How Long Should One Be On A HOA Board?

Volunteer: a person who freely offers to take part in an enterprise or undertake a task.

I've been an owner of a unit in the HOA for about 15 years. These are my observations during those 15 years of "observing HOA boards in action." This will be a diverse post.

Providing some perspective: (this link will open a new window).
http://briarcliffelakes.blogspot.com/2008/09/about-our-condominium.html

Unfortunately, the boards of 2002 and beyond had decided upon upscale architectural roof improvements. That decision would require at least twice the expenditure I predicted in 2008. Time was most certainly not on the side of the HOA.

About this post
This post cannot go into all of the planning and preparation required to be a successful HOA board member. But it can address the question posed in the title of this post.  The subtitle could be "Who should be on a HOA Board?" It's my opinion that only those who are willing to get the job done, have specific skills and are willing to work and to learn should be on a HOA board.

Some owners are of the opinion that the best years of BLMH lie ahead of us. That may be true, but it will not happen automatically. Our boards are aging. Our boards usually have one or more vacancies. We need capable replacements. We need a plan. Attracting new, responsible and capable board members is a necessity. Mentoring of new board members is a necessity. But this won't be easy and cannot and will not happen with the current structure, which includes the board in total. I am convinced that board members in recent years have not realized the seriousness of this situation, nor have they been willing to do anything about it. Just more of the "same old, same old." Denial is not a good mechanism for achieving results.

Our most recent board president decided not to run for re-election and departed. In tbe vacuum that was created I took his place. He was by several decades the youngest member of the board. Now, one would think that after 3 years of service that one should have a choice on how they spend their life, and he made that choice. Surprisingly, I heard Sean's departure explained as "He resigned." That's how quickly board members are dismissed here at BLMH. Apparently if you decide to move on and vacate that prized spot for another owner, you have abandoned your post.

I was unaware of any interest on the part of some board members as to why he left when he did. To the entrenched he was treated as an interloper, a "newbie." At least one was happy with the departure. It meant getting an opposing viewpoint out of the way. Shortly thereafter we returned to the "same old, same old" of "We need significantly higher fees,"  Really?

In some environments it is difficult to attract talent. There are barriers and turf wars, too. To overcome this gravity it usually requires a crises. That's what happened in 2008. But first the finger pointing begins. Only after the emotional stuff passes can the work begin. I suppose it may take another crises or two. I won't be here to clean up the next big mess,

Sean left after three years of service. I'm here for going on seven years. I took this on because I saw a serious crisis, a lack of foresight and the willingness of boards to take short term measures while failing to deal with the unpopular, uncomfortable, or long term issues. BTW, raising fees in the face of the lack of an independently prepared reserve study is questionable, in my opinion. This HOA didn't have such a prepared study for 30+ years. Was it stupidity or sadism?  Who knows? Ask the board members from the 1990s and 2000s. I can only provide true insights into the thinking of board members from 2010 and beyond. Prior to that it was behind the veil of "executive privilege" or hidden by backdoor machinations.

There is an underlying question to be asked. That is "How long should a HOA board member serve?" If there is a legitimate answer, it is determined by another question which is "What is required to serve successfully as a HOA board member?"

The foundation is a willingness and ability to serve as a fiduciary
This post won't delve into fiduciary duties and these obligations for a board member. I've published earlier posts on that subject. I will say this. I've heard board members describe being a fiduciary as "doing the right thing" or "being fair" or "being just."  I wish that was the case, but it isn't. The standards are higher. "Fairness" implies impartiality and owner equality. Some boards have had real difficulties achieving that.

The Illinois Condominium Act (ICA) does set some guidelines for HOA board members. However, those guidelines don't assure a successfully run association.

Our HOA has a "oath" that board members are to take. There are guidelines and minimum requirements that are circulated to all owners each year as part of the election cycle. Owners are made aware of the duties and obligations so they may choose to knowingly volunteer. However, these guidelines barely scratch the surface.

Another question to be answered is "What are the skills and tools required for a board member to successfully complete their tasks?" Yet another is "What are the time requirements?"

