As an HOA Board member, you have legal, fiduciary responsibilities to your Association. You’re one of its main overseers, and it falls to you to shield your HOA community from any undue risk. Even so, there are some significant ways in which the actions of the Board can actually increase risk—and obviously, those are things to shy away from.
Here’s what we mean.
Erring in Insurance Coverage
Your HOA needs to have every possible legal protection in place, and insurance is square one. Having sufficient insurance coverage is vital for safeguarding your HOA from legal threats—but how much insurance do you actually need? The good news is, you can easily locate this information in your CC&Rs, which should spell out your insurance obligations. If not, speak with an HOA management professional, who can walk you through the types of insurance you do and don’t need.
Turning a Blind Eye to Short-Term Rentals
AirBnB and similar services have led to many clashes between neighbors, and between homeowners and their HOA Board. It’s imperative that your HOA have a clear policy in place to determine whether or not AirBnB rentals are allowed in your community. Make sure to check what local laws say, first.
Neglecting the Reserve Fund
Part of your financial responsibility is ensuring a sufficient reserve fund, allowing for any emergency repairs to be made quickly and without hassle. Are you ensuring regular reserve studies? Are you keeping an eye on the Association’s financial outlook? And are you willing to take the unpopular step of levying a special assessment, when needed?
Forgetting Key Maintenance Duties
When you serve on the HOA Board, it’s important to have a clear understanding of what the Association’s maintenance duties entail—and to stay on top of those maintenance duties. This doesn’t just mean fixing things that are broken. It means doing some proactive maintenance to keep them from breaking in the first place!
Failing at Communications
A final and important way you can put your community at risk is to be negligent in communicating with homeowners—which can breed distrust or even resentment. Always make sure owners are looped in to whatever you’re talking about in HOA meetings, and that full explanations are given for any new projects, assessments, etc. We personally suggest newsletters and other communications be sent out to HOA members regularly.
These are just some of the factors to consider as you think about your HOA and its level of risk. To learn more, contact Kuester Management Group and ask to speak with a community management professional today!