafting governance documents, following local laws, and setting up a board of experienced people who can competently oversee operations.
The association board makes important decisions for the community about processes, guidelines, community rules, and how the board itself functions and members are elected. If you are in the process of establishing an association, it's important to know how to assemble the right group of people to make a successful board. Here's what to know and where to start.
Elect qualified members
First of all, because the board will be making a variety of decisions about how the association functions (which is essentially the way a business functions), the board members need to have knowledge in different areas. At a minimum, your board members should collectively have expertise in these areas:
- Vendor management
- Real estate
It is also helpful to select a few individuals with experience managing other people, since resolving conflicts among homeowners and maintaining effective communication are also parts of the board's responsibilities.
Make sure board members can accept their responsibilities
Each state has its own laws regarding HOAs and associations, so it's important for board members to study your state's regulations and requirements. These requirements must then be embedded in the governing documents of the community, known as the covenants, conditions, and regulations (CC&Rs) and the bylaws. The board is essentially responsible, legally, for the association, so it's no small consideration.
Because the board has the responsibility of upholding the rules, it's important that board members can actively pursue any complaints or violations within the community. If rules are being broken, they need to be addressed by the board and fines incurred, or, sometimes, rules need to be updated according to the wishes of the homeowners' in the community. Conflict resolution is an important part of a healthy association and the board is responsible for making that successful.
The face of the association
Board members should also realize that they are representing the association. Members of the board must always keep the interests of the community in mind — and this can be difficult because they live in the association, too. Board members must speak for the members of the community and take their interests to heart.
Board members deal with claims and complaints, where they must strive to protect the rights of the home or unit owners. They represent the collective interests of the community members while at the same time upholding its laws and regulations to those members. It is one of their most important responsibilities.
Be open to outside help
You may not have candidates with legal or financial experience when assembling the board. In that case, consider seeking the advice of outside legal counsel or hiring an accountant. The most important thing is for the association to follow and uphold the applicable laws and be financially viable. If you can't provide either of those things with the board members available, it makes sense to hire an expert.
Some community associations hire outside management companies to take over many of the tasks of running the association. This can also help if conflicts arise between the association board and community members. A lot of legwork can be taken on by the management company, including administrative tasks and enforcing rules and fines. These professionals also have knowledge and experience managing properties that the board can lean on.
Even when you have a solid, experienced board to govern the community, it's still not a bad idea to seek outside advisors. The team at PeytonBolin is ready to help. Get in touch with us today to learn about the legal services we provide and how we can assist you in creating a successful HOA or condo association.