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HOA’s Should Adopt a Board Code of Ethics


While it’s certainly not mandatory, the board of directors for your homeowner’s association (HOA) should think seriously about implementing a code of ethics, which would serve to aid in the management of the HOA, as well as help community members.

What exactly is a code of ethics for an HOA board? Basically, it’s a document that establishes guidelines for appropriate behavior of board members.

An HOA code of ethics is designed to help director’s exercise good judgment in the best possible way. This document can benefit the community as a whole.

A code of ethics should encourage board members to:

  • Have the best interests of the association as a whole at heart, regardless of personal interests
  • Be united with other members once decisions are made
  • Use good judgment to make the best possible business decisions for the association, taking into consideration all aspects of the situation
  • Act within the boundaries of their authority as defined by law and the governing documents of the association
  • Conduct open, fair, publicized elections
  • Allow residents to comment on decisions
  • Perform their duties without bias
  • Disclose personal or professional relationships with any company or individual who has or is seeking to have a business relationship with the association.

A code of ethics should discourage board members from:

  • Misrepresent the facts in any issue involving HOA business
  • Reveal confidential information or personal information about any association owner, resident or employee.
  • Make unauthorized promises to contractors/bidders
  • Support or lobby for any action or activity that violates a law or regulatory requirement
  • Accept any gifts—directly or indirectly—from owners, residents, contractors or suppliers.
  • Use their positions for personal gain or to seek an advantage over another owner or non-owner resident
  • Reveal to any owner, resident or other third party the discussions, decisions and comments made at any meeting of the board properly closed or held in executive session
  • Spend unauthorized association funds for their own personal use or benefit
  • Launch personal attacks on board colleagues, staff or residents.
  • Harass or threaten any board member, owner, resident, employee or contractor

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Expectations of HOA Board Members


A functioning homeowners’ association is crucial to the success of planned residential communities and all HOA’s are only as strong as their board.

Those serving on an HOA board must first be dedicated, wanting only the best for the community. They also need to have a thorough understanding of the community, what’s happened in the past and what the goals should be for the future.

You’re likely to face numerous challenges so it’s vital that you maintain your composure and practice patience when issues and concerns are brought to your attention. Realize you can’t make everybody happy all the time, so your focus must be on what’s best option for the whole community.

HOA board members must strive to be good communicators, as it’s crucial to keep homeowners, as well as fellow board members, informed. Being able to listen, not just to fellow board members but to homeowners as well, is an important first step in successful communications.

It’s imperative for board members to understand how much time serving on the board involves and to have a comprehensive understanding of their position and its responsibilities. They must anticipate they will need to to work with budgets, fiscal policies and reserve funds.

Finally, making certain you’re going to be able to attend meetings as participation is crucial in staying on top of things.

Remember, being asked to serve on your HOA board gives you a voice and an opportunity to take an active role in the future of your community. Take the job seriously and enjoy being able to make a difference!



What You Need To Know About CAI


You’ve likely seen the CAI professional designations, particularly if you’re part of a homeowners’ association (HOA), but what exactly do they mean?

The Community Associations Institute (CAI) is an international membership organization that is dedicated to building better communities and has more than 33,500 members and works in partnerships with 60 chapters.

CAI’s mission is to provide homeowner volunteers who govern communities, as well as those who support them, with information, education and resources. CAI members include association board members and other homeowner leaders, community managers, association management firms and other professionals who provide products and services to associations.

Dedicated members who are responsible for fashioning the future of its ever growing organization, its chapters and the community association marketplace, lead the way for CAI.

Heading up CAI’s governing body is its 15-member Board of Trustees, which includes members from all across the United States. One of them, we are proud to report, is our own General Manager Joe Wise,.  Joe, holds the CMCA® (Certified Manager of Community Associations), AMS® (Association Management Specialist) and PCAM® (Professional Community Association Manager).Wise Property Solutions is also East Tennessee’s only AAMC® (Accredited Association Management Company).

The CAI Board of Trustees is supported by three Membership Representation Groups (MRGs), elected members who give their constituencies a voice in crafting CAI policies and work to ensure that CAI provides services and benefits valued by members.

The CAI serves community associations and homeowners by:

  • Providing them with seminars, workshops, conferences and educational programs, most of which lead to professional designations for community managers and other industry professionals.
  • Publishing the largest collection of resources available on community association management and governance, including website content, books, guides, Common Ground magazine and specialized newsletters.
  • Advocating on behalf of common-interest communities and industry professionals before legislators, regulatory bodies and courts.
  • Conducting research and serving as an international clearinghouse for information, innovations and best practices in community association development, governance and management.

