HOA Insights: Common Sense for Common Areas

075 | Resolving Conflict Between HOA Boards & Home Owners

Hosts: Robert Nordlund, Kevin Davis, Julie Adamen Season 1 Episode 75

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This week we get a listener question from Jennifer talking about how she felt HOA board members are looked down upon like “the bad guys”. Kevin and Robert tackle this question by reminding HOA board members it’s your fiduciary duty to make sure your community is financially healthy and is complying will all the rules. HOAs are a business and not a social club! 

Chapters from the episode:

00:00 - A Big Problem Kevin Sees in HOA Insurance Claims
03:23 - Listener Question: How HOA Board Members Stop Being Seen as 'The Bad Guys'
07:25 - Upholding Rules Over Popularity
10:29 - Communicate & Don’t Hide as a Public Figure
17:21 - Ad Break - Association Reserves
17:53 - Education, Communication, and Leadership Skills for Board Members
24:22 - Mission Statements Help HOAs
27:22 - Updating Rules in Your HOA
29:58 - Treat Your HOA Like a Business, Not a Social Club

The views & opinions expressed in this program are those of the Hosts & Guests, intended to provide general education about the community association industry. The content is not intended to provide specific advice or recommendations for any individual or organization. Please seek advice from licensed professionals.

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Julie Adamen
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Kevin Davis, CIRMS
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Kevin Davis:

The one problem that we see, and when we see our claims, some call selective enforcement of the documents. Selective enforcement becomes that issue, because all of a sudden, Jennifer realizes that, you know what, maybe I am being tough. Maybe my next door neighbor has a right to park that car in that visitor spot. So now all of a sudden, Jennifer, who went it from doing the job she should be doing, you know, passing assessments. You know, maintaining Association and forcing the rules. All of a sudden she selectively enforce the rules. That's where you can have a small problem. It's really big problem.

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:

Hi. I'm Robert Nordlund of association reserves, and I'm

Kevin Davis:

Kevin Davis of Kevin Davis Insurance Services. And this is HRA insight, where we promote common sense

Robert Nordlund:

for common areas. Welcome to Episode 75 where we're again speaking with insurance expert and regular co host Kevin Davis, about the conflict that often exists between the board who sets the budget and guides the association forward according to the governing documents and the rules, and the homeowners. Well, often it seems like the boards and the homeowners operate at cross purposes, and we're going to address that issue head on today and try to bridge that gap. Well, this is a follow up to episode number 74 which was another of our popular live stream episodes where you get to hear and see all three of our regular co hosts and conversation in real time, addressing current topics like the new Fannie Mae Association lookup tool, and answering your questions, and if you missed that episode or any other prior episode, take a moment after today's program to listen from our podcast website, Hoa insights.org or watch on our YouTube channel, and, better yet, subscribe from any of the major podcast platforms so you don't miss any future episodes. Well, those of you watching on YouTube can see the HOA insights mug I've got here that I got from our merch store, which you can browse through from our HOA insights.org website, or from the link in the show notes. Of course, you'll find we have some specialty items for sale, like this and free board member zoom background, so some things for sale and some things for free. So as a treat, go to the merch store, find the mug you'd like, and I'll have that mug shipped to you free of charge. To the 10th person to email podcast at reserve study.com with their mug choice and mentioning episode 75 mug giveaway. Well, we enjoy hearing from you responding to the issues that you are facing at your association. So if you have a hot topic, a crazy story, not that that ever happens in our world, or a question you'd like us to address, you can contact us at 805-203-3130, or email us at podcast@reservestudy.com now one of those listener questions prompted today's episode where we had Jennifer from Phoenix, who wrote in saying, I feel like ever since I got on the board homeowners who were my friends, look at me like I'm the Bad guy. Is this common, and how can we change that? Yeah, and Kevin, and that's, that's what we're going to tackle here today.

