Board members FICO score

Started by MarkM19 • 7 replies • 1843 views

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MarkM19 (Texas)
Posts: 65

Posted:

I have recently read several of the different Blogs and what seems to come up often is the fact that many Board members do not handle HOA dollars responsibly. I got to thinking about this and wonder what “HOA Talk” thinks about asking Board Members being required to show their Credit Score when running for a seat on our Board. In our case we have nearly a Million dollar a year budget. If the person who gets elected because they may be popular can’t manage his or her personal finances how can we expect them to manage the HOAs?

Could we make this a mandatory thing that the community requires?

RichardP13 (California)
Posts: 1,767

Posted:

Mark

Having worked in the financial sector, I can tell you the FICO or their credit score is not the indicator you should look at. Many companies will require a CREDIT RETORT and BACKGROUND CHECK as a condition of employment. The credit report itself will show IF they have any outstanding debt, tax lien, collections, judgments, etc. against them.

The problem is, who is going to administer the credit report and background check, the property manager, who maybe should have the same done on them. My credit score is over 800, but that doesn't mean I would be a good Board member. People could have low credit score for a number of reason that may have been out of their control, serious medical issue, divorce, loss of job(s) etc.

If your Association is professionally managed, I would be more worried about them with your money than the Board who really wouldn't control the money on a regular basis. We have a serious issue involving serios dollars with a management company that manges a community that controls our water.

TimB4 (Tennessee)
Posts: 21,047

Posted:

Mark,

I'm not so sure it's the boards actually act irresponsibility but its that they give the perception of irresponsibility due to lack of communication.

BrianB (California)
Posts: 2,820

Posted:

i was thinking the same as Richard... FICO doesn't mean you can handle money, necessarily. Or are good at it.

I know people with great FICO scores who can't make change for a $20, and I know people you could trust to carry a million dollars to your bank through a dark alley who would never score more than minimum.

I would suggest you seek board members based on other characteristics, and set up a transparent accounting system so everyone can see what's going on with the monies at any time.

SureshD
Posts: 268

Posted:

All that is required in most states is to be a member of the association.

You risk discrimination litigation if your bylaws do not require such personal references.

MaryA1 (Arizona)
Posts: 7,043

Posted:

Mark,

Frankly I think a BOD would have a lot of nerve to require a board candidate to show their credit score. This is personal information and really has nothing to do with your ability to be an effective board member. As another poster stated, usually the only qualification stated in the bylaws is that the person be a member of the assn. Some bylaws may also require that the member be current on his assessments and have no outstanding CCR violations. IMO, unless the bylaws give the BOD the authority to state requirements for running for a board position, only what is already stated in the bylaws can apply.

SusanW1 (Michigan)
Posts: 5,202

Posted:

Perhaps you mean that they need to be bonded.

But it any case, I think running a credit check on board members is ridiculous and probably violates their civil rights.

RogerB (Colorado)
Posts: 5,067

Posted:

Quote:

Posted By RichardP13 on 09/05/2010 12:01 PM
Mark ......
......
If your Association is professionally managed, I would be more worried about them with your money than the Board who really wouldn't control the money on a regular basis. We have a serious issue involving serios dollars with a management company that manges a community that controls our water.

Outstanding point Richard. A management company can cost or can save an association $$$$$$$$/year - many not comprehended or known

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