As a member of the HOA board, it is your duty to run and maintain the association with the community’s best interests in mind. While errors are human nature, not all of them are reversible. Some errors can be detrimental to your association. Therefore, you must be aware of your actions and make a conscious effort to refrain from committing any HOA board mistakes.
Stay Away from These Common HOA Board Mistakes
The relationship between individual board members and the homeowners that they represent can be one of the best parts of a homeowners association. It can also be one of the most frustrating aspects of an HOA if these relationships are not healthy. A lot of the responsibility to create these healthy interactions rests on the shoulders of the board.
Although you cannot control the reactions of the people around you, as a board member, you can do your best to refrain from making HOA board mistakes to promote peace in the community.
Here are the top 14 mistakes an HOA board member should avoid:
1. Failing to Read the Governing Documents
One of the most common HOA board mistakes there are is not reading the governing documents. If you are not already familiar, an HOA’s governing documents contain everything you need to know about the association’s rules and regulations.
They act as the guidebook for HOAs to follow. As such, it is every board member’s responsibility to be familiar with these documents. You cannot enforce the rules if you do not know what they are.
2. Not Following the Governing Documents
It is not enough to just read your governing documents and call it a day. Rules are meant to be followed, so you must see to it that you abide by the ones set forth by your governing documents to the best of your ability. Ignoring these rules is not only one of the top mistakes to avoid, but it can also result in serious consequences.
3. Working Against the Board
There is a time to disagree, and there is a time to give up your opinions and support the rest of the board. Disagreement can justly occur during open discussions and during voting or elections.
However, once your board has reached a decision, it is each board member’s responsibility to stand behind the decision. Disunity in the board can cause confusion, unnecessary anger, and resentment in the community.
4. Not Communicating Properly
One of the hallmarks of an effective homeowner association board of directors is open communication.
Your HOA board must be able to liaise with all residents promptly and properly, whether it has to do with updates, new rules, or meetings.
You must also allow homeowners to voice their opinions, especially during open comment time, without fear of being cut off every so often.
5. Not Collecting Fees on Time
Most homeowners are incredibly faithful about paying their fees on time every month. Nothing is more frustrating and unprofessional than a board that neglects to collect the fees in a timely manner. This not only inconveniences residents, but it also makes your board seem like you do not care and disrupts crucial cash flow into the association.
6. Neglecting to File Tax Returns
A common misconception among board members is that it is unnecessary for a homeowners association to file tax returns during tax season. In fact, most HOAs are required to pay some taxes, and even those who have officially registered as a non-profit organization still have to fill out IRS Form 1120-H or similar. Failing to do so can drag the community down by exposing the association to fees, penalties, and the loss of your non-profit status.
7. Working Without the Board’s Approval
Although enthusiasm and a desire to improve your homeowners association is a healthy thing, this eagerness can translate into frustration when it is viewed as an attempt to gain control or power over the rest of the board.
This can happen when you go behind the back of the board by having meetings with residents, contractors, or vendors without the knowledge or permission of the board. Even if you think you are working in conjunction with the board’s wishes, it is best to always gain approval before acting.
8. Acting Without Legal Advice
In line with the previous point, HOA board members like yourself must make sure to seek legal advice before taking action, especially if that action can put you in trouble with the law. Always consult with a lawyer or your HOA attorney for every important decision, such as when dealing with a difficult resident or signing a new contract with a vendor.
9. Neglecting to Update Insurance
Excessive special assessments are one of the most frustrating things for homeowners. Special assessments can happen when the board neglects to update current insurance, does not have insurance at all, or does not choose an effective policy. It is your board’s responsibility to maintain an updated and excellent policy at all times in case of emergency or natural disaster.
10. Being Reckless with Vendor Choices
New board members have a tendency to switch vendors immediately after assuming office, but this is one of the most common HOA board mistakes to stay away from. If you disliked the way the previous board ran the association, it does not mean you should place blame on the vendors themselves. Before changing vendors, you must do your due diligence. This means talking to the vendors to see what went wrong and conducting proper research first.
11. Not Budgeting for the Future
One of the most damaging mistakes that HOA boards make is failing to budget for the future. While short-term expenses are important to consider, long-term finances must also be taken into account.
This means making sure there is enough money in your reserve fund to cover future replacements and unforeseen expenditures.
12. Disregarding Past Mistakes
It is not unheard of for an HOA board of directors to commit blunders during their reign. However, it is the job of current HOA board members to learn from these past mistakes. Study what went wrong with previous administrations. Check meeting minutes to get a good grasp of the things your predecessors did well or poorly. This way, you can ensure you do not commit the same HOA board mistakes during your tenure.
13. Changing Policies Hastily
Just because you dislike a certain policy or rule does not mean you should change it without understanding why it exists in the first place. This usually happens when new board members take their seats, but it is not recommended.
Before amending any rules, take the time to examine how they affect the community. Are these rules beneficial to the community or do they do more harm than good?
14. Stealing Money
Stealing money from your own association is one of the worst HOA board mistakes you can make. It is an outright crime and can land you in trouble, not just with your HOA, but also with the law itself. Apart from competence and transparency, honesty is what makes a good HOA member.
Become a Model Board Member
As an individual board member, you can have a lot of positive influence on the other board members, residents, and the community at large. By staying away from these HOA board mistakes and reminding your fellow directors to do so as well, you can bring favorable changes to your association.
If your board is still having trouble managing your community, you may benefit from hiring an HOA management company. Should you decide on it, do not hesitate to give us a call.
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