Kevin Davis:

Yeah, you know what's a good topic? Because, again, as we handle directors and offers insurance for Community Association, that's all we do. And we see this a lot, where you have board members who are constantly out there trying to do their best job but not be respected, not being treated fairly and considered the bad guy. And the reason why is this, why I believe they they feel that way, because they board as basically three jobs. They have to enforce the wolves, collect the stuff and maintain the association. So when they do that, guess what happens? Nothing. Nobody comes by say, thanks a lot. Jennifer, you did a really good job of maintaining Association, and I'm glad you enforced the documents as well as you should. Congratulations. Jennifer, well done. And assessments you collected, Wow, they look great. And everything you've done has been a wonderful job. When they don't collect enough assessments, right, when they don't enforce schools without maintaining associations, they get beaten up, and that's where the problem comes like is that they get beaten up because they're doing their job in the best way, but people who live there don't agree with what they're doing. They could be Jennifer, could be doing the best job possible. Okay? Yeah, but they don't agree that you're collecting the assessments correctly. You know, they believe that you're either a you're not collecting them the right way because you want more money than you should be having. You want to pass the special stuff that you should be passing them, or you're not enforcing documents uniformly. You're treating me unfairly. And guess what? I'm looking at, I'm looking at the tree not being trend. So I see all those different things, and I'm blaming Jennifer personally, especially at the pool,

Robert Nordlund:

yeah, and we all know that you're stealing from the association. That's why you want to raise the assessments. It's amazing the distrust. So I was trying to figure out, where do we even start on this one? And I guess I kind of want to start with owning real estate is expensive, yeah, and people are entitled to their positions, and it's a little bit of damned if you do, damned if you don't like you let out with they've got a job. They need to collect assessments, enforce the rules, and take care of the property. And that takes time, and that takes money. And the people who don't know what a board member does, it's easy for them to criticize, and it's easy for them to say, you're picking on me, or you're picking on people unfairly. And it's just, it's crazy. We both

Kevin Davis:

live in single family homes, right? We have the same problems that that that Jennifer has, you know, I have to make sure that the rules are enforced in the household. We have two children that come by every time, and guess what? You know, they think they're guessing. Okay, yeah, so the rules that we have established, they don't follow me, they don't apply it. Okay, all right. I don't collect enough money to pay the electric bill. This came back. Okay? This has been the hottest summer on Iraq. Okay, electric bill comes in. I know on that issue of electric Jeff and they talk about this maintenance of my home. I've been there for 20 years, 1955 and so these are the issues I face normally. Now, my wife and I, we get along, and she accept the fact that some things may take longer than other, but poor Jennifer doesn't have that luxury that I have, and you have your wife, yeah.

Robert Nordlund:

Okay, so what do we do? We've got board members that they need to take care of the association, they need to do the job, and they're getting the stink eye from homeowners that things are not going well. Okay, what can we do? Well, I guess, go ahead.

Kevin Davis:

Yeah, this the first thing we got they have to understand is that if they do the job they should be doing, they're going to hold their head up high. If they are enforcing a document formally, okay, they are maintaining best their ability, and they're collecting assessment, passing it, then guess what happens? They get a chance that they could be they could be perceived as a bad guy, but inside of them, they have to realize that, guess what, I am doing my job at the Association board member, and they have to understand that that is the way they have to look at life now, because what happens when they don't do that? The one problem that we see, and when we see our claims, sometimes selective enforcement of the documents. Selective enforcement becomes that issue. Because all of a sudden, Jennifer realizes that, you know what, maybe I'm being tough. Maybe my next door neighbor has a right to park that car in that visitor spot. So now all of a sudden, Jennifer, who went it from doing the job she should be doing, you know, passing assessments, you know, maintaining Association and forcing the rules, all of a sudden she selectively enforce the rules. And that we see that that's when you have a small problem into a big problem. When Jennifer slides and I, I'm going to be, I'm going to ease up a little bit, because I don't want to be the bad guy. Imma allow people to do what they want to do. They want to have a pet, and then we now we don't have a we did not allow that pets. Okay, guess what? I'm going to allow this one person this time, but I'm not allow anybody else. And that's where they get in trouble when they start selective enforcing, because once they selective enforcement, then all of a sudden, now nobody's and everybody loses. Association loses because saying, Yeah, treating association the way you should, based on that document

