15 Common Mistakes of New Board Members: A Print 'Em Out Checklist
Dec. 21, 2009 — Winter is the traditional season reserved for annual meetings and the election of new co-op and condo officers and directors. The individuals elected to serve their associations represent homeowners' interests in order to govern according to the Declaration of Corporation or of the Condominium. Some have had extensive business experience, which can be very helpful. Others have no experience at all, which in some cases can be just as helpful. I know of no real practical experience or training that will prepare anyone for being on a board: It is a unique endeavor, in that you are dealing in business with friends, neighbors and a group of different personalities.
The inexperienced face common mistakes in administering an association. Some mistakes can be rectified through education and practical experience. Most can be solved with a common sense. And all of it, says John R. Math, owner of the 21-year-old real estate and property management firm Associated Property Management in Lake Worth, Fla., starts by recognizing, here, the 15 most common mistakes for new officers and directors.
1. Some unit owners want to be board members for their own personal gain, or to right some wrong they feel they've received in the past. This type of thinking can lead to trouble for all concerned.
2. Some directors are unwilling to put sufficient time and effort into their positions. This is unfair to he other unit owners, and to the other directors who then have to make up the slack.
3. Not being familiar with the association documents. Many owners may be aware of the rules and regulations, but not with the Declaration and its Bylaws. These documents set forth how your association will be governed and act as a guide.
4. Not being knowledgeable of State Statutes, as well as other state and federal laws. In any instances, if your documents do not address a certain problem or circumstance, then these other laws prevail.
5.Being unaware of your personal liability while serving on the board. Certain decisions and actions can result in litigation, and the board may be held accountable on a personal basis. Being aware of this may help some to act more judiciously. As a director, you have a fiduciary responsibility to all the unit owners. Rely on an attorney who specializes in association law to guide you.
6. Some new board members will selectively enforce rules with some residents while ignoring others who may be violating those or different rules. This is not only unfair but it can also bring action against board members.
7. Many new board members are unaware of what the property manager does. If there is a property management company, what is its contractual responsibilities? Being unaware not only creates friction but also hinders everyone from performing their jobs efficiently. You board should meet with your managers, review their job responsibilities with them, and talk about the way you'd like would like to interface with them or their firm
8. Some officers and directors are unaware of their own responsibilities. Actual job descriptions can clarify these duties. Obviously, the best time to be fully aware of these duties is prior to being nominated. The Bylaws will list these duties.
9. Directors may be unfamiliar with existing specifications, contracts, leases and the bidding process.
10. Directors may be unfamiliar with standard insurance coverages. This one single area will produce most of the litigation against a board, especially if it is not properly covered.
11. Some board members may be unfamiliar with requirements for reserves for repair and the calculations of same. Also, directors who are unwilling to make tough decisions with regards to preventative maintenance expenditures, for fear of criticism.
12. Some members may be unfamiliar with standard accounting practices and procedures. Allow someone with knowledge in this area to take the responsibility for this all-important area.
13. Boards may not be prepared for emergencies and the unexpected. Such things will happen and they should be thought about well beforehand.
14. Some directors may overstep their bounds of responsibility and be in conflict with the documents. This will disrupt the workings of the association.
15.Never conduct business and meetings in private. This is in conflict with documents and state laws.
This list is comprised of only the most common mistakes that seem to be repeated by new officers and directors. They are all correctable and, through a period of adjustment and experience, can all be conquered. In the meantime, new officers and directors, prepare for a year of exhilaration and disappointment — as well as satisfaction for a job well done.
John R. Math, owner of Associated Property Management , is a Florida real estate veteran with more than 35 years experience in community-association management. This checklist is adapted and expanded from his article "15 Common Mistakes Made By New Board Members " in the APM News Express online newsletter.