Association Boards, Things You Should Have Learned From the News!

Here are examples of a few lessons that should have been learned by reading the newspapers:

• There is no substitute for good financial management and a solid reserve program.

The combination of foreclosures, budget deficits, embezzlement and the inability to continue with the maintenance was felt in Community Associations across the country. Those Associations which had to cut corners, or assessments, are often found in deeper problems, and in some extreme cases, in the street. This is the time to be smart.

• Disasters happen – do not bet the HOA that you will be spared.

The last two years have seen not only a financial disaster hit the U.S., but also a string of natural disasters that have severely affected a large number of Homeowner and Condominium Associations. Many did not have flood insurance, or increased deductible or lower limits of their insurance coverage. Many canceled special policies that covered hurricane, earthquake, wind or other things that they hoped would miss them. Too often, it was the wrong bet. As a result, some organizations simply disappeared, owners forced to leave, the units condemned, without any hope of recovery. Some had to sell the buildings damaged at a great loss and move on. Others had to live for months outside the homes in hotels with only some or none of the costs covered, while the Board has wrestled with insurance companies, contractors and the courts. Insurance is one of the most important things that boards have to deal with.  Do not bet on the future of the Association, Mother nature may try to ignore you.

• Find a way to deal with “going green“, without confusion, expense and visibility.

In nature (and often the CC & R), Associations,  are resistant to change. But this is not going away, and the Association is almost always going to come through to look bad when they resist any change. Clothes lines, solar panels, false grass, landscaping and other items are only the beginning. Start with an owners vote on how they feel about various issues and real information (not just rumors) about how they will help and what are the options. It can be a single owner that poses a problem, but you can expect many more to follow.

• Flags cause problems – no flags allowed at all causes even more problems.

If you allow the U.S. flag to fly on holidays with a bracket attached to the unit / home, you can almost count on someone  pushing to do more. They want to fly the flag every day, on a pole 20 feet in front of your unit / home, or a service flag for the Navy or Marine, or the stars in the windows to show a family in danger, or flag college game day, etc, etc, etc. Someone will always push the envelope. Again, just survey the residents and see what is the general consensus, which the majority will support. This is not only an individual problem, the Board must decide and then publish.

• If you’re not active on the internet, it is very likely you will be found “on” the internet.

The number of sites created by the owner of the individual to attack or publish less than favorable information about your Association has grown exponentially. You can get on the Internet for almost no cost and see what is published can  stay forever. Transparency of operations and multiple methods of communication must be a primary consideration of the board. Do not keep putting it off. Get connected now.

• State legislatures will cost the HOA more money unless the owners SHOW UP.

Since there is very little actual data about Associations and owners available, state legislators often act due to the squeakiest wheel, usually one or two owners who have beaten their heads with the Board. Who is really to blame rarely counts.  It is what you can give a legislator in particular. The positive exposure usually results in bills that will cost money from the owners. Boards should be aware of how legislation will impact the potential of the Association and all owners and find a way to voice their position.