It's Not in My Job Description

That was the response of our "Rules and Regulations" Director to a Unit Owner request to inspect an alleged violation to the rules. This is a direct quote from our Association meeting of March 11.

Sounds like "open season" for rules. Oh, but our CD and the R&R Directors are so concerned about making our "renters" welcome here at BLMH! To put it bluntly, they seem to have a problem with determining what they are supposed to be doing, as members of the "Board of Managers".  Or perhaps we should rename this the "Board of Social Directors"? For example, let's make the renters and our friends feel warm and fuzzy while vandals run loose in the streets, water sprouts destroy our trees and the streets disintegrate. But we have funds for "coffee and donuts" for our friends to come visit us at the IHOP!! Gee, just like the city of  Wheaton. Makes one feel simply wonderful, like the Mayor, doesn't it? Well, this will continue for as long as each unit owner sends that check each month for $300. That will fund a lot of "discretionary items" even if they aren't in the budget, and even if the reserves are underfunded. But these are "good things", or so they believe, and so they tell us, and so it will be. And that is the only critiria. What they "believe" is reality.

I have a few questions for our most illustrious and beneficent board. Do our renters send that money to the lock box each month? No, they don't. Do our renters have perhaps $190,000 invested here? No, they don't. And when our renters are behind in their payments, who "eats" this? And who is held accountable for payment of that association fee and the real estate taxes? Certainly not the renter or "occupant". It is the Unit Owner, who is a Member of the Association, who pays his or her association fees, the taxes and the mortgage. That's who. So why the emphasis of our CD for our "poor" renters? It seems that to be a renter at BLMH  is to be "the flavor of the month". Perhaps our CD, R&R Director and others on the board are merely fully committed to flushing the money of the unit owners, and at the unit owners expense. Who knows? Her official position is that this is "a good thing". Really? and for whom? And why should I or anyone else who has a vested interest at BLMH ever believe this individual?

Frankly, where in anyone's job description does it say anything about this kind of behavior?  Oh, I forgot, here at BLMH our board members are allowed to create their job titles, and to pick and choose their job responsibilities and duties. So the person who makes the Newsletter becomes our "Communications Director", our R&R Director states to unit owners that inspections or rule enforcements "Isn't in my job description", etc. One member of the board doesn't have even have any specific duties. Obviously, even without a "Landscaping Director" we have more than enough people on the board to carry out all of the ephemeral duties of the board.

Apparently, if the member of the board doesn't want or like a task or if there are tasks that we consider as "unpalatable", or difficult, those duties are simply "dropped out" or pushed over to the board president or some other responsible member of the board to do. As members of the Board of Managers, we'll pick our jobs and do that which works "for me". Part of what works "for me" is making the people I choose to champion feel welcome here; by shirking our duties, ignoring our responsibilities and just as the little children we are, by not doing the things we don't like to do, simply because "I'm not going to and you can't make me - so there."

So the person who decided to be "responsible" for the newsletter selected the title "Communications Director." Based on her actions and my observations, I really do think that "Social Director" would be far more appropriate. Too bad this isn't a retirement home. However, with the latest change in direction, perhaps "Director of Rentals" would be more appropriate. It probably doesn't matter, as long as the title is "Director" of something. How about "Grand Poobah"; yes, that sounds simply "grand".

It truly is amazing how capable some of our directors are, why, they can do anything! Anything that is, that has absolutely nothing to do with "fiduciary duties" or any of the other aspects of running this business. Administrators simply "administer", they hire and fire and let the minions or lesser members of the board "do the work" and "do the heavy lifting". Isn't that wonderful!

Returning to the subject of this post, I can understand that people take on responsibilities they aren't equipped to fulfill, particularly if they are sold a bill of goods by their "friend" on the board.  When the going gets tough, or uncomfortable, or I simply don't feel like it, all one has to do is turn to the unit owners and say "It's not in my job description".

Board Operation, Some Examples and Fiduciary Duties revisited - Part IIb

An Interesting Case Study:

(1) "Among many other obligations, an Association, acting through its Board of Directors has the absolute duty to manage, operate, maintain and repair all common areas and to keep them in a safe, attractive and desirable condition for the use and enjoyment of its owners. In fulfilling this obligation the Board of Directors also has the duty to prepare a budget and establish assessments for the Association adequate to meet the financial requirements necessary to maintain the common areas.

[HOA Services Group] was recently awarded the management contract for a large 25-year old condominium community.....This community could easily spend $500,000 just to address the obvious deficiencies. And, of course, their reserves are $0.

