22 minute read
The Self-Managed Association: Getting Governance Back on Track
Getting Governance Back on Track
The last few months have been challenging for self-managed community associations, as boards of directors and committees, deal with curtailed meeting schedules, navigating online meetings, restricting common area usage, and deferring projects and governance. As communities emerge from the isolation and fear
of the pandemic, its time to re-engage community members and get community governance back on track.
Official responses to the coronavirus pandemic have taught some valuable lessons about governance. These lessons will outlast the virus, and shape how boards can more effectively govern their communities.
Effective communication is the key to effective community governance, especially during a crisis. Community association governance is debated and determined at the board of directors level, but its implementation and consequences are felt and experienced by all community members. During the height of the pandemic, society was treated to non-stop briefings by federal, state, and local officials about the status of the pandemic and the effectiveness of mitigation measures. For the most part, people considered this valuable information and set aside activities, including work, to “flatten the curve.” As self-managed community association boards of directors begin to restart community amenities, activities, and meetings; effective communication to members will play a large part in successfully transitioning back to normal and reestablishing governance continuity. Boards must communicate with members often and use a variety of delivery methods. Mail, posting in designated common areas, email, and posting on community social media accounts can be effective ways to inform community members about reopening strategies, and meeting protocols. Work to keep communication compact, concise, and on topic.
THE POWER OF A COMMUNITY-WIDE APPROACH
TO ENCOURAGE GOVERNANCE SUCCESS. Webster defines “community” as “a group of people living in the same place or having a particular characteristic in common.” Webster also defines “association” as “a group of people organized for a joint purpose.” For community association members, the “characteristic in common” is membership in the legal entity described as the homeowner association and their “joint purpose” is defined in the association’s governing documents. Boards of directors must embrace governance objectives and practices that are inclusive of all community members, celebrate community diversity, ensure community financial sustainability, and engage members to share responsibility for common areas and the well being of community members. This is not “pie in the sky” and may be difficult for self-managed associations, whose boards of directors may confuse operational tasks, the running of the association, with governance. Community association governance asks first, “what do we want our community to be?” The coronavirus pandemic has provided a pause, a chance to rethink, reboot, and re-examine what’s best for the microcosm of society that is represented in our communities. Association governing documents, and rules are silent on conducting critical association activities during a pandemic. It may be prudent for the board to consider revising annual meetings, board meetings, and committee meetings practices to include pandemic contingencies. Voting and election rules should include provisions for conducting elections during pandemics. Boards may find it helpful to solicit members’ preferences and comments about reopening strategies and deferred projects. Continued on page 28
The importance of evidencebased and informed decision making. Although the “science” of the pandemic is being hotly debated, there can be no debate about how the science impacted federal, state, and local decision making and influenced pandemic policymaking. It was not uncommon for officials to site medical professionals, scientific studies, and experts to validate decision making. In community association governance appealing to the evidence is called “sound business judgment” and forms the basis of the board’s indemnification in decision making. To put it formally: community association directors are presumed to act in good faith, on an informed basis, and in the honest belief that the action taken (decision made) was in the best interest of the association’s members. This is a powerful principle that lies at the core of effective community association governance.
As communities reopen and boards get back to business as usual, the temptation will be to dive into projects, plans, and decisions that were deferred or postponed. It may be more prudent to re-examine and reconsider these activities in light of the unintended consequences of coronavirus and stay at home orders to community members, and social and economic uncertainty. Data and evidence that informed board decisions in late February and early March may not be relevant today, or if still relevant,
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We counsel:
• Condominium Associations • Planned Unit Developments • Mixed Use Associations • Commercial Associations
We provide general counsel to Associations including the following services:
• Construction Defect and
Civil Litigation • Dispute Resolution • Governing Document Interpretation • Governing Document Revisions • CC&R and Rules Enforcement may require a more patient, phased-in approach to ensure community-wide engagement and success. Boards may want to consider postponing non-critical maintenance and repair projects to prioritize common area maintenance that was deferred or canceled during the pandemic. Meeting with critical vendors and service providers may provide needed insight into requirements for reopening common area amenities.
Large or small, self-managed community associations have been afforded a great opportunity to get community governance back on track. Community members will appreciate effective communication, a communitywide approach, and evidencebased, informed board decision making.
John Cligny AMS, PCAM, CCAM-HR is a veteran portfolio manager and community association management executive. As co-founder of Association Consulting Group, John is a trusted advisor primarily focused on educating and advising community association board members on effective governance to promote a positive public opinion of homeowner associations and community management. John is a frequent speaker and panelist on a wide range of community association topics and issues.
The Legislative Session Continues!
For the most up-to-date information, visit the HOA Advocacy section at the Echo website: www.echo-ca.org/hoa-advocacy SUMMARY: Includes among the permissible reasons
2020 is the second and final year of this legislative session. The list below contains new bills introduced this year. This list, and the impact of each bill, will change as authors amend the language in these bills and others.
