Responsibilities of a Board of Directors for a Condo Association

 

It takes a village to run a condo association, in the sense that a board of directors serves in much the same capacity as the governing body of a small town. Once elected, members of the board of directors of a condominium association have specific and critical duties. These duties are included in the association’s bylaws, with which every board member should become familiar. Every condo owner may vote in board member elections, and a board member’s primary duty lies in acting with the best interests of the condo owners in mind. A board member should never act in his or her own self-interest. They are always representing the owners of the condo, and are held accountable by them. The number of board members depends on the individual condo association.

 

Everyone has something to say about the Boards Decisions, but not many want to become a board member!

When an owner approaches me to complain about the decisions of the board of directors at his or her association is;  The First Question I ask is- “did you attend the meeting that decision was made at?” The Second Question is- “have you considered running for the board so that you can be part of the decision-making process?” All too often the answer to both questions is no. If you want to understand why your board makes the decisions they make and possibly influence those decisions the best way to do this is to attend the board meetings and comment on items you have knowledge or concerns about on the agenda. Want to take part in the decision making, step up, and run for the board. – by Royale Management Services

 

The vast majority of business decisions are made in meetings. While small decisions are made in all kinds of meetings, the more important decisions often get their own dedicated meetings.

There are different types of group decision making processes, and care should be taken to choose a process that best matches the situation. A decision making process can include group activities like information gathering and sharing, brainstorming solutions, evaluating options, ranking preferences, and voting on the final options. Below are the most effective ways of running decision making meetings.

 


 

Primary Goals for Decision Making Meetings

Goals for a decision-oriented meeting can vary a little based on the type of decision being made, but they are always centered on coming to a consensus about a future plan. It is important to remember that the goal of these meetings also includes planning how to best execute the decision that has been made.

 

Make the best possible decision

If a decision making process is flawed and dysfunctional, the decisions will be bad.

By involving a group in making a decision you can rely on collective intelligence; knowledge beyond what is possible with individual decision makers. Because each participant has unique information and perspectives, combining group information leads to more informed decisions. However, it is important to use meetings designed specifically for group decisions efficiently, to not waste the group members’ time.
If all planning decisions were made by one person, not only would the choices be uninformed, there would also be little unity around team goals and direction.

 

Planning for execution

When individuals feel that their opinion has been considered in the group planning, they are more likely to embrace the decisions and work to carry out those goals.

Most discussions of decision making assume that only senior executives make decisions or that only senior executives’ decisions matter. This is a dangerous mistake.

Participatory decision making leads to increased team productivity and likelihood of goal execution, because team members feel ownership and responsibility for the decisions made.
Addressing both short term and long term goals at your decision making meetings is a great way to make sure team members leave with a direction and know the next steps. The short term plan can be as simple as outlining action items and assigning tasks. In the long term it could mean setting a timeline of general dates and milestones. Initial planning can be an effective way of aligning the group and cementing the decision that was made.

 


 

Key Roles in Decision Making Meetings

The participants in decision making meetings may play different roles. Understanding the distinctions between these levels of involvement is a useful way of holding members accountable for their role in implementing decisions.

 

Meeting leader

In order to avoid getting off topic it is recommended that one person be in charge of guiding the direction of team negotiation. In addition, it can be helpful to use some elements of status update meetings in order to have meeting attendees present and be held accountable for research into the decision being made.

 

Those with authority to carry out the decisions

For decision making meetings it is particularly important to include all relevant persons with authority to carry out the decision. If decisions are made without including the relevant people, it can often be very challenging to implement the resulting decision.

In some cases, it can be useful to dedicate one leader of a team to be a representative for that group. Often, this job is given to someone in a senior position, but it can be fulfilled by anyone capable of accurately reporting information on behalf of a group. If this method is used, the representative should be prepared to report back to the team the consensus that was reached. Without this information exchange, the group unity that should have been a result of the group meeting is lost.

 

Note taker and process observer

Decision making meetings can often get derailed or become ineffective for a variety of reasons. To counter this, it can be helpful to include a note taker and process observer. These roles should be filled by people not directly involved in the decision so they are not biased toward any particular opinion. A note taker records what was suggested and decided throughout the meeting while a process observer records how those decisions were met. Incorporating these roles can lead to a lasting group understanding as well as ability to improve decision making meetings in the future.

 

Common Challenges in Decision Making Meetings

Making group decisions can be hard. Making good group decisions is even more challenging. However, good decisions is what can make or break your project or even your company or career. Being aware of the most common challenges in decision making meetings will move you closer to facilitating successful group decision making.

 

Incomplete information and narrow perspectives

An important aspect of collective decision making is to incorporate a broad spectrum of opinions and ideas, and through group collaboration converge these into a best possible solution. This process is easier said than done. Getting to a solution often involves dealing with a lot of conflicting agendas and opinions which are not easily resolved.

 

Identifying the best possible solutions

Another classic challenge of the decision making meeting is knowing what possible options are worth further consideration and discussion, and which options to discard early. Time is often wasted discussing possibilities that are not even among the most likely or best choices.





