Monday, May 7, 2012

Taking your community's pulse: what Condominium, Cooperative and HOA boards need to consider

Think back to the night of the annual meeting and election when you may first have been elected to the board. If your victory came after a hard-fought battle against an incumbent or after years of suffering through previous boards' bad decisions, it was probably a moment you cherished. Still, when you heard your name called that night, did you and your fellow board members truly know what goals the membership was hoping you would accomplish on its behalf during your term on the board?

Most boards don't receive instructional manuals at their first organizational meeting. Some boards do run on a platform of change and it is usually the changes they personally want to see implemented in the community should they win. How many new and existing directors regularly poll their members to take the community's pulse on what is most important to THE RESIDENTS?

Thanks to the plethora of educational classes and materials made available (often for free) to volunteer board members these days, most directors know that there are certain areas where the community's members must be consulted and their approval given prior to the board taking action.

What are these areas? Among other items:

-Waiving reserves;
-Using funds held in reserve for non-reserve purposes;
-Materially altering the common elements;
-Amending the governing documents (although rare, some governing documents do allow the board alone to amend them); and,
-Reducing the financial reporting requirements.

There are other areas, where boards are within their scope of authority to act without ever informing the members or seeking their input. These include:

-Signing contracts;
-Hiring employees;
-Firing employees;
-Fining residents;
-Filing lawsuits (although rare, some governing documents do require membership approval prior to commencing a suit); and,
-Canceling contracts.

Just how much input should a board seek from its members on the list above?

Should the owners be consulted prior to suing that painter who walked off the job? What about prior to firing the long-term landscaper? How about the board deciding to not renw the bulk cable contract but advising owners that they must enter into their own contracts with the cable provider of their choice? All of these examples are decisions that boards can and do make on their own. Some boards, however, take an extra step and bring the members into the dialogue before making the final decision.

This can be accomplished by straw polls on a variety of contemplated actions and/or by special membership/board meetings prior to big decisions. In some communities this works beautifully and has created a level of transparency and inclusion that creates greater membership satisfaction. In other communities, just the opposite has occurred. If you ask members what they think and then ignore their opinions, you might just have opened Pandora's Box.

What has your experience in your community been? Too little membership inclusion, too much membership inclusion or just the right amount?

1 comment:

  1. Donna, you've raised the keystone element in the success of a condo association -- two-way communication. Unfortunately, no single method of feedback can achieve a strong enough consensus of Owners on which a board can base their decisions. "Straw polls", as you suggest, wouldn't be sufficient where I live. Email utilization is limited and for the resolution of some issues prohibited by law, as you know. Our board re-submits a vote several times, on critical issues, in order to achieve a 2/3 required vote. What to do, what to do?