Friday, September 23, 2011

HOA Board Transparency

Provided By Realty Times

Governments have problems. The leadership of city, state, and federal governments is populated with people that are largely untrained in the broad variety of topics put before them. HOAs are a form of government but like no other. The entire membership has a direct interest in the outcome of how well, or how poorly, the HOA business is run. This isn't the case in the other forms of government where there is little individual voters can do to make changes. Not so with an HOA. With some effort, HOA members can oust the board or vote in a new bunch.

There are other controls. The governing documents can only be amended by the members, not the board. That is real power. Doing that with the other forms of governments is not possible. Since voters are little control over what their elected representatives do, most don't pay much attention or develop the attitude that "whatever they do doesn't affect me personally". Of course, that kind of thinking is exactly why elected officials get away with what they do.

HOAs have actually brought us much closer to the way things used to be when democracy was more accessible. An HOA board is only able to lord over the members if the members let it. But HOA members have a real and viable way to gain relief from oppressive government. It does take some effort to gain that relief but the means, at least, are there.

Fortunately, the majority of HOAs are relatively well run and the community harmonious, in spite of being run by amateurs. And the amateur boards that get educated on the process really shine! But most boards still have room for improvement in the communication department. The core philosophy here is "Transparency". Do not operate behind closed doors or withhold information that every HOA member is entitled to see. (There are exceptions to this rule, but the list is short: ongoing litigation, employment issues, competitive contract bidding). Here are several ways to keep the body politic transparently in the know:

Annual Planning Calendar. This is a multi-use document that combines meeting, social and maintenance dates all in one place. Meetings should be calendared a year in advance and major maintenance well in advance so that residents can make alternate plans.

Email. Pre-Y2K, there was still a significant amount of the population that was internet challenged. Today, few make that claim. Even the seniors have invaded Facebook. Make use of this reality by communicating that way to all that want it. Save time and save money.

HOA Website. If your HOA does not have a website, run, don’t walk, to one of the many providers that specialize in user friendly HOA websites. Basic websites which would work for most HOAs are available for less than a $1 a day.

Open Meetings. All HOA members have the right to attend board meetings. The fact that most don’t doesn’t mean the board should not advertise them and hold them in guest friendly venues.

Circulate the Meeting Minutes. All HOA members have the right to know what the board is up to. Make DRAFT minutes available within a week of each board meeting.

Make Financial Reports Available. All HOA members have the right to know how their money is being spent. Make them available upon request.

Have and Follow a Reserve Study. This 30 year plan charts a course for the board to follow for scheduling major repairs and a funding plan for accumulating the money to pay for it. If you don’t have one, contact the Association of Professional Reserve Analysts for a list of credentialed Professional Reserve Analysts (PRAs) that can provide this invaluable service. Oh, by the way, the HOA members are entitled to see the reserve study because, again, it’s their money that will be paying for those repairs.

Newsletters. Publish quarterly newsletters to remind of frequently violated rules, contact information, upcoming projects and meetings. It doesn’t need to be a major production. One or two pages will do. Send it by email to reduce cost.

Board transparency will reap great rewards by building confidence and trust. This is one glass house that will clearly show that the board has nothing to hide. This emperor is fully clothed.

Have more questions? Give us a call at 972.772.7000 or email us at

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