- August 5, 2020
- Posted by: Scott Setterlund
- Category: Article, associations, Business plans, communities, Community, Finance & accounting, Franchising, Funding trends, HOA, homeowner association
Making decisions regarding a Idaho community where all the property owners have a stake in owning community property, often places the unpaid, Board member in a position to lose objectivity, and, at times, in uncomfortable confrontations with neighbors. Some say it’s a thankless undertaking.
A Board position should not only represent the majority view of their neighborhood, but it also gives them the authority to enforce and dictate rules. In some states, Boards have power to foreclose on a property. It is these tumultuous situations that garnish the most attention from the media and are the seeds to the growing mystic of being a Board member. To manage a homeowner association requires a tremendous amount of patience and knowledge. Training isn’t readily available; it’s often learned in the trenches.
Being responsible for the collection of dues and the distribution of revenue, requires a person to make decisions that could affect one homeowner and/or the entire subdivision. What most Board members will find in every subdivision, will be a small percentage of homeowners who are always late to pay their dues, or who will disagree with a rule, or those who will always be negative toward their HOA. Certainly, it would seem the deck is stack against Board members.
It is the Board’s obligation, however, that when a homeowner is late to pay their dues or when a homeowner neglects to follow the rules, is to provide some measure of leadership. If leadership is unchecked, the small percentage of non-payers will increase, the noncompliant voices are louder, and result in a decrease in community values. When this occurs, investors are likely to move-in and rental properties pop-up. Ultimately, property values decrease, because people care less.
A Board member may lack resources or the necessary leadership skills to interpret the rules or may bring in their own bias to govern the way they believe the rules were intended. A community’s culture is often a reflection of good and bad leadership.
By having a third-party, manager to support and facilitate the governance of a subdivision, may be a better option. They provide the heavy lifting and perform the most time consuming tasks which frees up the time of a Board to focus on more relevant issues. An unbiased management service does not change over time and is a sure guarantee to succeed in the long-run and particularly provide the same service when Board leadership turns over.
MGM Association Management is an example of a professional manager that specifically works with associations. MGM is a member with the Community Association Institute (CAI) which has a global membership of over 350,000 associations and provides oversight and continuing education for association managers. MGM is not a property manager or a bookkeeper or an accountant who typically attempt to partner with homeowner associations, but these specialists lack the necessary governance experience. MGM specifically assists to govern these associations and understands the value of being accessible to homeowners; providing guidance and expertise on applying the rules; collecting, depositing and tracking all account payables and receivables, and implementing proven enforcement and violation processes that will not tarnish a good community.
If you are a Board member and interested in learning more about your role, or you would like more information regarding association management, contact MGM Association Management, call (208) 846-9189 or visit www.gomgm.com.