Yalnes, Inc. Blog

A Resource for Condo Owners

And You Are Now On The Board…

It is the end of the Association’s annual meeting and you have just been elected to the Board.  Do you know your duties and responsibilities?  Do you know the needs of the multi-million dollar corporation you’ve been put in charge of?  How do you ensure consistency in application and effectiveness of the existing policies, maintenance plans, long term fiscal planning, etc. and where do you start?

These are the questions newly elected Board members and Associations find themselves asking when annual meetings are held and the membership elects “The Board”.  One must find a perfect balance between continuing down the path toward the vision the Association previously established and trying to find ways to build community, increase property values, maintain the existing assets and be fair to all residents (owners and renters). 

The administration of community associations, as a whole, is a unique industry with its own set of governing documents and policies, as well as laws at the local, state and federal levels.  A community association is also a diverse neighborhood where residents have different backgrounds, ideals and expectations.  Board members are often burdened with the responsibility of ensuring the Association complies with applicable laws, acting as a mediator when it comes to neighbor disputes, and being experts in plumbing, roofing, insurance, financial planning, and other matters which impact the community.  That’s a tough job especially if the Association is self managed; yet being on the Board can be one of the most rewarding ways to volunteer your time (yep, you don’t get paid for being on the Board).

There are a few practical solutions to make the transition between Board members easier:

  • Education – answers to most questions can be found in the Association’s governing documents; however, there are also general industry standards and other laws which apply to community associations.  Community Associations Institute is a great resource for volunteer leaders and provides networking and educational opportunities.  Community Association Volunteer Leadership, as a one day workshop, is just one of the many educational seminars offered by CAI that will immerse you in the basics of Condominium and Homeowner Associations.  CAI also offers publications, available through its website, that are a valuable resource to current and future Boards;
  • Staggered Board member terms – many Association Bylaws include a provision which provides for staggered Board member terms.  The most common provision is where each Board member is elected for a set number of years, with positions expiring in different years.  Some of the positions could expire in odd-numbered years and some in even-numbered years (for example, if you have five Board members, three could be elected in 2011 and two could be elected in 2012).  This approach carries the wealth of information and knowledge from one Board to the other through members who remain on the Board, allowing the newly elected members to learn how the Association operates;
  • “Policy Manual” – develop a comprehensive Standard Operating Procedures / Board Manual to cover items the Association handles on a regular basis.  It does not have to be extremely detailed, but should include enough information for someone to quickly understand the Association’s operations.  What happens when a new resident moves in?  The intercom has to be updated, appropriate documents must be collected (e.g. lease agreement if a unit is rented), new residents should be given a tour of the community, etc.  The manual generally includes a maintenance plan, emergency procedures, vendor list, annual budget and financials, reserve study, prior meeting minutes, governing documents and Association policies, insurance, and other information pertinent to the Association’s day-to-day affairs.  If the Association is self managed, the document will allow Board members to easily carry out routine tasks and make decisions in the future.  If the Association contracts with a professional management firm, it will bring clarity and consistency to the Association’s affairs.

The wealth of knowledge that an Association accumulates over the years is almost impossible to document.  A good share of that knowledge is lost every time a new Board member is elected, however this loss of information can be mitigated through Board member education and communication, staggered terms and the development of a comprehensive policy manual.

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April 14, 2011 Posted by | Board of Directors, Planning | Leave a comment

How to increase operational efficiency while retaining control of your Association’s finances.

We come across a wide range of approaches Associations take to managing and maintaining their Common Areas.  Some Associations wish to address any and all maintenance needs as quickly as possible when they arise and some prefer to go through a competitive bidding process prior to performing repairs.  We suggest developing and implementing a specific policy to provide guidance to the Board of Directors (and the Management Firm, when the Association is professionally managed).  Doing so will eliminate (or at least minimize) lengthy discussions over whether or not something should be repaired, how many proposals from independent vendors should be obtained (does replacement of a light bulb really require three proposals?), how vendor invoices should be approved for payment, etc.  A resolution will also provide consistency in Association’s operations as Board elections are held and the composition of the Board of Directors is changed.

