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Subject: HOA Engagement
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PaulM30
(B)

Posts:41


02/10/2020 11:49 AM  
I'm the HOA president of a small 15 unit condo building. I have served for 4 years, in the face of absolute disinterest and disengagement from our owners. I'm on the verge of resigning, but am worried that if we can't form a board, a receiver will need to be appointed. I was considering a last ditch, very blunt, communication to our owners to stress the importance of being able to form a full board, but that I am not prepared to continue in the face of disinterest or disengagement from our owners, and that fact that we have many owners with a 0% meeting attendance record. I'm also going to stress that this is particularly true for the 4 units which are owned and rented out.

I'm am debating if this is a good idea, but am not sure what else to do. We have several owners who have moved from apartment buildings, and seem to believe that the HOA board are the equivalent of their landlord or building manager, and will regularly complain directly of minor issues rather than adressing them to our property management company. We have had multiple complaints of poor service from our management company, so the board sent an email to ask for volunteers to form a committee to help with research, which was met with not a single respondent.

So, any advice on what to do here? I'm stuck between a rock and hard place, where I don't want to harm my investment, but I can't carry on as president while maintaining the status quo.
SheliaH
(Indiana)

Posts:3465


02/10/2020 12:13 PM  
I like your first option - write a STRONGLY worded letter asking for volunteers - you can help with the transition, but someone else is going to have to step up and take over. Give them a deadline on which you will call a homeowner's meeting. If no one shows up or steps up, the last thing you will do as HOA president is to talk to the association attorney about filing for receivership.

Be sure to tell them what receivership is and what it means:

* the court will appoint someone to run the association. That person will have to be paid for his/her services, and receivers can cost several hundred dollars an hour.

* the receiver will only answer to the court, not the homeowners and his/her primary responsibility will be to pay the bills. If that means assessments will increase significantly to cover the court costs, attorneys fees, receiver's fee, routine monthly expenses AND funding reserves, so be it.

* homeowners will not have ANY say on how the association is run because the receiver only answers to the board, not them. If they think they can sell and get out from under this, it's possible, but they will likely sell at a significant loss because no one wants to buy into a building or community where the homeowners don't get a say.

* when you ask for volunteers, that means the off-site owners as well. It's not the HOA's responsibility that they make money and manage their property for them - the HOA property manager is not the same as a dirt-cheap property manager for private investor-owners.

Moreover, they AND the new homeowners need to stop acting as if the association (and the property manager working for it) is an el-cheapo property manager for investor owners and a landlord for everyone else. They are HOMEOWNERS and even though this is a condo building, all the homeowners have a responsibility to act as such. If they don't like it, sell for whatever they can get and buy a detached single-family home where they can do what they like. Ditto for the investor-owners - if doing the maintenance themselves means cutting into their profit margin, oh, well

It may be people still won't care, so you need to be prepared to pull the trigger - you might want to start by having a chat with the association attorney to see what's required and how much it'll cost. Put that in your letter as well.

You don't say if you have two or three other people (allegedly) serving with you - if so, it's time to call them out as well. Every board member needs to be put in charge of something - how much work it will require will depend on what the task is and how good they are at managing their time and working a project from start to finish. If they don't know how to do that, there are management books in bookstores (there are a few left!) or the library they can get and take the time to learn.

DeidreB
(Virginia)

Posts:99


02/10/2020 12:20 PM  
Excellent advice by Sheila.

In addition, while you draft your letter I would get to know the owners better through any means necessary to see if you can identify and "recruit" the best candidates to run. Of those not serving, some are certainly better suited than others. It would be nice if you could coax them to run/serve instead of accidentally getting someone who may make serving harder.

