1. New to the Board? Getting started.
2. The Governing Documents – What are they, are they important?
3. What are the Board Positions? What does each Board member do?
4. New Board – First Things
5. Great Board practices – How do the best run Associations operate?
6. The Management Company – What is their role?
7. Communication – The board, Management company, owners?
8. Board Meetings – How often? Legal requirements
9. Annual Meetings – Election of officers. Inspectors of election.
10. Minutes – Guidelines and importance of good minutes
11. Treasurer Training
12. Vendors and Insurance Issues
13. Addressing Collection Issues
14. Successful HOA Leadershhip
15. HOA Board Quick Tutorial
You’re now on the Board. Congratulations! And Thank You! You have now become a board member of your association. Serving on the board as a volunteer is important work and we want to be the first to let you know we appreciate your willingness.
Probably the most important thing to realize is that by becoming a board member you now have the awesome responsibility to think about the welfare of the entire association, distinct from the needs and desires of any single owner including yourself. This is not easy, but it is extremely important.
Being on the Board of Directors is important for a variety of reasons. Most importantly you will be able to make a positive and direct impact on the future direction of your community and hopefully a positive impact on the value of your investment and your home. As an increasing number of buyers are evaluating the features of living in a condominium there is more awareness of how value is created and maintained in a homeowner’s association. It is more than square footage and number of bedrooms in the living space. The value of your home is directly affected also by the quality of common area maintenance of the amenities, the enforcement of the rules and regulations, the adequacy of reserve funds, and the community spirit.
Every owner should serve on the Board of Directors at some time during their ownership. As they do they will gain a better understanding and appreciation for the role of the Board. We appreciate your willingness to serve on this board. We look forward to a very productive future together.
Since your prior Association Board made a decision to go with professional property management and to select Beven & Brock, we are here to help. We are partners together in managing the affairs of your association. We are able to provide guidance and direction on issues facing the association. The issues you face, for the most part, are not new to us.
Our job is to support the association with you as you volunteer for the association – we are here to make your job a whole lot easier. Another section on this page will address the issue more specifically of what the role of the management company is.(Back to Top)
The “governing documents” are critically important. As a new Board member, you actually should find a copy and review them, if you haven’t already before now. You were likely given a copy when you purchased. The governing documents consist primarily of two types: the bylaws, and the Covenants, Conditions and Restrictions, also known as “C.C. & R’s. Additionally, the following may be considered part of the governing documents may also include the Articles of Incorporation, and the Condominium Plan. But primarily you will mostly need to be familiar with the By-laws and the C.C. & R’s. These documents are not good bedtime reading unless you are wanting to fall asleep. While you should look at the entire documents, you should especially focus in the By-laws on the sections pertaining to the Board, and also the requirements pertaining to meetings. In the C.C. & R’s, the important sections will pertain to maintenance responsibility and financial management. However, we urge you to find the time with sufficient coffee to review the entire document.
Also, the other information that you may want to become familiar with is the California state law, known as the “Davis-Stirling Act”. A great web-site, www.davisstirling.com is an excellent resource.
Again, your association manager at Beven & Brock, are a great resource to answer specific questions you may have. Some questions that you have may be too technical or critical and may need to be answered by an association attorney which we can refer to you.
(Back to Top)
Homeowner association boards that operate in effective and healthy ways for the benefit of their associations operate with every Board member playing a distinct and active role relating to a specific area of responsibility. Each board member should be the point person on their given area of responsibility, so that there is no potential of confusion communicated to third parties, such as the management company or other association vendors.
Generally those positions are: President, Vice-President, Treasurer, Secretary, and Director-at-Large. These are typical board positions for a five member board which is most common. Some by-laws provide for a three member board, in which case some roles have to combine into one.
• Facilitates the process of each Board finding their specific role on the board.
• Allows the other Board members to fulfill their role.
• Sets time/place for meetings and Chairs the board meetings and annual meeting.
• Prepares the Board meeting agenda
• Leads the Board with the same voting power as any other board member.
