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BOARD BASICS
be best not to have that board member reporting or inspecting for violations at that owner’s unit. In addition, a board member has to remember he/she is running a business, and cannot treat his/her friends (or enemies) differently!
Mistake #9: Not consulting governing documents “Let’s fly by the seat of our pants” is not the motto to be followed by board members. To avoid any other mistakes listed herein, board members should be familiar with the association’s documents. This promotes consistent enforcement of the documents. This first step to avoiding this mistake is to make sure that the Association’s books and records contain a complete set of the association’s governing documents, including a copy of the declaration which was recorded with the County Recorder of Deed’s Office. When the Board is in doubt as to what the documents mean, it should seek the advice of legal counsel. As noted above, obtaining advice from the professionals in advance of acting can save the association money later. Further, in Illinois if the Board of Directors relies on the advice of counsel, even if incorrect, the Board has not breached its fiduciary duty. Carney v. Donley, 261 Ill.App.3d 1002, 633 N.E.2d 1015, 199 Ill. Dec. 219 (2d Dist. 1994). Likewise, if the Board of Directors acts contrary to the advice of counsel, one can argue this is a violation of the Board member’s fiduciary duty.
Mistake #7: Treating owners differently This mistake is similar to mistake number six. Yet, it is different as in mistake number six, a board member is allowing his emotions to control the decisions he makes (or does not make). Whereas, with this mistake, the board member is focused on the actor rather than the act itself. The board should discuss matters based on the situation rather than based on who is involved in the situation. This will lead to a board using better judgment and make a decision that is more reasonable. Have you noticed the theme here? Inconsistency can lead to common mistakes. Inconsistent enforcement can also lead to setting a precedence that was never intended. Though a policy or resolution can be updated or changed by a new board, documenting the policies in writing can provide a record of current and past policies, to avoid claims of inconsistency.
Neglecting To Play By The Rules Mistakes
Mistake #10: Micro managing the Association Finally, not only should the board surround itself with professionals, it should also let the association’s professionals do their jobs. For most board members, this will be the first time that they run a corporation. While a board is not expected to have all of the answers at all times, it is expected to know where to go to get the answers. For this reason, a board should put together a team of key players including a licensed community association manager, an attorney, an accountant, an engineer, an insurance agent and other vendors such as a landscaper, roofer, paver, etc. Each member of the board’s team plays an important role. Yet, how important a player is depends on how much the board will allow the player to do his job. That is, while the board should not sit back and do nothing because an expert is involved, it also must find a way to balance its involvement without limiting the expert’s role. Y
Mistake #8: Not acting as a Board There is a reason that a board consists of several persons. After all, several board members lead to several opinions. Remember there is no “I” in “board”. Therefore, there is no one person controlling a board. The President is an officer of the board and not a dictator. Though the role of president may be that of a leader, there is no additional power associated with the position. unless otherwise stated in the association’s governing documents, the board can act only with the approval of a majority. This mistake can also be made when a board member undermines the decisions made by the majority of the Board. It is okay for individual board members to have their own opinion, or vote against a decision. However, once a decision has been made, the decision of the majority should be respected.
Tom Engblom
Larry Myers
CMCA AMS PCAM
Assistant Regional Account Executive
Vice President/Regional Account Executive
www.carusomanagementgroup.com
779.435.2937 Toll Free 866.800.4656 ext. 7429 larry.myers@ mutualofomahabank.com
312.209.2623 Toll Free 866.800.4656 ext. 7498 tom.engblom@ mutualofomahabank.com
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Member FDIC. Equal Housing Lender
National Corporate Member of Community Associations Institute.
No part of the publication may be reproduced whatsoever without written consent from the publisher. All material herein is copyrighted 2012©.
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