My Home Owners Association (HOA) is currently involved in a dispute between the Board of Directors and the residents. It has become so nasty, it is starting to resemble a Tong War. Interestingly, this is not the first time this has happened. About 25 years ago the association built a substantial brick wall at the front of the neighborhood, but the Board refused to account for the money spent. This turned into an ugly donnybrook and caused a changeover in the board, and feelings were hurt. This is what caused me to get involved and help cleanup the association and restore confidence. Many years have passed since then and many new neighbors have moved in, none with a sense of what happened before, but it appears history is repeating itself.
Our HOA is relatively small, with 163 properties. Shortly after my reign, the board contracted with a management company to implement the administrative detail of the association. This is quite common these days as board members have become reluctant to do hands-on work, regardless of how simple it is. During my day, I built a data base for the group and was able to churn out customized letters, dues notices, and much more. I was fortunate to have a treasurer who was an accountant who used some basic PC financial software. Even though this was hardly rocket science, this was all dropped after the board changed and turned the administrative detail over to the management company.
As time passed, our HOA became overly dependent on the management company. Residents complained of the callous behavior of the company. It got to the point where it appeared the HOA worked for the management company as opposed to the other way around. A flash point occurred earlier this year when our new treasurer asked for a series of financial reports from the management company, none of which were forthcoming. This raised a red flag and caused the treasurer to resign from the Board and write a letter to residents explaining his reasons for his departure.
To me, this was deja vu all over again, as the cover-up of financials is what caused the friction 25 years earlier. Instead of publicly answering the former treasurer’s accusations, the president consulted the association’s attorneys which produced some fine gobbledygook to hide behind, thus arousing suspicions in the neighborhood. Had the president answered the treasurer properly, the issue would have been closed, but instead it escalated, fearing something was being hidden from the residents. So much so, the association called for a full audit of its financial activities by an independent firm, a very expensive proposition I might add. This vote to call for an audit essentially meant the board had lost the trust of the association.
As I mentioned, managing a nonprofit organization as small as this is not exactly rocket science. I have written about this in the past, “Managing a Nonprofit Organization.” In such groups, the board has a fiduciary responsibility to its membership. As such, finances, minutes, and governing docs must be transparent. In both instances, 25 years ago and today, this is the cause for the uproar.
As the board hides behind its lawyers, the association realizes they cannot fight city hall and the only thing to do is to fire the board at the end of the year, and start over again with new members (and hopefully without the management company). I am somewhat philosophical about this, as I have a sense of history with this association. It’s good to clear the air every so often. Like any organization, a lot of crud creeps into a nonprofit over time, and without strong management, it will continue to grow unabated (see Parkinson’s Law).
I have served on many board of directors over the years, for a variety of groups. I would have to say though that participating on a HOA board is the most thankless job around. It is essential to keep things simple, transparent, be well organized, and act professionally. In other words, learn Robert’s Rules of Order, print an agenda, get a gavel and give it to someone who knows how to use it. This will go a long way to simplifying work, communicating with your membership, and maintaining their trust. It is rather sad to see neighbors viscerally attack each other and hurt feelings in the process. This type of pettiness and drama is what discourages residents from participating in such associations. Further, this has an adverse effect on the spirit of the neighborhood and is actually detrimental to house values. After all, who wants to move into a neighborhood where everyone is at each other’s throats?
Hopefully, we can begin the mending process once the board has been voted out of office. The only positive effect of all this, is that people are beginning to ask to participate on the board. I’ve been asked, “Tim, why don’t you get involved again?” The answer is rather simple, after I cleaned it up last time, finally getting us to operate in the black for the first time, I stepped off the board, whereby new members changed it and turned everything over to the management company. I cleaned up one gigantic mess years ago, and they screwed it up. I certainly am not going to go through such madness a second time. What’s the old expression, “Fool me once, shame on you; fool me twice…”?
Keep the Faith!
P.S. – Don’t forget my new book, “Tim’s Senior Moments” now available in Printed and eBook form.
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Tim Bryce is a writer and the Managing Director of M&JB Investment Company (M&JB) of Palm Harbor, Florida and has over 40 years of experience in the management consulting field. He can be reached at [email protected]
For Tim’s columns, see: timbryce.com
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Copyright © 2019 by Tim Bryce. All rights reserved.