Below is a sample Board Resolution.  There are many things that go into development of a Resolution; however, all Resolutions should include:

  • Purpose – state the reason why this particular Resolution is being adopted;
  • Authority – reference / quote applicable language from Association’s governing documents (commonly referred to as Declaration; Covenants, Conditions and Restrictions (CC&Rs); Master Deed; ByLaws; etc.), giving the Board of Directors / Association the power to adopt the Resolution;
  • Result – this is the main portion of the Resolution and will typically describe a specific process, implementing the Purpose of the Resolution.

 

SAMPLE ASSOCIATION
BOARD RESOLUTION # 09-01
GENERAL COMMON AREA REPAIR/EXPENSE APPROVAL GUIDELINES

WHEREAS, Section X.X of the ByLaws obliges the Board of Directors to provide for the operation, care, upkeep and maintenance of all of the Common Areas; AND

WHEREAS, Section X.X of the ByLaws empowers the Board of Directors to manage and supervise business affairs of the Association and to employ services of any independent contractor and to prescribe their duties; AND

WHEREAS, Article XX of the ByLaws permits the Board of Directors to authorize any officer or officers, agent or agents, to enter into any contract and to sign checks, drafts, or other orders for payment; AND

WHEREAS, the Board of Directors wishes to maintain effective control over the Association’s expenditures while providing for efficient day-to-day operations of the Association;

NOW THEREFORE, be it resolved that the following approval levels and repair procedures are agreed upon:

  1. Invoices for recurring services (contracts for services and maintenance and utilities), which were previously approved by the Board, shall not require additional approval for payment;
  2. Required repair work of non-recurring and non-emergency nature: (a) The Association Manager (or a Board member appointed to oversee Association’s maintenance) shall have authority to approve repair work and/or invoices not exceeding one thousand dollars ($1,000.00).  An independent contractor’s proposal/estimate shall not be required for repairs below $1,000 unless deemed necessary by the Association Manager (or a Board member appointed to oversee Association’s maintenance);  (b)  President of the Board of Directors shall have authority to approve repair work and/or invoices not exceeding five thousand dollars ($5,000.00).  An independent contractor’s proposal/estimate shall not be required for repairs below $2,500 unless deemed necessary by the President.  In the event estimated repairs exceed $2,500, the President and/or Association Manager shall obtain at least two (2) independent proposals for the work;  (c) Approval of the Board of Directors and at least three (3) independent proposals shall be required for expenses exceeding five thousand dollars ($5,000.00);
  3. Any one (1) Board member and/or the Association Manager shall have authority to approve repairs / expenses of emergency nature; however, such Board member and/or the Association Manager must notify all Board members of the emergency work while making the protection of life and property a first priority;
  4. Checks and / or drafts for operating expenses shall be signed by the Association Manager (or one (1) member of the Board of Directors);
  5. Checks and / or drafts for reserve expenses must require approval and signatures of at least two (2) Officers of the Board of Directors.

Adopted at the Board meeting held on _____ day of ___________________, 200__.

SIGNED BY:

________________________________
President

 

ATTESTED BY:

________________________________
Secretary

September 20, 2009 Posted by | Board of Directors, Governance | , , , | Comments Off on How to increase operational efficiency while retaining control of your Association’s finances.

Being a Board Member

If you’re considering running for the Board, ask yourself the following three questions:

Do I have the time?: As a Board member, you will need to devote at least several hours of your time each month to Association business. In addition to regular Board meetings, you will need to be active in email discussions and occasional special meetings. During special projects, you may need to spend a little extra time on Association business. Some board members may also spend a little more time than others if they work with a committee

Can I make tough decisions when it’s required?: The primary role of the Board is to conduct the business of the Association. This doesn’t just mean approving the budget, but also developing and enforcing policies. Board members are required to step outside their immediate circle of family and neighbors and make decisions based on the greater good of the community.

Can I do all this and have fun, too?: It isn’t all about policies and tough decisions. An Association is only as good as its owners make it, and establishing and maintaining a sense of community is a part of a Board member’s responsibility. Planning and attending functions such as picnics and being a presence in the community are as important as any policy decisions you may make.

Being a board member can be frustrating at times, but it may also be one of the most rewarding ways you’ll find to volunteer your time.

December 12, 2008 Posted by | Board of Directors | , | Leave a comment