Are You The Hang Up In Your HOA?

Board infighing seems to be on the rise. I assume that is for several reasons, the main one being strong differences in opinion on how to collect difficult accounts, resolve big money issues, choose and treat management, spend association funds, and run meetings. Issues over these things are triggered in large part by the economic and political strain on associations because of the financial issues and prevailing fears over holding and sustaining real property in California (and don’t think it is not going on elsewhere as well).  I recently attended a law conference where the topic was “Rogue Board Members”, probably triggered by experiences of the attorneys presenting in handling situations where board members were doing things that were definitely not acceptable. Sometimes problems arise when a minority group gets a director elected and then either the group holds that director’s feet to the fire or the director feels the group should be apprised of all board actions and discussions,  even those in executive session which are entitled to legal confidentiality.

While I am big on transparency, I too have had considerable experience helping associations whose boards have either become completely dysfunctional or one or more directors has caused sufficient problems to require intervention of legal counsel -meaning use of an attorney, not necessarily court action.

I can attest that bringing an attorney in to settle board dysfunction will cost in the thousands of dollars. If court action is required you are talking tens of thousands. So don’t be the hang up on your board or it will cost you and your neighbors dearly!

Here are some points deserving of recognition – any person serving on an HOA Board should:

  • Place the community’s best interests above personal interests.
  • Maintain a high standard of conduct that is above reproach and toavoid any appearance of impropriety.
  • Accept the BOD’s decisions in choosing outside vendors and to take direction from the BOD at all times and respect the processes chosen and the appointed contact point-person to communicate with the outside vendors.
  • Demonstrate mutual respect for fellow Board Members and Members of the Association at all times, even at times when one disagrees with BOD decisions, and respect the decisions made by a majority of the BOD and understand there may not be unanimous support for every action taken.
  • Attend and participate in all meetings and review all communications, come to all meetings prepared to participate, and to become familiar with the agenda and any materials distributed ahead of time to board members beforehand.
  • Listen, discuss and provide thoughtful input and participate on matters that come before the BOD and the membership.
  • To the extent email is used as a means of board communication, refrain from having secret communications with fewer than all Directors and if necessary becuase of an emergency item or involves scheduling a meeting, communicate with all.
  • Maintain confidentiality with respect to all BOD “executive session” meetings, discussions, and  privileged communications including attorney-client privileged letters.
  • Allow the Chair of meetings courtesy to lead the meeting, and allow fellow board members a reasonable opportunity to speak on matters without interruption, threats or harassment.
  • Respect parliamentary procedure at all meetings, refrain from speaking out of turn, avoid unnecessary or unproductive verbal sparring (participating in a business-like manner instead), keep your temper, and excuse yourself from the meeting if you cannot maintain this respect.
  • Act responsibly in financial matters and decisions that may have material effect.
  • Resign from the Board if you cannot maintain this Testament to service.

Not so hard, is it?  It shouldn’t be for a person of integrity.  Notice I do not suggest you have to be a doctor, lawyer, financiar, or expert on any particular subject, but many people think they are (even when they are not).  Being part of a board is being part of a team and its not hard to imagine how poorly a sports team will function if each member acts with only his or her interests in mind, or acts like a diva.

Honesty, integrity, respect for others and a certain amount of grace is all that is required and understand that if friction starts to get in the way, calling in an expert sooner rather than after things deteriorate to chaos can help save money. There are measures that can be suggested for minimizing chaos and dysfunction. And if you are the instigator, you are not doing service to yourself or your association. You are incompetent to serve if you cannot respect simple tenets like those stated above.

For boards that continue to argue, fight, talk over each other, interrupt, shout, disclose confidential information and tromp all over the fiduciary and loyalty duties imposed by corporate and civil laws, you can expect that your association’s financial or other woes will be seriously exacerbated and the end result is not pretty.

Be the catalyst for change, not the cog in the works.

 

 

 

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