Is Your Association Governance Balanced?

By Kelly G. Richardson, Esq.

The ancient Chinese concept of yin and yang deals with opposite and inseparable forces. Common interest developments (“homeowner associations”) have their own “yin and yang” issues, in which four basic and inseparable priorities must be balanced to produce a successful and harmonious community. These four interests are the association’s corporate, real estate, financial, and community priorities. Each are critically important areas of emphasis for a healthy community. Neglecting or over-emphasizing any of these priorities can result in major association problems and even community conflict.

The “Corporate:” HOAs are a legal entity and are governed by legal documents such as covenants and bylaws. Boards must obey laws and the governing documents and observe the corporate process.

The “Property:” HOAs are real estate developments, and their boards must act to preserve, protect, and maintain the common area and the community’s architectural continuity. Buildings, streets, and other common elements must be repaired and maintained.

The “Fiscal:” HOAs collect money from the owners and then spend it to benefit the association community. Money must be collected diligently and be spent wisely. Budgets, bids, and bills are part of the “bottom line” in the association’s financial world.

The “Community:” HOAs are made up of people who chose to live in a way that trades some independence for the benefit of cooperatively sharing some control with one’s neighbors. The community interest attends to the fact that the members are not just stockholders or investors but neighbors, and boards promote the peacefulness of the community.

The real estate interest can often conflict with the finances, as a board tries to keep the property in good repair but also keep the budget under control. It can be tempting to delay preventative maintenance, reduce landscaping, or cut back on janitorial services, in order to try to avoid increasing assessments and “hold the line” on expenses. The financial responsibilities demand that the board is careful to spend reasonably, but if taken too far can result in member unhappiness as the property deteriorates in appearance. The corporate interest often can conflict with the association’s community interest. The legalities are important, but too often boards, managers, and lawyers address only part of most decisions, asking “Can the board do this?” but neglecting the related important question - “Should the board do this?” Community interest might influence a board to take extra effort to inform the community in advance of a significant project, even though the board may have the legal power to pursue the project without member vote or input. Community interests are advanced by member communication (websites, newsletters) and may cause a board to occasionally issue a warning before citing members regarding violations, or to plan and fund community social events to promote neighborly interaction.

The cause of serious HOA struggles can often be traced to an imbalance between these four facets of association operation, if any of these priorities has been overemphasized or neglected.

Excellent association governance results from balancing these four critical but your need but you come to know yourself, and then an entirely new level of creations and creativity arise Speculation is costly. Instead focus on independent thinking and how to break with all that is old and worn out, no longer needed. You are in search of and striving for liberation. often competing priorities:

CAPRICORN: As you attempt each day of your life to bring constancy and calmness to your home, know that sudden upsets may just continue to occur there. Moments of unexpected freedom happen, too. One needs to recognize life as a state of constant transformation. You assess present needs with past needs and see how the needs, since last summer, have changed. As life proceeds into states of breakdown, new opportunities arise. Always in chaos and conflict there is the seed for harmony. Look for these, write and communicate about them. You will be creating a new tradition. You are an artist and writer.

AQUARIUS: Be aware that your thinking, communicating, processing information and interacting with others is significant and that it changes people. Careful, therefore in the thoughts you think, which become the way you speak. You consider striking out in different directions, going here and there and everywhere. A rebelliousness erupts, an aspect of advanced and new thinking. You become interested in sources of light. And will begin to think more and more about community. It’s where you belong.

PISCES: Often you experience daily life as not steady and stable. It’s simply a Gemini fact. During Earth lives, we see duality, conflicts and vicissitudes continually occur. We must hold ourselves with poise no matter what occurs. Material things come and go, unforeseen events upset plans. This is not due to anything you have created. All conditions in our world are changing. The new world is being created. It’s not quite here yet. It’s built through our creative visualizations. For now, remain near pine, cedar, juniper and fig trees. And rest a while.

1. Making sure the association obeys the law and its governing documents,

2. Ensuring the community is well-maintained and presentable,

3. Diligently collecting and carefully spending assessment funds;

4. Making sure the community is a pleasant place to live, with residents feeling they are considered and valued by their association.

Kelly G. Richardson, Esq. is a Fellow of the College of Community Association Lawyers and Partner of Richardson Ober LLP, a California law firm known for community association advice. Submit column questions to kelly@ roattorneys.com. Past columns at www.HOAHomefront. com. All rights reserved®.