The role of an HOA board can be summed up by three different words: to protect, maintain and enhance the Association. What does it mean to protect? It’s to keep someone from harm or injury. In a homeowners association it’s the board members' responsibility to protect the homeowners and community.
What does it look like for an HOA board to protect the Association?
1. Understand the laws
Ignorance is not a defense for an HOA board member. Boards don’t always understand there are laws to follow and they vary by state. For example, the Davis-Stirling Act is the overwhelming body of law for homeowners associations in California and part of the California Civil Code. It’s crucial that board members understand the laws the HOA operates under so they know their responsibilities to residents, such as sending out financial updates or conducting a reserve study to plan ahead for future projects and improvements. When a board doesn’t understand the laws they are under, it risks being faced with lawsuits because it didn’t do something correctly or disclose something it should have. Understanding the laws is an ongoing process because they are constantly being amended each year.
2. Watch what you say as a board member
Let’s say you’re the president of the HOA board and you’re taking your dog for a walk around the neighborhood. A resident sees you coming down the street and meets you at the curb with potential paint colors he’d like to paint his house. You take a look and say, “oh yes, that blue is very nice” and then continue on your way. Well, the owner takes your comment as getting your approval for the paint color and next thing you know there is a bright blue house on the block.
The problem with the above scenario is that the homeowner had a perception that you as the Board President have applied authority to make the decision, where in reality and according to the CC&Rs, a decision like whether or not a resident can paint his house a certain color, needs to go through the formal review process. Otherwise, it will start a snowball effect that leads to disagreements and dollars.
3. Be objective
Sometimes it’s hard to be objective as a board member because you are part of the community and have your own opinions on things and personal experiences. You might even be put into a compromising position by your neighbor who thinks they have an “in” and expect to get their request to build a fence around their yard approved just because you’re on the board. Being objective as an HOA board member means removing yourself as the owner and asking what is best for the organization as a whole, not just for yourself or your neighbor who needs a favor.
4. Surround yourself with experts
If you’ve been following the news at all you’ve seen General Motors in the hot seat due to faulty ignition switches that has launched massive recalls and led to at least 13 deaths. The case has received inquiries from Congress about why the company didn’t put the recall in affect sooner. It seems to all relate back to a design decision that was made, and could have been corrected by an inexpensive fix. But the Board at GM didn’t make the decision to push the company to fix the problem or perhaps didn’t even surround themselves with trusted experts to help them make the right decision, setting the tone that it was okay to just ignore it.
In the same way, HOA board members need to surround themselves with experts to help educate in areas and set proper policy for the Association. These types of experts include:
- HOA Manager
- Reserve Study Specialist
This will help limit liability for the Association as well as make informed decisions for the community.
As an HOA board member, take the time to evaluate if your board is fulfilling its role to protect the Association, or if it needs the help of a trusted and professional HOA Management Company. If you’re ready to have the conversation, contact The Hignell Companies below for a free evaluation.