<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=867098190059835&amp;ev=PageView&amp;noscript=1">

6 Mistakes That HOA Boards Can Accidentally Make

Posted by IKO Community Management on May 25, 2017 at 9:00 AM

hoa-board-mistakes.jpg

A lot of responsibility rests on the shoulders of your HOA board, and it’s up to them to keep a harmonious environment between residents while increasing the value of the community as a whole.
But what happens when a bad apple ruins the whole operation? Or you accidentally break the rules? Here’s IKO Community Management’s list of common mistakes that HOA boards make:

  1. Not reading governing documents. 

    Many boards don’t look at their CC&Rs and other declarations and bylaws. Instead, they operate in a way that they think makes sense, that others told them works, or according to what their president or community association manager says.

    This can lead to missed meetings, unruly budgeting, and so much more. It can also get your board into some legal trouble, too. 

  2. Not following the rules.

    Some boards know what their governing documents require, but they ignore those mandates. Whether it’s not holding a meeting on the third Thursday in November or forgetting to send a proper warning over holiday decorating violations, this lackadaisical attitude will get called out sooner or later. 

  3. Meeting informally or improperly.

    If a handful of HOA board members go to lunch to discuss neighborhood matters, it’s an illegal HOA meeting. Depending on your CC&Rs and the content up for discussion, a proper and formal meeting should be held. Most of the time, homeowners have a right to attend and be heard, too. 

  4. Communicating Poorly.

    Communication solves a lot of problems. If your HOA board isn’t good at getting back to homeowners via email, social media, or direct mail, misunderstandings about new rules and meetings are inevitable. 

    Another common communication problem is that board members cut one another or homeowners off during meetings. If a resident gets up to three minutes to speak on agenda items then gets cut off, it sends a bad message.

  5. Acting without talking to a lawyer.

    "Sometimes, when boards are dealing with a difficult homeowner, they'll...call me and say, 'Was it OK that I told her this?'" said Nancy Polomis, a partner at Hellmuth & Johnson PLLC in Edina, Minnesota, to HOAleader.com.

    "What am I supposed to say now? You can't unsay something. When you're dealing with difficult situations, I...encourage boards to check with counsel before they do anything, especially disclosing information or conversing with a particularly difficult homeowner."

    Polomis finds a similar problem in consulting your board’s lawyer too frequently or not frequently enough.

    "Statutes change, so legal requirements regarding things like insurance and notice change from year to year," said Ben Solomon, an attorney and founder of the Association Law Group in Miami Beach, Florida. "You should be getting consistent legal advice."

  6. Stealing money.

    It’s hard to believe that this happens, but the growth in cases warrants a discussion.
    According to the Educational Community of Homeowners, it takes up to 18 months to detect a fraud case within your HOA. The illegal schemes are usually found via a tip or by accident, and it can take years to recover the losses.

    If you suspect someone is stealing from your HOA, check these hot spots first:
    1. Falsified bank statements or balance sheets
    2. Payments made to vendors that didn’t exist
    3. Exorbitant “consulting” fees paid to people who either didn’t exist or had no credentials to consult (except for on a fraudulent plan)
    4. Payments for highly excessive or unnecessary repairs or amenities, such as buying more patio furniture than could ever fit near the pool

Being on the HOA board isn’t the easy job, but it is worthwhile because the opportunity makes an immediate difference in your community. If you need more advice on how to successfully run your HOA, download IKO’s guide below:

Download IKO's Guide to Running a Community Association

Topics: HOA Board