«The Board Member Tool Kit A GUIDE FOR COMMUNITY ASSOCIATION VOLUNTEER LEADERS ABOUT CAI Community Associations Institute (CAI) is a national ...»
The Board Member Tool Kit
A GUIDE FOR COMMUNITY ASSOCIATION VOLUNTEER LEADERS
Community Associations Institute (CAI) is a national organization dedicated to fostering
vibrant, competent, harmonious community associations. For more than 30 years, CAI
has been the leader in providing education and resources to the volunteer homeowners
who govern community associations and the professionals who support them. Our mem- bers include community association volunteer leaders, professional managers, communi- ty management firms, and other professionals and companies that provide products and services to associations.
ABOUT CCAVCAI recognizes that volunteers ultimately are responsible for building community, meet- ing the expectations of neighbors and protecting property values. For this reason CAI has created the Center for Community Association Volunteers (CCAV), a specialized member group committed to providing the information and support you need to be a more effective, efficient, and respected leader. CCAV provides the customized products, services and expertise you need to be successful in your community. As a volunteer leader member of CAI, you are automatically enrolled in CCAV at no additional cost.
ISBN 0-944715-97-4 © 2005 Community Associations Institute All rights reserved. No part of this document may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, audio, visu- al, or otherwise, without the prior written consent of the publisher. Inquiries should be directed to Community Associations Institute.
Community Associations Institute 225 Reinekers Lane, Suite 300 Alexandria, VA 22314 This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is published with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional services. If legal advice or other expert assistance is required, the services of a competent professional should be sought.—From a Declaration of Principles, jointly adopted by a Committee of the American Bar Association and a Committee of Publishers CAI thanks Ellen Hirsch de Haan, ESQ.; Paul Grucza, CMCA, and AMS, PCAM;
Pearline Atkinson-Stewart for reviewing this document.
Printed in the United States of America Contents
1. Governing Documents
2. The Role of the Board
3. The Role of the President
4. The Role of the Secretary
5. The Role of the Treasurer
6. Working with a Professional Manager
7. Working with Professional Partners
8. The Importance of Meetings
9. Electing Board Members
10. Finding Volunteers
13. Selecting Contractors
14. Communicating with Residents
15. Rules How to Get the Most from Your CAI Membership
Introduction W elcome to CAI. Whether you manage the association yourself or have the assistance of professional management; whether you’re on the board of a condominium or homeowner association or a cooperative; and whether your association comprises just a handful of homes or thousands of homes in a large-scale community—joining CAI can do more to ensure your success than just about anything else you can do.
DID YOU KNOW?
I You’re part of the leadership team of a corporation.
Your association is a corporation; and, although you’re not running Microsoft or AT&T, you’re still a corporate board member, responsible for running a business. Your investors are your association members, and you’re responsible for maximizing the return on their investment—their homes.
I You’re an elected official. Your association likely provides some services that traditionally were provided by local government. That makes you similar to a town council member (or the mayor, if you’re the president), responsible for ensuring that services are provided and that rules are appropriate and fairly applied. Your citizens are—again— your association members, and you’re responsible for maintaining and enhancing their quality of life.
I You’re a leader. Your association is a neighborhood like a family. That makes you a parent, cheerleader, role model, social director—in short, a community builder. Your members are your neighbors, and you’re responsible for their civic well-being.
That’s a lot of responsibility, and we’re here to support you.
Our mission is to help you not only succeed, but to achieve success with a minimum amount of anxiety and angst. Hopefully, we can even help you enjoy the experience. That’s why we’re providing you this free overview of what you need to know. It’s just the beginning; and we trust it will lead you to the information, tools, and resources you need to be a successful and respected leader.
Most of the sample forms, checklists and notices in this Tool Kit are available to CAI members at www.caionline.org/members.
There you can download the documents and, in most cases, customize them for your association. See the Appendix for more information about accessing these services online.
Be sure to take advantage of all that CAI has to offer. We know we have a lot awaiting you, so we’ve tried to catalog and simplify those offerings in the Appendix: “How to Get the Most from Your CAI Membership.” This Tool Kit is just one of the resources that can help you be a successful and respected leader. If you can’t find what you need in this guide, call us toll-free at (888) 224-4321 (M–F, 9–6:30 ET) and we’ll be happy to help you.
Governing Documents F ew people like fine print or red tape, but there are several important documents board members need to be familiar and comfortable with. Collectively, they’re called governing documents. Depending on the type of association you live in, individual documents will differ. Each is a very useful tool that will provide specific guidance.
W H Y A R E G O V E R N I N G D O C U M E N T S I M P O R TA N T ?
I They give boards the authority to govern by providing for the operation and regulation of the association.
I They provide guidance and protect boards.
I They protect association members by spelling out their rights and responsibilities.
I They are supported by local ordinances, state statutes, and federal regulations.
Governing documents will provide the structure within which the board can work effectively, they’ll guide board decision making, and support association operations. Their greatest value, however, may lie in the protections they provide to board members.
Community association governing documents typically include several items in descending order of authority.
