Time and time again, I encounter very good intentions of a board, which end up with very bad results. And it often turns out that the board is the cause of its own association’s downfall. There is no reason for this. Here are four signs that you are your association’s own worst enemy.
1. You Act in a Vacuum
A board of directors is in a unique position of power. Once elected the board is in a position of trust. It has the power to manage the money of the association (sometimes a great deal of money). It has the power to preserve the property. It has power to enforce the governing documents. It has power to promote the community desires.
As Uncle Ben says: “With great power comes great responsibility.” (Yes, I’m a Spidey fan.) One such responsibility is to ensure that you are wielding that power only after making an informed decision. How does one make an informed decision? Boards can get informed in many ways, such as asking a lot of questions, seeking advice, obtaining expert opinions, getting educated, etc.
But one such way is often ignored, and it has to do with connecting to the very community you are tasked with operating. Too often boards come up with ideas that may look fabulous on the drawing board but fall apart in reality. When you are exploring potential plans only with other board members, you are missing a critical piece of good decision-making: taking the pulse of the community.
Stop acting in a vacuum. Seek input, feedback and help from the homeowners. Just because you have been elected or appointed to the board does not mean your thoughts reflect the view of a majority (or even the minority) of the community as a whole. Test your proposal with the homeowners and see if it gets a favorable reaction.
And by all means be transparent, as a rule not an exception. Allow homeowners to observe the decision-making process. Not only is it a violation of statute to prevent homeowners from attending board meetings (other than when in executive session), but by encouraging attendance and involvement from the homeowners, you might uncover talent you didn’t know you had, right there in the audience. Great wisdom and know-how could be at your fingertips. Why deny yourself the chance of revealing it?
Also, why shoulder the entire burden yourself? Use committees and task forces to assist you with the association’s goals. Appointing a committee frees time for the board members and develops a team approach to resolving community-wide issues. Community members who are involved in the committee process are empowered, which enhances the legitimacy of decisions based upon committee recommendations.
Now I’m not proposing that every single decision be vetted by the homeowners, or that every project be turned over to a committee for research and investigation. But I am suggesting that, depending on the issue, failing to get feedback could jeopardize the entire project. Certain actions, such as big-ticket items that impact the pocket (e.g., levying a hefty special assessment), changing the use of property (e.g., replacing a swimming pool with a parking lot), restricting one’s use of property (e.g., imposing a leasing cap), etc., could provoke strong objection if not approached correctly.
2. You Micromanage
A board of directors should be meeting on a regular basis to ensure the proper operation and governance of the community. Often this means meeting on a monthly or quarterly basis to
formulate goals, develop plans, assign tasks, and monitor progress. One of the keys to being an effective board member is understanding each person’s role in achieving the desired outcome, trusting each person to carry out that role, and not exceeding your own role or infringing upon someone else’s role in the process.
Here is an example of what NOT to do:
Micromanaging Board Member: Hi there, I just sent you an email about last night’s meeting.
Manager: Let me check my inbox.
Micromanaging Board Member: Please read ASAP. It says….
Manager: Will do.
Micromanaging Board Member: I just sent (Manager) an email and one of the things I asked her to remind you to do is….
Another Board Member: I know, she just told me about it.
Micromanaging Board Member: Has Manager checked her inbox?
Assistant Manager: She’s in a meeting right now, but I’m sure she will as soon as she’s done.
Micromanaging Board Member (to Board Group Email Address): Hi all, as a follow-up to last night’s meeting I want to make sure that we are all on the same page. In case anyone wants to join me, I’m heading to the Manager’s Office right now to make sure she remembers to….
Micromanaging Board Member: Is Manager back? Have you talked to her?
Assistant Manager: I told her to check her inbox.
Micromanaging Board Member: Has she?
Assistant Manager: I don’t know, but I’m sure she will as she always does.
Micromanaging Board Member: Ask her again, I’m just pulling up to your building now and will see you in a few minutes.
Micromanaging Board Member (to Board Group Email Address): Hi all, I just met with Manager and I added a couple of other tasks to her list. Here is what I asked Manager to do…
Do you see a pattern to the above? The Micromanaging Board Member has his hands in everything, shows no trust in others to perform tasks that are assigned to them, creates more paperwork than necessary, and wastes the time of everyone around him or her, etc.
