Board Basics: The Essential Five People on Your Association Board

 

It takes a lot to build a great community. You need committed residents, a dedicated board of directors and a clear understanding of everybody’s roles and responsibilities.
 
At its best, your community association board will offer a complete vision for proper stewardship of the community. But its responsibilities go beyond that. In a practical, hands-on sense, the board is tasked with protecting the interests of the association, maintaining the common areas of the community, and enhancing the living experience for all residents. To make this happen, goals must be set, governing documents must be followed and meetings must be conducted.
Yet the underpinnings of your board will be the people who are part of it. Understanding their roles and responsibilities will help make your board more effective – and your community a more enjoyable place to live. Let’s start with the typical five essential people on your HOA board:
 
1.) President. As an elected representative of the association, the president must act democratically, as their role is very similar to that of a town mayor. The president’s responsibilities include important procedural roles as well as essential leadership functions. Minnesota’s association presidents gain their authority from State Law, specifically State Statute 515b, otherwise known as MCIOA (Minnesota Common Interest Ownership Association). The president is required to fulfill many different roles, but their primary role is to be a leader. Sometimes this requires setting aside personal roles such as neighbor or friend in order to do what is right for the association. As this can feel unpleasant and awkward at times, explaining this position to friends and neighbors will hopefully get them to understand that the president is entrusted to make decisions based on what’s best for the overall community.
 
Most common responsibilities of a president:
 
a. Strong, confident leader.
Confidence comes with knowledge. HOA presidents must be familiar with the governing documents and promote compliance in all regards. They are called upon to lead discussions based on a number of topics and therefore must understand the parameters within which the association can be most effective. The president is perceived as the community expert so they spend a lot of time (especially up front) studying the governing documents to best address each issue. 
 
b. Facilitate meetings.
During meetings, the president maintains order, proposes questions, calls votes, announces outcomes and recognizes those who are about to speak on the floor. The president also calls the meeting to order, announces the agenda and ensures that everyone adheres to it. At times, meetings can turn into heated debates, so the president must take control while giving everyone the opportunity to express their opinion, it can be a delicate balance. It is the president’s responsibility to ensure meetings are productive and efficient.
 
c. Liaison between association and property manager.
The president is the liaison between your property management company and the association. He or she must understand the full scope of the manager’s responsibilities and have frequent communication to promote success and ensure the contractual obligations are being met. When speaking on behalf of the association, the president’s decisions must be consistent with the board and they must always report back to the board with the content of these communications.
 
d. Oversees and advocates for volunteers.
There can be circumstances that prevent a board from effectively handling the workload. In this case, associations can create committees to efficiently share the burden. The president may appoint committees if dictated by the bylaws and help the committee to understand their tasks. Energy, leadership and vision can be instrumental in inciting support for the objectives your community wants to achieve. It is in the president’s best interest to help develop volunteers’ skills as team members to continue making people want to volunteer their valuable time on the board and its committees.
 
e. Works with professional partners.
There are times when the board’s abilities are limited and the need arises to contract professional services such as an attorney or architect. The president approves and enters into agreements with professional service providers.
 
f. Collaborate.
It’s typically not a good idea to make unilateral decisions, even though it might be the quickest means to an end-result. Operating on democratic principles by seeking board input and approvals eliminate residents’ questioning true intentions and personal agendas. The president works closely with the treasurer to prepare the operating budget and ensure the association adheres to the associations spending limitations and guidelines.
A good president assists in defining and prioritizing the association’s goals, which in turn, helps to direct the board’s efforts and contributes to the success and quality of life in the community. 
 
2.) Vice President. The vice president shares many of the responsibilities as the president and serves in the leadership capacity when the president is absent. This individual is tasked with helping to maintain order during parliamentary procedures, keeping the flow of business moving efficiently and acting as a knowledgeable source when it comes to the rules of the association. The vice president should stay informed about all association businesses so that he or she is prepared to facilitate a meeting in an emergency absence.
 
3.) Secretary. You can think of this person as the association historian. The secretary’s role is to record all of the actions of the board so they can be referenced later. This ensures clarity – imagine how often you’ve had a conversation with another party, only to find there were two different interpretations of the outcome after the fact. Now multiply that by every member of your association, and you understand how important good records are. The secretary’s functions eliminate those “Oh, I thought you meant...” scenarios by keeping accurate minutes during meetings and acting as the custodian of all records. The secretary will also sign the minutes of all meetings and other important community documents. Although the specific tasks are typically spelled out in a community’s bylaws, here are the main functions of an association secretary:
 
a. Meeting Minutes. This may not sound like an important task, but Meeting Minutes are a big deal as they summarize any motions made and all actions taken. During all formal association meetings, the board secretary must carefully and accurately note three key things: 1.) All actions of the association; 2.) Reasons behind each action; and 3.) Every board member’s vote on each action.
 
b. Record Keeping. The secretary is responsible for maintaining a record of all board meetings and ensuring all official association documents are kept in a manner that complies with local laws and regulations. They are also accountable for ensuring access to these documents and meeting minutes by homeowners and authorized representatives. Some of the documents include: governing documents, bylaws, articles of incorporation, declaration of covenants, and vendor contracts. 
 
c. Legal Concerns. Being the board secretary can sometimes feel like being a notary: they act as a witness when essential documents need signatures and they affix the corporate seal when required. They will also find themselves filing requisite forms with the appropriate government entities. 
 
d. Board Elections. In accordance to the governing documents and applicable laws, the secretary coordinates the distribution and collection of ballots and proxies during the board election process.
 
e. Communications. The association’s secretary coordinates the preparation and distribution of HOA meeting announcements and minutes according to the governing documents and pursuant to applicable laws. The secretary also facilitates the communication of correspondence to the members of the association. 
 
f. Additional Tasks. Every association is different and in some cases, additional tasks might be required of the board secretary. This could include typing documents, mailing materials, proofreading correspondence, drafting letters, and purging files.
 