I Declaration or master deed, including Covenants, Conditions & Restrictions, or CC&Rs (in condominiums and planned communities) I Proprietary lease, master lease, or occupancy agreement (in cooperatives) I Articles of Incorporation I Bylaws I Rules and Regulations
T H E D E C L A R AT I O NThe Declaration (or Master Deed) contains the CC&Rs that regulate resident behavior. They bind all the owners to the association, establish association responsibilities, and define owners’ rights and obligations. (In cooperatives, this document is called the proprietary lease or occupancy agreement.)
! Cautions The distinction between areas that are owned separately and areas that are owned in common is the cause of much misunderstanding in community associations. It’s important to understand the differences based on the information in the governing documents.
Association governing documents must not conflict with federal regulations, state statutes, or local ordinances. It’s important to have your association governing documents reviewed by the association attorney to ensure that they do not conflict.
Introduction to Community Association Management, Governance, and Services, Guide for Association Practitioners #1, by Clifford J. Treese. (Community Associations Press, 2002.)
Sample Policy Resolution WHEREAS, Article __________ of the declaration of covenants, conditions, and restrictions of the _______________ association creates an obligation for payment of assessments; and WHEREAS, Article _____, Section _______ of the declaration charges the board with setting the annual general assessment rate sufficient to meet the obligations imposed by the declaration; and WHEREAS, it is the intent of the board of directors to establish such an assessment rate for fiscal year _________;
Now, therefore, be it resolved that the annual general assessment for fiscal year ______ shall be fixed at ________ dollars ($_______).
BOOK OF MINUTES #_________, page________
The Board Member Tool Kit 1:5
GOVERNING DOCUMENTSLEGAL DISCLAIMER: Community associations are governed by state law, which can vary widely from state-to-state. Please note that the content contained in these documents is intended to be used for general educational and informational purposes only. Although we try to keep the information contained in these documents up-to-date, it may not reflect the most recent developments and it may contain errors or omissions. Community Associations Institute has not compared or reviewed these documents relative to the law in any state and does not warrant or guarantee that the contents of these documents comply with the applicable law of your state. The contents of these documents are not intended to be a substitute for obtaining advice from a lawyer, community manager, accountant, insurance agent, reserve professional, lender or any other professional.
1.2 Sample Administrative Resolution WHEREAS, Article VII, Section 1 (d) of the declaration of covenants and restrictions grants the board of governors powers “to exercise for the association all powers, duties, and authority vested in or delegated to the association herein or in the articles of incorporation or bylaws of the association and not reserved to the membership;” and WHEREAS, Article VIII, Section 8 of said declaration establishes the remedy for default in payment of assessments, and WHEREAS, there is a need to establish orderly procedures for the collection of assessments that remain unpaid past their due date since delinquent assessments post a serious financial and administrative burden on the association, and WHEREAS, it is the intent of the board to establish steps for the collection of delinquent assessments;
Now, therefore, be it resolved that the procedures for collection of delinquent
assessments be as follows:
1. Each monthly assessment is due and payable on the first day of each month and is delinquent on the fifth day of the month.
2. Delinquent accounts not paid by the tenth day of the month will be assessed a ten dollar ($10) late charge.
3. In the case of payments that are delinquent for 30 days or more, owners will be sent a “Ten Day Notice of Lien.” If the amount that is delinquent plus late charges is not received in the 10 day notice period, a lien upon the delinquent unit will be filed as provided in said Article VIII, Section c. Such lien will include interest at 10 percent per annum, a $50 administrative cost and reasonable attorney’s fees. A copy of the notice of lien will be sent to the unit owner and the holder of the first deed of trust of record.
BOOK OF MINUTES #_________, page ____________________________________
Date adopted: ________________________________________________________
1:6 The Board Member Tool Kit GOVERNING DOCUMENTS LEGAL DISCLAIMER: Community associations are governed by state law, which can vary widely from state-to-state. Please note that the content contained in these documents is intended to be used for general educational and informational purposes only. Although we try to keep the information contained in these documents up-to-date, it may not reflect the most recent developments and it may contain errors or omissions. Community Associations Institute has not compared or reviewed these documents relative to the law in any state and does not warrant or guarantee that the contents of these documents comply with the applicable law of your state. The contents of these documents are not intended to be a substitute for obtaining advice from a lawyer, community manager, accountant, insurance agent, reserve professional, lender or any other professional.
2 The Role of the Board
How do you succeed with such a challenging assignment?
Put your personal preferences and circumstances aside.
When you make decisions as a board member, you have an obligation to work in the best interest of the entire community, regardless of how they affect you personally.
Educate yourself. Part of learning how to be a good board member will come from trial and error; but, you can reduce the errors and the time it takes you to get up to speed by attending seminars, reading books, networking with community association board members, asking questions of your manager, accountant, or attorney, downloading free materials from the web, and much more. [See the Appendix for a detailed list of educational opportunities and resources.] Know the difference between the roles of the board and the manager. Boards set policy and make policy decisions. Managers implement the board’s directives and take care of operations.
2:2 The Board Member Tool Kit THE ROLE OF THE BOARD Stand united. Once the board makes a decision, stand behind it and make every effort to see it succeed—even if you voted against it.
Don’t allow personality differences to interfere with the work of the board. Be cooperative, positive, and make every effort to stay focused on the needs of the community.