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.
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.
Latest posts by Leslie Johnson
- Top 3 Bad Board Decisions - May 15, 2019
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