4.) Treasurer. The effectiveness of your board is dictated largely by your budget. This makes the treasurer’s role essential. He or she is responsible for maintaining the finances and ensuring financial growth. Look to the treasurer to submit financial records in the case of an audit, and to authorize any disbursement of funds. The treasurer is also the primary check signer for community payables. Every board member serves many important leadership functions, but it is essential that all board members are congruent in their understanding of the roles and responsibilities of the treasurer. 
 
a. The treasurer has a voice. Boards are made up of different people, all with different priorities. Maybe it’s safety. Maybe it’s quality of life. Maybe it’s compliance. But for your treasurer, the main priority is financial health. This person must always be the voice for financial stability in your association. As such, he or she will function as the liaison to the auditor, the manager or the management company, the financing committee, the accountants and bookkeepers, the bankers, the reserve specialists, the investment advisors and more. 
 
b. The treasurer is looking at an association’s long-term financial health. Though your treasurer may serve a variety of functions, his or her primary duties will include: the development and ongoing review of the annual operating budget; overseeing the association’s reserve funding plan; investment of the association’s funds and collection of assessments. The treasurer must also ensure that assets are secure and proper internal controls are in place. Records retention also falls within the treasurer’s purview. 
 
c. The treasurer is an educator. Board members and association members may not have a clear understanding of the role that reserve funds play in the future of the community. Sometimes, treasurers are the only members who truly understand that these funds are set aside for future capital expenditures, not alternate operating funds or contingencies. It’s up to the treasurer to educate the board and membership as to the proper use of these funds and apply them appropriately. 
 
d. Beyond the big picture, the treasurer focuses on brass tacks. Make no mistake: the treasurer is integral to the ongoing financial health of the association. At the same time, it’s his or her duty to take charge of the finer points of financial management, including record keeping, insurance maintenance, investments, collections and delinquencies. 
 
e. The treasurer is a manager, not a doer. Just keep in mind that, though many functions fall under the treasurer’s purview, it’s not up to him or her to complete those tasks personally. Instead, they will oversee the diligent execution of these responsibilities by the appropriate vendors, such as the association’s CPA, and together they will work to determine how taxes are filed, when annual audits are completed, etc. 
 
5.) Manager. As an outside party bound to your association by contract, it’s important that your manager comes from a reputable property management company. This means that your manager has the additional resources necessary including the knowledge and expertise to deliver the best service to your community and board. Though the specifics of his or her duties vary by contract, all managers typically execute the policies dictated by the board and administer all of the services, operations and programs of the association. Your manager should also be an important source of information and insight. In fact, many boards become more effective through training provided by an experienced manager.
 
As with many boards, the individuals elected to their roles will bring strengths and talents all their own. It’s important to allow those strengths to come to the forefront – the board will benefit from it. Yet understanding the basics of each role will help make sure the essential functions are covered and enable the board to function as a team. It’s important to clearly understand the roles of the association board and your property management company to ensure objectives are met and nothing slips through the cracks. Here are some stead-fast rules to remember to keep everyone on track and prevent duplication of effort:  
 
a. The board sets the vision. Board members have the privilege of providing the leadership and inspiration for the association, creating a sense of community, onboarding committee members, keeping homeowners committed and engaged in upholding the community standards, and fostering a sense of wellbeing.
 
b. The association management company facilitates the action item list and sets the vision in motion. The property management firm should have the expertise to lay the foundation to fulfill the board’s overall plan. Need to reduce expenditures? The best property management company will have the capability to leverage their relationships with vendors and renegotiate contracts. How about promoting a greater sense of community? A good property management company can bring different groups of people together, like homeowners, and help the communication process to share ideas with greater efficiency.
 
c. The board operates in an administrative capacity. Board members are often the authority on covenants, codes and regulations. Along with any association committees, the board helps the community stay true to the guidelines.
 
d. The property manager operates in an executive capacity. The enforcement of covenants, codes and regulations falls to the property manager. It is their responsibility to send violation letters, ensure that recorded amendments are incorporated into the governing documents and distributed to homeowners as required by law, and they’re the professional resident’s call with an issue or concern. 
 
e. Be specific about priorities and expectations. The board’s role is to think big picture, but it’s essential they’re clear with the property manager about how they see their role and eliminate any potential misunderstandings from the start. Get on the same page. Your property manager is likely a talented multi-tasker, but prioritizing your community’s most important needs can help the manager attack the most pressing issues first.
 
f. The property management company should have the resources and skills to fully and efficiently support the board and community. The property management company will lead meetings, post notices about the meetings and file the minutes from each meeting. Your manager will also conduct regular inspections, and troubleshoot potential maintenance issues. They’ll leverage relationships with banks, insurance companies, maintenance companies, landscape companies, security companies and more, just to make sure you have well-negotiated rates and receive excellent service. They’ll distribute financial packages and help you stay compliant with the city ordinances and building codes. They’ll take those late-night calls and meet service people early in the morning if needed. A great property management company will provide your community with a technology that allows residents, board members, committee members and staff to communicate in one place – and get important community information and updates, too.
 
At the end of the day, collaboration between boards and property management companies is essential to the wellbeing of a community and its residents. By working together, you can maximize the potential of both organizations – and that’s a pretty powerful combination, indeed.

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