Current Legislation AB 2227
AUTHOR: Irwin SUBJECT: FDIC & Fidelity Bond Coverage STATUS: In Assembly Housing POSITION: Watch SUMMARY: Would require that association funds transfers greater than $10,000 receive prior written approval from the board of directors, that association POSITION: Watch
funds shall be deposited in an institution insured by the FDIC, and that the association maintains certain types and levels of coverage for its directors, officers, and employees.
AB 3182
AUTHOR: Ting SUBJECT: Short Term Rentals STATUS: Passed Assembly. In Senate Housing POSITION: Watch SUMMARY: This bill would make void and unenforceable any governing document that purports to prohibit the rental or leasing of any of the separate interests in a common interest development. association. This bill would eliminate the prohibition
It provides that an owner of a separate interest in a common interest development is not subject to provisions that effectively prohibit or unreasonably restrict the rental or leasing of any of the separate interests. The bill would not apply to a provision in a governing document that prohibits short-term rentals of 30 days or less.
SB 182
AUTHOR: Jackson SUBJECT: Fire Retardant Roofs STATUS: In Senate Housing POSITION: Watch SUMMARY: Within a very high fire severity zone, requires an association to allow an owner to use at least one type of fire retardant roof covering material that meets certain requirements as defined in the
SB 969
AUTHOR: Wieckowski SUBJECT: Association Elections STATUS: In Senate Housing POSITION: Watch for disqualifying a person from nomination as a member of a Board of Directors of a common interest development, if the person has served the maximum number of terms or sequential terms allowed by the association. Requires additional persons to be appointed and overseen by the Inspectors of Election to also satisfy the criteria of who may be an independent third party.
SB 981
AUTHOR: Archuleta SUBJECT: Email Delivery of Documents STATUS: In Senate Rules SUMMARY: Would require an association to deliver documents by email unless a member has not provided a valid email address. Requires an association to make a good faith effort to acquire member email addresses. Additionally requires an association of at least 50 separate interests to maintain an association website, with certain exceptions.
SB 1340
AUTHOR: Wilk SUBJECT: Inspection of Decks and Balconies STATUS: In Senate Housing POSITION: Watch SUMMARY: Existing law requires an inspection of exterior elevated elements and waterproofing in an section and in the International Building Code.
against the contractor performing the inspection from bidding on the repair work.
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Executive Director’s Message Continued from page 6 participants learned to better use the technology, meetings have become more streamlined.
As a result, one significant positive occurred: Member engagement has increased as sheltered-in-place homeowners and non-resident homeowners have tuned into meetings to learn how the HOA works and benefits them. More community members now can join and participate, or simply listen and learn. They can do this from the comfort of their home or in a far-off land with a computer or mobile device and internet connection. It is very attractive to non-resident homeowners, homeowners who travel and to those who are more introverted or circumspect about attending open meetings. People will tune in and be involved.
Listening to the board and how it works, from home, removes much of the mystique and uneasiness that might be due to a lack of knowledge about the process or the players. An efficiently run virtual meeting not only allows business to be conducted, it allows members of the community to know and understand why and how decisions are being made by removing the perception of insular decision making.
The solution found in virtual meetings should help boards make better decisions because of greater community involvement, more efficient communication of decisions, and the ability to better hear the voices of member constituents. In addition, when the community feels the board is listening, homeowners will want to be more engaged. Virtual meetings present an interesting tool to address community apathy and help educate and motivate future leadership and community volunteers. The trick is how to make this tool a permanent part of the management equation.
It is up to the boards of directors to seize the opportunity and leverage the tremendous tools of technology and tech communication to jump into the future. Boards can apply these solutions to enhance improved community involvement and establish a new, transparent way to do business. Adopting virtual meetings as a standard provides a glimmer of hope in a period of unsettled and paralyzing negativity brought on by the coronavirus.
Stay safe, stay positive and carpe diem!