May represent the association or board to third parties, such as the management company. In those cases, the President should always seek to speak for the majority of the Board, not just his or her own thoughts on an issue.
The President may NOT unilaterally speak for the board, but must always be the “voice” of the board.
Qualities that would be helpful for the President: manager, leader, able to delegate, speaks well, organizer.
Assumes the duties of President as needed when the President is unavailable. Available for special tasks as needed, such as architectural issues, internal dispute resolution, community building efforts, or landscaping.
Maintenance Liaison. A Maintenance Liaison would coordinate with the management company representative on issues that may require board interaction between meetings. This person could speak for the board on maintenance issues between meetings. This may mean that this board member would need to poll board members on a particular decision that could not wait until a meeting can occur.
Qualities that would be helpful for the Vice- President: same as President, willingness to learn and grow into the role of President manager, leader, able to delegate, speaks well, organizer.
• Records the minutes of all meetings, prepares them for approval by the Board, and arranges for distribution to the owners and the Association Manager.
• Prepares the Notice of the meeting and Agenda and posts it on the property, so that owners are aware of the meeting and have an opportunity to attend.
• Maintains a record of all previous minutes in a “Minutes” book
Qualities that would be helpful for the Secretary: comfortable on a computer and word programs, able to prepare notices and minutes for distribution. Short hand is not required.
• Primarily responsible for the financial affairs of the association.
• Receives and reviews weekly payables, signs checks and mails to vendors.
• Receive the reconciliation’s and copy of reserve statements as they are processed.
• Responsible to safely invest the reserve funds according to the direction of the board, and transfer to the operating account funds as they are needed for reserve projects.
• Reviews monthly financial reports
• The link between the Board and the management company on financial issues
• Coordinates transfers into and out of the reserve account.
• Need to be aware of and understand the reserve study.
Qualities that would be helpful for the Treasurer: able to read and understand basic financial concepts. It is possible to be overqualified for this role for some people who have been involved professional in high level accounting positions as a CFO or controller. Association finances are fairly basic and involve a great deal of common sense. A person who balances their own checkbook is likely able to learn what is necessary.
The Member-at-Large – available for special projects, subject to the direction of the President. The director-at-large may serve as the maintenance liaison.
Member– At-Large: Same as Vice President, perhaps with background or knowledge of maintenance would be helpful.
(Back to Top)
NEXT, NOW THAT THE OFFICERS ARE DETERMINED:
1. Notify your Beven & Brock manager of the names and positions of each board member.
2. Bank Signature card. It will be necessary to sign a new signature card for your operating and reserve accounts. Contact you Beven & Brock association manager who will set you up with one of the staff in the office who is trained on this process. At least four Board members should sign the bank card so there is back-up in the event someone is unavailable to sign the weekly checks. In addition, there are a couple of other forms to sign. These have to do with instructions regarding the possible need for filing of liens, as required by the law firm handling liens, and another form regarding owners having the ability to pay their dues by automatic debit.
3. Meetings – determine the best time and place to meet. Normally meetings occur at the home of one of the Board members or in a recreation room if one exists. Notify your Beven & Brock manager of the dates of your meeting (i.e. third Wednesday) so that we can be sure to have your management reports to you before your meeting. Most associations meet monthly. However, if your By-laws permit, and you do not have many issues pending, you may be able to meet less often.
The President should also designate a board member to communicate directly with your manager just after board meetings. Your association manager at Beven & Brock may or may not be contracted to attend your Board meetings. If it is in your contract with us to attend, we certainly will do so. The issue of whether we attend meetings or not can be altered by mutual agreement if the Board deems it necessary.
If you need a manager at a specific meeting, and if we are not contracted for evening meetings, our contract may allow us to charge per hour and this is paid directly to the manager to help compensate for them working a very long day. We would respectfully ask that you allow the manager to present their report and handle questions as early in the meeting as possible and then be excused.
