The ancient Chinese concept of yin and yang explores the dynamic balance between opposing forces. Similarly, homeowner associations (HOAs) face their own yin-and-yang challenges, where four essential and interdependent priorities must be harmoniously balanced to create a successful and thriving community.
These four priorities are the corporate, real estate, financial, and community interests of the association. Each of these priorities plays a critical role in maintaining a healthy community. Neglecting or overemphasizing any of these priorities can lead to significant problems within the association and potentially result in conflicts among community members.
The corporate aspect entails that HOAs are legal entities governed by specific documents such as covenants and bylaws. The board of directors must adhere to these legal requirements and follow the proper corporate processes.
Taking care of the property is another important aspect of HOAs. As real estate developments, the board of directors must strive to preserve, protect, and maintain the common areas and architectural integrity of the community. This includes the repair and maintenance of buildings, streets, and other shared elements.
Financial considerations are crucial for HOAs. These associations collect money from homeowners and allocate it towards benefiting the community. Proper collection and wise spending of funds are essential for the association’s financial well-being. Budgets, bids, and bills play a significant role in managing the association’s financial affairs.
Lastly, HOAs are comprised of individuals who have chosen to live cooperatively, sharing control with their neighbors. The community interest focuses on fostering a peaceful and harmonious environment. The board of directors promotes neighborly interactions and considers the collective experience of community members.
However, conflicts can arise between the real estate and financial interests. The board may face the challenge of balancing property maintenance while keeping expenses within budget. It may be tempting to delay preventative maintenance, reduce landscaping efforts, or cut back on janitorial services in an attempt to avoid raising assessments. However, neglecting these responsibilities can lead to member dissatisfaction as the property’s appearance deteriorates.
Similarly, conflicts can arise between the corporate and community interests. While legal compliance is crucial, solely focusing on legalities may neglect the broader impact of decisions on the community. Considering the question of “Should the board do this?” rather than simply “Can the board do this?” is vital in addressing the community’s needs.
Addressing the community interest involves effective communication with members and promoting neighborly interactions. Boards may choose to inform the community in advance of significant projects, even if member vote or input is not legally required. They may also plan and fund social events to enhance neighborly relationships.
Imbalances between these four facets of association operation often lead to significant challenges within HOAs. Striving for excellent association governance requires carefully balancing these four critical priorities:
– Ensuring compliance with laws and governing documents.
– Maintaining the community’s appearance and overall maintenance.
– Diligently collecting and judiciously spending assessment funds.
– Creating a pleasant living environment where residents feel valued and considered by the association.
With a focus on balancing these priorities, homeowner associations can cultivate thriving and harmonious communities.
Kelly G. Richardson, Esq., a Fellow of the College of Community Association Lawyers and Partner of Richardson Ober LLP, is a renowned legal expert in community association advice. Should you have any questions or concerns about this column, feel free to reach out to Kelly at [email protected].
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