A homeowners’ association (HOA) relies heavily on its board of directors. Their duties can cover everything from creating annual budgets to enforcing property owner rules.
But because the HOA property owners vote on board members, they may lack the full range of experience needed to develop annual budgets, enact maintenance routines, or establish effective communication with residents. That’s why it’s essential to ensure that HOA board members receive the training necessary to fulfill their obligations.
It’s the job of the homeowners’ association’s community management organization to educate and train new board members. Here are some vital issues often covered.
There are many items of business that an HOA board needs to communicate with HOA members promptly. For example, owners must be notified of any HOA rule changes, fee increases, and special assessments. Likewise, because HOA board meetings are open to members, HOA homeowners must be given appropriate notice when these occur and where.
Board meetings are an opportunity for members to express various issues with the board members. Board members must be educated on setting up and conducting these meetings to keep communication flowing effectively.
Board members have a responsibility to carry out their duties competently and in the best interests of the homeowners. However, when a board action costs the HOA money, it can be seen as a breach of fiduciary responsibility. Homeowners may respond by removing the offending board members or even filing personal lawsuits.
Because of this, board members must have a firm grasp of the legal context in which they operate. For example, many states and local governments have laws specifically for homeowners’ associations. In addition, board members should become aware of specific federal legislation, such as the Fair Housing Act and the Americans with Disabilities Act.
Making certain new board members receive training in the legal aspects of HOAs will help everyone avoid the kind of poor decisions that result in legal liability.
Board members are also usually HOA homeowners. Because of that, the potential for conflicts always exists. For example, a board member may have another family member in the HOA or may have a personal connection to a vendor used by the HOA.
Ideally, an HOA board member who finds themselves having a conflict of interest should know to remove themself from any decisions that affect their interest. That said, it’s possible that a new board member may not understand the importance of abstaining or not do it appropriately. Practical board member training should include ethics sessions where board members learn to avoid conflicts.
Fortunately, most HOA boards have accounting professionals on staff to assist in keeping on top of accounting issues. Just the same, one of the fiduciary responsibilities of the board members is knowing how to handle the HOA funds appropriately. They must learn about managing budgets and reviewing financial reports, paying for services and other expenses, and, of course, tracking and recording spending. Board members must also make decisions about HOA dues, collect and settle delinquent payments, and manage fines, if any.
New board member training should cover the fundamentals of developing a budget, reading a financial report, and developing a collection policy. The basics should already be in place, but besides knowing these policies, board members need to learn how they work.
There are usually no specific educational requirements or specialized licenses needed to be an HOA board member. Understandably, questions will come before the board that requires professional guidance. Training sessions on the consulting process and making informed decisions will encourage new board members to feel more confident with their decision-making responsibilities.
Many HOA residents want to serve on their board but aren’t sure where to begin. Similarly, what should they look for when residents select a new board member?
An effective, responsible board member should:
As important as it is to make sure HOA board members are appropriately educated and trained, it’s equally important to select the right people for the job.
The most significant indicator that an individual will make a good board member is their willingness to put in the work and follow through with their responsibilities.
If you are looking for assistance in bringing board members up to speed on policies and procedures or for ways to improve managing your HOA community, give Henderson Association Management a call.
We can help you find the best answers to any questions about building a neighborhood you can be proud of. Give us a call today or fill out a contact form!