Attorneys and community association managers can be a godsend for the board of a co-op, condominium or HOA. Most boards consist of volunteers who usually have quite busy external lives themselves, so having an experienced professional on the team for advice, guidance, and enforcement of policy can be a huge help.
But even so, it’s the board that is elected by residents to uphold their community’s best interests, and the board that is accountable for major decisions. Over-reliance on third parties such as managers and attorneys can sometimes lead to internal issues, especially – but not only – if those third parties are not acting in good faith. That’s why it’s imperative for board members to understand when to delegate and handle things internally, as well as how to identify when that trusted adviser may be overstepping his or her bounds. A board that hands over the keys to its kingdom to an unelected party is courting trouble – and the wrath of its constituents.
Know Your Role
“A board needs to make sure that it has all of the information necessary in order to have productive discussions and make proper decisions,” says Pamela Lytle, manager of Winnetka Mews Condominium Association in Winnetka, Illinois. “I believe that the best boards use their professionals – whether manager or attorney, accountant or engineer, etc. – liberally, and that a liberal use will shield the board from liability.”
To be clear, however, a board should think of itself as the primary decision-maker on all association matters. Any advice should be evaluated on its merits – not followed blindly. “Unless the management contract or decision by the board expressly gives a manager authority to take certain actions, the manager should only carry out those decisions made by the board,” Lyle continues. “Managers cannot, for example, grant rules exceptions or hire contractors. If a board should observe a pattern of behavior that concerns them, but they think that the manager does a good job otherwise, then they should address the issue directly with the manager in attempt to preserve the relationship. If the manager continues to behave in a problematic fashion, then the board should strongly consider asking the management company to replace that individual.”
While the personalities of individual board members may occasionally clash with that of the manager, the real measure of management performance is how they work within the greater association. “If the association has contentious meetings with angry owners, a manager who can de-escalate conflict would be an asset,” notes Lytle “If the association is struggling financially, a manager who is particularly skilled at budgeting and/or implementing creative ways to raise funds outside of assessments would be appreciated by any board. If the association finds itself considering a lengthy costly lawsuit, they would certainly want a litigator with an impressive track record. If boards have a clear idea what their needs are, it should be obvious when those needs are not being met. Occasionally, boards have to move on – even when they like their professionals as people – because it is in their best interests as fiduciaries.”