Unquestionably, running an HOA community is difficult and challenging. But by building a solid foundation you can achieve great success. Here are some helpful ideas on how to run an HOA well.
A Successful HOA
So, how do you build a well-rounded, successful HOA? There are many possible answers. Much will depend on the type of community association you have, your assets including the facility, and your homeowners, to name a few things. There are, however, several common traits or characteristics that make up a successful HOA.
Build a Competent HOA Board
The beginning step for a thriving HOA is choosing a competent HOA board of directors.
Board members, as the governing body of your community, should have a working knowledge of community association management, which means they must be able to understand the governing documents to make sound decisions.
Crucial to picking potential candidates for the board is to look for homeowners who have management experience, leadership qualities and good communication skills. Seek out people who are proactive, collaborative, strategic, and reliable.
How many board members should be on your board varies, but anywhere from three to seven is typically a good number. Most HOAs will include a board president, vice president, secretary, and treasurer, however, consult your bylaws as it will lay out that number.
Fulfill the Fiduciary Responsibility of HOA Board Members
A successful HOA board must put the community and its members at the forefront of their decisions. You must remember your fiduciary duty to the association, meaning you have a legal obligation to take reasonable action in the best interest of the entire community.
Among the tasks that fall under fiduciary duty are creating the annual budget, preparing and participating in board meetings and association events, using fair practices when enforcing HOA rules and regulations, avoiding conflicts of interest, and creating connections among the members, or a sense of community.
Although a desire to better your community should be enough motivation, don’t forget that breaking your fiduciary duty as a board member can lead to legal issues.
Involve Community Members
The HOA board is not an island unto itself. Homeowners and your HOA management company should work in tandem to run the community successfully. Working in cooperation with both parties will make the management piece easier and with property owner’s involvement, it will also be more fun.
The HOA board is required to follow specific guidelines, but it is possible for everyone to work together collaboratively, as well. Homeowners are valuable in the expertise and experience they can bring to the table to ensure the community functions at its best.
Run the HOA like a Business
Roles should be assigned to each HOA board member, and they should know their roles, duties, and responsibilities. When making decisions on behalf of the community, they should be strategic and logical. The board should think about the mission, vision, and values that the community upholds.
The regular preparation of financial reports and statements, scheduling maintenance and repairs, collecting dues, and monitoring insurance deductibles are all HOA board duties and should be priorities.
When these things are properly taken care of, The association will be able to operate smoothly and efficiently when these things are properly managed, which then paves the way for the community’s success and growth.
Hold Productive and Concise Board Meetings
Another trait of a successful community is that it conducts productive and concise board meetings. Board members should come prepared to meetings by studying the meeting agenda and other relevant documents in advance. Questions should be asked prior to the meeting. And board members should remember that meetings are not discussion forums or planning sessions – those conversations should be discussed in committee meetings.
Short board meetings do not equal a waste of time. It simply means the board was organized, members came prepared and was ready to make decisions. Ask that board members stick to the agenda and be concise in expressing their thoughts.
Fair and Consistent Rule Enforcement
Even though everyone is responsible for knowing and following the HOA guidelines and rules, not everyone will comply, making enforcement one of the most difficult aspects of community management.
It is vitally important that the board be fair and consistent in its rule enforcement. If homeowners think the board is playing favorites, they may refuse to comply and inconsistent enforcement can lead to legal problems.
Openly Communicate Necessary Information
Residents have a right to know what’s going on in their own neighborhood so open communication is essential for a successful community.
Your HOA board should consistently provide members with updates on all non-confidential community matters. It goes without saying that transparency is a critical element of a well-run board. The annual operating budget, the HOA’s income and expenses, and the reserve fund should be available at any time for members to review.
In addition, communication should be sent out regarding any projects and financial transactions. Since homeowners pay a regular fee to the association, they should be kept informed on where their money is going.
Poor communication will leave homeowners feeling left out of the loop, which can cause discord and mistrust of the board, leading to problems.
Be a Good Partner with Your HOA Management Company
Since board members are volunteers, they won’t always have the time or knowledge to deal with tasks such as accounting, collections, or homeowner communications. These are areas where a community management company can help.
HOA management companies also have access to resources and technologies board members don’t. The technology piece can help the board run a more seamless, cost-efficient and effective community.
Use a Good HOA Software
If a HOA management company isn’t in the cards, consider self-management by investing in an HOA software program. It can assist in completing the time-consuming administrative work and help you keep up with requests, accounting, and collections.
Your HOA may think the cost of buying or subscribing to HOA software is prohibitive, but it can save you a lot of time, money, and trouble in the long run.
Following these guidelines won’t ensure a problem-free HOA community, but it can go a long way in reducing the number of issues common in unsuccessful HOA communities.