Robert Nordlund:

set. You know, I'm I'm hearing you, and I agree, and I'm wondering if, again to our our board member audience, they know, because they're living it. But it seems like there's multiple ways to get yourself in hot water. You can get yourself in hot water if you're not doing your job, if you are fundamentally not collecting assessments, not enforcing the rules, not maintaining the property. And you're also going to get people who don't like you if you are doing your job, if you are taking it. Because fundamentally, yes, I'm bracing myself for next year's electrical bill or next year's next month's electrical bill, because we're running the air conditioner a lot this month, our grocery bills are going up, and that's going to be an election issue. How much inflation has been so we all know that costs are going up, and that needs to get reflected in homeowner assessments. Um. So you know you're going to get that, but you also raised the third issue, that if you are selectively, or if you're doing things kind of halfway, that can get you into real trouble. And I think what we're at here is making sure that our listeners here are hearing that it may not feel magically right, but the best path forward is to do the right things. And can we talk a little bit about communication? As

Kevin Davis:

a board member, I have two choices. I can either do the best job I can do, or do it kind of like almost it. And if I don't do it, if I do it almost good, people will complain if I do a good job, then I have what a great job I do. People will still complain. It's like I said at the beginning. Nobody's going to say that you did a good job passing the assessments or maintain Association, but people will complain because they perceive you did wrong that you know you want more money from me this month. I don't believe that you need it. You know you should have passed that budget last year, and I look at the numbers, and now suddenly you need more money. I don't believe you're doing the right job. Now, what happens, though, if you aren't doing the best job possible, then you'll be okay, see, at the end of the day, you know if you're doing if you are a board member, and if you are following the doc, if you are a portion of document, and doing those three things? Well, people will get upset with you, but you're going to have to accept it. Being on the board of directors. You have to understand that there's certain responsibilities you have to have, and you have to be able to walk and say, I am doing the job. What's in the best interest of the association? I introduce your responsibility to do this job, and this one I'm doing. Can you imagine having a conversation about Jennifer, having a conversation with the person at the pool that personal pools complaining was, you raise a special assessment, you have a special assessment, right? And I can't believe it, because you want to replace all the rules, whatever it is, and I couldn't even have a reserve study done. And that special. And Jennifer can say, Guess what? I understand, I have a fiduciary responsibility to modern associations financially. Guess what we have done that we've done the job we should be doing. We can take your job we should be doing. And right now we need a special assessment so we can get these things done. Do you understand? And now all of a sudden, that person is sitting there, sitting back there, going, it's a different conversation. We talk to them. It goes back to what we normally say, look, instead of me getting angry, because how dare this person do this? I'm doing my job. I'm professional. When I'm a professional, I am a board member, and I know my job, and standing firm against somebody and walking out in the pool area and not hiding from somebody, because when you hide from somebody, guess what? They believe it was a big walk,

Robert Nordlund:

right, right? They think you have something to hide. I think you said something there, that as a board member, you become a public figure, and you then carry the responsibility Association on your shoulder. So it's important that you don't hide, that you don't minimize your trips to the pool, you don't minimize walking your dog at the regular time that you used to with different people around the association. So be a public figure and spread the Good News and spread the truth. I think you can say that, Hey everyone, our electric bill went up by $1,000 this month. And just want to give you a heads up that next year we're gonna have to raise assessments, because $1,000 more for electric divided by the 100 people, you can just tell them that that's where we're going, and they know that. Oh, that's unfortunate, but Joe or Fred or Susie or Cheryl or whoever. Wow, I need to stay friends with this person, because I can get the inside track to what the real story is, and all of a sudden you can go from being the bad guy, if you just wait and slap a increase on them, to being the good guy by being the provider of truth, the provider of information, and giving them a heads up. That's just a kind thing to do, and that's

Kevin Davis:

the key thing we talk about. You know, funny. I thought about the kindness part last month, August, national civility month, and in the office, we did all these different things to provoke kindness in our office, I'm thinking if the board members of community associations just operate and one word kindly to one another, and guess what happens now? All of a sudden, you're able to communicate better, you're able to promote the things that need to be done, and that alone will make a big difference. If Jennifer, right now, feel like she's a bad person, okay, what happens to Jennifer at the next meeting? She'd walk into that meeting feeling, you know, intimidated, feeling overwhelmed. As opposed to Jennifer, is going to feel like, Listen, I am doing my job, and I have one job to communicate. And you mentioned the word communication, I have to communicate with yourself in a kind way. Can you imagine, if you start communicating in a kind way, what kind of results you have for your association?