 

How to Host a Successful Decision Making Meeting

Decision is the spark that ignites action. Until a decision is made, nothing happens.

A great decision making meeting effectively incorporates all participants, benefiting from the knowledge and experience they bring to the process. Giving all relevant parties the opportunity to participate in the decision making process increases the quality of the decision, adds to the collective understanding and support of the outcome, and ensures successful implementation.

 

Consider all relevant information

We want as much relevant information as possible to go into the group decision process. This means involving as many stakeholders as practically possible to provide input when it comes to defining the problem area, come up with possible solutions, and evaluate options.

 

Generate and evaluate possible solutions

Identify and agree on solution requirements before starting to brainstorm potential solutions. Then, invite to brainstorm solutions with an open mind, focusing on the issue rather than the person presenting the idea. Use the solution requirements to evaluate the various suggestions, identifying the top ideas for further consideration.

 

Get everyone on board

The secret of change is to focus all of your energy, not on fighting the old, but on building the new.

One of the most important aspects of decision meetings is to create unity around the decision that is created. When each participant feels their opinion has been fully considered as part of the decision making process they are more likely to feel ownership of the decision, even in cases when it is not the outcome they hoped for.

 


 

It’s a confusing time for everyone affected, and we can all use some extra clarity. Our experts dove through the 88 page document and outline what you need to know about SB-4D so you can focus on making your building safer instead of deciphering the wordy documents.

Florida state legislature took swift action to implement inspection reform to mitigate the risk of a similar tragedy in the future. As of May 27th, 2022, Florida passed several laws to keep building safer in the state by requiring specific inspections and funding mechanisms. These new Florida condo laws mean significant changes for building owners across Florida, all within a relatively short time.

Find everything you need to know about Florida Building Inspections

 

An interesting question that arises from time to time is whether the protections of the United States Constitution (and the Florida Constitution) apply within the gates of a community association.

Read the Full Article...

Condo owners often complain that their board doesn’t do enough, or that the board members aren’t involved as much as they would like in the administration and maintenance of their building. While a disinterested or apathetic board is certainly a problem, going to the other extreme can be just as bad…or maybe even worse.

Read the full article...

 

Board Member Leadership and Governance in Florida\'s Condo Industry.

Officers of the condo board consist of the president, vice president, secretary and treasurer, as well as a member at large. The president runs the meetings, is in charge of day-to-day business and signs all contracts. He or she is responsible for ensuring that board resolutions are carried out. The vice president acts in the president’s stead if the president cannot attend a meeting, and the board may also give the vice president other duties. The secretary keeps minutes of board meetings and records all votes. It is the secretary’s responsibility to inform residents and members of board meetings. The treasurer handles all monies relating to the condo association and disburses funds as directed by the board. The treasurer also signs the condo association’s checks, with the president serving as co-signer. This position is charged with keeping accounts and arranging an annual audit of these accounts by an accountant. The treasurer also prepares the annual budget and income and expenditure statement for presentation to board members. The member at large is assigned duties by the board or president. Learn about good leadership and governance for board members


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What Are the Duties of Condominium Boards?

Condominium boards have complete management responsibility for their community. Even if they outsource some duties to a professional management company, boards still retain these responsibilities. Since individual homeowners, who may not be well-versed in real estate management and legal issues, serve on these boards, all members should understand their duties and responsibilities. Condominium boards should also retain experienced legal counsel and/or accountants to be information resources and advisers.

The duties of the condo board encompass every aspect of the condominium’s governance and management. They are the people making all of the major decisions and establishing policies for the condo association. Under Florida law, the board or its committees set assessments for residents, hire personnel, maintain common areas, purchase insurance, obtain accounting and legal services and establish house rules. On a regular basis, board members must:

  • Attend board meetings
  • Appoint committees
  • Communicate with residents
  • Investigate inquiries regarding violations, maintenance and other pertinent issues
  • Enforce penalties for violations
  • Maintain corporate records
  • Grant waivers, if applicable
  • Enforce the bylaws and other governance documents
  • Make decisions regarding litigation
  • Hire and monitor building management
  • Establish sound fiscal policies
  • Respond to owner concerns

 

Condominium Association Bylaws

Board members must become intimately familiar with their condominium association bylaws. Management of all condominiums is governed by the association bylaws. Board members must understand all items addressed in the bylaws, often called the “condo docs.” Further, boards must learn all state statutes that relate to bylaw subjects and strictly follow the letter of state laws to avoid legal problems.

 

Common Areas and Building Exteriors

The condominium association board must maintain–and keep in good repair–all common areas and building exteriors. Common areas are those used by all unit owners who have deeded title to small percentages of these areas. These areas include building lobbies, open land or parks, tennis courts, pools and other amenities available to all residents. Whether a high-rise style, townhouses or cluster housing, building exteriors require maintenance and repair, particularly the siding and roofs.

