Even the most well meaning HOA Board can trip, stumble and fall. However, instead of an unavoidable obstacle, more than often it’s caused by how the Board manages, or mismanages, business. Consider:

Micro-Managing. One of the most counter-productive things a Board can do is micro-manage the manager. Smart HOA Managers base their charges on the time it takes to get the job done. If a micro-manager is boosting the manager’s time with nitpicking phone calls, ultimately it’s going to cost the HOA more money in management fees. That, or the manager is going to quit to end the badgering. That too will cost the HOA money since breaking in a new manager is always time consuming and expensive.

Holding Unproductive Meetings. An efficient Board holds few Board Meetings. The largest HOAs can normally get by with monthly meetings and the rest meet quarterly. That said, it’s critical that those meetings be productive (read "get something done"). Here are a number of pitfalls that hinder productivity:

• Failure to provide meeting information packets prior to the meeting (or failure by the directors to read them).
• Drinking cocktails before or during the meeting.
• Discussing non-agenda items.
• Failing to make decisions.
• Long meetings

On the infrequent occasions the Board meets, make them production intensive. Have an "action" agenda and stick to it. Make decisions. Keep the meeting to no more than two hours.

Disregarding Personal Liability. The HOA is a business just like any other and needs prudent care in handling business. HOA directors have personal liability for the decisions that they make, or don’t make, on behalf of the HOA. If there is a director that doesn’t understand this and routinely says or does things that could attract legal trouble, purge that director from the Board. Loose lips sink ships.

Personal Agendas. Personal agendas push more important HOA business aside in an emotional huff. Beating a personal drum simply wears people out. When a personal agenda is spotted, instruct the carrier to lose it, and quickly, or leave the Board.

Failing to Acknowledge Volunteers. Volunteers are the lifeblood of a homeowner association. Without them, there is no Board or committees. Since there is no pay for these jobs, recognition is the currency of care. A kind word at a Board Meeting, an article in the newsletter and a plaque presented at the Annual Meeting all go a long way to retain current volunteers and attract new ones.

Yugo ≠ BMW You get what you pay for. The Board should always get competitive proposals on construction projects and service contracts from equally qualified bidders. There is always a cheaper price. What you want is a fair price for good service. This is often not the lowest bid. But a higher bid, in the long run, is often the best value.

Hiring a Member as Manager. In an ill advised attempt to save money, the Board may hire a member to act as manager or maintenance person. These are usually miserable failures because:

• Conflict of Interest. Hiring a member produces an employee that also is responsible for paying monthly assessments which include his/her salary.
• Paying Cash Under the Table. To save even more money, the Board decides to skip federal and state withholding, unemployment insurance and workers’ comp. This person is an employee and the HOA is a business. Besides being illegal, doing so exposes the HOA members to unnecessary risk associated with injuries and contested terminations.
• Rarely Qualified. Being retired does not qualify someone to do bookkeeping, perform collections, enforce rules or perform complex repairs.

On Call 24/7. Member managers are usually expected to be on call but rarely does the HOA want to pay for it. Also, being resident manager is like living in a fishbowl. Few can tolerate such close scrutiny for long.

Since the odds are high that it won’t work, hire only a non-resident with a proper resume for the work.

Tripping hazards are everywhere. When carelessly overlooked, the next thing you know, you’ve stubbed your toe and are headed for a face plant. Ouch! When it comes to managing your HOA business, make them trip free.

For more on HOA Management, see www.Regenesis.net

Published: December 27, 2002

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Richard Thompson owns Regenesis, a management consulting company that specializes in condominium and homeowner associations. He is a nationally recognized expert on HOA management issues. Regenesis publishes The Regenesis Report, a monthly newsletter for HOA boards, developers and managers. To subscribe, go to Regenesis.net. He can be contacted by email at .