Robert Nordlund:

I live in a planned community, and we have some renters who moved in across the street with two teenage boys, and they both have their own cars, and the fire hydrant on our street is just about in front of our house. And as they were new in our neighborhood, one of those two new high school boys cars would inevitably be parked smack in front of the fire hydrant, and that just annoyed me, and it just wanted my pet peeves. And I told Kathy that, yeah, they're always do they not know? And she says, Well, go over there and just say hello. And she was absolutely right. I went over there. I said, hello. I said, Hey, welcome to the neighborhood. I'm Robert. I just want to let you know there's a fire hydrant right next to our street, and the house next to us had a partial burn two years ago, and that was before your time. But I just want to let you know if fire hydrants are real and you don't have to move your car right now, but if you could start to build the habit of not parking right in front of it, that probably be good for all of us. I wasn't a jerk. I was making a point. You don't you don't have to move it now, because there's no houses on fire. No one knows crazy. But just be aware of that, and it hasn't been a problem since. And that was just one of those. It took my wife to remind me that to do the right thing and to do it kindly. And they

Kevin Davis:

go back to Jennifer right. Jennifer is doing her job. She feels comfortable doing her job, but this may be till she mistreated the words we just said and just said she heard us. Guess what happened now? Jennifer, Jennifer will think that, wait a minute, if I go back to my next door neighbors and talk to them in a kindly way to say, Guess what? I understand right now you're disappointed, because there's something has to go up, but there's a reason. It's something called inflation that none of us like. And one thing we know about inflation, once the prices go up, they don't usually come back down. You know, that's our new reality.

Robert Nordlund:

I want to follow up on that because I think we need to turn and start talking about, what are some real things that we can have our board member listeners begin to say, but let's take a quick break. It's time to hear from one of our generous sponsors, after which we'll be right back with more HOA insights.

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Robert Nordlund:

we're back. Okay. The reality is that, as a board member, you're a public figure, and the Homeowners are often suspicious about why the assessments are going up, why this is happening, why that's happening, and obviously they don't have the inside track. So Kevin, what is it about being a board member? Is it so much on communication and knowing the facts, knowing the story, so you're getting the truth out there?

Kevin Davis:

I one thing we don't talk enough about is education. You have to understand your job as a board member. You have feduciary responsibility. That means you have to act in the best interest of the association about any conflict of interest. And that's as simple as that. And so whenever you are involved with the unit owner or rent or whatever, and you realize that, wait a minute, I I interact in this person as a public official, I am almost like a politician trying to act a certain way. So when they ask me questions, I can't poopoo them. I can't say, you know, don't worry about it. I have to take a few minutes and answer that question. And most of the questions are the same. I can't afford it. I want this money from me. Most of the clients financially driven in terms of assessment, special assessment. So now we're talking about being educated, and this is informing the people who lived it. It's not that complicated. I'm

Robert Nordlund:

thinking that it may be as simple as having a little bit of a PowerPoint, a little slideshow or something at a board meeting saying we live in a nice place, and it's expensive to live in a nice place. Owning a home here is expensive, but you can see here that we're getting a little bit of mildew on the north side of the building, where we don't get as much sunshine. We're getting a little bit of dry rot underneath the decks and our insurance bill. You've probably heard about insurance. It's gone up. Inflation has gone up. Our electricity bill, for instance, went up by, as I said a moment ago, $1,000 a month, whatever it is. And so this is a little bit what it's like to live here in Happy Valley villas. And just want to give you the heads up that our assessments will likely need to go up next year, those kinds of things and go ahead,

