Today I’d like to talk about the importance of the board having a team of experts. In Oregon, members of the board must be individuals and owners of a property in the community in order to serve on the post-turnover board (there are other allowances if the property is owned by a corporation or a trust, but I won’t cover that here). Owners elected to serve on the board come in only knowing whatever they might have experienced in their personal and professional lives, which may or may not be helpful in the performance of their board duties. That means that board members - like community managers - either have to know a little bit about pretty much everything or have to know where to obtain that information.
I believe it is critical for a board to get as many of its experts lined up before any of them are truly necessary. What kind of experts am I talking about? At a minimum, I think all associations/boards should have a relationship with: a community manager, an attorney (for general counsel as well as collections), an insurance agent and a certified public accountant. It is preferable too if these folks have a working relationship with other associations, and not simply just experience in their field. This does not mean that you use these services all the time, just that you have a relationship with them so that if you need their help (and it stands to reason you’ll need their help at some point, and maybe quite urgently!), you know who to call when the time comes. If the association is responsible for maintenance of common property, like landscaping or buildings, then I also recommend you have a relationship with a landscape firm and a professional building consultant.
Why is it important to develop relationships with these experts? The most basic answer to that question is that when association stuff happens, it generally happens very quickly. Let’s take an experience out of my own management life: a tree falls through a condominium building. If this happens at your community and the board is responsible for action, do you know what to do? If you don’t, but you have a community manager, he or she can get the ball rolling for you (call the insurance agent, file a claim, contact a restoration company). In this scenario, if you also have a good insurance agent who has helped you get a good policy, he or she will not only be an asset in filing the claim but will also make sure you get the full coverage you’ve been paying for. Hopefully it won’t be necessary to involve a lawyer, but if the owner of that unit then files suit against the association for failing to properly maintain the trees, you don’t want to be stuck trying to find an attorney to defend you - and what’s the point of having an attorney that doesn’t know association law or doesn’t know you?
Obviously when dealing with an insurance claim it’s helpful to have your experts lined up, but even with a more mundane experience like resolving delinquencies it’s useful to have an established relationship. The American economy is tight right now and has been so for some time, which means that many associations are seeing delinquency levels (that is, the number of owners who are not paying their dues on time or at all) rise steadily. Until there is a significant shift in the economy, there’s no reason to think but this trend will continue. So what to do? The best thing is to be prepared! Your two best allies in this situation are your community manager and your collections attorney. A community manager can help you put together a collections resolution (in keeping with your governing documents and state statute) that reminds all owners of the need to pay their assessments in a timely manner as well as the consequences for failing to do so. The attorney can use this resolution with the nonpayment to perfect liens, obtain judgments, and get the association any assets of the debtor. Even if the debtor has no assets now, a judgment can follow him or her for several years, so when he or she begins to earn again, the association can recoup its costs then. While no one wants to have to sue another owner, boards should remember that they have a fiduciary duty to uphold the governing documents of the community (more about this on another blog). Why should those who do not pay get the same benefits as those who do not?!
The two best places to find your experts are within our local organizations: CAI-Oregon and Oregon Washington Community Association Managers (OWCAM). Here are links to their websites:
I have had the privilege to work with many of these experts and would be happy to share my experiences of them with you. Feel free to give me a call at 971-258-2826 should you be interested in my perspective.
To recap - boards should find their experts and develop a relationship with them so that when the time comes they have people on their side who are ready and able step in and help as needed.