Serving on a condo association board is a great way to help your community. But it can be tricky to navigate all the ins and outs of managing an association. There are a lot of rules to learn, and a lot of people to keep satisfied. Being on the board of directors may put you in the line of fire if things go wrong. Here are some common mistakes that land condo association boards in hot water.
1. Not Staying on Top of Financials
Failing to collect dues in full and on time is a common mistake. If you don’t have the funds to run the association and serve the needs of the community, that’s a big problem. Make every effort to encourage timely payment, send reminder notices promptly, and make it easy for members to pay their dues by setting up an online payment portal.
Have checks and balances in place to ensure financial accounts are in order. It only takes one dishonest person to drain the condo association’s bank account. This kind of theft often happens in small increments which are easy to overlook. Transparency and accountability in bookkeeping and establishing a review and approval pathway for vendor payments greatly reduces the risk of fraud.
2. Not Budgeting Effectively
Most condo associations want to save money—and make members happy by keeping dues low. But failing to assess high enough dues to keep the community in excellent condition will do more harm than good in the long run. If you face a shortfall and must institute a special assessment to make up the difference, this is sure to make the community members upset.
Review the budget in detail at least once a year to ensure that projected costs can be covered. Include all typical ongoing maintenance, insurance, legal, and other costs when budgeting for the operating fund. Maintain enough money in the reserve fund to cover unexpected expenses as well as major upcoming capital improvement projects.
3. Reacting Instead of Responding
When there is a conflict with a property owner, it’s easy to take things personally. One of the biggest mistakes a board member can make is reacting emotionally to a complaint or accusation. Follow the board’s established guidelines for responding to complaints. Don’t shoot off an email in the heat of the moment. This could put you and the rest of the board in a tight spot later if your response is interpreted as board policy.
If you are too close to an issue to be objective, meet with the rest of the board to determine a measured and reasonable response. It may also be wise to ask the board’s attorney for advice and assistance with drafting a response—especially if there are questions about the legality of the board’s actions or an accusation against a board member.
4. Violating Condo Owners’ Privacy
Sending vendors and contractors into a condo without permission or advance notice is a potentially explosive issue. In emergencies or to protect the well-being of the community and the integrity of the property, it may be necessary to enter a condo when the owner is not there. But even when the board is be legally within its rights, the unit owner may feel their privacy has been intensely violated. Have a clear policy governing when and if third parties or board members may enter a member’s condo. Make every attempt to gain permission before doing so. This is a good reason to have multiple contact methods on file for each association member.
5. Failing to Keep Up Exterior Elements
This is a pet peeve for many condo owners. If they are paying association dues, they can reasonably expect that necessary repairs and replacement of exterior elements will be covered. Being proactive about upkeep for limited common elements like balconies and patios is smart. So is responding promptly to maintenance requests. Roof leaks, mold remediation, and other serious issues are often the subject of lawsuits for condo associations. And associations often lose these court battles. If the board is struggling to pay for upkeep of exterior elements, it’s time to revisit the budget and make sure dues are assessed to handle this important issue.
These are just a few of the common mistakes that get condo association boards in trouble. At Ardent Residential, we help our clients avoid many pitfalls and keep their associations running smoothly. Contact us to learn more.