by Dan Zimberoff, Partner at Barker Martin When faced with a difficult or controversial issue, many community association boards of directors become paralyzed, overwhelmed, reactionary; and in some instances, all of the above. Such inaction often leads to delay, adverse financial consequences
by Dan Zimberoff, Partner at Barker Martin
When faced with a difficult or controversial issue, many community association boards of directors become paralyzed, overwhelmed, reactionary; and in some instances, all of the above. Such inaction often leads to delay, adverse financial consequences and heightened distrust and animosity within the community.
To avoid such inefficient and problematic results, a board should take the following steps when confronted with a problem, dispute or complex issue:
Step 1: Be proactive. Establish a game plan from start to finish incorporating the steps below with a corresponding timetable. Ensure each stakeholder (board members, affected homeowner, third party vendor, etc.) buys into the process and timeline.
Step 2: Gather information. Establish a set period of time in which to gather facts and other information relating to the issue. If relying upon third parties for information, exercise some level of verification or validation to ensure accuracy and relevance.
Step 3: Filter the information. Discern subjective from objective information and identify possible biases. Subjective or biased information is not “wrong” or invalid, but it should be weighed appropriately.
Step 4: Rely on internal and external resources. Though board members have wide ranges of life experiences and backgrounds, some issues require help from professionals, such as contractors, attorneys, managers or other consultants. If available, the Association may have persons or documents that provide historical data on the issue.
Step 5: Look to and follow governing documents. The answers to most issues a community association board faces can be found within its governing documents. Questions of authority, responsibility and funding are often provided specifically within the set of documents. If not specific answers, general concepts and guidelines should be set forth.
Step 6: Be transparent. Unless the dispute involves litigation or other privileged matter, the board should deliberate and act openly and transparently. If recusal of a board member is appropriate, then that should occur seamlessly. Two-way flow of communication (to and from the board) should occur uniformly and consistently.
Step 7: Feedback. Before making a final decision, the board should have some mechanism in place to receive feedback or input from homeowners. This is not to say that the homeowners get to vote (though in some circumstances state law or the association’s governing documents may require a homeowner vote), and not every decision requires an appeal process, but if practical, a board should allow some level of input from the association members.
Step 8: Document. Whether by formal resolution, meeting minutes or some other written record, a board should document in writing its decision or action. If the decision constitutes a variance or permit from governing documents or other established practice, the board should qualify with as much specificity as possible the grounds for the variance.
If after following the foregoing steps a board is still stuck, then assistance from a mediator or business facilitator may be required. As an absolute last step, the association could petition the court to appoint a receiver. I almost forgot the most important step that applies uniformly to every decision and action a board takes: Step 1(a): Exercise common sense!