4. Contact Information and Survey – In order to help us at Beven & Brock to serve you better please take a couple of minutes to complete the enclosed information. It will help us get to know you better and how best to reach you. You can find information about us on the following pages. Please return this to our office in the envelope provided.
We have worked with great boards since 1985, and we have worked with Boards who had great difficulty in leading their associations. Here is what we have observed in working with great boards:
1. Great boards learn to work as a team. There is a balanced sharing of the work load among all board members.
2. The directors listen to others perspective, respecting those on the Board or the association with different opinions. The best decisions are made after a lively discussion of all the issues and concerns. Decisions made, even though not unanimous, become THE decision of the Board. Minority members accept the decision of the majority.
3. No single board member controls or dominates the Board or association. Board discussion is balanced with all members contributing. Board members with dissenting opinion are encouraged. The President leads, but should not dominate.
4. There are no decisions or actions outside of Board meeting, unless the President is required to take emergency action, in which case it is reported to the other members as soon as possible.
5. Board members do no not directly undertake tasks/jobs, that are more suitably handled by a designated professional….. CPA, attorney, consultant. Outside counsel is sought and followed from Management Company, attorney and other consultants as needed.
6. Decisions are made for the best interests of the entire association.
7. Board members understand that they are “serving” their members, not acting as managers.
8. The job of the board is to establish policies and review the work done by others.
9. The Board utilizes professional and competent vendors and they have reasonable expectations of their vendors.
10. Board members realize that they are Board members at Board meetings, or while conducting board business outside of a meeting, and homeowners the rest of the time. After all, this is your home too.
11. Board meetings are regularly scheduled, with proper notice to owners, to which Board members are prepared in advance with material read, and arrive ready to make decisions.
12. Minutes are taken that reflect the decisions made and distributed to owners in a timely fashion.
13. On the awarding of maintenance jobs cost is not the primary issue, rather a concern for the long term effectiveness. In other words, value, is more important than cost. Also, vendors are paid promptly upon satisfactory completion.
14. In the association there is a great community spirit. Owners voices are given consideration, and there is healthy dialogue when needed on important issues. Communication with owners is viewed as important.
15. Conflicts of interest: in a homeowners association the potential for this can occur frequently. Examples of this include relationships with association vendors, having work done on a portion of the common area that would benefit a board member and avoiding the same kind of work elsewhere, keeping the assessments low, at the expense of necessary repairs or reserve funding, so that a unit can be sold in the near future, are all examples of conflicts of interest. Be aware of them, and avoid even the hint of a conflict of interest.
(Back to Top)
The role of the management company can best be described in three general areas: Maintenance, accounting and administrative.
The following areas are what is presented to the Board of your association when our services were retained:
• Supervision and Coordination of routine maintenance requests
• General Supervision of association contracted vendors
• Status or management report to Board on pending issues prior to Board meetings
• Coordination of large maintenance projects
• Periodic walkthrough inspections.
• Access to a team of independent maintenance personnel for after-hours emergencies
• Weekly preparation of checks for review and signature by Board
• Coordination with Treasurer on financial issues
• Monthly dues billing statement to all owners, with copies of minutes as provided by Board.
• Follow-up on delinquent owners consistent with association lien policy.
• Late fees imposed and deposited to association’s account.
• Monthly financial reports to Board members
• Automatic dues payments available
• Coordination of Civil Code requirements – Reserve study, annual disclosures,
• Coordinate tax return and review, if required.
• Insurance renewal
• Homeowner violation letters, at Board direction
• Advice on management issues to Board –
• Beven & Brock Newsletter “News & Views” to Board members
• Board Member Education – by e-mail, and free seminars.
• Mail additional charges – all anticipated postage included
(Back to Top)
Communication is an essential issue in every association. This discussion can be broken down into several categories: between board members, between the Board and owners, between the Board and the vendors, including the management company.
