Community associations are receiving a lot more press these days than in the past, and most of it is less than flattering. Let’s face it, nobody wants to read a story about all of the thousands of associations that are doing things right. People are only interested in the bad news, even if it is intentionally skewed to make things look worse than they actually are. The media is all-too-ready to run stories about homeowners being “victimized” by their associations or management companies, charged legal fees for “no reason” or having to pay large assessments for repairs to the property, and will publish the so-called “facts” from the homeowner perspective without regard to the truth or without giving equal time to the other side. The public and the legislature are also listening to these stories and believing the worst about associations without verifying the information. While we know that, in most of these cases, there is more to the story than what is being portrayed in the media and that, often, the alleged “victim” is anything but innocent when it comes to following the association’s reasonable rules or paying their share of assessments, we also know that there are bad actors out there that are deserving of the reputation created in the media and that are making it harder for those good boards and managers to do their job. This article will provide some tips on how NOT to end up in one of those bad media stories.
DO: Understand and follow your governing documents and applicable statutes. Be educated and informed about best practices and changes in the law that affect how you operate, and make sure you know the requirements of your particular documents so that you can follow the proper procedures. Consult with your manager or your association attorney if you have any questions before doing something that you might later regret.
DON’T: Make things up on the fly, fail to keep up with changes in the law or continue doing things the same wrong way because “that’s how we have always done it.”
DO: Communicate, communicate, communicate. The number one complaint most owners have about their boards and management companies is a perceived lack of transparency. The best way to combat this complaint is to provide frequent and thorough communications to the owners on a regular basis. This is especially true when it comes to things like insurance, repairs and other projects, special assessments and governing document amendments or rule changes. While some people will ignore everything you say, no matter how many times you say it, and others will complain no matter what you do, a board that effectively communicates with the owners is less likely to be accused of wrongdoing than one that does not.
DON’T: Assume that owners know and understand how things work or what is expected of them. For many homeowners, this may be their first experience owning a home and/or living in an association. While owners are legally presumed to have read the governing documents and agreed to be bound by them by purchasing a home in the association, statistically very few people ever read their documents and fewer still understand what they say. They rely on the board and management to tell them what they need to know.
DO: Hold properly noticed, open board meetings, make decisions as a board, and avoid taking action without a meeting wherever possible. If your association is governed under the Minnesota Common Interest Ownership Act (“MCIOA”), you are required to have your meetings open to the members with very limited exceptions. The members are entitled to observe the board discussion and deliberation and to know what decisions are being made in real time. Even if your association is not governed under MCIOA, you should still follow its open meeting requirements to ensure transparency for your board. Limit the situations where you have to take emergency actions or actions without a meeting by planning ahead as much as possible, and then make sure to bring those up again at the next open board meeting so owners are aware of what was decided and why.
DON’T: Hold secret meetings or conduct all business by email. If boards or board members are holding secret meetings, making decisions outside of properly noticed meetings, or taking action without a proper vote of the board, not only does that violate the open meeting requirements under MCIOA, it creates distrust with the members and invites criticism and even potentially claims against the board or association. If you need to close a meeting to discuss a personnel issue or an adversarial matter, make sure it is done appropriately and that sensitive information is not included in the public meeting minutes or otherwise disclosed to third parties.
DO: Treat all owners fairly and equally in regard to rules and enforcement, architectural change requests and assessment collections. You cannot go wrong with treating everyone with respect and dignity and creating an inclusive community. Owners and residents who feel safe, respected and included are going to be happier than those that do not and are thus less likely to complain about their board or manager.
DON’T: Engage in discrimination. While the future of fair housing and anti-discrimination laws are currently uncertain, boards and managers should be familiar with these laws and ensure that they are not committing violations that could result in liability. We often see association rules or policies that are unintentionally discriminatory against various protected classes, particularly persons with disabilities and families with children, simply because the board members don’t know the law and are not aware of their own implicit biases. Boards should have their rules and policies reviewed by their attorney to ensure compliance.
DO: Acknowledge when you make a mistake and do what you can to correct it. We are all human and we all make mistakes sometimes. The difference between a good leader and a bad one is that a good leader will own up to his or her mistakes, learn from them and take action to correct them rather than trying to cover them up and hoping that nobody finds out. Most people can be pretty forgiving if you acknowledge your error and apologize.
DON’T: Persist in bad behavior or dig your heels in when you are in the wrong. This only makes things worse and creates bad blood among the community. And do not assess an owner for legal fees incurred in connection with pursuing or defending your wrong position. MCIOA only allows associations to charge an owner for legal fees and costs incurred in connection with the collection of unpaid assessments and/or the enforcement of the governing documents, rules and/or the provisions of MCIOA. If the board is the one who is in the wrong, not following the governing documents, etc., and an owner challenges them on it, that is not enforcement.
Even boards that operate completely by the book will occasionally find themselves in a dispute with an owner. That is part of living in a community with people from different backgrounds, personalities, etc. However, if you follow the above guidelines, hopefully that dispute will not be interesting enough to end up in the media or, if it does, the association will not be portrayed as the villain in the story.