The CAI, whose mission is to inspire professionalism, effective leadership and responsible citizenship, believe homeowner and condominium associations must exceed the expectations of their residents. In order to attain that goal, the CAI is dedicated to identifying and meeting the needs of professionals and volunteers who serve associations, by being a trusted forum for the collaborative exchange of information and by helping members learn, achieve and excel.

https://www.caionline.org/HomeownerLeaders/Pages/LearnMore.aspx



Best Practices for Board Members


If you’ve never served on a Homeowners Association board, it’s important you understand what your duties, responsibilities and obligations are and that you are, in fact, acting as a fiduciary on behalf of your fellow owners.

First and foremost, you must take your responsibilities as a board member seriously, always use good judgment, avoid conflict, be committed and be aware that the interests of the HOA take priority over your own. Being selfless and unbiased is a must.

Confidentiality is crucial. For example, if there’s a conversation about dues or competitive bids during a meeting and the board member tells someone outside of the board about it, they’ve potentially violated policy.

It’s important to be sensitive to potential conflicts of interest as they too can cause issues regarding your duty as a member. If something is being discussed in front of the board that a board member might have other involvement or interest in, it’s imperative that they disclose this and recuse themselves.

Remember too, that as a board members of the HOA its interests and well being come first and it’s important to think things through, while using common sense and sound judgment.

Communication with fellow board members, homeowners and the management company is also key to being effective in your role.

As a board member paying attention to the “little” things, like attending and participating in meetings, voting even when confronted with difficult choices, participating in community events, obeying deed restrictions, being financially responsible, treating everyone with courtesy and respect and passing responsible budgets in a timely fashion.

In the end, it’s quite simple. If all HOA board members maintain core values, do the job they signed up to do and use their heads, you’ll end up with a well run association.



Effective HOA Meetings


It can be frustrating to be part of a meeting that’s disorganized and seems to go on and on. It’s not difficult to run an effective HOA meeting – all you need to do is follow these simple guidelines:

  • Make sure you have a plan. The last thing you need is to call everyone together and then fumble through the meeting. If you’re not organized and on point, you’re likely to waste time.
  • Have a minute-by-minute agenda, which will keep the meeting moving and on topic. This keeps meetings from running too long, and having a specific time listed for each item encourages people to better utilize the allotted time.
  • Make sure the meeting is informative, detail-oriented and interesting. Try to start out on a positive note, which makes members more inclined to attend. For instance, if you’ve met certain goals or finished specific projects, address that first. If possible use photos in your presentation to show progress or completion of a project.
  • Provide members information pertinent to the agenda. Include materials and data in order to make the best possible decisions.
  • Be aware of your environment. It’s always best to meet in a professional setting not at someone’s house. Board meetings should take place at a neutral location like the HOA clubhouse or the management company conference room.
  • Avoid a party-like atmosphere. Don’t turn board meetings into social affairs. You’re there to take care of business, not talk about last night’s football game or your kids’ birthday party. Business first, socializing afterward.

Remember, your HOA board meeting is a business function, so treat it as such. Be prepared, don’t stray from the agenda and make it interesting. Trust us, your meetings will be more productive – and participation will improve!



Which Hat? HOA Board vs. Good Neighbor


Most of us wear many different hats in our daily lives. Perhaps you juggle the hats of a spouse, parent, worker, friend, HOA Board member, neighbor, etc. Keeping your personal and professional lives separate is challenging. Many HOA Board members find it even more difficult to separate Board responsibilities from simply being a homeowner. If you’re spending too much personal time handling Board business, here are some ways to reclaim your “good neighbor” status.

Getting to know your neighbors fosters better relationships. Informal social gatherings or enjoying community amenities are good ways to meet neighbors. Keep conversations focused on general topics about each other. When neighbors know you, they see more than just your Board hat. You are a neighbor.

Because you’re on the Board, you’re aware of your neighbor’s financial difficulties. If a friend is delinquent in assessments, it can be awkward or uncomfortable because your friend knows you know. Overcome discomfort by avoiding association business discussions outside of Board meetings. Don’t share with family, friends or even other Board members. Neighbors respect that you keep HOA business confidential.

Do you field HOA questions when you’re walking through your neighborhood? Community events? The pool? Seeing a Board member triggers ideas and/or issues that homeowners want to share. Instead of taking action, redirect the comments. Explain your Board’s process for capturing input, and provide the email or number to the resident. If your Board doesn’t have a contact protocol for non-urgent issues, establish one.

