Publications

Being a Board Member Can Be Rewarding

Published July 5, 2003 as
You have much to learn when serving on the board

For the owners who take the time and trouble to get elected to the board of directors of an association, like any other job, it does require education and training. Unfortunately, too many people take on this responsibility without learning what the job entails.

People who serve as directors may get on the board with certain expectations and goals they would like to accomplish, but it is important to do the necessary homework to become a competent and contributing member. Sometimes it is better to keep a seat vacant than to appoint or elect someone who does not even do the bare minimum to become acquainted with the legal documents governing the association and the responsibilities of the board. Far too many associations are run by people whose motives are honorable, but because of the lack of knowledge, experience and training, their meetings and sometimes their entire administration, is a disaster.

Here is a basic primer to becoming a contributing member of the board:

First, become familiar with the operating documents. Very few owners ever look at the declaration or by-laws, let alone the rules. However, in order to be a competent director, this is the route the association must follow and each director should have a “map” of the basic knowledge of what the trip entails. That is not to say that a director should be able to interpret complex issues such as the nuances of insurance coverage, however, each director should be familiar with what the owners get to vote on, the essentials of association maintenance responsibility, open meetings requirements and so on.
The declaration generally contains all of the covenants binding the property such as restrictions on use, financial obligations and remedies for owners who fail to follow the rules. Granted, many declarations are written in archaic legalese and often are loaded with developer references, but a careful skimming can lead to an understanding of the basic duties and responsibilities. The gaps can be filled in by an experienced manager and legal counsel.
The by-laws are generally easier to read and spell out the duties and responsibilities of the board and its members. These provisions should be more familiar to each director. Although the declaration has more authority, it is usually written in a more generalized fashion and the by-laws often address issues ignored by the declaration.
Familiarity with rules and regulations. More important than understanding all of the nuances of the declaration and by-laws, each director should have a working knowledge of the contents of the rules. Since these are approved by the board itself and are subject to change from time to time, this is the document which has the most relevancy to each owner and director.
Each owner is responsible for identifying and reporting violations when they see them. Although the members of the board are not policemen, they should be able to recognize violations and respond to questions from the owners. So long as the rules have been reviewed by legal counsel and periodically updated, they should be enforceable and be readily available for any director to review.
State (and federal) law. Directors should have some familiarity with their legal obligations. There are many laws applicable to an association that are not discussed in the documents. Each board should have a periodic legal checkup or at least information from their lawyer as to important new cases or changes in the law, i.e., the new insurance law requirements and restrictions on charging late fees. Each director of a condominium should have an updated version of the state’s condominium/homeowner association statutes and each director of a townhome or homeowners’ association should have a copy of the Illinois General Not For Profit Corporation Act.
Financial statements. Learn how to read one! Everyone knows an accountant or bookkeeper or if you have an experienced manager, ask them to go over the form so you understand what the numbers mean. Likewise, a budget and a balance sheet.
Books, periodicals and other publications. National organizations such as the Community Associations Institute (CAI) and Institute of Real Estate Management (IREM), and local organizations such as the Association of Condominium and Townhome Associations (ACTHA) have newsletters and helpful books and pamphlets on numerous topics to orient a board to its duties. A conscientious board member should not only be up to date on significant changes in the law and the basics of the legal documents, but also the practice and theories of running an efficient association.
Seminars and programs. A good way to keep up on changes in the law, efficient techniques and exchanging ideas is to attend some of the many programs offered throughout the area on selected community association topics. CAI and ACTHA offer numerous seminars on specific topics as well as full day programs at their trade shows. Even if a board does not belong to the organization, many programs are promoted in the newspapers and are available to non-members for a nominal fee.
Have an orientation and goal setting session for new directors. Many people, not just new boards, have a need for an overview plus an intense discussion of risks and liabilities for board members. After each election, the new directors, in addition to being advised to read and go to seminars, should also be force-fed the “do’s and don’ts.” Legal counsel, in conjunction with the property manager, should be familiar with the particulars of the property itself as well as the governing documents, so as to provide useful information at the first meeting of a new board.

Membership on a board of directors is a serious responsibility and should not be taken lightly. New directors should learn that they need to attend all meetings, review the materials in advance, pay attention to what is going on around them, ask questions and work through established procedures to efficiently operate the association and effect change where needed. They should also know that they are not the chosen representative of a faction or single issue focus group and their duty and allegiance is to the entire association.

The starting point is the familiarity with the legal documents either through reading or further education. By fulfilling these obligations, meetings can run smoothly and efficiently and thus will make serving on the board a more rewarding experience, as well as provide the association with the guidance and leadership it needs.