On Saturday morning, State Senator Linda Newell, who represents most of the South Metro Denver area, held a phenomenal Town Hall Meeting which focused on homeowners’ associations (“HOAs”) and related issues. The turnout for the meeting was excellent and the participants were there to learn and share their stories in a collaborative manner. It was my pleasure to share information about HOAs and to lead this great group of folks in discussing HOA-related issues. It was also an honor to work with Senator Newell who is one of those rare legislators who truly works across the aisle in this hyper-partisan political world we live in.
While many issues were discussed, a noticeable trend at the Town Hall Meeting was the challenges faced by self-managed HOAs. In particular, the challenges associated with the maintenance, repair and replacement of physical components of structures the HOAs are responsible for and budgeting and setting assessments at a level necessary to meet these obligations. One homeowner shared her story of trying to sell her unit in a condominium association, only to be thwarted by the fact that the concrete patio on the back of her unit is pulling away and is in a horrible state of disrepair. This patio is the responsibility of her HOA and it doesn’t look like the HOA has the funds necessary to deal with the problem.
Let’s face it; serving on the board of directors of an HOA is a big responsibility. The boards of self-managed HOAs have the same responsibilities as the boards which benefit from the advice and assistance of professional community association managers. Without the expertise of these professional community association managers, many self-managed boards struggle to obtain the information necessary to carry out their responsibilities and to fulfill their fiduciary duty to the communities they serve.
So what are these folks to do? Here are some tips:
- Consider joining Community Associations Institute. This is a trade association, with a local Chapter, which deals exclusively with HOAs (commonly referred to as “community associations”). One of the membership categories of CAI is the Community Association Volunteer Leaders (“CAVL”). The CAVL members of CAI have access to invaluable resources related to governing and operating their HOAs. In addition, there are great educational opportunities available at the Chapter level.
- Check out this blog on a routine basis for information relating to applicable laws, governance and operations of HOAs. In particular, check out the 8 Traits of Highly Effective Directors and the tab on the left side of the blog entitled CCIOA 101 for HOA Boards. In addition, check out the requirements to comply with the new HOA records law which will go into effect on January 1, 2013, by clicking the tab on the left side of the blog entited Hot Topic – HOA Records.
- Keep your eye out on this blog for educational opportunities we will be offering in the future for the boards of self-managed HOAs.
On a final note, for the boards of self-managed HOAs that are currently in the midst of preparing budgets for 2013, check out the Financial Operations Best Practice Report published by the Foundation for Community Research. This Best Practice Report addresses a variety of issues relating to the financial management of your HOAs – including the budgeting process.