First, communication between the Board. Most Boards currently communicate between themselves via e-mail. Meetings are the only legally recognized way for Boards to conduct business. At this time, e-mail is not considered a legal way for boards to conduct business, and should only be used in case of an emergency, at least in terms of making decisions. All owners have a right to know what the board is discussing, and have an opportunity to contribute to the discussion. This is not available to them if the Board does everything by e-mail. Board members should be careful to only engage in non-material discussion via e-mail. Our office would request that the Board not copy the Association manager on e-mails between them. Feel free to contact your manager by e-mail if there is a specific question or instruction that the manager needs to have from the Board as a whole.
Communication between the Board and owners generally occurs in several different ways. Some associations send out newsletters, some post notices, and some send copies of the minutes to the owners. It is true that communication with owners goes a long way toward creating an environment where the owners are kept aware of Board activity. Every meeting of the Board must be posted with an Agenda in the common area so that members are aware of what is being discussed and decided.
Communication between the Association and its vendors should only occur with one person from the Association to the management company. Often the President will be the liaison with the Association manager, or that role may be delegated to another Board member. There will be a need to be readily available usually by e-mail which is the most effective communication tool available today. Generally always, the Treasurer is the liaison with the accounting staff at Beven & Brock or the Association manager. In terms of communication between the Association and other vendors (i.e. gardener, pool, etc), the Association manager takes on that role, unless specifically directed otherwise, in which case a Board member may take this on.
In order to have a smooth relationship, it is best that communication takes place between the Association manager and the Board via a management report format which is sent to each Board member before your meeting. Board members who prefer more frequent contact should only expect more frequent updates on emergency issues. We want to respect your role as a volunteer Board member.
(Back to Top)
8. Board Meetings – How often? Legal requirements
The success of an association is often reflected in the quality of its meetings. A well-run meeting sets the tone for a well-run association. The Board meetings and Annual meetings are the places where most owners observe how their association operates. Your meetings are effectively training sessions for future Board members.
Practically every association can benefit from being more knowledgeable in how meetings are conducted. The following information is intended to provide solid and helpful information to Board members and homeowners as they engage in all types of meetings.
There are four general types of meetings that Board members need to be aware of:
Meetings are legal requirements for every association, both Board meetings and Annual Association or Membership meetings. Most board meet monthly, or less frequently as their needs dictate. The frequency of meetings is usually referenced in your associations By-laws.
The notice of the meeting to the owners is four-days, unless the governing documents require longer notice. Members must be given notice of the time and place of board meetings which must include an agenda, and it is usually provided by posting the notice in a prominent place or places within the common area. However, it may be mailed, or delivered or announced by newsletter.
Members are welcome to attend and may speak during the “open forum” portion of the meeting. Boards usually set aside time at the beginning or end of their meetings for the open forum. Members are typically given 3 or 5 minutes to speak, depending on the number of persons who wish to address the board. No response from the board is required during this portion of the meeting but boards should address member concerns at an appropriate time.
The most important aspect of any meeting is for the Board to address the current issues of the Association through meaningful discussion and to vote on the issues at hand. The purpose of a meeting is to make decisions. Out of respect for the voluntary time being given by the Board members, the President who chairs the meeting must stay very focused to run an efficient meeting. Effectively run Board meetings should last no longer than 90 minutes, ideally 60 minutes.
This is possible, because an Agenda is prepared and distributed in advance of the meeting with supporting information provided to the Board members in advance of the meeting regarding any issues that are to be decided.
Unless there is an emergency situation, there should be no surprises at the meeting. Unless there is an emergency situation, the Board members should have full knowledge ahead of the meeting of the issues to be discussed.
It should go without saying, but the Board members must read the material sent to them before the meeting. The Board meeting time should not be used to get some members up to speed on the issues.
The President should insist that each Board member who wants to raise an issue supply all pertinent information along with a proposed motion prior to the publication date of the agenda. This will give Board members with an interest in a particular topic the opportunity to discuss it and raise questions about it prior to the meeting. At the meeting, when the issue comes up on the agenda, a motion is made regarding the item, limited and pertinent discussion ensues, and then the matter is voted upon.
