Of Home Owners Association
By Wayne S. Woody
Federation of Greater Baton Rouge Civic Associations President
A home owners association in which all property owners in the subdivision are mandatory members ordinarily conducts its day-to-day business through its board of directors. What are the best practices of such a board to properly discharge its duties? Let me suggest some that usually apply:
- The board should maintain liability insurance in order to protect the association and its mandatory members.
- The board should maintain Directors & Officers (D & O) insurance to protect the board members and thereby encourage their service on the board.
- The board ordinarily enforces the restrictions (rules for your community) through an Architectural Control Committee. Its purpose is to ensure the continued integrity of the community's original design. Should a home owner plan to change the outward appearance of their property, they must submit those plans for review to the committee to ensure they conform to the restrictions. It should make sure that homeowners are familiar with the restrictions by providing printed copies or putting them on the association's Web site. The Committee must be scrupulously impartial in its work in order to encourage the confidence of fellow homeowners and discourage lawsuits from those who might be unhappy with the committee's decision.
- The board should treat fellow property owners as they would expect to be treated themselves by being respectful, listening to complaints and responding as soon as possible.
- The board's failure to enforce a restriction against a violator for two years will make it legally impossible to enforce the restriction against that violator. If the board does not take action against violators of a particular, the association will lose its right to apply that rule to anyone.
- The board should conduct business transparently. Financial statements should be available, if only at the annual meeting. Communication is expected and essential.
- The board should always try to anticipate problems rather than waiting to react until complaints are issued.
- An annual budget is necessary to ensure fees are adequate to meet expenses. Special assessments are possible but should be used only when absolutely necessary. No one likes surprise bills.
- The board must be diligent in the collection of fees in order to be fair to all members. Fee collection can be enforced through legal action. However, it is wise to work with those who have particular short-term problems.
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The board
should be creative in fostering community spirit and general confidence.
There are many more specific matters with which a board must be concerned. Such matters may be better informed through participation in a professional organization, such as our own, the Federation of Greater Baton Rouge Civic Associations.