One of the best things you can do as a board member is to avoid day-to-day decision making. Allow plans to be administered and tasks to be carried out. Trust in your management company to carry out the board’s decisions. Stop conducting meetings between meetings. If you continue to look over every one’s shoulders, rather than just doing your job, you may find it difficult to keep managers, vendors, and possibly other board members by your side.
3. You Use Email…a Lot
I am a big fan of technology. It increases efficiency, allows for more accessibility, expedites your work product. However, while technology can certainly be a positive factor for your community, it ought to be used sparingly for board business. If you are a board that avoids physical meetings and conducts business almost exclusively via email, you are making a mistake. (This, of course, excludes those clients who live out of state, where electronic meetings are a necessity.)
For one thing, use of email on a frequent basis does nothing to promote transparency. As you may be aware, the Colorado legislature has been adopting, on a regular basis, legislation that promotes transparency in community associations. Why? Because lack of transparency continues to be one of the most common complaints against board members and managers today. By constantly conducting business via email, you are creating the perception that you are making secret decisions behind closed doors, just as you do if holding a working session (and do not allow homeowner attendance) vs. an open meeting.
Furthermore, you might not get the same kind of thoughtful discussion and input as you would if you had a face-to-face discussion. Email is certainly less personal and can hinder meaningful discussion rather than help it. How many times have you either skipped over an important piece of an email or, more likely, over-analyzed an email trying to figure out the meaning behind the words? Emails are left up to interpretation, and if there is no face or body language to go with them, you can easily misunderstand the tone or intention behind the writer’s statements.
On a completely different note, the constant emailing between meetings, often times unnecessarily clogs up one’s email inbox and creates a whole new level of frustration. The typical scenario is that the monthly meeting ends, and then the trail of emails begins and continues until the next monthly meeting. The result? You, the manager, other board members, etc. are all spending too much time reading and responding to questions via email that can and should be saved until the next meeting barring emergencies. You are causing the same problem as the micromanaging board member: You are wasting the time of the manager and other board members, producing more work than necessary, and potentially creating the perception that you do not trust others to carry out their tasks.
Finally, emails are permanent records, some of which can be inspected by homeowners, all of which can be discovered in litigation, and should be treated carefully. If you are emailing on a regular basis, you are exposing yourself and the association to liability if you fail to follow the laws surrounding business via email.
4. You Don’t Communicate
As lawyers, we often focus on whether the board has authority to take an action, the proper legal procedure for an action, the legal responsibilities of the association and the owners, and similar issues related to duty. While the legal aspects of operating an association are important, it is vital that board members remember that communication is just as important.
Think back to the last big, controversial decision the board made. Board members have a fiduciary duty to act in the best interests of the association as a whole. This frequently means making unpopular decisions such as adopting a special assessment, increasing regular assessments, amending documents, or closing an amenity because of a major repair or safety concern. Boards rarely make these decisions lightly or without examination of a lot of information and investigation of options. But most owners do not know this, so decisions may seem hasty or uninformed. To prevent owner criticism and obtain support for a decision, the board must do more than hold open board meetings and send newsletters.
A board should continue to encourage homeowner attendance at board meetings, even if only a few homeowners attend. These few can be recruited as ambassadors to spread the word. Newsletters and distribution of minutes are good communication mediums but not everyone reads them. So where does that leave board members and managers? You must begin communication at the start and continue it to the end. You must continuously communicate in as many mediums as possible, remembering that communication is two–ways. You need to disburse information but also listen to input. Some ideas may be:
• Obtain owner input through surveys
• Send special mailings
• Hold special meetings or informational sessions advising and discussing important issues in the community
• Recruit committee members so more owners are active
• Launch a website for 24/7 access to information
• Consider block captains to communicate in smaller groups
• Have association phone number for owners to leave messages suggesting ideas.
Even if the board knows that the ultimate action will be to levy a special assessment or increase annual assessments, by explaining the situation in advance, exploring options, seeking input, and opening a dialogue with members, the board can obtain homeowner support for those unpopular decisions. This, in turn, helps the board continue operating the association as smoothly as possible and avoid becoming distracted by the furor of “surprised” owners. Click here for more information on consensus building.
Please do not hesitate to contact a Altitude Community Law attorney at 303-432-9999 for more information on how not to become your association’s own worst nightmare and, instead, how to become your association’s best friend!