The Runaway Board

Sam Le Blanc is the Director of Association Finance at EJF Real Estate and has worked in real estate for more than 35 years.

Movie: Monty Python’s The Search for the Holy Grail; Scene: King Arthur comes upon inquisitive peasants in the fields, orders them to be quiet, and his authority is challenged.

ARTHUR “I am your King!” PEASANT “Well I didn’t vote for you.”

ARTHUR “You don’t vote for Kings.” PEASANT “Well how did you become King then?”

ARTHUR “The Lady of the Lake, her arm clad in the purest shimmering samite, held aloft Excalibur, signifying by divine providence that I am your King.”

This exchange between King Arthur and his peasants is one many of us can repeat verbatim and still crack up. Any manager who has spent substantial time in the industry can attest to observing the jockeying for position that can occur both to be on a board and within the board. The owners elect a board (a Court if you will)

and the Board votes on a President (a King or Queen). However, the relationship with owners and with the board itself requires a delicate balance of power and fair amount of humbleness mixed with willingness to make decisions. Property managers can spot when a board member or even the entire board begins to act in ways contrary to the best interest of all the owners who elected them. We call this a “Runaway Board.”

In a Runaway Board, the board president and members may ignore the property manager, forget who they are there to serve and eschew good advice. Fortunately, managers do have some strategies and tools they can employ to remedy the situation.

1. Governing Documents Rule – Bring Knowledge and Experience

One of the most effective tools a manager has is knowledge. Professional property managers have the advantage of experience. Most of the situations and decisions a Board

will face will be something the property manager has already encountered. The property manager can use that knowledge to skillfully guide the board to make good decisions for the whole community. The property manager should always brush up on the governing documents of the association. Know them better than the board. An experienced manager with that knowledge can educate the board on what the governing documents say. Usually when faced with facts printed in black and white, a board will make the right decision.

2. Education is Key – Guide the Board

The best cure for Runaway Boards is an ounce of prevention. Educating board members as soon as they are elected will go a long way to preventing trouble from brewing. CAI offers many useful and easy to follow publications on board roles and responsibilities. Property managers can personally reach out to new board members to answer questions, provide information, and establish a good working relationship from the outset. This small investment of time will go a long way in developing trust and credibility.

3. Designated Professional – Be the Certified Professional

Establishing yourself as a professional property manager will help you win the respect and confidence of the board. Serious career property managers should vigorously pursue education and professional designations. Our society is built on opportunities for advancement, recognizing achievement, and respect for those who have earned higher degrees or designations. A board is more likely to listen to a professional manager with advanced designations and follow their advice.

4. Call in a Second – Don’t Be Afraid to Ask for Help

If a board member or the board as a whole continues to act in a way that contradicts the bylaws or even the law, and will not listen to a property manager, then the manager should consider calling in a supervisor. The supervisor will have the imprimatur of being a higher authority and may be “heard” differently and the answers resonate with the board. The balancing act for the supervisor is to not undermine the property manager or create a scenario whereby the supervisor is called in each time a more complicated issue arises. Be sure to clearly convey the situation to the supervisor and discuss a plan prior to talking with the board.

5. Calling in the Attorney – Legal Can Be Helpful

If all else fails, the manager may need to unsheathe Excalibur and call the association’s attorney. A property manager will want to wield this tool carefully, but a stamp of approval from the attorney will carry weight. For some situations it may a simple call to the attorney to “check in” and confirm your interpretation or application of the governing documents is correct. The attorney may even send an email to confirm. The manager can then present the recommendation and mention that they “confirmed” the information with the association’s attorney. In complicated matters, the manager may seek the board’s approval to obtain a written opinion from the association’s attorney. If the board ignores or contradicts the attorney’s and their professional property manager’s advice, the property manager can rest assured they provided professional service and proper advice to the Board.

Above all, the property manager must be seen and heard as the professional advisor to the board. This can be achieved by earning professional designations, understanding the community’s governing documents, and knowing what other alternatives are available to dealing with a Runaway Board. Managers should not be afraid to call on supervisors or even the association’s attorney when a Board is not heeding solid advice. If the board ultimately ignores good advice, the property manager will know they have provided the best in professional service.