12 Basic Principles for HOAs

The influence of an HOA has a direct relationship to your community’s culture and whether your neighborhood will thrive or lose its value.  Our expectation of any HOA Board is that they govern fairly and responsibly.  Board members, especially, should have a clear understanding of their relationship to every homeowner, as a result of their authority.

By embracing these 12 basic principles, HOAs can increase community harmony, reduce conflict and build stronger, more thriving neighborhoods. 

1. Annual meetings.  Conduct at least one membership meeting annually, providing at least two weeks’ notice to homeowners.
2. Assessments.  Collect assessments and other fees from homeowners in a timely and equitable manner and in accordance with state statutes and Board-approved procedures.
3. Communication.  Provide at least one form of regular communication with residents, and use it to report substantive actions taken by the board. With the popularity of mobile communication, establishing an online process works best.
4. Conflicts of interest.  Disclose all personal and financial conflicts of interest before assuming a Board position.
5. Elections.  Hold fair and open elections in strict conformance with governing documents, giving all candidates an equal opportunity to express their views and permitting each candidate to have a representative observe the vote-counting process.
6. Financial transparency.  Share critical information and rational with residents about budgets, reserve funding, special assessments and other issues that could impact their financial obligations to the association.  Give members an opportunity – before final decisions are made – to ask questions of a representative who is fully familiar with these financial issues.
7. Foreclosure.  Initiate lien and foreclosure proceedings only as a last step in a well-defined debt-collection procedure – and only after other, less-disruptive measures have failed to resolve a serious delinquency issue in a specified period of time.
8. Governance and the law.  Govern and manage the association in accordance with all applicable laws and regulations.  Conduct reviews of governing documents to ensure legal compliance and to determine whether amendments are necessary.
9. Grievances and appeals.  Allow residents to bring grievances before the Board or a Board-appointed committee and follow well-publicized procedures that give residents the opportunity to correct violations before imposing fines or other sanctions.
10. Records.  Allow homeowners reasonable access to appropriate association records, including annual budgets and Board meeting minutes.
11. Reserve funding.  Account for anticipated long-term expenditures as part of the annual budget-development process, commissioning a reserve study when professional expertise is warranted.
12. Rules.  Uniformly enforce all rules, including architectural guidelines, but only after seeking compliance on a voluntary basis.  Distribute proposals for new rules and guidelines to all homeowners and non-owner residents.  Advise them when the Board will consider new rules and encourage input.  Once adopted, new rules and effective dates should be distributed to every owner and resident.

Has your HOA ever considered a professional association management service?  One who is insured, takes direction rather than giving them; affordable, has a great reputation for achieving its service; and who acts as a mentor to facilitate neighbors to become engaged in their communities? 

MGM Association Management has served the State of Idaho for the past 20 years, and differentiates itself by mentoring and advising Boards throughout the governance process.  MGM provides has a strong proven track record of service, provides affordable accounting services to customizing management services.  Their goal is to keep your HOA independent while headed in an financially solvent direction. 

For a no obligation quote, contact MGM at (208) 846-9189 or visit www.gomgm.com.