Before Creating a New HOA Policy, Ask These 5 Questions
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“How can we create policies that are effective, fair and EASY for homeowners to follow?”
Creating effective HOA policies is not an easy task for any board, but they are an essential piece of your association. Whether your policies address guest parking, smoking, amenity use, short-term rentals or pets, they provide a framework for how your association operates. And well-crafted policies can help your association run smoothly, enhance the resident experience and improve your reputation in the community at large.
But where do we begin?
Start by working with an experienced community management company that can provide guidance on establishing fair policies and communicating them clearly to residents. They will also be your go-to source for policy implementation, enforcement and documentation (which no one wants to deal with), so having their input from the get-go is critical. Next, sit down with your board and community manager to review your proposed policy and ask the following questions:
Question 1: Is this policy necessary for our community?Only create a new policy that is absolutely necessary for the well-being and growth of your community. If the rule creates more of a problem that the one it resolves, don’t make it. Some additional questions to ask:
- Does the policy balance property values and resident well-being with homeowner freedom?
- Is the policy designed for a specific outcome or goal versus our personal preferences?
- Am I motivated by political pressure, a personal agenda or any arbitrary reasons?
Question 2: Does this policy align with local laws and ordinances?Make sure that your policy lines up with the law. Your management company and association legal counsel can provide guidance to ensure that your rules are consistent with local laws and ordinances. This will also provide further validation for your policy and support future enforcement. Ask these further questions:
- Has the policy been vetted by our management company (to ensure it doesn’t contradict laws or existing association rules)?
- Is the policy in accordance with Nevada Revised Statutes that apply to HOAs?
- Does the policy fall in line with the association’s current governing documents?
Question 3: Will homeowners understand how to follow the policy?Transparency and communication are the principles here. Don’t create a rule that is difficult to follow or overcomplicated. The goal is to create a better resident experience; when confusing laws come into play, they can easily frustrate homeowners.
Communication plays a key role in the level of understanding as well – both before and after the law is in place. Make sure that you are getting homeowners’ input from the beginning and communicating what the law means for homeowners, why it’s important for them and the community and what they need to do to follow it before it rolls out. Melissa Ramsey, vice president at FirstService Residential said, “It’s best practice to keep homeowners abreast of changes coming down the pipeline, and Nevada law also requires that the association notify owners of any changes to governing documents within 30 days after the change is made.” Some states also require that you hold a meeting with residents prior to rule adoption to discuss.
To ensure that your policy is understood well, ask these additional questions:
- Is the policy written as simply and clearly as possible?
- Have we asked for feedback on the policy before it’s implemented?
- Are we letting homeowners know what will change in advance?
- Does the rule make sense, and are we communicating the potential benefits to the association so that they understand the meaning behind it?
- What channels are we using to communicate the policy change (e.g., community website, newsletter, emails, bulletin board and postal mail)?
Boards may be tempted to create policies because of an immediate frustration or concern. And the bigger the problem, the greater the temptation to write an overly strict rule that will likely cause more trouble in the long run. That’s why it’s especially important to ensure you are creating policies that are fair, reasonable and consistent. Take steps to maintain perspective when you are creating rules and make sure that they apply to everyone.
Question 4: Is the policy fair and reasonable?
It’s also critical that you leave room for personal judgment and some leniency once the policy goes into effect. The rules should apply to everyone and must be fairly enforced. If residents feel like they won’t be treated fairly, they have little motivation to comply with a policy. Your professional management company can help provide guidance to ensure that rules are created with an unbiased approach. Ask these additional questions to ensure your policy takes this approach:
- Does the policy make sense for our entire community (or just a handful of individuals)?
- Are we keeping the big picture in mind when creating rules?
- Will the policy be fairly enforced?
- Are we leaving room for personal judgment and leniency once the policy goes into effect?
Question 5: How relevant is our policy?While many policies are created because of an immediate need and concern, an ideal rule will not only address current concerns, but will stand the test of time. Think about the policy in terms of what it will mean for future homeowners as well as your current community. Additionally, make sure that you are keeping current issues and concerns of the greater community in mind when developing your rules. For instance, if short-term rental policies are a big concern in your city, make sure that policies reflect that. With the prevalence of social media and online review websites, it’s more important than ever to develop policies with your reputation in mind.
In addition to creating relevant policies now, review your policies and rules on an annual basis to ensure that they still apply. For instance, new legislation may pass that will render a rule obsolete. You may need to make updates or eliminate policies if policies no longer apply.
Ask these additional questions to create policies that are timely and effective:
- Does this policy reflect current concerns and issues in our community?
- Will this rule make sense five years from now?
- Is this a policy that future homeowners will be looking for?
- Are we regularly auditing our policies?