Good luck!
AugustinD


Posts:3934


02/10/2020 12:23 PM  
I agree with Shelia. Possibly shorten up her bullet points and yell about what the cost could be. Maybe attach a few links at the bottom of the letter that report on the effects of receivership, like:
https://www.latimes.com/la-xpm-2012-sep-23-la-fi-associations-20120923-story.html
https://www.echo-ca.org/article/receivership-what-happens-when-association-fails
https://pocketsense.com/happens-condo-placed-receivership-8795348.html
AugustinD


Posts:3934


02/10/2020 12:24 PM  
Also, if receivership looks likely, then maybe try to sell your condo before you leave the presidency.
PaulM30
(B)

Posts:41


02/10/2020 12:31 PM  
Posted By SheliaH on 02/10/2020 12:13 PM
I like your first option - write a STRONGLY worded letter asking for volunteers - you can help with the transition, but someone else is going to have to step up and take over. Give them a deadline on which you will call a homeowner's meeting. If no one shows up or steps up, the last thing you will do as HOA president is to talk to the association attorney about filing for receivership.

Be sure to tell them what receivership is and what it means:

* the court will appoint someone to run the association. That person will have to be paid for his/her services, and receivers can cost several hundred dollars an hour.

* the receiver will only answer to the court, not the homeowners and his/her primary responsibility will be to pay the bills. If that means assessments will increase significantly to cover the court costs, attorneys fees, receiver's fee, routine monthly expenses AND funding reserves, so be it.

* homeowners will not have ANY say on how the association is run because the receiver only answers to the board, not them. If they think they can sell and get out from under this, it's possible, but they will likely sell at a significant loss because no one wants to buy into a building or community where the homeowners don't get a say.

* when you ask for volunteers, that means the off-site owners as well. It's not the HOA's responsibility that they make money and manage their property for them - the HOA property manager is not the same as a dirt-cheap property manager for private investor-owners.

Moreover, they AND the new homeowners need to stop acting as if the association (and the property manager working for it) is an el-cheapo property manager for investor owners and a landlord for everyone else. They are HOMEOWNERS and even though this is a condo building, all the homeowners have a responsibility to act as such. If they don't like it, sell for whatever they can get and buy a detached single-family home where they can do what they like. Ditto for the investor-owners - if doing the maintenance themselves means cutting into their profit margin, oh, well

It may be people still won't care, so you need to be prepared to pull the trigger - you might want to start by having a chat with the association attorney to see what's required and how much it'll cost. Put that in your letter as well.

You don't say if you have two or three other people (allegedly) serving with you - if so, it's time to call them out as well. Every board member needs to be put in charge of something - how much work it will require will depend on what the task is and how good they are at managing their time and working a project from start to finish. If they don't know how to do that, there are management books in bookstores (there are a few left!) or the library they can get and take the time to learn.





thanks, I might take some of these points for my letter!

We do have two other board members...one of them is great, she takes on just as much work as I do. she used to live here, but moved out and rents her unit but has always been very engaged and has been stuck on teh board as long as I have. The other lives in Texas and his son lives in the unit. He is a nice guy, and will attend calls and give his input, but basically he was the only person who was willing to do it. everyone else we asked, declined.

The reason I'm on the fence is that we're likely going to want to sell this year, and I don't want to do anything to cause people to sell up and potentially depress prices, but at the same time, I don't want to leave my fellow board members with an even bigger problem. The smart thing to do would be to not say anything and just leave, but it's almost a matter of principle for me now.

PaulM30
(B)

Posts:41


02/10/2020 12:34 PM  
This is what I have so far...

The recent muted response to the board’s request for assistance has compelled me to write to you all with my thoughts on our community.

Along with other board members, I have spent many dozens of hours over the past 4 years on a volunteer basis to ensure that our building continues to run as efficiently as possible, especially given our challenges in finding reliable property management services, and several unexpected major projects and repairs. On several occasions I have carried out repairs and small jobs to save HOA resources, and coordinated with vendors during emergencies. A standard term is 2 years, but I agreed to continue my term for the sake of continuity and stability. I do not have, and never have had, any active desire to serve on an HOA board, but felt that it was ‘my turn’ when the previous President’s term expired.

Last week, the board asked for assistance from our members (i.e. time and effort) in easing our administrative burden by assisting with a special short term project. As is in keeping with the level of engagement I have come to expect from our ownership, this request was met with almost universal indifference and lack of engagement. In the 4 annual meetings I have attended, there are several owners who have a 0% attendance record, and some who have never responded to an email or a request for input in the form of a proxy vote form. This is particularly true for our owners who choose to use their units as commercial rentals, who are especially disengaged from the community they have chosen to invest in. To be completely frank, I do not see why the present board should continue to expend time and effort to oversee others investment on their behalf.