[A]tremendous opportunity for [HOA Services Group] and That's exactly what we believed as well. Unfortunately the easiest and very first step in beginning to clean up this community, the landscaping, still hasn't been addressed because the Board is trying to get the contractor to reduce his quote for an initial cleanup of the entire property from $900 to $750, a whopping savings of $150....

...we've pointed out that this “band aid” approach will ultimately cost the owners substantially more in the long run......According to the Board we just need to keep any special assessment to minimum, and be careful about proposing any increase in the monthly dues even though they haven't been adjusted in years. Is it any wonder why this property is in its present condition, and what exactly is the likelihood that we'll be able to convince this Board to properly address their many needs?

A Board of Directors has a fiduciary duty to always act in the best interests of its members. Unfortunately many Board members make decisions based on their personal situations, and sometimes forget that service on the Board carries with it the obligation to represent the interests of all the owners in the community. Failure to meet this duty will often result in decreased property values, dissention among the owners, and quite possibly lawsuits against the Association and its Board members. Defense of these types of claims against the Board of Directors can be both costly and time consuming, and typically compounds the already existing animosity between the owners and the Board of Directors.

We still have hopes that we'll be able to better educate the Board members of the community mentioned above. Unfortunately, while our efforts could be directed at returning this community to a well-maintained and desirable place to own and live, we'll first have to devote a substantial amount of time to changing this Board's philosophy. Hopefully we can do that before they have the opportunity to test out that new Directors & Officers Liability policy."

In the above, there are several interesting items, from which I draw a few parallels.

1. [The] "Board of Directors has the absolute duty to manage, operate, maintain and repair all common areas and to keep them in a safe, attractive and desirable condition for the use and enjoyment of its owners."
2. "[The] Board of Directors also has the duty to prepare a budget and establish assessments for the Association adequate to meet the financial requirements necessary to maintain the common areas."
3. The experts who wrote this stated that it was their perspective that this was an opportunity for the "Board of Directors to make a real impact on this community and to dramatically improve the property values of the unit owners."
4. The Board of Directors in this case study were having great difficulty establishing priorities and were, for example, improperly embroiled in a negotiation with a contractor over a difference in perspective which was "a whopping savings of $150."
5. The authors went on to state that it was the perspective of the Board that "we just need to keep any special assessment to minimum, and be careful about proposing any increase in the monthly dues."
6.  The authors then went on to state "we've pointed out that this “band aid” approach will ultimately cost the owners substantially more in the long run."
7. They also stated that "A Board of Directors has a fiduciary duty to always act in the best interests of its members. Unfortunately many Board members make decisions based on their personal situations, and sometimes forget that service on the Board carries with it the obligation to represent the interests of all the owners in the community. "
8. The authors closed with the statement that "We still have hopes that we'll be able to better educate the Board members......our efforts could be directed at returning this community to a well-maintained and desirable place to own and live, we'll first have to devote a substantial amount of time to changing this Board's philosophy."

Here at BLMH, everyone including our paid managers, who were put on notice, have taken the perspective that it is best to keep their collective heads down and keep their jobs, while in 2009 our new board argued in favor of parties and garage sales which benefit the few, glossy newletters, $500 bids for concrete, championed semi-trailers on the property, etc. What will 2010 bring?

In coming posts, we'll take a look at the aspects of Fiduciary Duty.

Oh, and as I promised, I will be posting an interesting chart pertaining to the condition of our reserves. This is as promised in 2009. I decided to delay this until after the new board had completed its budget "planning", which they did. According to the overwhelming majority of our board, our finances (Operating and Maintenance, as well as Reserves) are in sufficiently good condition that there was absolutely no need to raise our fees this year. In other words, we are accumulating reserves at a rate adequate to fund all the roofs, driveway paving and street repairs, etc. in a timely manner so as to "maintain and repair all common areas and to keep them in a safe, attractive and desirable condition for the use and enjoyment of its owners." Well, it seems our Treasurer wasn't as certain of this as the others on the board. As they say "follow the money". So what do the numbers say? What? Base our decisions on numbers, rather than on our constituents? Is that any way to run a political organization based on "change"? Oh, but this isn't about politics they say, it's about running this HOA.  Okay, I'll go with the flow and we'll see what the numbers tell us!

