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Your HOA is a community with real people, real finances, and real problems that need solutions. So what can you do as a board member to get ahead? It starts with changing your management mindset to fit a multi-million dollar business. Your are managing HUGE, EXPENSIVE assets. It's time to start treating your role as such and revamp your board. Learn the importance of full communication with all who are involved and affected by board decisions, assessments, and ignored deterioration. Take these tips with you to start managing your HOA like a business.
Chapters 00:00 Intro to How to Manage HOA Like a Business 02:52 Meet Kay & Her HOA 03:47 Why Be a Board Member 05:30 Best & Worst Parts of Being a Board Member 06:05 HOA Meeting Problems 07:07 California’s New HOA Water Use Law 08:17 Past Board Failures (Assessments & Reserves) 09:04 HOA Board Wins 11:35 Is Our HOA Funded Enough? 15:26 Restating 20yr Old Governing Documents 16:47 Communicate with Owners AND Tenants 18:21 The Best HOA Management Mindset
Always think as a director of a multimillion dollar corporation, not as a homeowner, what is best for the corporation? Even if it's not best for you as an individual, what's best for the corporation? Being a homeowner is one thing. And what I do on my own as a homeowner is totally different than what I do as a board member. What I do inside my home is my business what I do for as a board member for the community, and the common area is a totally different decision.
Announcer: HOA Insights:
Common Sense for Common Areas, exists to help all 2 million volunteer board members nationwide have the right information at the right time to make the right decisions for their future. This podcast is sponsored by for companies that care about board members, association insights and marketplace, association reserves, community financials, and Kevin Davis Insurance Services. You'll find links to their websites and social media in the show notes.
Robert Nordlund:
thankless job, what comes to your mind when you hear those two words? Having served on the board of my condominium association for several years followed by decades of experience in this industry. There is one job that without a doubt deserves to be at the top of the list and elected volunteer HOA board member. So a regular feature of our weekly podcast is one episode a month devoted to sharing the stories of real life unsung board heroes. In our eyes, a board hero was one of the 2 million elected volunteers who are worthy of recognition for simply performing a thankless job well, if you match our definition of a board hero or know someone who does, please reach out to us our contact details are provided in the show notes. Welcome back to Hoa insights common sense for common areas. I'm Robert Nordlund. I'm here to share the story of an unsung board hero named Kay Diack. This is episode 65. And if you missed meeting our other board heroes, you can find them easily on our website, hoainsights.org on our YouTube channel, or by subscribing to Hoa insights on your favorite podcast platform. But before you hear Kay's story, let me introduce you to one of our sponsors. Hi,
Kevin Davis:
I'm Kevin Davis, the president of Kevin Davis Insurance Services. Our experienced team of underwriters will help you when you get that declination. We provide the voice of reason someone who will stand by you. Our underwriters bring years of knowledge to our clients that can't be automated by technology or driven by price. As a proud Amwins company, we bring true value to your community association clients. We are your community association insurance experts.
Kay Diack:
Hi, my name is Kay Diack and I have served as a volunteer on the board of park bought villas townhouse association for five to six years. When I am not wearing my board member hat I enjoyed reading and walking. Three words I would use to describe the job of being a board member are rewarding educational, and about 50% of the time challenging. The main story I'd like to tell is the importance of this sense of community and support. Park
Robert Nordlund:
Mont villas is a 66 unit townhome Association in Fremont, California. The property is 47 years old is about 79% owner occupied. The association has an annual budget of about $285,000 Kat has lived there for 26 years and as you just heard has served on the board of directors for the last five or six years. We decided to kick off this interview by asking what motivated her to join the board of her Association.
Kay Diack:
I believe all owners, at one time should be a board member to learn what's involved in being a director. So after retiring, and wanting to be more involved in our community, I joined the board. I have been a director, secretary treasurer and now I'm the board president. It's
Robert Nordlund:
always nice to hear our board heroes encourage homeowners to join the board. Since volunteering and serving on the board helps bridge the gap between board members and homeowners and fosters both communication and understanding in the community. We then asked Kay about the makeup of the board at Park Mont villas, namely how many seats there were and if they had any term limits or not.
Kay Diack:
The governing documents call for five directors. We currently have three. No, we do not have term limits. Each director does serve however for two years.
Robert Nordlund:
While there aren't any term limits to the board seats. The two year term length means that Kay's seat can be contested in their next Board election. We decided to ask her if it's easy to get elected to the Board
Kay Diack:
pain we have five positions we only have three it's easy to get on elected to the board. I think owners need to be more involved. Because what I hear is we don't have. And I've seen, I've heard this from many we don't have time to be involved. We're multimillion dollar corporation. Every owner is part of that corporation. So you have to it's your vested interest to be involved.
Robert Nordlund:
Kay appeared to be passionate about getting other homeowners involved in the community and helping them understand what their roles and responsibilities to the community are. We then asked her what her favorite and least favorite aspects of board service were. Here's what she had to say.