 

Condominium Association Budget

Creating and managing the association budget is a critical duty for condominium boards. The most common reason for condominium problems is mismanagement or misuse of the budget. Association boards without an experienced accountant as a member should consider getting advice from an outside CPA to ensure that their budget is reasonable and complete. Condominium budgets should be built like those of nonprofit corporations. By estimating expenses, including insurance, landscaping, trash removal and similar operating costs for the coming year, the association board determines the amount of monthly individual homeowner assessments, commonly called “condo fees.”

 

Maintenance and Repair Reserves

Along with operating expenses, the association must carefully consider the funds needed as “reserves” for maintenance and repair. As part of the budgetary process, establishing realistic reserves is often overlooked by association boards, sometimes with dire consequences. For example, picture a 48-unit high-rise condominium, with each unit having a suspended wooden deck for relaxing and entertaining. Decks need periodic staining and water protection applications. Further, on older condominium projects, deck replacement would be needed at some point. Neglecting to build reserves into the annual budget for deck maintenance and replacement could result in “special homeowner assessments” of thousands of dollars. Condominium boards must diligently add these to annual budgets to build up cash to make these repairs.

 

Collecting Assessments

Monthly homeowner assessments–condo fees–must be collected by condominium boards. While most condominium bylaws permit boards to place liens on individual units for unpaid condo fees, liens do not equal money. Unit owners may not refinance or sell their homes for many years, leaving the condominium association short of funds to meet budget and reserve demands. Boards have a duty to establish an effective collection policy, much like a bank, to ensure consistent monthly cash flow into the association account to meet operating expenses.

 

Fiduciary Duty

Condominium associations must fulfill their fiduciary responsibility to manage the project in a businesslike and conservative manner. Depending on the size of the condominium project, association boards may manage many dollars and complex business issues. Fiduciary duty is typically measured by evaluating the actions of individuals or groups that “reasonably prudent” persons would take. For example, neglecting to collect condo fees, putting sufficient reserves in the budget or not completing necessary repairs is a breach of fiduciary responsibility. Condominium boards usually have individual and collective fiduciary responsibility and could be subject to serious lawsuits from unit owners for failing to act prudently.

 


 

The problem is that community associations have a lot of records and it goes beyond what a board of directors have control of because managers and management companies also have control of essential documents that very often go missing.

Outgoing board members to return all official records … to the incoming board.

 

Every board of directors, whether for a Fortune 500 company or your community association, needs a great secretary. The secretary is responsible for maintaining those records accurately, including meeting minutes, bylaws and membership records.

 

Prior to recent amendments to the procedures for fining and use right suspensions for non-monetary violations.

 

Are your community Documents Updated?

Homeowners Associations and Condominium Associations have three governing documents: the Declaration, the Bylaws, and the Articles of Incorporation.

The Declaration is the “contract with the membership” – it contains things like pet restrictions, vehicle restrictions, guest rules, the ability to do background screening on incoming buyers and tenants, insurance obligations, and other things that affect every community member’s everyday life.

The Bylaws are your go-to for procedures such as who gets to vote? How many members comprise the board? When are your elections? Who can be on the board? Who can call meetings? When is the annual meeting?

And the Articles of Incorporation are your contract with the State of Florida that incorporate you as a corporation-not-for-profit.
All three documents reference one another, and it’s important to have congruency.

 


 

Take Action today; select one of our Legal Members for a comprehensive, custom-tailored update to all three community association documents

—the Declaration, the Bylaws, and the Articles of Incorporation

Covid-19 & New Laws have brought many changes; every community should have the new laws added to their governing documents.

 


 

The Process of updating governing documents.

The board shoulders a bit more responsibility – giving us lots of information about your association—and then we collaborate together on the tougher provisions, ensuring you have the very best guidance and governing documents that are perfect for your community.

  • Search of original documents and amendments all the way through the mailing of proxies and finally recording of your new documents..
  • Our presence at town hall meetings, board meetings, or assistance with mailings.
  • There will be a lot of questions from owners, we can help answer these for your community.

Legal Members can provide not only guidance about your community standards, but also lots and lots of ideas from all of the other communities with whom we work! Some of the most popular updating provisions these days include: preventing AirBNB and sober homes, creating a non-smoking building (while grandfathering in current residences), eliminating investors, protecting the association from corporate takeover, and screening new residents and tenants for criminal histories and good credit references!

 

How much time does it take to update documents?

This depends quite a bit on you! As soon as you retain our services with payment, we send you a packet of information you need to get started. We also are ready to schedule your telephone conference within the following fourteen days. That said, some associations need a bit of extra time—someone’s on vacation, or it’s hard to coordinate calendars with everyone. (And that is perfectly alright!)

You will also have an opportunity, after our phone conference, to review everything before we create your docs. Rewriting 60-100 page documents takes a bit of time! We ask for six-to-eight weeks to create your new documents, and then we send them to you.
Once you get them, you’ll start “getting the vote” in your community! Some Associations can do this within a few weeks—and for others, the process can be months! This timeline is what fits best for your community, and we are happy to provide support in any way needed.

 

Updating governing documents can be an exciting time for your community—there are so many incredible updates to protect and modernize your association!