All too often, boards spend large amounts of time focused on relatively unimportant matters, so as a result, weightier matters get ignored. It can be easy to get caught arguing about an endless number of minor issues and lose sight of their responsibilities. They might skimp on items like reserves or insurance to keep their fees as low as possible. Then use special assessments to do their maintenance. Or maybe they neglect necessary safety measures and allow one person to handle all the finances for the organization with little to no oversight.
We run across a disturbing number of boards that find themselves in deep water because their choices led to trouble down the road. Somewhere they got lost in the small, unimportant details, and essential things, even such things as filing the tax returns, didn’t get done.
Your board exists to administer the business of an HOA and is charged to care for millions of dollars in assets. The homes in your HOA not only represent the dreams and desires of the residents, but they are also often the single most significant investment the owners will ever make. Maintaining the value of these investments through the proper management of the HOA is the serious business of the board. It’s the reason the board exists.
As a board member, a great example is to see your role as similar to the role of a board member of a Fortune 500 company. It is identical in that Homeowners are the shareholders in the company; they have a stake in the outcome of your decisions and your wisdom, but they do not run the company. The board of a Fortune 500 company may hold the ultimate financial responsibility for the health of a company. However, just like an HOA board, it does not handle the day-to-day work of the company, but instead, it sets direction and policy.
It oversees and hires those who will do the work of the company. We find that task-oriented boards that conduct themselves in a fashion similar to corporate boards outperform boards that make it their job to micro-manage every aspect of the HOA business. They also make serving on the board a much more rewarding experience.
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To find out more about HOAs, contact Hudack Law today at (877) 314-4309 Toll-free, please visit areas of service (open link in a new tab) or hudacklaw.com (open link in a new tab).