Kay Diack:
My most favorite is helping new young owners learn what it means to be a homeowner for the first time. And my least favorite is having owners upset with the board. When we make the hard decision, like having to raise assessments to meet our financial obligations.
Robert Nordlund:
We noticed that Kay did not as many of our board heroes have mentioned board meetings as either a favorite or least favorite aspect of board service. So we decided to ask how board meetings are conducted at Park mod villas and what she defines as a successful board meeting,
Kay Diack:
I would say a successful board meeting is completing everything on the agenda within two hours. Our board meetings are hybrid, we meet bi monthly, which means we always have a packed agenda. Sometimes the director will show up for the board meeting, never opening the board packet in so when we then we have to spend time reviewing all the detail that's in a particular item, because they've not reviewed it ahead of time and they have a lot of questions.
Robert Nordlund:
I'm sure many of the board members listening to this program can sympathize with Kay's plight of having a director show up to the meeting unprepared to discuss the agenda items in the board packet. To that end, we asked Kay if the board of directors at Parkmont villas had a particular item that they were focused on at this time?
Kay Diack:
Yes, we do. At the end of 2023, California passed a new law regarding water use a non recreational landscape that by January 1 of 2028, we need to comply with and even though this sounds like a long time out. In reality, it's not when you put in the planning and execution of the plan. They want you to use what's called non potable water, which is non drinking water. But if your jurisdiction doesn't supply that close to you, now you've got a problem. And so next week, it's on my agenda to go to the water district to see what their plans are. It's hard to make a plan when you don't know what your resources going to be.
Robert Nordlund:
There's a lesson in that answer for all board members, especially for any board members listening from California. Be proactive about compliance with new state laws will affect the operation of your community association. Her attitude towards the situation made us feel that she was setting up future board members for success. This naturally prompted our next question about whether she felt that the previous board had set her up for success or for failure. I
Kay Diack:
believe the prior board set me up for it set us up for failure. The past board did not raise our monthly assessments for 13 years, or invest any of the reserve funds in a see days, we are now having to make the hard decision to do a large monthly assessment increase each year to fund our reserves and not go bankrupt.
Robert Nordlund:
While the previous board dug a large hole for K and the rest of the current board to climb out of it did seem like she enjoyed serving on the board. We asked her as we often ask our board heroes to tell us what she liked and what she wishes the current board could improve in the future
Kay Diack:
star number one, they're willing to remain on the board when owners make negative comments about them on social media that we cannot respond to. second star. They challenged me they made me think about my decisions. How and why I made it and look at their point of view, like one wish that they lived in the on site in the community. Anyone that tells a board member you only have to show up to meetings. They're not painting a real picture because that's never going to be the real picture. This
Robert Nordlund:
was the first time that we had heard that Kay was the only current board member that actually lived full time in the community. Naturally we want to know if Kay had any on site help from a professional management company, and if so, whether she had some positive feedback and suggestions for improvement for their current manager are as well.
Kay Diack:
Yes, we are professionally managed. And as a board president i deal with our manager. I believe our relationship is good. We think a lot alike, we do not always agree, but we do discuss it. And we talk out our disagreement, and we listen to each other's each side of the viewpoint. She is very responsive, responsive and timely to our owners request and emails is not weeks day, it's not weeks or months before she responds. She responds, usually within 24-48 hours. My second star, she knows the California Civil Code that govern plan developments. And this is very important because it's so different than other states laws. California has very specific laws, a governess and they're called Davis Stirling, and they are very different and very direct on what we can and cannot do. My one wish is that we could have her 100% of the time as a dedicated manager and not a portfolio manager. I wish she could be cloned,
Robert Nordlund:
given the kind words that Kay had to say about her fellow board members and community manager who wanted to know if she felt that overall, Parkmont villas was well run and well funded. Here's Kay's response.
Kay Diack:
Would I consider my association to people well, well run, for the most part, yes. Would I consider the association well funded? No.
Robert Nordlund:
Kay told us further that their reserves were only 41% funded. She had previously mentioned her intention to try and increase monthly assessments each year, but was such a low percentage funded in the reserves. We are concerned that an increase in monthly assessment might not be
Kay Diack:
In recent years, no. The last special assessment was enough to prevent a future special assessment. So we asked Kay whether Parkmont villas had tried to pass a special assessment in the past, and whether or not the association was successful. Here's what Kay had to say on that matter. around 2002. And this is before I was on the board. However, I do remember what happened during that time. And one of the lessons I learned that I think it's very important is the lack of communication at the time, the board made decisions, they said this is what's going to happen. They had one town hall meeting. And it was an emergency assessment due to the safety of homeowners, our entry stairs were beginning to collapse after being only 20 years old. They were not constructed well. And nobody knew about it.
Robert Nordlund:
A special assessment is never easy on the board or the community at large. However this assessment was passed over 20 years ago, and a lot can change in a community over that time board members have stepped down and new ones have taken their place. Residents have moved out and sold their homes to new homeowners. For this reason we asked Kay if she felt that the community had retained any lessons learned from that special assessment.
