14 Apr 10 HOA Policies Every Board Should Have
How homeowners associations create, enforce, and review HOA policies provides clarity and helps manage resident expectations. When a community is founded, governing documents are created in CC&Rs, bylaws, and other rules. These provide the formal structure for the HOA board by outlining the responsibilities for all parties. The CC&Rs are restrictive and permanent documents that define homeowner’s rights, association responsibility, and the role of the board. The bylaws guide how the HOA will operate. Incorporated with this are policies the HOA board puts into place for managing and enforcing the restrictions found in the CC&Rs.
The policies a homeowners association implements tell a lot about how the community governs. As long as the procedures in place do not amend or shift the original governing documents, the HOA can use policies to manage various community functions. Of course, it’s a balancing act of financial considerations, keeping rules in check, and keeping residents happy. Let’s review some standard policies HOAs should have.
HOA’s need to communicate with residents regularly, mostly in digital form. This requires knowledge of the guidelines for sending, sharing, and receiving electronic communications, whether in email, text or on a social media platform. There are federal and state laws around personal data and data sharing safety, which the board should be aware of. Also, board members should abstain from doing any official business via text or email, especially to avoid or shorten meetings.
As more residents utilize social media or other community-based apps, there should be clear expectations of acceptable behavior. A simple misunderstanding can flare up into something quite ugly and severe if not monitored. With social media, the communication should only flow one way: from the association to residents. Draft a policy surrounding what information can be shared, with whom it can be shared, and for what reason. Include appropriate disclaimers to limit potential liability.
Enforcement of Regulations
Every HOA can expect the need to enforce the CC&Rs and bylaws with clear-cut enforcement policies. No matter how fair or clearly defined a rule is, someone will break it at some point. It’s up to the homeowners association to combat rule-breaking and firmly, but relatively, deal with offenders. HOAs need to make their enforcement policies crystal clear to avoid confusion or any “grey” areas that residents may use to argue to deter future offenses.
Ensure all residents know what will be considered a violation, what fines can (or will be) used, and the due process a resident should expect. HOAs don’t like levying fines, nor do residents like receiving them (at all). Giving a warning for the first violation usually keeps tempers at bay. Be ready to impose a fine if the violation occurs a second time. Depending on the action required or the violation in question, the board may need to refer to the bylaws.
Coming up with a pet policy to appease every resident is unlikely to happen. Some people don’t like pets, while some can’t live without them. Establishing policies can be tricky, especially when pets can in different shapes, sizes, and species! The first step is to define what pets are allowed and where. Other determining factors, more specifically around dogs, are the weight and type of breed. Furthermore, detail any potential violations for noise, refuse collection, or bringing the pet to a restricted common area.
One point to remember is that residents with a service animal are excluded from some guidelines. Regardless of the community approach to pets, service animals and emotional support animals cannot be denied to a resident with the required documentation. The HOA should understand the circumstances around the form of pet ownership and have a process to accommodate different needs.
The HOA board sometimes needs to take on the role of mediator. Sometimes complaints will be minor, some major, and some not an infraction at all. The HOA’s job is to review the facts, consult the CC&Rs and bylaws, and adopt a policy of fleshing out the issue to find a resolution. This is one of the more delicate roles board members have, and the kind of policy to review on a semi-annual basis as different types of issues come up.
A community cannot meet its responsibilities without the budget to operate. Having a policy in place for collecting monthly dues as well as assessments is imperative. While collecting monthly fees tends to be more straightforward, special assessments can be more challenging. When having to impose an assessment, have a policy in place to minimize potential friction with residents. Outline clearly what the assessment is for, when and how it will be collected, and consequences resulting from nonpayment. Depending on your state, there may already be laws defining some requirements. Speak with an attorney for more information and to eliminate potential liability. Legal action resulting from non payment of assessments can and does happen, so be prepared. The right property management company can be a big help in these areas.
Most homeowners associations review and process a considerable number of documents each year. Although most can be stored electronically, all papers should have a retention date. Figure out the level of importance for various documents, the timeframe in which they are needed or required, and how to expunge them. Do not fill a storage room full of documents from 1982 somewhere on the property. Recognize what’s needed and for how long, and ditch the rest.
When we can rent just about anything right from our phone, the topic of rentals is more topical than ever. HOAs need to formulate a policy for short-term, long-term, or a ban on rentals. This is another delicate subject that HOAs need to approach. Homeowners have many reasons why renting their home could make sense, but neighbors may or may not want a community’s transient environment. Even with supporting documents and background checks, there’s no guarantee on the character of the person moving in. Assuming rentals are allowed in the community, the HOA should have a policy for owners to adhere to and equally important for renters to follow. The onus is on the owner to communicate HOA policies to the renter and ensure the renter abides by the community CC&Rs and bylaws. Ultimately the homeowner is responsible for maintaining the property and keeping with all community policies in place. Any necessary action taken will be against the landlord.
Conflict of Interest Policy
On occasion, a board member could find him or herself facing a conflict of interest. Any board member that has ties to a vendor and could somehow benefit from a particular transaction should excuse themselves from the board discussions and voting. Board members are still residents and need to follow all the guidelines and policies, arguably more so as they set an example in the community.
Committees play a vital role in a community. They have varying responsibilities depending on their formation but do great work in promoting and assisting the HOA. Forming these committees requires agreed-upon procedures for the roles and responsibilities the committee will have, how they operate, and accountability.
Residents will want to make updates or changes to their homes. One special committee is the Architectural Review Committee, which reviews residents’ applications with desired changes and shows how they will comply with the CC&Rs in place. Any exterior changes must conform to the community’s standards at large, so having a policy in place ensures this. The committee should require things like a visual representation of the proposed changes in the form of sketches and plans, specific details of colors and materials, a timeline for implementing the changes, and how to notify adjoining neighbors of the work. Some of these can be pretty minor, while some could be noticeable enough to be denied.
One of the great benefits of living in a community is socializing with neighbors. Although an HOA will encourage social gatherings among residents, there need to be some policies that ensure safety and minimize liability. It’s common for homeowners to request approval for a party if they will be serving alcohol and to require any event staff to be licensed and insured, mainly for the use of common areas. Also, ensure your policy contains details about the kind of event requiring the homeowner to obtain event insurance would be wise.
It seems like there are layers of formalities and hoops that HOA members must be privy to. It’s tough to sugarcoat the realities of everything involved in being a great board member. Your property management team is an excellent resource and can help formulate policies to help the HOA govern effectively. Keeping these policies accessible to homeowners, being fair with enforcement, and actively reviewing them will go a long way to advancing the community’s goals and residents’ well-being.