Kevin Davis:

but getting go back to that simple thing. If Jennifer said everything you just said, We'll start out by saying, guess what? At the fiduciary responsibility and association, just by saying that, if you add that one line to it, then all of a sudden, just makes you feel that you have an authority by that you're saying something, some strength or some power, as opposed to saying, Robert, guess what? You know, we have some issues right now the roof, and the roof was leaking, and we need a special assessment. And all of a sudden, you can wish it. But if I said, Listen, I have a fiduciary responsibility to look at what's the best interest of the association. Let me talk to you about the roof that needs to be paired. All of a sudden, the conversation changes. Also Jennifer walks in and just walk that one line up front that I'm a fiduciary, which she basically I'm a professional. My job is to look out for the best interest. But by putting that fiduciary responsibility that just makes her it gives her some power to be able to talk to somebody, and without having the other person, maybe they still may not have the respect, but it may garner a little respect from that individual, and maybe have that conversation more time, at that point

Robert Nordlund:

in time, yeah, I hope that the average person has compassion for someone who is trying to help. And if you can touch on that by making it clear that, yeah, I volunteered for the board, and now I have a fiduciary responsibility. I have a responsibility to the association to lead because, you know, there were two leaks on the on building number five last year, and all the other buildings are going to be right behind, and we just can't afford to have all those buildings leaking and all the repairs. So it's time, at 22 years old, it's time to get new roofs and just explaining the situation, explaining it calmly, and getting the word out. I continue to think that there's so much benefit to speaking the truth, and if you can speak clearly, and you know, while you Kevin, while you were talking, you said, you need there's education involved. And I started writing down all the skills of a board member. There's education, there's communication, there's leadership, there's investigation, you know, why did the water bill go up? Did we have a broken line in the sprinkler? And should we get that fixed? Um, uphold the community. And sometimes you need, may need to be a salesman saying that, hey, it's time to paint this building. Because if we paint it, that'll hold our property values. That'll maximize our property values, because our property values the last two bedrooms sold for x2 months ago, and that's a good number, we want to make sure those numbers keep climbing up. There's all these different things that you can do. It's not just a board member. You have so many of these different skills that when you combine them, all of a sudden, again, we're leaning on some compassion. We're expecting the truth. We're expecting kindness. In other

Kevin Davis:

words, transparency, transparency. Add that to your list. Because if you're transparent, that person's not going to say, Guess what? We need a special assessment to fix the rules, and all of a sudden you see a new car comes next time. But it never fails, somebody only got buy a new car. My other months have a special assessment. And guess what? Because you're not transparent, because you don't really explain all the details. All of a sudden, everybody's mind goes, Wait a minute, I haven't got a new car. And then all you know, before that car gets into the garage, all of a sudden, association, it's all through association about this person brought a new car, yeah? And that's

Robert Nordlund:

fantasy, yeah. It's so important for a board member to be a public figure, and to say, Yeah, I got a new car, but I'm also leaving an hour earlier because I got a new job that pays more, and I'm here two hours less every day because I got a longer commute. And yeah, I'm wearing a suit and a tie now, but yeah, I got a new car, but it has nothing to do with a special assessment. Any other questions? You know, there's a truth there, and the truth speaks. Okay. So what do we have? Education, communication, leadership, investigation, upholding, selling, transparency. Counselor, okay, oh, gee, we

Kevin Davis:

could probably go out this work. He hasn't done the work. Consistency. I like that. Yeah, consistency.

Robert Nordlund:

You know, it really helps when your association has like, a mission statement, like we here at Happy Valley villas are here to provide families a great place to raise their kids, access to public transportation, close to mainstream park, or whatever it is, and we'll do this in a search, you know, and all of a sudden you can say, I'm following consistently trying to do those things, and

Kevin Davis:

