Be Aware of Common Board Member Mistakes (5 Deadly Sins)
It can be a fulfilling experience serving on the board of a condo or homeowner’s association. Many members really enjoy the experience of being active in their community, assisting neighbors regarding association matters, and getting to know the members of their community better.
Most board members take their positions seriously, and truly want to do the best job possible. The fact is that being a board member can be very challenging and there are a fair amount potential pitfalls and possible liability, and it can be all too easy to make mistakes. This can be harmful to an association. For these reasons it can be a huge advantage for the Association to work with a licensed community association manager (CAM).
In Florida and many other States, CAMS must be licensed and prior to that complete a 18 hour CAM licensing course before sitting for the state exam. Just like CAM’s need training before practicing, so do board members. Florida requires all newly elected or appointed board members to participate in a board member certification seminar or sign a document stipulating to their knowledge and expertise.
Licensed managers can help board members stay away from various pitfalls to ensure the association runs smoothly and legally.
Below are some of the common mistakes boards can make:
1. Holding meetings incorrectly
All board meetings need to be documented and notice provided to all members. It is considered a board meeting any time a majority of the board members get together and speak about association business. Often board members may get together for a casual lunch or similar gatherings and talk about board business, not realizing this could be a violation of association law. Talk with your CAM to help be clear about clarify what is okay (or not okay) to discuss with other board members when no official meeting is taking place.
2. Not adhering to the governing board documents
Sometimes boards do not carefully read their documents and then fail to abide by them. This can happen if a new board is elected and they neglect to review the declaration and bylaws of the association. This is usually unintentional, but it can cause a lot of issues. EVERY board member should read the By-Laws first and all other documents of the Association. Having an association manager who can assist with questions a board might have about documents prevents many possible problems. CAMs will also review the documents and help advise the board.
3. Mismanaging the association funds/budget
It is all too easy to use bad judgement in relation to the funds of the association. It is a common mistake to spend too much too quickly, without leaving anything for emergency situations or miscellaneous items. Board members should also consider long-term finances. While a board may want to use funds on things that may seem important in the short term, it is imperative to think ahead for long term. It would be wise to go over prior year budgets and learn from them. CAMs can typically provide excellent guidance and give knowledgeable advice throughout the entire budget process and also help ensure any work completed is done so at a good and reasonable price.
4. Becoming overzealous
Board members are generally excited to have their position, and often they can make large decisions too quickly. It is always best to weigh any major policy changes very carefully. For example, a new board may decide to make a decision, believing it is best for the association. However, in doing this, all ongoing projects lose momentum. An example is changing vendors. Take the time to speak to your association manager, and if you are unhappy with someone, then your CAM can give you advice about vendors as well as how to make changes within the community.
5. Not seeking advice of a legal professional
You will find there are situations where legal advice should be sought after. Community managers are not lawyers and are prohibited from offering legal advice to their clients. If you are dealing with a situation with a homeowner that could possibly turn into a lawsuit, you will find it may be a great idea to work with the attorney for advice and procedure. Consider that the expense of the attorney may very well be far cheaper than the potential legal liabilities.
In short, being a board volunteer is a tremendous responsibility and requires important decision making skills and judgement. It can be very easy to make common mistakes that can cause significant issues in the future. Reading the advice above and keeping a good relationship with your association manager and other professionals is an excellent way for your community to operate successfully and smoothly.