Board members are not obligated to speak to each issue that is raised, however all Board members are encouraged to share, especially when they think they have the minority opinion. The best decisions come from healthy discussion. Board members should remember that they are there for the best interests of the Association and not for themselves. Board meetings are not performances for the general membership, or social events to catch up on the neighborhood news.
If you have committees, their reports, with recommendations for Board action, prior to the meeting, should be submitted to the President and Board members so that they can be reviewed.
The ideal scenario for a Board meeting is in a business-like setting. However, we understand that most Boards meet in a Board member’s home. While a home is not the best location for a business meeting, meeting at a table is the far better than meeting in comfortable chairs in the living room.
Effective use of Robert’s Rules does not require everyone to be a parliamentarian. The preamble to the Rules states, “Robert’s Rules are merely a guideline to an effective meeting and decision making process”. They can be flexible. Only in the most extreme and formal cases do they need to be followed to the letter. However, certain rules can be very useful in any meeting.
For instance, no discussion should take place about any item without a motion, and a second to the motion. A motion is a proposal that the board takes a stand or takes action on some issue. Only Board members can make motions. If you adopt this rule, you may find your meeting taking on a much more business-like tone, and be far more productive.
For a sample agenda, please go to the “Forms” section of this information.
Quorum : Before any official business can be conducted by the Board of Directors, a quorum must be present. A quorum is a majority of the Board of Directors. In the absence of a quorum, the only formal actions a board may take are to recess, adjourn, or take measures to obtain a quorum.
Open Forum – The Board members do not need to respond in depth to any issue that is raised by a homeowner at that time. In fact it is advisable NOT to respond. If it is a new issue is being raised, the homeowner should be thanked for bringing the issue to the Board, and the item can be placed on the agenda for a future meeting, unless it is of an urgent nature, and must be addressed that evening. Try to avoid having to deal with new issues during this meeting. If a subject or issue was urgent, it should have been on the agenda.
Every owner who takes the time to come to a meeting to address the Board needs to know that the Board has HEARD them. If a homeowner feels that the Board has heard them they will more likely respect the Board’s decisions and they will feel that they have been fairly treated in the process.
Here are some tips about this part of the process, which you may find helpful:
Avoid making personal judgments about people, it can hamper your effectiveness.
Don’t immediately dismiss a complainer. Consider the complaint – it may be legitimate,
Be consistent in how you treat the owners.
If people are angry, try to understand why. Ask for an explanation.
If someone gets too angry, call for a break.
Once the Open Forum part of the meeting has ended, the homeowners do not have a right to speak. The Chair of the meeting must faithfully see that this happens. This will help to keep your meeting stay on track, and not be a cause for longer meetings than necessary.
An emergency meeting of the board may be called if there are circumstances that could not have been reasonably foreseen which require immediate attention and possible action by the board, and which of necessity make it impracticable to provide at least four (4) days prior to the meeting.
Emergency meetings may be called by the president or by any two directors other than the president. A notice and agenda even though less than four days, must be posted so members can attend.
Executive sessions of the board are private sessions which homeowners are not allowed to attend.
Executive sessions are provided for by statute so that boards can address issues which involve privileged information or matters of a private nature. These include:
1. Litigation. Both current and potential litigation matters may be discussed in executive session. This preserves attorney-client privilege, litigation strategy and settlement strategies.
2. Formation of Contracts. So as to avoid unfair bidding practices, the board may meet in executive session to review bids and vote on contract proposals.
3. Disciplinary Hearings. Boards should meet in executive session for all disciplinary hearings. The accused member is entitled to attend the executive session.
4. Personnel Issues. Personnel matters include, but are not limited to, hiring, firing, disciplinary matters and performance reviews.
5. Payment of Assessments. Board may meet with members in executive session to discuss requests by such members for payment plans for delinquent assessments.
A notice and agenda is not required to be posted. Minutes are to indicate only a general nature of the discussion.