I don't want a mission statement that talks about but make sure you include the things that are important in there that you have a maintenance plan. So this is the maintenance plan we follow. Okay, make sure you have a non discrimination policy. Okay, a lot of associations forget that one very important thing. And what happens now, especially for Jennifer there, because if Jennifer perceives she's a bad, bad guy Association, and she's enforcing the rules, you know as well, she should see that she's selecting, enforcing that one person that you're selecting, of course, and the other person you you're 100% enforcing, they'll come back and say, you discriminate against. You're bullying in the harassment so by not having a non harassment policy, a non bullying policy, and if you have one, he's like, that's what we're following, our non harassment policy, and I'm bullying policy, a non discriminatory policy. See, these are all the things that happen because you do not follow your rules exactly. You know, you follow your rules exactly again, you come back and go, guess what? We have a policy against that we don't allow that association. You've seen you read that. Here's section 4.1 of the declarations, yes, it's a consistency is important, but it goes back to understanding it. These are the rules. These are things we have to follow, and we follow them, and again, I can do your responsibility, right? Okay, so you right now you upset because the pool hours not doesn't conform your two o'clock in the morning because that's the time you wake up. Well, here you read the rules, right? And you said you agreed that you signed these things. Robert, right? And, yeah, but, yeah, but okay, we expect you to follow just like the same thing you did with the fire. You know, you know you're not supposed to park there. You know you're not being mean, you're not being vicious, you're not being unkind, unfriendly, you're just saying it's the behavior that we all agree to. Society agrees not park in front of fire hydrant, right? So it's the same thing. We have certain things that we agree to do we and we follow these agreements. Guess what? We can live more peacefully and more common. You know, in our association,

Robert Nordlund:

yeah, well, we got a lot of people working, working and living together in a community, and they're bound by the governing documents and all these things. And that's going to be, by nature, bumpy, because people have different ways of looking at things. They have different priorities. They have responsibilities. Board member is a collect, assessments, enforcement rules, maintain the association. Let me put a little twist on this. I read in the news there was an association that made the news for all the wrong reasons just the last couple of weeks, and it was a rules enforcement issue. The board was standing on the rules, and technically the homeowner was breaking the rules. Is there a time and a place for the board to say, you know, maybe it's time we updated the rules. Oh, sure.

Kevin Davis:

You have rules in you have rules that are going to 30, 40, 50 years, and they could be discriminatory. So you have to look at the rules and make sure they're not discriminatory against children. You know, you have some rules. May say the children can't be in a pool from these hours. Well, you can't discriminate against children. You can't so and certain things too that you have to things have changed. You have association rules, and you can't you can't have people who work from home, or have certain types of work you can have from home. Sometime you can't have the documents need to be updated. And you see things, especially if you see things in documents that are discriminatory. If you think they discriminatory, they probably are. If you just wait, are these discriminatory? Check it out, because that's where the problem comes to play that you end up putting something in there. You can say, we have, we don't allow any pet, not Association whatsoever. Well, guess what? That doesn't you can't do that, you have people who have doctor's note that says we have a mental health pet, okay, yeah, see, and I know, you know, try not to be absolute, because it's always going to be a wiggle room somewhere, and you have to use your best judgment. But if you you will do what better by following the rules uniformly and consistently. So let's say you do follow the rules consistently, and you say that, you know, well, we're gonna stop enforcing this rule. Well, consistently, we're not gonna enforce it anymore. You know. You know, if Okay, we're gonna allow pets, but small pets, okay, it's okay to change the rules from our pets, but you can't say we're gonna make an exception and allow for SNAP pet and nobody else. Yeah, I'm

Robert Nordlund:

with you there. I added another word and compassionate. And so at the right time, it is probably time to adjust the rules. Change the rules, but you don't want to be being inconsistent. I would say change the rule before you start becoming inconsistent and unenforcing. Kevin, fascinating topic. I think our board member audience is aware that they are walking around as different people once they become on the board. So as always, it's great talking to you with all your insights, any closing thoughts to add at this time.

Kevin Davis:

You know what? We never. Mentioned that it's a business, treated as a business, not a social club. And once you put that business hat on as a board member, you will do a better job understanding that you are a board member. You're somebody who has a purpose there. You have a job to do. And as you do that, and you do it uniformly, consistently, all the words we said before, I think you will do a better job. And Jennifer, you, you may be foreseeing yourself as the bad guy, but you're not. You're doing your job for the betterment of the association. So it kind of change your thinking a little bit, because you're not, you're just doing the thing that should be done. Because at the end of the day, you would make sure, when you ready to sell, that you it's worth more than Association down the street.

Robert Nordlund:

Absolutely, I like that close. Well, we hope you learned some HOA insights from our discussion today that helps you bring common sense to your common areas. We look forward to having you join us for another great episode next week.

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