Question: Recently, the board contracted with a weatherproofing consultant to provide a report listing all the major construction defects which may be causing waterproofing problems in the building. The homeowners were never informed that a consultant was being hired to research this problem. Once the report was finalized, the board refused to release a copy to the unit owners to view the results. The owners paid for it. Don't they have a right to view the contents?

Answer: Generally speaking, if the information is being used for contract negotiations or for litigation against the builder or developer, it should not be shared with the owners. Also, some kinds of technical reports can only be understood with proper explanation, background and context. If this is that kind of report, issuing copies to owners could create problems for the board by owners that misunderstand or misuse the information. However, if there is no reasonable reason to withhold it, the board should either make the report available or hold a special meeting to discuss it and its implications.

Question: Our board is paying 30-40% too much for a renovation project. And since our reserves are not adequate to cover the costs, the board is planning to borrow money without getting owner approval to do it. Can it do that?

Answer: It's unlikely that the board would spend 40% more for a project since the board members have pay their fair share too. But the board should get at least three apples to apples proposals on large projects from qualified contractors. Getting three bids doesn't necessarily mean the board should pick the cheapest one. Contractor reputation and references need to seriously considered as well.

There is a saying in the contractor business, "The profit is in the change orders." This means that unless the proposal is very specific on the scope of work, a less than scrupulous contractor could low ball his bid to get the work and then go about requiring a series of change orders and extra charges to actually get the job done. Reputable contractors do not operate this way and often charge somewhat more to cover unforeseen details. Paying more up front for a reputable contractor can often be much cheaper in the long run than engaging a low bidder with weak or no references. So when checking references, always ask about cost overruns and change orders.

When borrowing money is being considered, it's crucial that the board address the reasons at a special meeting. When HOAs borrow money, it is a commercial loan with higher interest rate and loan fees than the typical home loan. Maybe some owners would rather pay their share in cash or borrow from a home equity line of credit rather than pay high interest and bank fees. In other words, the HOA should only borrow as a last resort. And before any money is borrowed, the board should have a comprehensive reserve study done to know what other future expenses need to be considered.

After all is said and done, if you're still convinced that the board is spending money like a drunken sailor, I strongly suggest that you run for the board at the next election along with like minded owners and start making a change for the better.

Question: What are the do's and don'ts of homeowner work parties to help perform some of the projects around the HOA like painting, weeding, fence repairs, etc.?

Answer: Work parties are fine although should be totally optional so the few that volunteer don't resent those that don't. (It happens). Limit the tasks to those that require no particular expertise and don't involve climbing, roofs, heavy lifting and other high risk activity. Touch up painting, changing light bulbs, renailing siding and fences and planting flowers are all great low impact activities that will get folks involved that want to and save the HOA money at the same time.

For more innovative homeowner association management strategies, see Regenesis.net.

Published: July 6, 2011

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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 .