Kay Diack:
Yes. And noo. Any owners that are currently living here that were living then, we remember what we went through. And that's probably about 15 owners. And unfortunately, none of that's really documented unless you remember it. Some sense, it's not documented what we went through. No current owners are going to realize what was involved having to replace 33 sets of stairs. And it would be days, we would have to walk up ramps to get to our front door because it's a half a flight of stairs to get to our front door. And so while they were reconstructing reconstructing the the framing and all because of dry rot, people don't realize what's involved in redoing things like that. It's virtually sort of what in California, SB 326, which people consider the balcony bill, but it's more than balconies. It's any of your structures that are six feet off, even though I don't believe our stairs are six feet off in there. It's wood base underneath on top with tile on top. If you don't have the proper waterproofing, you're gonna get dry rot and that's our original stairs didn't have a proof appropriate waterproofing and nobody knew that and you can try and educate people but if they don't read newsletters, they don't come to board meetings. They How do you communicate Okay, you can't talk about board meetings, or board business outside of a board meeting. And people don't get that.
Robert Nordlund:
While Kay was not on the board at the time of that special assessment, we were happy to see that she had learned some lessons from it that she could share with the current board and the community at large. We then asked Kay, what the biggest challenge was that she had experienced as a board member,
Kay Diack:
I would say my biggest and most challenging or interesting is restating our 20 year old governing documents. It took us over once we hired a law firm, it took us over two years, several votes, multiple townhall meetings with our attorneys, explaining to owners why we had to have certain items in our governing documents. Why they had to be restated, owners do not understand that as a planned development, we are a multi million dollar corporation, and the need to keep our documents which are the CC&R's bylaws, other documents such as collection policies, current with the current laws, they think, we just we don't need any of those. They don't understand that this is required by civil code
Robert Nordlund:
Kay said something in that last answer that we felt was a really smart way of looking at a community association or planned development, to think of it as a multimillion dollar corporation because it's quite true. For that end, we asked Kay what she thought the board could do in the next year to improve the multimillion dollar corporation that they manage.
Kay Diack:
I think better communication with the owners and tenants and I include tenants because owners need to communicate to tenants that I think tenants need to be included in some communication. And it's hard when owners do not read newsletters, or attend board meetings to communicate. We're always looking for ways of communicating and we're our hands are so tied on how it can communicate to owners. If they don't meet us partway, and owners say they don't have time to communicate time to be involved in the HOA makes it difficult. They think showing up on our doorstep and us answering questions is a way of communicating and they don't understand we're not allowed to communicate this way. We
Robert Nordlund:
felt that the board and community at Parkmont villas were very lucky to have Kay serving them both. And while we would love for her to stay on the board, for as long as she's willing, we asked her to think about the impact she will have left on the community after she eventually leaves. And here's what he had to say about that.
Kay Diack:
Hopefully, helping to maintain, improve the property value, improve and stabilize our financial situation, our health, our financial health, and educating owners what it means to live in a planned development.
Robert Nordlund:
Finally, we want to close this board hero episode, as we often do by giving Kay the chance to share a word of advice to any other board members tuning into the program.
Kay Diack:
The one word of advice I would give is to always think as a director of a multimillion dollar corporation, not as a homeowner, what is best for the corporation. Even if it's not best for you as an individual what's best for the corporation. Being a homeowner is one thing and what I do on my own as a homeowner is totally different than what I do as a board member. What I do inside my home is my business. What I do for as a board member for the community, and the common area is a totally different decision.
Robert Nordlund:
We want to publicly acknowledge Kay for performing a thankless job well, and compliment the entire board of directors at Parkmont Villas for taking their responsibility seriously, to act in the best interests of their association. Well, we hope you gained some HOA insights from the case story and that it helps you bring common sense to your common area. Thank you for joining us, and we look forward to another great episode next week. And remember, if you match our definition of a board hero or know someone who does, please reach out to us, our contact details are provided in the show notes.
Announcer:
You've been listening to HOA Insights: Common Sense for Common Areas, you can listen to the show on our podcast website, Hoainsights.org, or subscribe on any of the most popular podcast platforms. You can also watch the show on our YouTube channel. Check the show notes for helpful links. If you like the show and want to support the work we do, you can do so in a number of ways. The most important thing that you can do is engage in the conversation. leave a question in the comment section on our YouTube videos. You can also email your questions or voice memos to podcast@reservestudy.com Or leave us a voicemail at 805-203-3130. If you gained any insights from the show, please do us a HUGE favor by sharing the show with other board members that you know. You can also support us by supporting the brands that support this program. Please remember that the views and opinions expressed by the podcast do not constitute legal advice. You'll want to consult your own legal counsel before making any important decisions. Finally, this podcast was expertly mixed and mastered by Stoke Light Video & Marketing. With Stoke Light on your team. You will reach more customers with marketing expertise that inspires action. See the shownotes to connect with Stoke Light.
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