Monday, 19 November 2018
Agent Resource Center
This Old House - Do-it-Yourself

Ask the HOA Expert: Hiring an HOA Member to Do HOA Work and Public Delinquencies

Written by Posted On Monday, 05 November 2018 05:30

Question: Our current landscape committee chair has offered to take over the landscape contractor’s job and save the HOA money. He has run his own business in the past but has never been in the landscaping business. Would it be prudent for us to enter into such a contract with a owner?

Answer: It is bad business to hire an HOA member to do HOA work because there is a clear conflict of interest even if the member is competent to do the work. And if the member turns out to be incompetent, the board will end up firing him and likely create a long term enemy. Unless this person provides a service that is unavailable elsewhere, stick with outside professionals.

Question: What approaches have you seen boards take to inform their members about other members who are in arrears? Our board likes to post names and amounts in arrears as well as put the information in the minutes.

Answer: Do not post delinquent member names! And get rid of that stock and pillary! The board should refer to a collection only by the amount owed, time past due and status of the collection process. Naming names is a sure way to alienate neighbors and trigger litigation for defamation of character. Besides, all collections are not created equal. Some may have a legitimate reason for not paying (disabled, unemployed), others don’t pay because of a matter of principle: “I’m not paying until the board (fill in the blank) and some may simply be jerks.

To avoid favoritism, the board should institute and use a Collection Policy which is uniformly applied to all members, including themselves. Even better, that Collection Policy should be enforced by a hired professional manager since no board member should be put in the position of personally enforcing collections on other members. There is a sample in the Policy Samples section of www.Regenesis.net

Question: Our board asked our current management company to get competitive quotes from other management companies. Somehow this seems ill advised.

Answer: There is an obvious conflict of interest in what the board proposes. Instead, the board should appoint a committee to develop a Request for Proposal (RFP) which is given to at least three qualified companies, which may include the current management company, depending on what the board is trying to achieve. There is a sample RFP in the Manager Issues section of www.Regenesis.net

Question: The board is proposing that, since some people are not comfortable addressing others in person at the annual meeting, that they can submit questions or comments in writing for a board member to read. Is it appropriate?

Answer: The board is not given some special authority to speak for other members. If certain members are too timid to speak for themselves, they are entitled to appoint a proxy (legal representative) to speak or act on their behalf. That representative, of course, could be one of the board members.

Question: Our annual meeting proxy form has an option that reads: “This proxy is valid for quorum purposes only”.

Answer: This is a common proxy option. It means that the proxy is not valid for voting purposes but can be counted toward achieving a legal quorum (as defined by the governing documents) so that the meeting can be held.

Question: Our board president does not like one of the members and will not recognize her when she wants to speak. Does the president have the power not to recognize someone?

Answer: If a general member is speaking out of turn or otherwise acting disrespectfully or rudely, yes, the president can refuse to acknowledge her. However, not liking someone is not a valid reason. If this president cannot overcome this self-serving and immature tendency, the board should remove and replace her with another director who can.

For more innovative homeowner association management strategies, subscribe to www.Regenesis.net

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Richard Thompson

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 rich@regenesis.net.

www.regenesis.net

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