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BOOKSTORE The Echo Bookstore is your source for valuable information on the duties of HOA board members. Find these and other informative publications, including FREE downloads, online at www.echo-ca.org. BOOKSTORE 2020 Condominium Greenbook Member Price: $17 Non-Member Price: $25 This companion to the Condominium Bluebook is 2019 2019 Condominium Bluebook 2020 Edition Member Price: $17 Non-Member Price: $25 This well-known compact guide for operation of coman in-depth guide to all mon interest developments aspects of association finin California now includes a ances, including accounting comprehensive index of the 2019 2019 2020 Condominium Greenbook Member Price: $17 Non-Member Price: $25 This companion to the Condominium Bluebook is 2020 Condominium Greenbook Member Price: $17 Non-Member Price: $25 This companion to the Condominium Bluebook is methods, financial statements, reserves, audits, taxes, investments and much more. Not for the accounting novice, this is a tool for the treasurer or professional looking for specific information about association finances. 2019 2019 Condominium Bluebook 2020 Edition Member Price: $17 Non-Member Price: $25 This well-known compact guide for operation of comCondominium Bluebook 2 020 Edition Member Price: $17 Non-Member Price: $25 This well-known compact guide for operation of combook and a chapter containing more than 200 frequentlyasked questions about associations, along with succinct answers. an in-depth guide to all an in-depth guide to all mon interest developments mon interest developments aspects of association finaspects of association finin California now includes a in California now includes a ances, including accounting ances, including accounting comprehensive index of the comprehensive index of the methods, financial statemethods, financial statebook and a chapter containing book and a chapter containing Construction Defect Claims ments, reserves, audits, ments, reserves, audits, more than 200 frequentlymore than 200 frequentlytaxes, investments and much taxes, investments and much asked questions about asked questions about Member Price: $19.95 more. Not for the accounting more. Not for the accounting associations, along with associations, along with Non-Member Price: $25 novice, this is a tool for the treasurer or professional looking for specific information about association finances. novice, this is a tool for the treasurer or professional looking for specific information about association finances. succinct answers. succinct answers. New buildings can conceal extensive faults. It’s a board’s worst nightmare—rainstorms damage buildings and bring owner complaints. Is legal action necessary? With this new book, you’ll learn about the resolution process for construction problems, and how to handle complex claims.
2020 Civil Code Sections Governing California Construction Defect Claims Construction Defect Claims Home and Condo Defects
Community Associations Member Price: $19.95 Non-Member Price: $25 Member Price: $19.95 Non-Member Price: $25 Member Price: $12.95 Non-Member Price: $17.95 Member Price: $20 Non-Member Price: $25 Board Member New buildings can conceal extensive faults. It’s a board’s worst nightmare—rainstorms damage New buildings can conceal extensive faults. It’s a board’s worst nightmare—rainstorms damage Construction defect litigation can be confusing, expensive and fraught with legal pitfalls. This This publication includes the current version of the Davis-Stirling Common Interest Development Act, the Civil Code sections that apply to common interest developments and selected provisions from other codes important to associations. FREE DOWNLOAD FOR MEMBERS Handbook Member Price: $20 Non-Member Price: $25 This publication is the essential guidebook for HOA Board members, dealing with governance, finances, insurance and maintenance issues. buildings and bring owner complaints. Is legal action necessary? With this new book, you’ll learn about the resolution process for construction problems, and how to handle complex claims. Home and Condo Defects Member Price: $12.95 Non-Member Price: $17.95 buildings and bring owner complaints. Is legal action necessary? With this new book, you’ll learn about the resolution process for construction problems, and how to handle complex claims. Home and Condo Defects Member Price: $12.95 Non-Member Price: $17.95 Robert’s Rules of Order Member Price: $7.50 Non-Member Price: $12.50 eye-opening guide, written by accomplished construction-defect attorneys, is an essential tool for board members who need to understand the legal process.
Board Member Handbook Member Price: $20 Non-Member Price: $25 Board Member Handbook Member Price: $20 Non-Member Price: $25 Construction defect litigation can be confusing, expensive and fraught with legal pitfalls. This eye-opening guide, written by accomplished construction-defect attorneys, is an essential tool for board members who need to understand the legal process. Construction defect litigation can be confusing, expensive and fraught with legal pitfalls. This eye-opening guide, written by accomplished construction-defect attorneys, is an essential tool for board members who need to understand the legal process. A step-by-step guide to the rules for meetings of your association, the current and official manual adopted by most organizations to govern their meetings. This guide will provide many meeting procedures not covered by the association bylaws or other governing documents.
This publication is the This publication is the essential guidebook for HOA essential guidebook for HOA Board members, dealing Board members, dealing with governance, finances, with governance, finances, insurance and maintenance insurance and maintenance issues. issues.
FREE DOWNLOAD FOR MEMBERS Robert’s Rules of Order Robert’s Rules of Order
Member Price: Member Price: $7.50 $7.50 Non-Member Price: $12.50 Non-Member Price: $12.50 MEMBERS: To order, log in for member
A step-by-step guide to the rules for meetings A step-by-step guide to the rules for meetings pricing through the Online Store at of your association, the current and official manual adopted by most organizations to govof your association, the current and official manual adopted by most organizations to govecho-ca.org ern their meetings. This guide will provide many meeting procedures not covered by the associaern their meetings. This guide will provide many meeting procedures not covered by the associaor call (408) 297-3246 tion bylaws or other governing documents. tion bylaws or other governing documents.
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Lead Confidently. Our goal is to help managers and boards work better together. We know that management companies wear two hats: professionals trying to grow their businesses and educators who guide and inform their HOA clients. Our Management Membership helps management companies market their services directly to HOA boards and provides resources and opportunities for managers to educate board members about best practices and how to work cohesively as a board in the best interest of the community.
An Educated Board Helps to Make HOA Management Easier. A simple fact: it’s easier to work with an educated and informed HOA board. Echo education helps board members better understand and differentiate their role from their manager’s role. All board members and homeowners from the communities you manage are encouraged to attend our events – whether they are in-person or online. Register a board member today and
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