7 Reasons Why HOA Board Training is Fundamental
Updated: Sep 13, 2021
Without sufficient knowledge of how to do your job, it is nearly impossible to do it well. The same principle applies to board members of a homeowners association. HOA board training, while often overlooked, is an essential aspect of successful association management.
Why Is HOA Board Training So Important?
Homeowners associations are run by a set of members known as the HOA board. The board is responsible for a number of things including but not limited to planning the budget, communicating with homeowners, handling disputes, enforcing rules, and overseeing maintenance projects. Its members, volunteers from the community who are elected or appointed, must maintain curb appeal and protect property values.
The success of the community largely hinges on the abilities of its board. Because of this, it is imperative that board members are qualified to deal with the multitude of tasks and problems that arise regularly.
Most associations don’t require board members to possess certain degrees or certifications, though they can be helpful. If your board lacks a background in community management or its equivalent, then it is up to you to better yourself by pursuing training.
1. Handle Funds Well
As a board member, it is part of your job to take care of the association’s finances.
You must plan the annual budget, track your spending, approve expenditures, record all transactions, and prepare financial reports. The burden of collecting dues and settling delinquent accounts also falls on your shoulders.
At a glance, these financial tasks may not look difficult. But, once begun, many board members quickly find that handling an association’s financials is not as simple as it initially seemed.
What goes into planning a budget? Is there a right way to record your financial transactions? How do you even begin to create a financial report? How can you collect unpaid dues? These questions and more typically populate the minds of inexperienced and untrained board members.
And it is not like you can just leave it up to chance. An association’s funds are the lifeblood of the community. Poor management of your HOA finances can lead to detrimental consequences in the form of a shortage or even bankruptcy. And when the association is low on funds, the logical alternative is to turn to special assessments or loans. In any case, homeowners will not be happy.
2. Communicate Better
Communication is an essential tool in any homeowners association. Board members must constantly keep in touch with the members of the community.
You must inform them of important updates and announcements. This includes meeting notices, rule changes, planned fee increases, and other notices. Providing owners with proper notice is not only common practice but also typically required by state statutes or governing documents.
But, it does not stop there. Communication is a two-way street. And just as you would disseminate information to members, you must also keep an open channel for the reverse. It is important to have a method in place that will allow residents to reach out to you when needed. Let them express their concerns, opinions, and feedback. Email, suggestion boxes, written letters, and surveys are good ways to do this.
Many association boards, though, don’t know how to set up the proper communication channels. They also lack experience in creating policies that control how these communication channels are used. Sufficient HOA board member training can address all this and more.
3. Deal With Disputes Properly
Homeowners associations are made up of members — board and otherwise — with differing viewpoints, values, and personalities. As such, it is not uncommon to have squabbles and conflicts within the community. Neighbors fight, residents argue, and board members can disagree on decisions. Left to worsen, though, disputes can erupt. Before long, personal attacks, violence, and even lawsuits can enter the mix.
Dispute resolution is not something just anyone can do. It requires some background or training to accomplish successfully. Hence, it is important to train HOA board members in the ways of association management. This includes dispute resolution, whether it occurs within the board or outside of it.
4. Preserve Property Values
It is easy to say that it is the board’s responsibility to protect the property values of the community. But, what actually goes into achieving this objective?
In truth, preserving property values is a never-ending task. The board does it by continually performing the duties expected of them. This includes financial management, homeowner communication, dispute resolution, rule enforcement, and more.
Without board training, completing all of these tasks can be an uphill battle. You need proper guidance and education to effectively carry out your responsibilities. This, in turn, will help keep the community afloat. Remember that an ineffective board can bring down property values and ultimately hurt the association.
5. Avoid Liability
Board members have certain fiduciary duties to uphold. This means acting in good faith, with care, and within the best interests of the community.
When you make a bad decision that ends up costing the association, residents can claim a breach of your fiduciary duty because you failed to put the community’s interests first. This can result in owners banding together to remove you from your position or, worse yet, file a lawsuit against you specifically.
Additionally, running an association demands more than just a passing knowledge of the law. There are so many statutes that can affect homeowners associations. For instance, per the OTARD rule, it is unlawful for HOAs to prohibit the installation and use of certain reception devices. You must also pay attention to the federal Fair Housing Act, the Americans With Disabilities Act, and much more.
Apart from that, states also have their own set of laws that apply to HOAs. For instance, the FHA has many state equivalents, and it is required to adhere to both the federal FHA and state fair housing laws. You may also have local ordinances to follow.
Liability exists in almost every aspect of association governance. And if you want to avoid the risk of liability, HOA board training is a big part of the answer.
6. Avoid Conflicts of Interest
You might think it is common sense to avoid conflicts of interest, but you would be surprised at how many HOA boards fail to do so. Many board members hire their friends, relatives, or even themselves as the association’s vendors. This can upset residents because, from their viewpoint, the decision seems unfair. Pretty soon, they will start to question whether the decision was made within the community’s best interests or within yours.
Boards must work to avoid conflicts of interest or even the appearance of it. If you have a potential conflict of interest, it is imperative to disclose it and recuse yourself from the vote. HOA board training teaches you how to abide by a code of ethics, including staying away from conflicts of interest.
7. Make Informed Decisions
As a board member, you make decisions for the association on a regular basis. Most decisions, though, can pose challenges and require you to perform adequate research.
Some decisions even call for professional advice. Not all boards know how to approach the decision-making process, which is why proper training is necessary. When it comes down to it, board education just helps you become a better board member.
A Worthwhile Investment
Even though it should be, HOA board training is not a priority for a lot of associations — and it is easy to see why. Because board members are just volunteers from the community, they don’t always have a lot of free time on their hands to attend training sessions. Some seminars and workshops also require payment and not all associations have room in their budget for such things.
Considering how important it is, though, every association should allocate time and money on adequate board education. Board training is not a waste of resources; rather, it is an investment that will yield rewards in the form of effective and successful association management.
Several HOA management companies offer board education as part of their services. If you want professional assistance while simultaneously learning from seasoned managers, hire a management company today. Start looking for the best one in your area using our comprehensive online directory.
Originally published at HOAManagement.com