hly Effective Boards

Be Polished and Organized. Have professional-looking

financial and

association records. Do you have a copy of the recorded declaration, all recorded amendments and all plats on file? If not, then you will be scrambling around every time someone asks for a copy and spend hundreds or even thousands

of unnecessary dollars obtaining them. Have your financial records been prepared and updated in accordance with professional accounting standards? Have they been reviewed by an independent CPA no less than every other year (though an annual review is advisable)? If you cannot figure out your statement and the columns do not line up, you need a financial facelift, promptly.

Many unhappy owners start out with trying to obtain and then review records. Unfortunately, those records may be incomplete or disorganized. If you cannot tell at first glance how much money is in the bank, and how much the association owes, this is a good place to start.

Make Records Easily Accessible for Inspection. Records should be obtained easily, in an organized fashion, for a nominal fee. Do you want to start a civil war? Easy. Give everyone a hard time about seeing records they are legally entitled to inspect, make them wait an unreasonable amount of time,

and charge them a high fee. If a smooth and easy procedure is in place, then there is no reason for the board or the manager to even know someone asked. It is a simple administrative procedure, and unless the management company is a one-person shop, even the manger does not have to be involved.

Plan Ahead Financially. The well-run association has a financial plan, a reserve study, a long-range plan and a useful life study.

A budget is adopted for necessary expenses plus a reasonable allocation for reserves. The least

enjoyable meetings anyone can attend are when a special assessment for a large amount has to be levied. This occurs for one of several reasons: the association members were under- assessed for too many years; inadequate reserves were set aside; there is a high percentage of owners who are delinquent; or there is an emergency.

Reserves and capital expenditures, if not fully funded, can at least take the sting out of any additional assessments. Associations are budget based. If contracts are bid judiciously, and reasonable cost savings measures are implemented, then assessments should constitute what it costs to run the property.

It is the failure to save for the future and boards that refuse to increase a budget in order to keep assessments low—knowing full well certain fixed costs have gone up—that can potentially create an explosive device with a timing mechanism.

By following the simple procedures adopted by well-run associations, boards can help create an environment where owners are happy to live and invest.

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