All of the above, if taken together, may provide some insights into the question posed in the title of this post. When we look at skills, tools and time requirements we will discover that the guidelines are very ambiguous and incomplete. I fact, at BLMH our board agreements are "open ended." Boards have been skewed toward attracting retirees or those who can expand the available task to fill the available time.

So some  board members may camp out at the Management office because they literally have nothing else to do. Some would prefer weekday meetings during normal business hours, and in fact, the only way to interact with management outside of the monthly HOA meeting is via email or during normal business hours. That doesn't work if a board member has any other obligations. It does, however, create an artificial barrier to participation. At times, I have concluded that is an intent of some boards and board members.  This too must change.

Communications and Spending
Interestingly, there is no communication requirement to be a board member. Simply come to the monthly meetings, prepared or not. So some board members seldom use email or don't have it. Over the years I've concluded that some either don't read the monthly management packet, or don't understand it.

We don't need to have email, period. Nor is a cell phone or the use text messaging a requirement, either. This led me to retort to a comment by a board member that "There was a time when we didn't have telephones."

But this is also the consequence of a board of volunteers. Having technology available is at a cost. Some board members are simply unwilling to make that donation to their HOA. Can you blame them? Yet, there is a problem and a paradox. We today have owners who expect near instant response to their communications and demands. Yet. they don't want to pay the fees for this. They expect boards to provide their own technology and cater to their every need, want and desire. This, when coupled with board members who have very limited communication ability creates an undermining situation.

In a large HOA which spends more than $1 million each year and with a 2 hour monthly meeting to make that decision, or at most 24 hours per year, wouldn't you think it be a requirement that board members have "up to date" communications abilities? Let me put it this way. For each hour of a board meeting the board is spending or collecting more than $42,000.

That spending is based upon a myriad of decisions. Some based on contracts, and some spur of the moment.

A lack of understanding
Some board members didn't understand the requirements when elected. A very few have thought that their duties and responsibilities were primarily to attend HOA meetings and to vote. Furthermore, if a board member is unsure then there is a real tendency to find a leader to follow. That is not the best way to spend $42,000 per hour and that is why I press board members to participate and be aware of all things that require their vote.

However, board members often forget that their decisions during each HOA meeting will spend $42,000 of fees. I sometime wonder if each owner knew that each and every HOA meeting literally determines how $250 of their money would be spent, would they attend it?

That's something I'll be putting in a newsletter.

Perceptions of being a board member
According to some owners, being a board members means one is to be "the boss" or "the bully." It may be an opportunity to be popular, or run a social group. In recent years some board members have brought these perceptions with them and have run their rackets. In fact, the real requirements of a board member is to make good business decisions, be fully informed of all of the goings ons of the HOA, ask good questions, treat all owners fairly and uniformly and follow the ICA guidelines. The monthly information packet is merely the wrapper.

Treating owners as the shareholders they are has apparently been beyond some.

Why Are Skills, Tools, and Time Important?
At BLMH our board is a working board. Management provides information and guidance. The board ultimately makes most of the decisions. In a HOA as large and built such as BLMH, this can be a difficult task. It is also about 40 years of age.

One thing that is an unstated requirement for board members is familiarity with the HOA. That includes the property, the business and how HOAs and boards work. This sets a high bar for a new board member. As I once explained to a newly elected Architecture & Maintenance Director "You will have to hit the ground running." He didn't fully comprehend what I was saying. This is in fact, true for all board members.

An Example
The first task our newly elected boards are faced with is determining the annual budget! In other words, determining owner fees and spending projections.  This immediately determined an issue for the "change" board of 2008.  That board couldn't reduce the fee increases when they had to confront the financial issues facing this HOA. So they took the bitter pill.

