In order to effectively run a community, board members and managers must be familiar with that association’s governing documents because, in most cases, failure to follow the governing documents exposes the association and its directors to liability.
Additionally, it is imperative to become familiar with the current practices of your association to ensure smooth and effective management of the community.
Much to people’s surprise, they often know far less about their communities than they thought. Try answering the below 25 questions to see how well you know your association. If you cannot answer 5 or more of the below questions, it may be time to reread your documents and catch up on the processes.
1. What banking institution does the association currently use?
2. How many and what type of banking accounts does the association currently have?
3. How many and whose signature(s) are required on association checks?
4. Do the governing documents require an audit?
5. What are the total annual assessments and are they collected on a monthly or other basis?
6. Are assessments imposed equally against all units/lots or are they weighted?
7. Does the association’s budget process require owner approval, ratification, or both?
8. What is the association’s process for determining its reserve needs and what portion of the assessments are allocated to reserves?
9. Do you know the name of the law firm representing the association?
10. Can you identify the association’s CPA?
11. Can you identify the association’s insurance representative?
12. Does the architectural committee have autonomous power to act outside the board?
13. What are the deductibles associated with the insurance policies? What is the wind/hail deductible?
14. Does the community have all 9 required good governance policies? When were they last updated? Have you ever read them?
15. How are votes in the community allocated? Are they equal or weighted?
16. Does the community have written guidelines for contract bidding, selection, and performance?
17. How many units/lots are in the association?
18. What are the association and individual owners responsible for maintaining and insuring?
19. Where are the community’s records located?
20. Can you identify all (or most) common elements in the community?
21. Can you identify all the contractors currently performing services for the community?
22. What is the quorum requirement for membership meetings?
23. What is the quorum requirement for your board meetings?
24. Do your bylaws allow for board member proxies? (If they don’t, you can’t use them!)
25. What does the association currently charge for late fees and interest on delinquent assessments?
How did you do? Did the results surprise you? Although this is by no means an exhaustive list of information you should know, it covers some of the basics with which you should be familiar.
Please do not hesitate to contact an Altitude attorney at 303.432.9999 or at [email protected] if you have any additional questions concerning this topic.