Servant Leader's Stewardship - Altitude Community Law

If you are following this series on Servant Leadership, you may be wondering about the term itself. Servant Leadership is based on the premise of being a leader in a nonprofit organization, which has some differences from leadership in a for-profit corporation. The primary difference is that you are entrusted with the assets of the other members. To fully understand this concept we first need to understand what are the assets with which a community association board member is entrusted? Here are the general surface answers:

The common elements in the community such as pool, club house, exteriors of buildings, tennis courts, chairs in recreation room, etc.;
The cash in the association’s bank accounts;
Other financial assets like CDs, money market accounts.

But, what about non-tangible assets like property values, social interactions and community pride? These too are assets of the association and you, as a board member, hold them in trust for the members of the association. Are there other assets in your community? You may want to take a few minutes at your next board meeting to brainstorm all the assets in your community so all board members understand what you are entrusted to preserve, protect and enhance.

So now that you know what you are entrusted with, the next question is how do you fulfill that trust? You do so by always being aware of your fiduciary duty as explained in more detail in this article.

I just don’t like the word “servant,” even though we all realize that we are here to serve our fellow homeowners. Many board members choose to forget this fact, and act as if they are in vacuum, making decisions based on their own desires and beliefs, without even considering for one moment the needs and wishes of their constituents, the homeowners who comprise the association. Many boards adopt the tact that THEY are the association, because they have the “power.” Those folks usually use their position to make life miserable for their neighbors. In the association in which I live, the board has steadfastly refused on multiple occasions to honor the requests of homeowners. In fact, they sometimes do just the opposite of what the owners want, just to show them “who’s the boss.” Living in such a community under such governance is very uncomfortable. All this having been said, I still would prefer a different word other than “servant.” “Representative,” perhaps? And yes the standards are different for a non-profit vs. a for-profit corporation. By law, a for-profit corporation MUST make money for the shareholders, while a non-profit corporation should spend on maintenance the money it budgets and collects for that purpose. It should not consistently show a profit at the end of the fiscal year. If a board collects money from the owners, and then does not spend it in the manner in which it said it would (via the budget), the board is being deceptive. Some boards are so proud of themselves for being able to report to owners at the annual meeting that they made a profit during that year. They are only able to do this by failing to perform the maintenance which they told the owners they would when they levied the annual assessment. I know of HOAs that perform no maintenance unless it is absolutely necessary, or when forced to do so by owners. This is not right. In one HOA, the board refused to replace a dead roof on a building (which had been leaking severely for years), and did so only when threatened with a lawsuit by an owner who bought her unit under the premise that the roof would be replaced “soon.” Of course, roof replacement comes out of reserves, but reserves are one of the budgeted items. Reserves should be spent, generally speaking, in accordance with the reserve study, but again, many boards choose not to follow the study, choosing instead to “bank” the money. Someone needs to explain to these boards what it means to “serve” a non-profit HOA.

One response to “Servant Leader’s Stewardship”

Joe Felice says:

August 2, 2013 at 7:05 pm

I just don’t like the word “servant,” even though we all realize that we are here to serve our fellow homeowners. Many board members choose to forget this fact, and act as if they are in vacuum, making decisions based on their own desires and beliefs, without even considering for one moment the needs and wishes of their constituents, the homeowners who comprise the association. Many boards adopt the tact that THEY are the association, because they have the “power.” Those folks usually use their position to make life miserable for their neighbors. In the association in which I live, the board has steadfastly refused on multiple occasions to honor the requests of homeowners. In fact, they sometimes do just the opposite of what the owners want, just to show them “who’s the boss.” Living in such a community under such governance is very uncomfortable. All this having been said, I still would prefer a different word other than “servant.” “Representative,” perhaps? And yes the standards are different for a non-profit vs. a for-profit corporation. By law, a for-profit corporation MUST make money for the shareholders, while a non-profit corporation should spend on maintenance the money it budgets and collects for that purpose. It should not consistently show a profit at the end of the fiscal year. If a board collects money from the owners, and then does not spend it in the manner in which it said it would (via the budget), the board is being deceptive. Some boards are so proud of themselves for being able to report to owners at the annual meeting that they made a profit during that year. They are only able to do this by failing to perform the maintenance which they told the owners they would when they levied the annual assessment. I know of HOAs that perform no maintenance unless it is absolutely necessary, or when forced to do so by owners. This is not right. In one HOA, the board refused to replace a dead roof on a building (which had been leaking severely for years), and did so only when threatened with a lawsuit by an owner who bought her unit under the premise that the roof would be replaced “soon.” Of course, roof replacement comes out of reserves, but reserves are one of the budgeted items. Reserves should be spent, generally speaking, in accordance with the reserve study, but again, many boards choose not to follow the study, choosing instead to “bank” the money. Someone needs to explain to these boards what it means to “serve” a non-profit HOA.

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Servant Leader’s Stewardship

One response to “Servant Leader’s Stewardship”

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