Boards are elected in September and in October the budget meeting is held. For a new board, that is actually a daunting task. With management's guidance even a new board can do this. But there are always unknowns in any budget. Board members must do their own preparatory research. They must study previous budgets. This isn't about providing a "rubber stamp" and there is historical evidence of just how financially dangerous that really is. I usually spend days preparing. A new board probably won't do that, and established boards may not do that. Setting fees must match spending requirements for the year and that includes long term reserve requirements. To accomplish this the previous year's budget must be scrutinized and compared to actual spending for the year. To make this even more difficult, at the time of the budget meeting the year is only 75% complete. It is possible for projection errors to occur.

Why is it so difficult?
For the above reasons, budgeting is more difficult than necessary. The explanation I've been given by our most experienced boards is "That's the way it has always been." It is implied this is the proper way and it is unchangeable. That's not necessarily so.

The current approach favors the most experienced board members and places newer board members at a severe disadvantage. This is because of the timing of the budget meeting(s), the difficulty involved and the need for "expert" knowledge. I have come to view our budgets as potential minefields. Even the board "experts" don't get it right all the time.

What is a newer board member to do? Well, as they lack "expert" knowledge gained by being a board member for a few years or a few decades, it is not unusual for board members to align into groups. Even experienced board members who are less aware of the intricacies of the finances will do this.

So we have factions on the board, and in the end, we really don't have six or seven board members. In fact, we may only have one or two. Board members may align behind the most vocal or most forceful board member. That completely short-circuits the decision making process. The result may be bad decisions and sometimes the promotion of simplistic arguments. One's "gut" may play a part as decisions become based upon emotions or beliefs.  This HOA went down a financial rabbit hole for several decades. It is only now seeing daylight.

What is really required to make good decisions is:

1. Ability to Act as a Fiduciary. 
2. Informed and Knowledgeable board members.
3. Factual and Complete Information.
4. Truly Open Dialog.
5. Ability and Willingness to Ask Responsible Questions. 
6. Ability and Willingness to Listen. 
7. Partnership with Professional Managers.
8. Ability to Use Critical Thinking Skills.
9. Personal Well-Being. 
10. Responsibly Involved Owners.

Working With New Boards

If a board functions with the above requirements satisfied, then it is possible that even with new board members successful results can be achieved. Not simply occasionally, but consistently. 

This post cannot go into all of the planning and preparation required to be a successful HOA board member. But it can address the question posed in the title of this post.  The subtitle could be "Who should be on a HOA Board?" It's my opinion that only those who are willing to get the job done, have specific skills and are willing to work and to learn should be on a HOA board. 

New board members need to be mentored. Mentoring required the transfer of  the "expert" knowledge gained by experienced board members to newer ones. It requires respectful and honest dialog. There is no shame in saying "I don't know." Of course, there is a lot we don't know. None of us, not one, has any secret knowledge of the future and there will always be uncertainty. 

Mentoring requires imparting a lot of knowledge in all areas to all board members, both new and experienced. 

Mentoring is also the most rapid way for a new board member to gain knowledge.

If boards are unwilling to mentor others and actively train their replacements, then the HOA has a problem. 

How Long Should One Be On A HOA Board?

This is actually two questions. 

1. How long does it take to become a successful board member?
2. When or why should a board member step down? 

The answer to the first question is dependent upon the other, more experienced board members as well as the board member himself or herself.  Suitable knowledge of the HOA, confidence and ability cannot be achieved in one or two years. 

There are exceptions to any rule. If a newly appointed or elected board member has actively served on Committees, studied the HOA in great detail for a period of years, and so on, then that experience will assist them in "getting fully up to speed" in the shortest possible time. 

However, most board members will not be aware of what truly is required of them until they are on the job. Even with experience, it will require one or more years to become reasonably proficient as a board member.  

Board Realities

It is useful to be aware that board members, as a group, make decisions in all areas of the HOA. This includes Finance, Maintenance, Projects, Landscaping, Rules and so on. A truly proficient board is comprised of members who have a good understanding of all of these areas. It is obvious this cannot occur in a year or two. In fact, some boards have members in which some members have very limited understanding of some of these areas. That does limit the effectiveness of the boards. It does not cripple boards unless they break into factions. By a faction I mean a group which aligns behind a person or persons and expects them to provide direction. It is a "follow the leader" approach which frequently has rubber stamped voting as a consequence. 