If you enjoy slick presentations and colorful charts, "you are gonna love this" as they say. According to our official HOA Communications Director, the majority of our members love our new shiny and expanded newsletter, so this post should be enthusiastically greeted by all. Frankly, more information and less pap is my approach and it seems some new leadership is guiding her in that direction. It's my perspective that the more information and data that is available to ALL of our members, the better our association will function.

===========================

References, Errors, Omissions, Additions:

(1)  HOA Services Group - A leading provider of reserve studies and maintenance plans

Finances for Unit Owners

I was asked a few questions about the recent post on inflation. I have decided to host a discussion group which will delve into some of the aspects of finances and financial planning for unit owners. It will also include discussion of related topics, such as how finances and planning, both short and long term, are vital parts of the work performed by our board of managers, and how they are bound under Illinois law, and the meaning of fiduciary duties.

Before you ask, I am not a CPA. Just a normal person with normal common sense and normal financial acumen. However, I am also a successful businessperson, I have been successfully employed as a manager for very large and complex projects, and I have served on the boards of several corporations. I have about 40 years of "real world" experience dealing with and successfully solving "real world" problems. I have earned a living as an engineer, and I train.

So if you are interested in joining our group, which will include graphical presentations, etc., then give me an email or, you can talk to one of the various people here at BLMH with whom I associate. They'll get the word to me.

Don’t Shoot the Messenger - Vote NO for Driveways!

This is the first of several posts pertaining to the recent comments by readers.

On September 29, Anonymous said... “Again, your comments are full of negativity and inaccuracies. Can you at least get the facts correct before you publish them. How do you know, without being on the board, that certain individuals were to blame for the delay in the roofing and the asphalt project. Get a life.”

My response is this: I have attended most board meetings for the past 12 months. I'm one of the 4 or 5% of unit owners (excluding the board) who do so. During the meetings I keep thorough notes. For example go to:

http://briarcliffelakes.blogspot.com/2009/08/august-13-2009-association-meeting.html

The above post is edited. It includes only a portion of the notes that I took at that meeting. That’s why I titled the post “August 13, 2009 Association Meeting Highlights”; I emphasize the word “Highlights”. Editing is for three purposes; 1) to keep posts brief ,  2) I sometimes remove aspects which could compromise the privacy of an individual, 3) I sometimes edit aspects of the meeting which could put our association in a very bad light.

For example, and to address your statement, there have been discussions during quite a few meetings regarding the state of driveways. Here is a summary, but not necessarily in the order of the actual events. The discussions included aspects of the how and why of performing these repairs. Unit owners attending the meetings brought some of the problems they were having to the attention of the board. They stated issues they faced last winter. There were a number of discussions over several meetings about ice, heaving driveways, heaving garage floors, standing water, water entering garages, methods and options for controlling run off and the flow of water from roofs, etc. The state of driveways and water was described as a "serious" problem by several members of the board. The board authorized the management company to complete a thorough survey of all driveways and rate them. At a subsequent meeting the manager reported on the driveways most in need and those had been ranked. Discussion at various meetings was interrupted by events I have reported in earlier posts. Eventally discussion at meetings resumed. Details of asphalt installation and concerns were stated regarding the unique nature of many of the driveways and even the uneven traffic patterns. Concern over weather interference, specifically the closing of asphalts plants in the fall and the need for urgency was pointed out. Finally, at a meeting the board discussed the results of inspections by our Architectural Director and our Landscaping Director.

The Architectural Director made a final presentation and stated there were sufficient funds to do some, but not all of the driveways. He requested that seven (7) driveways be approved for repair and replacement in 2009. He made further statements regarding the criteria for selection.

The board voted and the motion was passed. There was a single NO vote cast. That vote was cast by our Communications Director.

Wouldn't you consider that a NO vote is an attempt to delay or thwart driveway replacement at the association? I don't know why she voted no, and I don't have any idea how voting against a fundamental repair to our association, is consistent with her ongoing calls for a “kinder, gentler” board of directors. Perhaps you can tell me how this all goes together.

By attending meetings, I know a lot about what is going on in our association. According to law, as per the Illinois Property Condominium Act, associations are required to hold open meetings. Board members are prohibited from holding closed meetings, except for special circumstances. So unless our board is in violation of the law, then attending meetings and keeping good notes, should give me a very good insight into what is going on.

