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Ask the HOA Expert: Our Board Is Slow To Change

Written by on Tuesday, 19 July 2016 2:31 pm

Question: Our board is conservative and slow to change. One area where this is particularly true is with architectural and design requests. The committee the board appointed denies many applications simply because they don't conform to color, roof and siding standards that have been in place for over twenty years. There is nothing particularly outrageous about the requests, they just reflect modern standards. Opinion?

Answer: While maintaining standards is important, over time those standards should consider new, improved or contemporary materials, designs and colors. To stay stuck in the past causes home values to fall. The committee is not appointed to block change but to guide the process to a reasonable outcome. The board should appoint committee members with a balanced views. Committee decisions should always allow for appeal to the board who also should represent a balanced view.

Question: Our board is considering hiring a resident member to be a resident manager. The candidate is retired and needs extra income. Is this a good idea?

Answer: It is generally a very bad idea to hire a member to act as manager. It has been tried many times and I have never seen it work well. There are a number of reasons:

  1. They rarely have the experience and credentials to do the job.
  2. The board may be doing this to avoid paying taxes and other required withholding. This exposes all members to significant penalties from state and federal authorities.
  3. If the member does not pay taxes as required, again, the members have personal exposure.
  4. There is an undeniable conflict of interest. How can a member/employee be impartial when getting maintenance work done?
  5. A resident manager is basically on call 24/7 and compensation rarely reflects it. Eventually, the manager starts "adjusting" the work schedule to self compensate and less and less real work gets done.
  6. Hiring someone because "he needs the money" should never drive a board's decision; getting quality work at a reasonable price should be the goal.
  7. If things don't work out (often the case), the board will have to fire a neighbor who will likely be resentful and antagonistic.

To avoid obvious pitfalls, the board should look outside the HOA for a professional that carries the proper credentials.

Question: We have always had the management company count the votes for the election of officers. To prevent any hint of conflict of interest, we are having the count audited by our accountant. How do other HOAs do it?

Answer: Have several HOA members that are not running for office do the vote count. Retain the proxies, ballots and tally sheet until the next election. For this task, an accountant is overkill.

Question: I serve on the board and have been informed we should not communicate with each other directly via e-mail because it potentially constitutes a board meeting. Is this true?

Answer: The issue of the board using email generally involves how it is being used. Communicating by email on routine HOA business and settled policy is not prohibited any more than picking up the phone or exchanging information in the parking lot. The board needs to communicate to direct normal business.

Such communications, however, may sometimes wander into topics that should be discussed in open meetings. The board needs to be aware when that line has been crossed. This is particularly true of controversial issues like spending significant money outside the approved operating budget or reserve study. The members have the right to audit such discussions and it simply isn't possible outside a physical meeting. That said, email is a terrific way to communicate meeting minutes, newsletters and other information to the members. Speed up communications, their frequency and reduce costs. Win-win-win.

Question: At the last board meeting, some members requested the names of people who have not yet paid their HOA fees. The board announced the names of past due accounts. Is this correct protocol?

Answer: No. Besides the humiliation and libel aspect, there may be extenuating circumstances like a death, disability or unemployment. Not all delinquencies are created equal. At the end of the day, HOAs are made up of neighbors and the board should be sensitive and careful whose names it smears. To be safe, discuss amounts owing but not the names of those that owe them.

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  About the author, Richard Thompson

Individual news stories are based upon the opinions of the writer and does not reflect the opinion of Realty Times.