Board decisions aren’t always met with unanimous support. Some homeowners can be extremely vocal when disagreeing with a decision. HOA Board members have to live side-by-side with angry neighbors. So, you can’t go to the mailbox without someone catching you. Consider creating opportunities for homeowners to make comments and suggestions give homeowners an opportunity to express themselves. Making people feel heard goes a long way in diffusing anger.

Although your Board members may strive to enforce rules fairly, some homeowners will take it personally. One of the benefits that a property management company offers is to shift the viewpoint from personal to business. Delegating some of the daily tasks to the management company removes you from on-call duty. This will allow residents to see your “neighbor” hat more than they see your “Board Member” hat.

Distinguishing between being a neighbor and a Board member can be tricky. It’s up to you to achieve balance so that you can enjoy your neighborhood. Make the effort to retain or reclaim your “good neighbor” hat. You’ll be glad you did.



10 Things Homeowners Wish Your HOA Board Knew


Homeowners choose to buy a home in a managed association for a combination of reasons. They like the standards that maintain property appearance and values. They have access to amenities they might not be able to afford on their own. They lack either the time or skill needed to address exterior maintenance and repairs. Homeowners have high expectations of their HOA Boards. How does your Board rate among the ten things homeowners wish you knew?

  1. Keep homeowners informed. Homeowners grow suspicious when they feel like they aren’t clued in about association business. Transparency is vital for HOA Boards. Make your meetings as open and accessible as possible. Have financial records available for review. Communicate news to homeowners via newsletter or website. Creating a glass house for your HOA Board builds homeowner trust.
  1. Avoid playing favorites. Selective rule enforcement rarely escapes notice. It pits neighbor against neighbor. Homeowners lose respect for the Board. Every member of the association is subject to the same rules, assessments and penalties. Violations become less personal and generate fewer complaints when rules are consistently enforced. It’s the HOA Board’s duty to enforce all rules fairly—for other Board members, neighbors and family.
  1. Present a united front. Board disagreements cause conflicts in the community. Everyone has their own idea on how to run the association, so differing opinions are common. It’s okay to disagree behind the scenes, but communicate with a united voice within the community. It’s difficult for the community to have confidence in a Board that is publically divided.

 

  1. Clarify communications. Unclear messages from your Board create more questions than answers. Long-winded details and statistics are only good for bedtime reading. Keep homeowner attention focused by communicating clearly and concisely.
  1. Don’t rely on special assessments to balance the budget. Homeowners recognize that unexpected major expenses create the need for a special assessment. But, homeowners resent Board members passing an insufficient budget that will ultimately require a special assessment or assessments to make ends meet.
  1. Seek to understand before acting. Avoid hasty decisions when assuming your board responsiblities. Take time to understand how things work (or why they don’t) before attempting changes. Understanding is the first step to better decisions.
  1. Don’t abuse your power. Rule No. 1 is that Board members act as a team, not individually. It’s essential for every member to understand what he or she can and cannot do legally.
  1. Be responsive to homeowners. If a question or comment requires investigation, let the homeowner know. Acknowledge receipt of all homeowner communication, and followup. This encourages both trust and confidence.
  1. Implement scheduled maintenance. Routine maintenance requires less expense and time than major replacements costs. Don’t allow the community to slide in a state of disrepair.
  1. Maintain personal ethics. Individuals shouldn’t derive personal gain from serving on the Board. Not only is this an ethical problem, but many situation are illegal.


Core Values and Expectations for HOA Board Members


Board members come together from vastly different backgrounds to focus on the common goal of serving their community. Some are inclined to research the smallest decision while others make decisions based on experience. This diversity helps bring different perspectives to the table for better decision-making. Regardless of their approach, Board members should share some core values and expectations.

Participate in HOA Meetings: You need to attend and actively participate in HOA meetings. You can’t contribute ideas when you aren’t there. Making decisions is one of the main responsibilities associated with being a board member.

Manage Finances: HOA Board members have a fiduciary responsibility to maintain and protect the value of the community property. This means taking care of association finances by managing assessments, annual budgets, reserve studies and maintenance schedules.

Maintain Confidentiality: Don’t discuss association business with family and friends. Conversations containing confidential information should be confined to Board meetings.

Enforce Rules: Fairly enforcing rules and regulations is vital to a community. Rules apply to every homeowner—Board members, family and friends. If your community has old rules or regulations that are no longer relevant, it’s important for Board members to review and work to amend the documents.

Respect Others: The best decisions are made after understanding different viewpoints. Listen and respect the opinion of others. Whether or not you are in favor of the final decision, you should support the Board’s decision within the community.

Communicate Effectively: An HOA Board needs to work as a team, negotiate with vendors and speak with homeowners. You need to be able to communicate effectively in person and in writing.