(Back to Top)
Every Association is required to conduct an Annual meeting of the membership. The date of the meeting may be specified in your governing documents, however more than likely is not. Most associations, by tradition, hold their Annual meeting in a certain month of the year. The location of an annual meeting usually occurs in the common area, or a nearby meeting room. The preparation for an annual meeting, however, should take two to three months if done properly.
The early stages of the process include setting a date, and determining who will be the “Inspector of Elections” or IOE. This person could be an outside company or an owner who is qualified. The IOE is responsible for sending out information to all the owners to solicit potential candidates for the Board. This should be done at least 60 days before the meeting, since the Announcement of the meeting and the Ballot must be mailed 30 days before the meeting. In some associations, the entire board is elected every year, and some associations have staggered terms. Regardless, it is always a good idea for some former board members to be always remain on the Board for sake of continuity.
The IOE, when selected, will send out to all owners a nomination form. At this point, future board members are being nominated to serve on the Board and there is no discussion about filling a particular office such as President. The Officers is determined by the Board once they are elected. Owners may nominate themselves to serve and the form should include the opportunity for owners to indicate why they would like to serve on the Board. This will allow all the owners to know more about their future Board members.
The ballot is to be mailed to owners at least 30 days before the announced meeting date. The ballots can be returned by mail, and if so, will count toward the quorum of the meeting. Of course, owners are encouraged to attend the meeting and turn in their ballot at that time. It is always possible that owners will be nominated at the meeting.
While there is no legal requirement for owners to attend the meeting it recommended for owners to participate in the association in this way. In addition to electing a new Board of Directors, it is a great opportunity for the Board to celebrate it’s accomplishments of the preceding year and discuss the goals for the next year. The annual meeting can be a great way to celebrate the accomplishments of the Association. (Back to Top)
The Secretary is responsible for writing the minutes and preparing them for Board approval. The minutes should only be a record of decisions made by the board of directors, not a recitation of the discussions and opinions of the directors or others present. It can be helpful to record a summary of the reasons why the board of directors made a particular decision, especially if that decision may be controversial. The summary of the board’s reasoning can later be a basis for supporting the reasonableness of the board’s decision.
Minutes should state:
• The type of meeting – regular, special, executive
• Name of the group – i.e. Happy Acres HOA Board of Directors
• Date and time of the meeting, and the place.
• Who was present, including guests and vendors, but not owners by name. Establishing a quorum is important.
• Action taken on the minutes of the previous meeting and corrections, if any
• Motions: exact wording of each motion, the name of the person making the motion, and whether the motion was adopted, failed to pass, or withdrawn.
• Date of the next meeting, and hour of adjournment.
The minutes, minutes proposed for adoption that are marked to indicate draft status, or a summary of the minutes, of any meeting of the board of directors of an association, other than executive session, shall be available to members within 30 days of the meeting.
The minutes shall be distributed to any member of the association upon request. Many associations distribute or post the meetings as they are available, while this is not a legal requirement.
Draft Minutes. Minutes of the board’s meetings, other than executive sessions, must be made available to the membership within 30 days, even if only in draft form (should be stamped “Draft”). Summary Minutes. In addition to posting minutes on bulletin boards, some associations enclose summary minutes in their monthly billing statements; others post their minutes on their web-sites.
The minutes, proposed minutes, or summary minutes must be distributed to any member of the association upon request. Associations may charge for copying costs. Failure to do so can result in penalties against the association. (Back to Top)
Sample Monthly Financials and Explanations
The Beven & Brock accounting office has been making a concerted effort to monitor the insurance status of all vendors who provide services. The reason for this is that if an Association utilizes vendors who do not carry either Worker’s Compensation insurance themselves, or a liability policy that establishes that they are an independent contractor, that in the event of an injury on the property, in all likelihood, a determination will be made by the Worker’s compensation Appeals board that the association will be responsible for the injured worker. (Read More on Vendors & Insurance)
Associations who are faced with delinquent assessment issues are faced with generally three choices: judicial, non-judicial and small claims. The best approach to take depends on information that up until now, has not been readily available early enough in the process to make an informed decision. (Read More on Collection Issues)