Avoiding Common Board Mistakes Thou Shalt Not

Mary and Tom own a condominium in upstate New York, where they live with their three young children. The couple's otherwise idyllic suburban enclave has been shaken with recent allegations that their association's current board of directors has been working to hide evidence that their previous president may have embezzled thousands of dollars from the association. The president under suspicion has since resigned and moved, and a full investigation was ostensibly conducted. Once the residents got wind of the possible cover-up and the total lack of communication between board and association members, however, many—including Tom and Mary—lost faith and trust in their remaining appointed board members, and are demanding answers.

Of course, the residents at Mary and Tom's condo complex are upset—and rightfully so—at the alleged crime committed by their previous leader, but in this case, the remaining board members made the additional mistake of trying to cover up the problem. Perhaps they believed they could remedy the situation on their own, or perhaps they were afraid of the potential legal ramifications if residents were to find out. In any event, it is this cover-up and lack of communication that has soured the current board's relationship with the association members—perhaps even more so than the alleged embezzlement.

Ordinary People

Boards of directors are usually made up of ordinary people, elected or appointed by their neighbors to run their community smoothly and efficiently. Unlike the former president of Mary and Tom's board, most board members do their utmost to fulfill that expectation, but occasionally, even the most well-intentioned board members make mistakes. Some errors are minor, but others can have serious ramifications for their building communities, as in Mary and Tom's case. A few of the most common—and most preventable—board mistakes are discussed here, along with tips on how to avoid making them in your own board.

Mistake #1: Covering Up

It's never a good idea for a board to bury its head in the sand like Mary and Tom's board did. "We all know from experience that if you try to cover up something it only gets worse," says Calvin K. Clemons, CAE, CMP and author of The Perfect Board, (Synergy Books, 2005). "It's always better to admit your mistake, make it public and then find a cure or solution. There may be legal and financial problems along the way, but admit the mistake anyway."

More than almost any other factor, communication is key to becoming a successful board. "Your relationship with the shareholders is very important," says Clemons. "Communicate back and forth and get that message out, no matter how serious it is. Let's say, for example, that you don't have money to repair the roof, and the roof is leaking. Don't hide that from the shareholders or unit owners. Tell the residents and work on a solution to raise the dollars and deal with it. There's only so long you can put off the inevitable."

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Comments

  • I agree with alot of your article, but what I don't agree with is take it to the polls, this does not work with the good ole boys...This has been proven at our last elections along with the homeowners who are just fed up with the way it has always been. Everyone likes to make it seem like we bought into this or just move and that HOA are there for property values...I call BS...I think that everyone needs a slap of reality, in the real world kids it does not work like that....many of us did not get the rules and governing documents until we signed on the dotted line nor did any of us know that our rights would be taken away due to corporate law and not our rights under the constitution...who are you trying to kid. The only thin.g I see is fool the people buying into these mandatory HOA so that the trade organizations, lawyers and vendors can line their pockets with my hard earned money. Wake up the HOA dream is over it became a missmanaged nightmare with no acocuntability.