Imperfect Knowledge

Frustrations abound whenever homeowners do not have the full picture.  Despite the desire for Board transparency, unfortunately there are times when the details must be withheld.  Whether it is a lawsuit, employee reviews, or contract negotiations - the Board of Directors finds itself balancing competing rights and obligations.  The result is often a lot of unfair abuse dealt out by the homeowner toward management and the Board.  Here are four examples.

EXAMPLE #1:  A new client community discovered years of massive fraudulent billing by the onsite maintenance company.  The maintenance men lived in the community and had cultivated friendly relations with all the homeowners.  A quick phone call and ‘presto’, the maintenance man was at the door.  No one could understand why suddenly it was taking several days to have simple work completed (since a vendor was having to travel to the community), although the work was now being done at a third of the price.   To not jeopardize the ongoing investigation and eventual lawsuit, the new community association manager stoically endured the daily insults.

IDEAL RESPONSE:  In this particular situation, it is best to say very little until the investigation is completed. The manager can continue to apologize for delays and address the homeowner concerns on a case by case basis. The community could look at providing owners with alternative companies to complete the desired work.

EXAMPLE #2:  In another new community, the Board received a threat of litigation, and only then discovered it did not have Directors & Officers insurance coverage in place.  It could not go out and obtain this insurance after-the-fact and still rely on it for the pending lawsuit.  The suit stemmed from a landscape violation citation, and the Board made the business decision to back down on enforcement, as the community did not have the funds to endure a court battle.  Neighbors, unaware of this background, were rightfully angry about the violation not being pursued.

RECOMMENDED RESPONSE:  They can inform owners that the Association is aware that this violation exists, the owner has been addressed but as a matter of policy and privacy for individual owners the Association does not discuss the details of individual owner violations. They could also state that due to pending litigation this violation cannot be discussed.

EXAMPLE #3:  A Board is receiving numerous complaints from the ownership about the management company. However, the Board has only just begun the process of interviewing new management companies.

RECOMMENDED RESPONSE:  The Board should not begin informing these frustrated owners that they are shopping for other management companies. However, the Board should thank owners for their feedback and reassure them that these matters will be addressed with the management company.

EXAMPLE #4:  It is easy to see the management company as a policing agent for all community issues. While this may be true for violations of the CC&Rs (covenants, conditions & restrictions) such as home and lawn maintenance, there are often complaints to the Manager that may be beyond the HOA’s realm of authority or responsibility. In one large community of single family homes with hundreds of children, a homeowner complained multiple times that the kids in the neighborhood were “delinquent kids” that “do not have respect for other people's property” because they were running through her yard. She was surprised to hear there was little the HOA could do to prevent or deter this behavior.  She responded, “You can tell someone they can’t cut down a tree but you can't address kids out of control?”

RECOMMENDED RESPONSE:  Constant homeowner education is important. While no one wants to be “that neighbor,” the HOA is limited by the CC&Rs and By-Laws on what it can enforce. When advising homeowners on neighbor-to-neighbor disputes, the manager should offer possible solutions for the homeowner to solve neighborly problems. If these solutions are not acceptable, the owner may need to look elsewhere for advice.

Associations have varying levels of transparency depending on the leadership in place.  While owners are entitled to a certain amount of information, many times it is not appropriate for non-Board members to know the details surrounding the timeline or means of enforcing a particular issue.  When bad things happen in the community or a large expense is incurred, people want to know how this happened and what is being done about it.  It’s important for management and the Board to focus on the action steps that will be taken and to communicate what can be communicated without violating the law or Association regulations.