Distribute Duties: No one Board member can fulfill all the association duties. Distribute duties among all Board members. Reach out to committee members or engage a property management company. It’s simply the nature of some people to wait until called upon. More hands make lighter work.

Maintaining clear expectations will improve your collective experience as HOA Board members. It leads to better relationships and community decisions. When everyone is on board with expectations, you create a community that truly shines.



Legal Obligations for HOA Board Members


Many HOA Board members don’t fully understand the legal obligations that come with serving their community. You rarely see one document that completely lists all responsibilities. State law may determine some. Governing documents outline others. And other regulations can further complicate the question. It’s little wonder that a lot of confusion surrounds legal obligations. Here’s a way to look broadly at your duties.

When you accept an HOA Board position, it’s a legal commitment. You agree to the responsibility to manage your association well. You take on the duty of keeping the HOA fiscally sound. You are responsible for maintaining common areas and property values. You plan for the future. All these hats fall under the legal duties of the “Three D’s”.

  • Duty of Care: Board members must exercise forethought and attention in performing all duties. Each officer should participate in planning, research and meetings so he/she can make informed decisions.
  • Duty of Loyalty: Interests and well-being of the association must come first. Officers must act fairly and impartially. When conducting association business, officers should not gain personal benefits from decisions. Conflicts of interest also extend to family members. Relatives of Board members should not derive personal gain from HOA business.
  • Duty of Obedience: Board members have a legal obligation to ensure that the HOA complies with articles of incorporation, governing documents and association laws and regulations. Board members can’t be experts in all areas. Thus, they need advice from industry professionals when faced with a decision. Qualified experts include insurance agents, attorneys, reserve specialists, accountants, property management company, etc.

HOA Boards have a fiduciary responsibility to oversee the association’s finances. This goes beyond simply balancing and reviewing monthly expenditures. The Board is responsible for developing an annual budget, establishing assessments and collection policies. Individual officers breaching fiduciary duty can be held liable to the association for resulting damages.

Board officers are responsible for setting association priorities and policies. They establish the guiding management plans for the association. Typically, Board officers can’t do all the work themselves. Professional community association management companies often carry out daily processes required to support the board’s policies and priorities. However, the Board retains legal responsibility for all actions.

As you can see, legal responsibilities span a wide range of areas. While officers may strive to follow all the legal duties, disagreements and lawsuits can happen. An association’s general liability insurance typically doesn’t cover legal expenses and damages for Board members. As an added precaution, be certain to protect your Board members with Directors and Officers (D&O) insurance.

Understanding your obligations as a board member is key to serving your community successfully. Playing an active role in your HOA is both challenging and rewarding. Don’t be afraid to take the opportunity to serve to positively impact your community.



Onboarding Techniques for HOA Boards


A new HOA Board member’s effectiveness directly relates to your onboarding techniques. It’s much more than an introduction and welcome. Starting your new HOA Board members off on the right foot sets them—and the entire Board— up for success. Here are some ways to maximize your onboarding techniques.

Communicate expectations for new members. Many HOA Board members wear multiple hats. As leaders, they have fiduciary responsibility. Functional leaders may be responsible for one or more areas, i.e., budgeting, communication, etc. Committee leadership may also be an expectation. Clarifying current and future expectations helps new members understand where to focus.

Appoint a mentor to orient and help a new HOA Board member get up to speed. A Board veteran can prioritize training topics and provide introductions to HOA vendors and committees. This go-to person reduces the pressure and intimidation feelings of being the new kid on the block. Having a hands-on mentor closes the learning gap so a new member can hit the ground running.

Provide HOA Board handbook as a training and resource tool for new members. Your professional association managers can assist you with developing the most effective method for compiling this information. Include responsibilities, volunteer roster, annual budget, strategic plan and the association’s rules & regulations. Current business items and budget are also items to include. Avoid overwhelming new members by only including information they need to have at their fingertips. Add a resource section to direct them to additional information as the need arises.

Offer training recommendations. Running an association is much like operating your own business. HOA Board members need knowledge in a wide variety of topics. Ask other Board members to share an overview of their role. Your property management company, vendors and www.caionline.org are other places that may offer training. Solid training helps new members gain the breadth of knowledge they need to make good decisions for the community.

Host a reception to introduce new board members to other HOA volunteers and key vendors. This icebreaker boosts relationships and paves the way for future teamwork.

HOA Board members are volunteers who are busy people. It’s important for them to be acclimated with a minimum amount of time and anxiety. Set your new member up for success with valuable onboarding techniques. with valuable onboarding techniques.

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