You Don’t Need To Be a Money Nerd.
Let me tell you right now that you definitely don’t need to be a money nerd to volunteer to be on the board of directors. Even to be the treasurer. In our case, we were using an association management company that would do all of the heavy legwork for us. We would meet every other month (because we got the management company to give us a discount for not having to come out every single month, and it just wasn’t necessary to meet every month.) The skills you need to be a competent homeowner’s association board member would be: listening skills, anger management skills, and critical thinking skills. That’s it. I’d say the middle is more important than you might think because if you have a thin skin, frustrated homeowners will take everything out on you and that can easily bring you down or make you angry. If you can’t control your emotions, you’re not going to enjoy the board of directors experience. Every state is a little different of course.
The Hard Stuff Gets Outsourced.
The management company would bring us nicely printed (black and white, of course. Save your fellow homeowner $$$ ya’ll) books of all the financials, and all the homeowner correspondence. We would have two sessions. The first would be the “regular session” that homeowners could attend and listen in on. You would also have a homeowner forum at the end for any homeowner to voice his or her concerns. NOBODY comes to these things. The only time that someone shows up is when they receive a notice about an increase in their HOA fees and they want to complain about it. I ALWAYS attended the HOA meetings before I ever volunteered to be on the board. I think that’s why the board appointed me to an open seat despite my fellow homeowners not giving me the necessary votes. It wasn’t uncommon for us to ask to ask the association manager “what would your other associations do in this scenario?”
Nobody Else Will Volunteer.
Around the time I purchased my condo, the board TRIED to install sub-meters for the water. There is kind of a water shortage in California. Who is going to bother to install low flow shower heads, low flow toilets, and fix their leaky water heaters in their condo unit’s when the “association pays for the water bill”? Nobody. That’s who. That first meeting that I attended right after my purchase was the ONLY time I saw more than two other non-boardmember homeowners at a meeting. Needlessly to say, there was much complaining, we didn’t go through with it and we continued to have ridiculously high water and sewer bills that we could do nothing to reduce because you can’t force a homeowner to replace their leaking water heater. Penny wise Dollar foolish. You are a part of the association, people. Paying your own water bill is a lot cheaper than incurring an unexpected four to five figure bill due to water damage. Homeowners liked the idea of us buying an association earthquake insurance policy, but not if it was going to cost them more money per month. So we actually never had Earthquake insurance on upwards of 300 units. In California. Super smart, right? The next year, everybody saw an increase in their HOA fees due to rising costs on everything. If we had subbed-out our individual water usage perhaps the dues would not have gone up as much the following year.
You Get To Be a Nosy Neighbor.
I’m not sure if this is a “plus” or a “minus”, but in addition to regular session, there was “executive session” (which almost always ran long). The purpose of executive session was to review and discuss various things on the agenda and to approve any actions. The kinds of decisions we had to make were things like approving accounts to send to collections. We’d also have to approve invoices for any unexpected maintenance. Those were the interesting tasks. The not so interesting tasks were reading the e-mails about all the people who would complain about their neighbors. “Betty Sue doesn’t pick up her dog’s poop.” “Billy Joe upstairs is too loud at night” You might issue a fine if it was a repeated occurrence of something particularly bad. It always amused me that people would purchase ground level units and complain about noise coming from above. You bought a downstairs unit in a converted apartment building!
You Develop Negotiating and Bargaining Skills.
The strategies I learned as a member of my HOA’s board were very helpful when I morphed my career from customer service into purchasing. I learned that you should ALWAYS ask for three bids. There are so many HOA’s (and businesses!) out there who will just go with a vendor because Joe Schmoe on the board has a distant uncle’s friend who will probably “give them a deal”. No. This is not how you responsibly make a sourcing decision on behalf of your fellow homeowners. You have a fiduciary responsibility to do what is in the best interest of the association. Don’t be lazy or stupid. You could be sued. Definitely DON’T volunteer to be on a board that isn’t going to provide you with director’s and officers insurance. What’s the point?
In addition to the sourcing aspect though, negotiating with your fellow board members was also a fascinating experience. Maybe we don’t need to paint our buildings yet, but we probably should trim the trees before branches start falling on cars. That HOA had a monthly budget that was well beyond any level of income that I will ever see and so I was exposed to monitoring a much bigger budgeted sum of money than I would ever spend in my personal budget. It was very fascinating experience.
As a HOA board member, you can expect to be under-appreciated. It’s a very thankless job. But the benefits outweigh the frustrations. If I was not on the board, I would have been oblivious to so many issues happening around my community. Your condo is a financial investment. If you live in a HCOL area, it’s probably a massive investment as a proportion of your net worth. You want to know what’s going on to make sure your investment has been a good one and continues to be a good one. A lot can change in between the time of purchase when you review the then-current disclosures and documents and whenever “now” may be. It was shocking how many people would buy a place and just didn’t give two shits about what was going on. If I didn’t have that valuable board member experience….perhaps I might even still be an oblivious condo owner today?