NAVIGATING THE TWISTS & TURNS FOR NEW BOARD MEMBERS
New to the Board or Thinking about Elections and running for a Board Position?
You’re now on the Board. Congratulations! And Thank You! You have now become a board member of your association. Serving on the board as a volunteer is important work and we want to be the first to let you know we appreciate your willingness.
Probably the most important thing to realize is that by becoming a board member you now have the awesome responsibility to think about the welfare of the entire association, distinct from the needs and desires of any single owner including yourself. This is not easy, but it is extremely important.
Being on the Board of Directors is important for a variety of reasons. Most importantly you will be able to make a positive and direct impact on the future direction of your community and hopefully a positive impact on the value of your investment and your home. As an increasing number of buyers are evaluating the features of living in a condominium there is more awareness of how value is created and maintained in a homeowner’s association. It is more than square footage and number of bedrooms in the living space. The value of your home is directly affected also by the quality of common area maintenance of the amenities, the enforcement of the rules and regulations, the adequacy of reserve funds, and the community spirit.
Every owner should serve on the Board of Directors at some time during their ownership. As they do they will gain a better understanding and appreciation for the role of the Board. We appreciate your willingness to serve on this board. We look forward to a very productive future together.
Since your prior Association Board made a decision to go with professional property management company they are there to help. You are partners together in managing the affairs of your association. They are able to provide guidance and direction on issues facing the association. The issues you face, for the most part, are not new to them.
SFPMA is here to support you as you volunteer for the association and offer you information making your job easier. Read Articles on our website learn and ask questions.
The “Governing Documents” – What are they, are they important?
The “governing documents” are critically important. As a new Board member, you actually should find a copy and review them, if you haven’t already before now. You were likely given a copy when you purchased. The governing documents consist primarily of two types: the bylaws, and the Covenants, Conditions and Restrictions, also known as “C.C. & R’s. Additionally, the following may be considered part of the governing documents may also include the Articles of Incorporation, and the Condominium Plan. But primarily you will mostly need to be familiar with the By-laws and the C.C. & R’s. These documents are not good bedtime reading unless you are wanting to fall asleep. While you should look at the entire documents, you should especially focus in the By-laws on the sections pertaining to the Board, and also the requirements pertaining to meetings. In the C.C. & R’s, the important sections will pertain to maintenance responsibility and financial management. However, we urge you to find the time with sufficient coffee to review the entire document.
Also, the other information that you may want to become familiar with is the Florida state law, Read the “Statutes 718 – CONDOMINIUMS” and “Statutes 720 HOMEOWNERS’ ASSOCIATIONS”. A great web-site, OnlineSunshine.com is an excellent resource.
What are the Board Positions? What does each Board member do?
Homeowner association boards that operate in effective and healthy ways for the benefit of their associations operate with every Board member playing a distinct and active role relating to a specific area of responsibility. Each board member should be the point person on their given area of responsibility, so that there is no potential of confusion communicated to third parties, such as the management company or other association vendors.
Generally those positions are: President, Vice-President, Treasurer, Secretary, and Director-at-Large. These are typical board positions for a five member board which is most common.
Some by-laws provide for a three member board, in which case some roles have to combine into one. Read the Governing Documents and the Bi-Laws for your Community.
The President
• Facilitates the process of each Board finding their specific role on the board.
• Allows the other Board members to fulfill their role.
• Sets time/place for meetings and Chairs the board meetings and annual meeting.
• Prepares the Board meeting agenda
• Leads the Board with the same voting power as any other board member.
May represent the association or board to third parties, such as the management company. In those cases, the President should always seek to speak for the majority of the Board, not just his or her own thoughts on an issue.
The President may NOT unilaterally speak for the board, but must always be the “voice” of the board.
Qualities that would be helpful for the President: manager, leader, able to delegate, speaks well, organizer.
The Vice-President
Assumes the duties of President as needed when the President is unavailable. Available for special tasks as needed, such as architectural issues, internal dispute resolution, community building efforts, or landscaping.
Maintenance Liaison. A Maintenance Liaison would coordinate with the management company representative on issues that may require board interaction between meetings. This person could speak for the board on maintenance issues between meetings. This may mean that this board member would need to poll board members on a particular decision that could not wait until a meeting can occur.
Qualities that would be helpful for the Vice- President: same as President, willingness to learn and grow into the role of President manager, leader, able to delegate, speaks well, organizer.
The Secretary
• Records the minutes of all meetings, prepares them for approval by the Board, and arranges for distribution to the owners and the Association Manager.
• Prepares the Notice of the meeting and Agenda and posts it on the property, so that owners are aware of the meeting and have an opportunity to attend.
• Maintains a record of all previous minutes in a “Minutes” book
Qualities that would be helpful for the Secretary: comfortable on a computer and word programs, able to prepare notices and minutes for distribution. Short hand is not required.
The Treasurer
• Primarily responsible for the financial affairs of the association.
• Receives and reviews weekly payables, signs checks and mails to vendors.
