Correcting a Past HOA Board’s Mistakes
Sometimes, a new community association Board faces the challenge of correcting a past Board’s mistakes. First of all, don’t point fingers. Everyone makes mistakes, so view this as an opportunity to learn from the past. It’s also important to recognize trends and laws change. Homeowners also change as circumstances evolve over time. Decisions that were right yesterday may be a problem today. The right approach will help you move the association in the appropriate direction.
Look before you leap. It’s important to understand why a previous Board did or didn’t implement a policy. Perhaps change was met with homeowner resistance, funds weren’t available or other reasons why a policy wasn’t changed. Conducting due diligence helps you gain understanding so that you can take the right actions.
Does your change involve legal issues? Some changes require a grandfather clause. Others involve specific wording to comply with federal or state regulations. Your Board may not be aware of or recognize legal issues. Seek the advice of your HOA attorney at the beginning to stay on the right side of the law.
One of the major issues we see in both Knoxville and the Tri-Cities is underfunded budgets and/or reserves. Associations that have an underfunded operating budget often dip into reserves to keep the community afloat—making a bad situation worse. Lack of finances is often at the root of past mistakes. If your Board inherited budget problems, take the time to assess where you are and where you need to be. Rome wasn’t built in a day, but you can set up the path to success. Whether your association is in financial distress or you need to find extra funds for a change, make sure you’re on the right financial track.
Check your governing documents to understand when your HOA Board can make a decision vs. when a homeowner vote is required. If a vote is needed to implement a change, follow the notification and voting process to the letter.
It’s your responsibility as Board members to adapt to the current needs of the community. Revisit decisions made by previous Boards. Keep what is working, and amend what is needed to keep your community thriving. Set your association up for success. It’s what good leaders do.
Wise Property Solutions is a property management company serving East Tennessee with offices in Knoxville, TN and the Tri-Cities, TN-VA. Specializing in Condominium Association Management, Home Owners Association Management, HOA Management and Gated Community Association Management. The firm is East Tennessee’s only Accredited Association Management Company (AAMC®).