Boards in which there are factions frequently devolve into a couple of camps in which followers simply do as told, out of loyalty or whatever. Of course, a board may simply have a single powerful leader and everyone is bullied or agrees to "fall into line." Board members may simply give up and walk because they see the handwriting on the wall. This is in fact is how some HOAs are run into the ground. Less than good decisions are made, sometimes for years. Those who could make better decisions leave of their own volition or simply give up, or are driven off. The result can be higher fees, financial distress, maintenance issues and unhappy owners. 

The second question involves time duration on the board. There is no reason a person shouldn't serve on a board for decades. However, longevity has its problems. 

One problem with aging is our cognitive ability. As we age, we lose some of our mental faculties. Some will always point to the exception to the rule and say "It won't happen to me" but in fact, it happens to all of us. 

Another problem with aging is physical ability and stamina. As we age, we will experience physical maladies. True, some may experience this later in life than others. A very, very few may be physically able until the day of their death. Dying young may have some advantage, but at a price for the individual. We may kid ourselves. Yes medicines can alleviate some of the symptoms of aging. Many medicines also have serious side effects. Particularly if taken for longer periods of time.

In a HOA as large as this one, physical ability is necessary to view the grounds, monitor the fronts and rear of buildings, participate in physical surveys, interact with management on site while contracts are underway and so on. These are some of the things that reveal the "pulse" of the HOA, It is a fact that at BLMH certain efforts simply stopped. Stream repairs stopped, concrete patio repair and replacements stopped, garage floor replacements stopped, and so on. If boards won't or can't physically inspect and view all of these physical aspects and more, then maintenance will suffer. At some HOAs this is handled by owners. Boards simply wait for the complaints to come in and then deal with them as they occur. In this manner hall carpeting may be replaced when a condition complaint is filed by an owner or resident. Entries may be repaired when a complaint is filed, and so on. Meanwhile, the entire property is aging and not gracefully. At BLMH the approach of boards created a backlog of problems, including old roofs and failing streets. 

A third problem is interest and it's partner, willingness. Being a volunteer on the board of a HOA is not an easy task. Boards regularly deal with the problems the other owners won't. Boards also see the worst in HOA living. Bickering owners, owners or residents who are nasty, mean spirited and spiteful. Owners who are struggling financially for whatever reasons. Doggie poop, unhappy owners, owners who make poor decisions with serious consequences, etc. The list is long.  Fortunately, the majority of all owners do pay their fees and do keep the rules. But each year there will be a few who don't. Some boards fail to appreciate that the invisible shareholders are not the problem, nor are they represented by the problems. 

After a few years, dealing with the worst problems of a HOA will take a toll on any board member. If anyone thinks there were not some really serious and difficult problems as a consequence of the financial panic of 2008, they are really oblivious to reality. Many, many boards struggled for years to deal with the consequences and the fallout continues to this very day. Some may deal with the continuous onslaught of problems by building a mental wall to insulate themselves. That insulates one, but one consequence is an inability to observe and to listen. Getting to know 336 owners is impossible and may create other issues. As one board member once remarked about making a really difficult decision "But these are my friends." Another method may be to simply dismiss owners as a body which is represented by the worst of the HOA, which is to say, the problem owners become typical and representative of all owners in the HOA. After years, this can result in an intolerance for owners.

To be truly effective it may be impossible for a board member to participate in special groups, clubs and so on.  All owners are to be treated equally and fairly. Special groups may be a means to achieve special treatment and access to board members. This too may take a mental toll on board members who find that they truly have no friends in their HOA. Yes, owners may be cordial and respectful. But board members should not politic or assume that one person or a group is representative of all of the owners because they are not. Loneliness may take a toll on the board member.

Well-being should also be a factor. Personal well-being should not be taken for granted. 

Taken together, cognitive and physical ability, the mental wear and tear of making unpopular decisions with an uninvolved owner body, dealing with difficult owners,  mental fatigue and even loneliness will ultimately make a board member less effective.  These things will interfere with the ability of a board member to do their tasks. This is why board members may not walk the grounds, or have an intolerance for owners, or fail to mentor others, or fail to put in the necessary time.

