HOAleader.com - Tip of the Week - September 21, 2012
Published: Fri, 09/21/12
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A Big Problem for Small HOAs: Too Much Inclusion?
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The good thing about some small associations is that they allow
all owners to get involved in decision making. The bad thing?
They allow all owners to get involved in decision making. In this
week's tip, we weigh the pros and cons of small-HOA boards
over-sharing with owners.
The practice of opening decisions to a discussion among all
owners is very common at small condo or homeowner associations.
"You see it a lot in associations made of three-family
buildings," explains Samuel "Sandy" Moskowitz, a partner at Davis,
Malm & D'Agostine PC in Boston who represents 30-40 community
associations at any given time. "Often everything works fine
when everyone is reasonable and has pretty much the same
financial status. But if someone loses a job or sells to
someone who's unreasonable, then it gets very frustrating. The
guy on the top floor says the roof is leaking and water is
coming into his unit; but the guy on first floor says he
doesn't have money for a new roof and his unit's dry. You wind
up really hamstringing the association."
Our experts have a range of opinions on allowing nonboard members
to participate in decision making. There are certainly drawbacks.
"When boards take an overly open approach, that to me says
there's insecurity or a lack of leadership," explains Elizabeth
White, a shareholder and head of the community associations
practice at the law firm of LeClairRyan in Williamsburg, Va.
"What's the purpose of a board if all decisions are made by
members? In addition, boards have fiduciary duties that owners
don't have. When you put decisions to the members, their
decisions may not be best for the association, often because
those members haven't had the benefit of all the information
that came before. And it gets tedious. Who'd ever want to live
in one of those associations? Board members often think, 'Once
I'm off the board, I don't really want to be bothered with what
color the hallway carpeting is.'"
Moreover, some discussions should be held behind closed doors.
"When you're talking about contracts, you don't want that done
in front of members because that can impede the competitive
bidding process," explains White. "That should be done in a
board meeting or even in executive session. We have situations
where boards, in the interest of transparency, have shared
information and there sitting in the audience is the grandmother
of the landscaping company owner taking notes on the bids to
give to her granddaughter."
However, our experts also see a benefit. Read about the upside,
and get tips on how to be inclusive without tying your small
board's hands, in our new article: Small-HOA Challenges: The
Pros and Cons of Getting Everybody's Input:
http://www.hoaleader.com/members/761.cfm
Best regards,
Matt Humphrey
President
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Recent articles posted at HOAleader.com:
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Small-HOA Challenges: The Pros and Cons of Getting Everybody's Input
One common problem at small condo and homeowners associations is that it
takes seemingly forever to make decision because many small-association
boards solicit input from all owners on major decisions--even if their
governing documents don't require them to. Here we discuss the benefits and
drawbacks of that practice.
Click here to read full article:
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Can't Fill That Open HOA Board Seat? Try These Suggestions
In this week's tip, we give you two suggestions for coping when you can't get
anybody to run for an open board seat.
Click here to read full article:
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What Happens When Nobody Runs for the HOA Board?
An HOAleader.com reader wants to know what happens when nobody runs for any
open board seats. Here our experts give the lowdown.
Click here to read full article:
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Look for Good HOA Neighbors to Share Ideas, Costs
In this week's tip, we cover the growing trend of HOAs networking with their
neighbors to share ideas and save money.
Click here to read full article:
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Three Tips for Networking with Nearby Homeowners Associations
Some condo and homeowner associations have reached out to neighboring HOAs
to share ideas and band together to reduce costs. Here we offer tips for
deciding who should reach out, how to determine which boards to contact, and
how to get the most out of that networking relationship.
Click here to read full article:
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