If you want to read the Act, it is available at the Illinois Assembly Website at:

http://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=2200&ChapAct=765%26nbsp%3BILCS%26nbsp%3B605%2F&ChapterID=62&ChapterName=PROPERTY&ActName=Condominium+Property+Act%2E

As an example, I provide two quotes from the Act:

The Act, as part of (765 ILCS 605/18.4) (from Ch. 30, par. 318.4) Sec. 18.4. states:

“In the performance of their duties, the officers and members of the board, whether appointed by the developer or elected by the unit owners, shall exercise the care required of a fiduciary of the unit owners.”

The Act, (765 ILCS 605/18) (from Ch. 30, par. 318)  Sec. 18 states:

"(9) that meetings of the board of managers shall be open to any unit owner, except for the portion of any meeting held (i) to discuss litigation when an action against or on behalf of the particular association has been filed and is pending in a court or administrative tribunal, or when the board of managers finds that such an action is probable or imminent, (ii) to consider information regarding appointment, employment or dismissal of an employee, or (iii) to discuss violations of rules and regulations of the association or a unit owner's unpaid share of common expenses; that any vote on these matters shall be taken at a meeting or portion thereof open to any unit owner; that any unit owner may record the proceedings at meetings or portions thereof required to be open by this Act by tape, film or other means; that the board may prescribe reasonable rules and regulations to govern the right to make such recordings, that notice of such meetings shall be mailed or delivered at least 48 hours prior thereto, unless a written waiver of such notice is signed by the person or persons entitled to such notice pursuant to the declaration, bylaws, other condominium instrument, or provision of law other than this subsection before the meeting is convened, and that copies of notices of meetings of the board of managers shall be posted in entranceways, elevators, or other conspicuous places in the condominium at least 48 hours prior to the meeting of the board of managers except where there is no common entranceway for 7 or more units, the board of managers may designate one or more locations in the proximity of these units where the notices of meetings shall be posted;"

From the above, the board is required to hold open meetings, and all but a few items are to be discussed during those meetings and when unit owners are in attendance. It also states that any unit owner is within their rights to take notes, and even record the meetings if they choose to do so.

I also suggest that you consider that “shooting the messenger”, which is me or anyone else who disagrees with you, is not going to resolve this. "Shooting the messenger" is a metaphoric phrase used to describe the act of lashing out at the blameless bearer of bad news. If you have a problem or an issue, then I suggest you come to an association meeting and bring it to the attention of the board, and observe the meetings and keep your own notes.

Benches and other "ideas"

During the most recent association meeting, the subject of park style benches was broached. This has come up during past meetings, also. Our Architectural Director pointed out some of the maintenance issues (that's code for "hidden costs", in plain English).

There is, however a way to get benches. I'm borrowing an idea from the nearby Morton Arboretum. The "Mort" has a program for "Tribute Gifts". According to the Mort, a tribute gift is "a unique way to honor and recognize special friends and family. The Morton Arboretum can help you celebrate a special occasion such as a wedding, anniversary, birthday, or holiday in the life of a loved one with an enduring tribute".

Good idea, and just on time for "Mothers Day".

I'm not suggesting that interested unit owners purchase a "Tribute Gift" from the Mort. Rather, I'm suggesting that interested members of our "community" consider purchasing a "Tribute Gift" from the Association. Our community has 40 acres or so, 802 trees in sculpted gardens with fountains, streams and many birds, chipmunks, squirrels and even ducklings. Quite a lovely nature area, and some of our unit owners have suggested that the dogie droppings are because of visiting neighbors. So why not fund our lovely preserve?

Possible choices, using the Mort as an example:

Tribute Tree = $2,500. Includes an engraved tree tag, dedicated for five years.
Tribute Bench = $5,000. An engraved name-plate dedicates a specific bench.
Walkway Brick = $1000. A 8x8 inch brick with four lines of personalization.
Library Book = $250. Dedicate a new book with a personalized name-plate in the front cover.

I realize we do not currently have a library. So purchasing a "Library Book" is probably not a good idea for our association. However, there have been suggestions in the past to have a "community building" and with the current emphasis on the theme of community by members of the board, who knows? Perhaps there is a library in our future. We do need somewhere to have these parties, don't we?

I recommend that unit owners who are interested in park benches simply send a check for $5,000 to our association and mark "park bench" in the subject line of the check. I am certain this will get the attention of the board and of management, and we will then have the park benches that some of us desire.

Taking this a step further, if each unit owner were to purchase a "Tribute Tree" from the association, we would fund 336 trees. We could enroll friends and relatives in purchasing the remaining 446 trees. That would generate about $2 million dollars for the association, and should assure the care of our grounds for many years.