Being on your HOA board requires you to make decisions that affect your entire community. Often, these decisions are fairly easy, as your community has governing documents that set the stage for sound decision making. But what about those gray areas, or decisions that seem like good ideas at the time, but turn out disastrous?
To help you recognize looming disasters before it’s too late, let’s take a look at some bad decisions — or decision-making patterns — that pop up all too often in HOAs across the country.
#3 Deferred Maintenance
As described in Are Bargain HOA Assessments Really a Bargain?, keeping assessments low is not always a great thing. And a common theme in communities that don’t increase assessments over time, is deferred maintenance. Deciding to not perform routine maintenance throughout the community is a slow-cooker recipe for not only a large expense in the future, but decreased property values. Deferred maintenance is a cosmetic and functional issue that stems from bad board decisions.
Of course it’s better to address maintenance issues as they arise, but beware of consistently seeking to put a band-aid on them. Think long-term, and you’ll most likely maximize your community’s money. If there isn’t enough money to perform routine maintenance, you may need to increase assessments. And if that’s not a possibility, look into a special assessment or other possibilities for financing.
#2 Inconsistency
As board members change, consistency can get lost in transition. To aid with this, help newer board members quickly get up to speed on the budget, projects, and community goals. It might be a good idea to have the newbies read at least the last year of meeting minutes to see what’s taken place, and then let them ask questions.
Your community should also strive for even-handed, voluntary compliance with the governing documents. If the board decides to take a more punitive approach, this can be jarring for the community, especially if the board applies the decision to only one homeowner. All properties (and their owners) should be treated the same. If a board member can’t remove his or her own bias, try using account numbers (instead of names or other identifying information) to speak about the issue at hand. Consistency and fairness are keys to a happy, well-run community.
#1 No Decision
No decision is the worst decision of all. Sometimes choices are difficult. Sometimes they take time and a lot of discussion. But the number one bad decision a board can make is to levy no decision at all. Indecision is paralyzing. If your minutes read as the same list of issues, tabled over and over, this is a red flag that your board may be suffering from analysis paralysis.
Not only is indecision debilitating for the community’s overall health, it also drives your community manager crazy. The most common example is when the board directs the manager to seek bids for a project. The manager writes the scope of work and solicits bids. The vendors submit the bids, and the manager presents the bids to the board. Then, no decision is made…for months, or even years on end. In the meantime, the vendors repeatedly follow up with the manager. As months pass, some vendors may rescind their bids or increase the price. Perhaps even worse, a good contractor could develop a bad taste in their mouth after working with an indecisive or unresponsive manager, management company, or board. Not to mention the fact that the project also sits idle or worsens, causing more complaints. Now you have both indecision and (albeit inadvertent) deferred maintenance. And that’s a double whammy!
Good decisions can be made with good information. If you need more information about a project, do the necessary homework and then decide to proceed. Read your governing documents, talk to your attorney, and listen to your community manager’s recommendations to gain confidence for making good decisions.
It’s important to know that good and bad board decisions — along with indecision — will live on in the minutes and the fabric of the community. What decisions are you making?
Leslie holds a Bachelor of Journalism degree in Advertising from the University of Nebraska-Lincoln.
- Top 3 Bad Board Decisions - May 15, 2019
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- 4 HOA Accounting Principles Board Member Should Know - November 1, 2017
Help
Very good advice. I will share with our Board. Thank you.
I’m glad you benefitted from it!
I see a many issues within our HOA Board. I am currently that VP on this Board. There are two important issues. 1) I can not get it through their heads that you can not act as individual when making decisions. The President seems to think it is okay to go off on his own and purchase items from taking petty cash without consulting with the rest of the Board. He also thinks it is okay to let past Presidents to buy items for the community and be reimbursed from petty cash again without consulting the Board. He feels little things like that does not need approval from the Board. He also runs the HOA Board like he is the male and what he says goes. 2)The other issue is this Board is slow on doing necessary repairs that involve things that are falling down and huge cracks in sidewalks and entrance steps. This Board is more interested in making sure things look pretty. I can not steer them to act on building repairs. As an example, my deck an the verge of falling down. Even the maintenance people agree it needs to be fixed this year. I have been telling previous Boards for 5 years that this deck is falling down. They would rather wait till it does fall down and someone gets hurt. I am trying to express to them that it is cheaper and wiser to get this deck fixed before it gets any worse. So five years later they still wait. We also have outside trim that is badly in need of painting. They will fore go painting and put in flowers and plants. As an example, landscaping has pushed mulch so high against the garage outside wall that the moisture in ruining the wall inside that the homeowners are responsible for. I said we need to remove that mulch and bring it off the wall of the garage and fix the wall inside the garage. What response I got was Oh we can not remove the bushes it won’t look nice then. I said well we can plant grass and some pretty flowers. Do you understand what I am dealing with. An elderly lady complaining for years to fix her deck boards that are warping so she can use her deck. She is afraid of falling. I said really what does a new six foot pressure treated floor boards costs and to put it in place so this lady can enjoy her deck before she dies.. The maintenance man said maybe I can put a few nails to fix it.. No it still is not done for this lady.
Now they are focusing on how to fine the homeowners instead what is more important.
I have a degree in Business Management minor in Marketing. Also have experience in managing apartment buildings. I was also President of the Landlord Association. The rest of the Board have no degrees. The President said, I am retired and I do not desire to do work
Before I loose my temper any suggestions how I can I keep this Board on Point when we have to deal with very important items first. Yes I have asked them at meetings to stay on point. That we have serious structure issues. Is there a reading I can do? is there an article that actually is clear cut and to the point that says how to run a HOA Board and how they can not make decisions on their own.
I have looked everywhere for something to say HERE this is where is says no decisions can be made on your own.
Thank you
Faye
Hi Faye, I’m so sorry to hear your story. You’re not alone, but there’s hope. Off-hand I would recommend studying Kotter’s Leading Change. (https://www.kotterinc.com/book/leading-change/). You can find a very good summary of the concepts here: https://www.kotterinc.com/8-steps-process-for-leading-change/. Take a look at it and let me know what you think. Best of luck!
Thank you for understanding, this is just a few issues. Thank you so much for steering me towards these two items. I plan to get to them right now. I appreciate this help it is very kind of you. I will get back to you on this matter. That’s for the luck I will need it.
I look forward to hearing from you. Change Management isn’t for the faint of heart but it can be done and John Kotter has helped many organizations get there. Best of luck!