Yes, board members can and do "burn out." It requires honest self assessment to determine if we truly are able to do our tasks. Personal well being should not be ignored. 

So the simple answer to the question "When should a board member move on" is when they are no longer able to perform their duties well. These duties are not about pencil, paper, using spreadsheets and so on. Yes, those things are really important. However, these are tools and methods. It is the foundation that makes a board member effective. 

That foundation is what allows board members to make good decisions and be a viable member of a team effort. I'll repeat the ten points earlier in this post:

1. Ability to Act as a Fiduciary.
2. Informed and Knowledgeable board members.
3. Factual and Complete Information.
4. Truly Open Dialog.
5. Ability and Willingness to Ask Responsible Questions. 
6. Ability and Willingness to Listen. 
7. Partnership with Professional Managers.
8. Ability to Use Critical Thinking Skills.
9. Personal Well-Being. 
10. Responsibly Involved Owners.

How Does This Apply To Me?

Of course, one of the requirements for a board member is to be an owner. However, I'll only be on a board in which I have determined there is a reasonable certainty of success.  I don't have any appreciation for turf wars or politics. These prevent success and ultimately that is what we are supposed to achieve.

It is a fact that I became actively involved at BLMH because I saw that it was in a downward spiral. It was in serious decline in some ways that I thought was detrimental to both short and long term success of the HOA. The "minefield" that the north section of Lakecliffe became was simply emblematic of the problem. The problems were far more substantial. That was my opinion in 2006. It is more than ten years later. There are those in the HOA including those who have served on various boards, who to this day are in complete denial about the problems and their causes.

I also am fully aware of the fact that this HOA has 336 owners. There are usually more than enough owners in HOAs to fulfill all of the board positions. At BLMH with 336 owners and seven board positions, there has been ample opportunity for more than half of the owners to have served in a board capacity.

This did not happen and under the current structure it will not. This is probably the greatest failure at BLMH. The apathy of the owners was and is not an accident. Boards worked very hard to create this condition of exclusivity and owners were more than willing to oblige. Working with several boards has been sufficiently difficult. At times, it was working "against" the boards. However, the owners do ultimately share full responsibility for what occurs at BLMH. Some pretend this isn't so. They are incorrect. 

I will stop being a volunteer when I decide that the objectives cannot be achieved, success is dubious, or I determine that the probable results don't warrant my personal efforts. A board position is not a hobby, nor is it for self aggrandizement. It is a serious job that may require 400 to 750 hours of work per year. It shouldn't. But that's what happens when boards are understaffed, make poor decisions, or play politics, have ineffective members and sufficient owners fail to responsibly participate in their HOA.  In a HOA of 336, what's the minimum standard for participation? How low is low? Believe me, we are near the bottom.

Some of this is simply due to recent successes. Owners tend to show up when things get really bad or they feel their personal lives are being interfered with. I think the highest owner turn out in 20 years occurred when someone posted a notice that the Board was voting on a special fee for dog owners. One must have their priorities!

My prediction? More likely than not there will be significant changes on the board in the near future. There will be setbacks in the HOA. Such setbacks may be necessary to get the attention of all of the owners and get them out of their state of automaticity.  If recent history is a guide there may be some ugliness and unhappiness. What ultimately occurs and what BLMH is like as it exits that tunnel will be determined by who has been in the engine compartment of good ship BLMH.   "Who" will be determined by owners. Some will choose to serve as volunteers and other owners will cast sufficient votes to elect them. If they are a new bunch as was our 2007 board, then it will be a rocky period. History does have a way of repeating itself. As the saying goes "Those who don't learn the lessons of history are doomed to repeat it." In HOAs which are struggling with owner apathy and noninvolvement, the owners really don't know what is going on or what it takes. Newsletters can be helpful. But 99% of the problems and decisions never make it to a newsletter.

We will be in that third domain of knowledge where "We don't know what we don't know."