• Receive the reconciliation’s and copy of reserve statements as they are processed.
• Responsible to safely invest the reserve funds according to the direction of the board, and transfer to the operating account funds as they are needed for reserve projects.
• Reviews monthly financial reports
• The link between the Board and the management company on financial issues
• Coordinates transfers into and out of the reserve account.
• Need to be aware of and understand the reserve study.
Qualities that would be helpful for the Treasurer: able to read and understand basic financial concepts. It is possible to be overqualified for this role for some people who have been involved professional in high level accounting positions as a CFO or controller. Association finances are fairly basic and involve a great deal of common sense. A person who balances their own checkbook is likely able to learn what is necessary.
The Member-at-Large – available for special projects, subject to the direction of the President. The director-at-large may serve as the maintenance liaison.
Member– At-Large: Same as Vice President, perhaps with background or knowledge of maintenance would be helpful.
NEXT, NOW THAT THE OFFICERS ARE DETERMINED:
- Notify your manager of the names and positions of each board member.
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Bank Signature card. It will be necessary to sign a new signature card for your operating and reserve accounts. Contact your association manager who will set you up with one of the staff in the office who is trained on this process. At least four Board members should sign the bank card so there is back-up in the event someone is unavailable to sign the weekly checks. In addition, there are a couple of other forms to sign. These have to do with instructions regarding the possible need for filing of liens, as required by the law firm handling liens, and another form regarding owners having the ability to pay their dues by automatic debit
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Meetings – determine the best time and place to meet. Normally meetings occur at the home of one of the Board members or in a recreation room if one exists. Notify your manager of the dates of your meeting (i.e. third Wednesday) so that we can be sure to have your management reports to you before your meeting. Most associations meet monthly. However, if your By-laws permit, and you do not have many issues pending, you may be able to meet less often.
The President should also designate a board member to communicate directly with your manager just after board meetings. Your association manager may or may not be contracted to attend your Board meetings. If it is in your contract to attend, they should certainly will do so. The issue of whether they attend meetings or not can be altered by mutual agreement if the Board deems it necessary.
If you need a manager at a specific meeting, and if they are not contracted for evening meetings, some contract may allow them to charge per hour and this is paid directly to the manager to help compensate for them working a very long day. We would respectfully ask that you allow the manager to present their report and handle questions as early in the meeting as possible and then in some cases, be excused.
- Contact Information and Survey – In order to help serve you better, please take the time to complete a list or outline for the information to be discussed. It will help them get to know you better and how best to serve you. This keeps everyone on topic and point for why the meeting took place.
Find Upcoming Events; Educate yourself and the Board Members
Great Board Member practices – How do the best run Associations operate?
We have worked with great boards for many years, and we have worked with Boards who had great difficulty in leading their associations. Here is what we have observed in working with great boards:
- Great boards learn to work as a team. There is a balanced sharing of the work load among all board members.
The directors listen to others perspective, respecting those on the Board or the association with different opinions. The best decisions are made after a lively discussion of all the issues and concerns. Decisions made, even though not unanimous, become THE decision of the Board. Minority members accept the decision of the majority.
No single board member controls or dominates the Board or association. Board discussion is balanced with all members contributing. Board members with dissenting opinion are encouraged. The President leads, but should not dominate.
There are no decisions or actions outside of Board meeting, unless the President is required to take emergency action, in which case it is reported to the other members as soon as possible.
Board members do no not directly undertake tasks/jobs, that are more suitably handled by a designated professional….. CPA, attorney, consultant. Outside counsel is sought and followed from Management Company, attorney and other consultants as needed.
Decisions are made for the best interests of the entire association.
Board members understand that they are “serving” their members, not acting as managers.
The job of the board is to establish policies and review the work done by others.
The Board utilizes professional and competent vendors and they have reasonable expectations of their vendors.
Board members realize that they are Board members at Board meetings, or while conducting board business outside of a meeting, and homeowners the rest of the time. After all, this is your home too.
Board meetings are regularly scheduled, with proper notice to owners, to which Board members are prepared in advance with material read, and arrive ready to make decisions.
Minutes are taken that reflect the decisions made and distributed to owners in a timely fashion.
On the awarding of maintenance jobs cost is not the primary issue, rather a concern for the long term effectiveness. In other words, value, is more important than cost. Also, vendors are paid promptly upon satisfactory completion.
In the association there is a great community spirit. Owners voices are given consideration, and there is healthy dialogue when needed on important issues. Communication with owners is viewed as important.
Conflicts of interest: in a homeowners association the potential for this can occur frequently. Examples of this include relationships with association vendors, having work done on a portion of the common area that would benefit a board member and avoiding the same kind of work elsewhere, keeping the assessments low, at the expense of necessary repairs or reserve funding, so that a unit can be sold in the near future, are all examples of conflicts of interest. Be aware of them, and avoid even the hint of a conflict of interest.
Tags: Condo and HOA, Condo and HOA Board of Directors
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