Do You Have What It Takes to Be an Effective Condominium Board Member?
There are also different levels of involvement on a board of directors that in some positions require active daily participation on a variety of topics while others require less. A board position is volunteer in nature and comes with no compensation regardless of countless hours of service.
September 24, 2019 at 10:00 AM
6 minute read
The creation of a board of directors in an association (after turnover from the developer) is intended for the residents to have the opportunity to vet and elect potential board member candidates via an unbiased election process. Residents run for the board of directors for different reasons. For example, they may believe their skill set could be an enhancement to the prior board or with dealing with a specific situation, political aspirations, they believe that the prior board is responsible for mismanagement of the association, and unfortunately in some cases, the individual may have a personal agenda. There are also different levels of involvement on a board of directors that in some positions require active daily participation on a variety of topics while others require less. A board position is volunteer in nature and comes with no compensation regardless of countless hours of service.
First and foremost, when a unit owner of an association decides to run for the board of directors, they must understand that they will be accepting the fiduciary duty of representing all unit owners and only making decisions in the best interests of the association. The summarized definition of a fiduciary in this case is when power is entrusted to someone for the benefit of the entire membership. It means making decisions and taking actions that are not self-serving and solely having the best interests of all of the unit owners in mind. Examples include unbiased vendor selection and not requesting kickbacks, enforcing the association rules and regulations equally for all unit owners, relying on the advice of the professionals working on behalf of the association among many other things. A potential board member must also understand that while they may have a lot of experience from their individual careers that experience may not always correlate with the operation of an association. For this reason, associations hire professionals such as management companies, lawyers, accountants, insurance agents, consultants, etc. to assist them, thereby ensuring all decisions are in the best interests of the association.
Are board members protected legally by the decisions they make? A directors and officers policy typically covers any board member, committee member, volunteer or person acting with permission on behalf of the association. Some board members unfortunately misinterpret this coverage to mean that they can make decisions that they otherwise would not have made if there wasn't a director and officer's policy in place. Either way it is important to consult with the association's insurance agent to have a better understanding of what is covered. As an example in some instances, if there is a desire of a new board to sue the prior board for various reasons and they don't fully understand the terms/exclusions of the policy, the association and the membership could ultimately end up responsible for all legal fees associated with this potential lawsuit scenario.
A potential board member should put thought into what role they want to take and what they can add in terms of value to the board collectively. For instance, if a board member is/was a CPA, they should consider running for the treasurer role to be intimately involved with the finances relating to the association. If a potential board member is/was a lawyer, they should consider joining to provide their expertise in conjunction with the association attorney on various matters. If a potential board member comes from the construction industry and the association is going through various capital projects or is having major maintenance issues, they should consider joining to assist the association maintenance staff, engineer, owner's rep, contractors, etc. People with leadership experience should certainly consider the president position, there is a need for board members that "guide the ship." This is not to say that there isn't a place for unit owners that don't have a specific skill. Boards also need representatives that simply have common sense, are selfless, don't make decisions based on ego and are team players.
Being on a board is just as much about politics as it is about following the definition of a board member as per Florida statute and the board certification classes held by association attorneys. The role is not for the faint-hearted and the title volunteer certainly does not correlate with the expectations and responsibilities set out directly by the law and indirectly by the other unit owners. It requires being able to think on your feet as different things will be thrown your way. Societal changes are also bringing along change to laws that directly impact associations. Florida laws specifically relating to Chapter 718 for condominiums and Chapter 720 for homeowners associations get modified on an annual basis however other state/federal laws affect associations as well. The legalization of medical marijuana, for example, has brought a whole new group of challenges to boards and property management agents on how to deal with the transition. In this case, the board should not only become educated on the topic through the association attorney, they should in turn educate residents as well as enforce the new rules based on the law and best practices. Other examples of mandated issues include the usage of service animals which the law, in some cases, provides for minimal direction at best.
Being a board member also means encountering issues and being knowledgeable about laws enacted years ago that are relevant and impact the association. Examples include Miami-Dade County and Broward County's 40-year building safety inspection program and recertification process; and the need for capital improvement projects such as a new roof, new lobby, corridor renovation, sea wall, etc. These types of projects often come with price tags in the millions of dollars that may be set aside via reserves and require a multiyear special assessment. Completion of these projects is a major responsibility as it requires extensive diligence related to contracts, insurance liability, pricing and a variety of other factors.
It is an honor to be elected and to serve as a volunteer board member of an association. This can be time well spent and can be exceptionally positive for a community. Potential board members should be keenly aware of what their responsibilities are after getting elected and the fiduciary duty that one must uphold.
Regan Marock is director of business development at AKAM On-Site, Inc., a leader in South Florida's residential property management industry. He may be reached at [email protected].
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