Let’s face it: nobody puts “organizing paperwork” at the top of his or her favorite-things-to-do list. But maintaining good records is essential to the critical functions of your homeowner association (HOA), and following a system of organization can streamline your operations by increasing efficiency, providing transparency and preserving a history of communication.
In this article, we’ll explore ways to make organization simple and easy. In the process, perhaps something that normally feels like a chore will become a little less onerous.
1. Know which documents are essential.
This first step is the most challenging, simply because almost all of the documents your HOA will generate are essential, including bids and reports. Crucial pieces of information – such as Articles of Incorporation, master deed, declarations (or CC&Rs) and bylaws – should be kept in an accessible place. In addition, your meeting minutes, all communications with homeowners, financial documents such as billing statements, vendor contracts, insurance policies, warranties and maintenance records should be placed into easily identifiable files so that they are readily available when needed.
2. Be aware of the law.
Unfortunately, most state laws don’t provide much guidance. In many states, it’s limited to broad statements requiring that records be kept “in accordance with generally accepted accounting principles.” Still, it’s wise to check with your auditor or the statutes in your particular state as they can vary greatly. The best property management company will be well versed in the law and can help you with this aspect of your record keeping. You can also consult with your association’s attorney.
3. Keep documents available.
Documents like CC&Rs and meeting minutes are essential to residents in your community. The board will need to reference them for guidance when they have questions, want to settle disputes, or are considering upgrades or enhancements to homes in the association that may alter or modify the overall community. Keep these documents accessible to residents, either at a central office or through an internal communications system. Your property management company can help you implement a system that ensures fair access for everyone.
4. Make it somebody’s job (like a manager).
Record keeping is very important and should be assigned to a specific person. Leaving it as anybody’s job usually means it ends up being nobody’s job, so make sure you identify a single individual as the steward of your records, like your property manager or assistant property manager. If your community is self-managed, this role normally falls to the Board Secretary, though any member can be assigned this important duty.
5. Maintain transparency – and confidentiality.
There are many documents that owners have a right to see, such as approved contracts, meeting minutes from open sessions, governing documents and monthly and annual financial statements. Keeping these documents available will maintain transparency between owners and the board. The other side of the coin, however, is confidentiality. Though owners have broad access to information, there are some areas in which the board’s privileges supersede those of owners. Communications regarding employment matters, issues of privacy, litigation strategies, certain delinquency matters and ongoing contract negotiations may be protected under applicable law. The association’s attorney can offer guidance in this regard.
There are ways to communicate with homeowners without disclosing confidential details, such as providing summaries of pivotal events through community newsletters to keep everyone informed, or holding informal, “informational gatherings” to address any general pressing questions from owners. Remember that it is always wise to have your managing agent or community manager and your association attorney available during these types of discussions.
If you’re picturing a tiny corner room packed with leaning towers of paper and overflowing filing cabinets, never fear. The answer is electronic record keeping. An excellent property management company can implement a system whereby all-important documents are scanned and digitally filed in the appropriate place or provide the necessary storage. In an age of ongoing digital security threats, they can help ensure the proper firewalls and security measures are put in place, too. This provides a safe, secure storing house for your records that is also easily accessible and searchable.
Implement the right systems and you’ll find you’ve got a robust collection of essential paperwork that enhances your operation rather than inhibits it. For more helpful information, contact FirstService Residential, North America’s leading residential property management company.