The HOA is a corporation which governs the common assets of our community, and generally seeks to provide structure and stability to our building. Serving on the HOA board is 100% voluntary, but membership of the HOA is conferred through ownership of a property within the community. In other words, HOA membership is not optional if you own a property in our building. Throughout my time serving on the board of our HOA, it has become more and more apparent to me that many of our owners have a fundamental misunderstanding of the role of an HOA board, and their own role within the community. The HOA board are not your landlord, nor are they proxy property managers, nor a property management service for investors. We are all HOA members. Board members have no requirement to serve beyond their elected term, or even make themselves available beyond formal meetings. It should not be assumed that the board will continue to serve in the face of apathy, and in several cases, rudeness and abuse.

When an HOA is unable to form a board, the corporation can be in a position where it can no longer continue to operate as a going concern, and the association is either dissolved, or a receiver will be appointed by court order. When a receiver is appointed, this cost is assessed to HOA members, with no defined time limit, and is an extremely expensive proposition. The HOA members no longer have control of the association, and all decisions are made by an outside 3rd party. The most common reason for this drastic measure, is community apathy and disengagement leading to the inability to form a board. We are fast approaching a point where disengagement simply isn’t an option, and everyone in our community will need to act as homeowners if our building is to continue to be viable. I would like to stress that this applies to both on-site and off-site owners.

Our next annual meeting is tentatively scheduled for May. It is critical that we see an increased level of engagement before then.

Sincerely
AugustinD


Posts:3934


02/10/2020 12:40 PM  
I think that's a fine, well-written letter. Send it. Expect it to be ignored, consistent with past practice. Send one more super short letter about the costs of receivership, then be done with it.
CathyA3
(Ohio)

Posts:1245


02/10/2020 2:01 PM  
Just one comment on the letter, about style rather than content.

If the owners are as apathetic as you say, it's unlikely that they will read a lengthy, densely worded letter. Research suggests that you will have about 3-5 minutes of a person's attention. I recommend:

* Your message should be concise and quickly digestible, with plenty of white space.

* The message should be in headers or headlines, because that's probably all that people will read.

* Put the most important stuff first in case you lose 'em before the end.

* I usually use a format like this:

-----***------

Header 1 (BOLD and Larger Font) Important Point 1 and Significance
(Supporting info)

Header 2 (BOLD and Larger Font) Important Point 2 and Significance
(Supporting info)

Header 3 (BOLD and Larger Font) Important Point 3 and Significance
(Supporting info)

Next Steps (if appropriate)

For Questions, contact...

-----***------

And try to keep it to three headers. People think in threes and seem to retain info better if that's what you give them.



And a minor quibble about Sheila's excellent summary of receivership. According to our attorney, if you're in receivership there is no board. The receiver is answerable to the court and does pretty much as he sees fit. So no homeowners will have any input into what happens.

The good news is that homeowners see the light once they start paying for the receiver's work (a receiver can earn more per hour than an attorney). You usually get volunteers pretty quickly after a month or two.
AugustinD


Posts:3934


02/10/2020 2:26 PM  
Posted By SheliaH on 02/10/2020 12:13 PM
* homeowners will not have ANY say on how the association is run because the receiver only answers to the board, not them.
Post-o? I agree with CathyA3 and what SheliaH said earlier in her post: The receiver answers only to the court.
SheliaH
(Indiana)

Posts:3465


02/10/2020 3:08 PM  
Yeah, that part about the receiver being responsible only to the board was a typo - thanks everyone for the catch!

Several years ago, one of our now deceased presidents had to write a similar letter and we did get two board members out of it. One was a former board member who was a nice lady, but her attendance aboard meeting vs was truly messy, partly because her husband was ill and became our meetings were the same time as her church choir's weekly rehearsal we ended up saying we understand about your husband, but you know how these are scheduled, so can the choir miss you at least once a month? If worked and she really improve her attendance. Sadly she had to quit again(this time for good) because her husband took a turn for the worst.
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