The work that HOA board members fulfill is essential. However, learning the ins and outs of association business can be tricky.  There are documents to study and rules to learn. Directors are representing a community, and there are a lot of interests to balance. Not everyone is going to be happy with every decision, and the board of directors is often in the line of fire when things go wrong.

There are 5 common mistakes that some homeowner association boards make. Here is how to avoid them.

  1. Stay on Top of Financials

Collecting dues in full and on time is can be a difficult task, especially during COVID-19. But if you don’t have the funds to run the association, you won’t be able to serve the needs of the community. Make every effort to encourage timely payment, send reminder notices promptly. Make it easy for members to pay their dues, such as through Destination Maui, Inc.’s online payment portal.

Make sure your association has accounting checks and balances in place. It only takes one dishonest person with access to the checkbook or online account to drain the condo association’s funds. Theft often happens in small increments which are easy to hide and easy for boards to overlook. Transparency and accountability in bookkeeping and establishing a review and approval pathway for vendor payments greatly reduces the risk of fraud.

  1. Budget Effectively

Most condo associations want to spend wisely and make members happy by keeping dues low. But by failing to appropriately anticipate expenses or assess high enough dues to cover community needs, you will be in budget trouble. At the top of the list that owners dislike is special assessments, which will be needed if money is needed to make up a budget shortfall.

Revisit the budget quarterly to ensure projected costs are on track. Maintain enough money in the reserve fund to cover unexpected expenses as well as major upcoming capital improvement projects. However, use cation when tapping into reserves.

  1. Avoid Overreacting

Conflict do happen from time to time…between neighbors and between owners and the board. Sometimes it’s hard not to take things personally. However, board members should hold themselves to a higher standard and not react emotionally to a complaint or accusation. Take a breath and read our article on conflict resolution. Then, follow the board’s established guidelines for responding to complaints. Most of all, don’t shoot off an email in the heat of the moment. This could put you and the rest of the board in a tight spot later if your response is interpreted as board policy, or worse, violates board policy.

If you are too close to an issue to be objective, meet with the rest of the board to determine a measured and reasonable response. It may also be wise to ask the board’s attorney for advice and assistance with drafting a response—especially if there are questions about the legality of the board’s actions or an accusation against a board member.

  1. Don’t Violate Condo Owners’ Privacy

Allowing vendors and contractors to enter a home or condo without permission or advance notice is a potentially explosive issue. In case of emergency or to protect the well-being of the community and the integrity of the property, it may be necessary to enter a condo when the owner is not there. But even when the board is be legally within its rights, the unit owner may feel their privacy has been intensely violated. Have a clear policy governing when and if third parties, board members or management may enter a member’s residence. Make every attempt to gain permission before doing so, including alerting an owner promptly in case of emergency. Make sure to update association member contact records annually, including multiple contact methods.

  1. Keep Up Exterior Elements

Outdoor elements are something owners and their guests pass by regularly. So if something is not well maintained, or left in disrepair for a while, it can be a great irritant. Most common area maintenance is part of association dues, and owners can reasonably expect that necessary repairs and replacement of exterior elements will be covered. Being proactive about upkeep is smart. So is responding promptly to maintenance requests.

Roof leaks, mold remediation, and other serious issues are often the subject of lawsuits for condo associations. The board should make sure the budget adequately covers upkeep of exterior elements, and there are sufficient reserves for unexpected problems.

These are just 5 of the most common problem areas for homeowner association boards. Management through Destination Maui, Inc. can help your association avoid these and other pitfalls. Contact us for a complimentary presentation for your association.