The Divided Association: What’s a Manager to do?

Imagine this scenario. An association of co-owners elects a Board of Directors to administer their community. Not long afterward, a group of the co-owners grows to disagree with the Board over matters such as community governance, community expenditures and community funding.

Apparently, the group of co-owners is dissatisfied with Board decisions and wishes to make changes.

This group may proceed in trying to remove the Board members and in installing members sympathetic to their cause by:

If any of these scenarios has happened to one of the communities which you manage, you have the dreaded divided association and you may be saying to yourself, “What should I do? Whose side should I stand on? How am I going to settle this down and retain the account?”

These are all valid questions. By focusing on the communicative aspects of the relationship, however, we sometimes find that the divided association can be avoided or that we can help to mend the relationship. Questions to help qualify the concern are as follows:

The first question - Who is the Client?

Answer : Association, Board of Directors, Individual Co-owner, and all of the above.

However, the management contract is with the association. Managers have a responsibility to the association. What is good for the association is a practical place to begin.

• Often, managers work diligently with members of the Board of Directors and may lose sight of what is good for the association as a whole, especially if the Board has it's own agenda such as lowering fees with a “pay later” mentality or focusing on individual Board Members’ needs rather than those of the association.
  
  
• Respect for Board members, Co-owners and the Manager's opinion is essential. The Manager may have to re-focus the Board as to what is in the best interest of the association, such as “pay as we go” funding of reserves versus large assessments when large projects occur.
  
  
• Try to always ask the question, “What is good for the association of co- owners?”

A second question - What is at the heart of the controversy?

Answer - What has the "group of unhappy co-owners been talking about?"

Has the Board raised fees? Does the Board want to defer capital maintenance? Does the Board want to do all of the capital maintenance in one year at a huge additional assessment? Maybe the Board adopted harsh rules and regulations, or removed a service co-owners are accustomed to?

• Communicate with the association members, hopefully before any uprising, or if not, immediately after the issue has registered resistance. Explain clearly in a newsletter, special project letter, or a letter that answers the allegations from the disgruntled group as to why the Board is doing what it has. Hopefully, you will have provided justification for the decision. Be positive and non-argumentative in your response.
  
  
• Call a special meeting to explain the issues and answer association member questions. If the issue is asset replacement/capital projects (roofs, asphalt drives, etc.), money is almost always the reason the members are upset. Explain the options and ask the members how they wish to proceed. Increase funding by allowing additional assessments over a larger period, provided you have time to build the funds, or get a loan from the bank. If the issue is service reduction or governing rules-related, it is suggested that you call a meeting and explain the options, asking the members how they wish to proceed.
  
   
• Potentially difficult issues are large projects, reducing services, raising fees, etc. The Board may wish to set up a committee to help study options, survey the membership, share the workload, etc. An Ad-Hoc Asphalt Road and Drive Committee is a good example. This can allow additional association members to be involved if they wish to serve the association, thereby helping to determine the best option for the association. This option also is a way to share the responsibility and member involvement so that information is disseminated to more members. A Finance Committee is often a tremendous help as more members become aware of the association’s work on the budget.  

A third question may be asked - Was the Board action fair?

Answer - If the Board acted in accordance with the governing documents and the Board expressed their willingness to get members involved in the decision, the results have a greater chance of being perceived as fair to all than if the Board acted outside the scope of the governing documents or singled out one member unjustly.

Has the Board acted reasonably? Do what is logical, ethical and practical for the situation.

Has the Board acted responsibly and in the best interest of the majority of members of the association? The obvious answer should be yes.

Did the Board communicate their intentions? Doing so is an essential step.

It is in everyone's best interest to avoid divided associations so that the time spent by Board members, association members and management is time spent moving the goals of the association forward.

Try communication with the members through newsletters and project letters. Ask members to serve on standing or ad-hoc committees to help the association determine a course of action. (Ad -hoc committee is for a specific issue or time frame and different than a standing committee such as Finance or Architectural.)

Help the Board understand the role of administration for the community that they are charged with. Many controversies are often the result of inexperience on the part of a newly elected Board.

Explain to the Board that you desire to move the association goals forward and help the Board develop and implement the collective goals of the association.

Have meetings with association members: Annual Meetings, Town Hall Meetings, open time on the agenda of the Board meetings. Advise the membership on what is on the general agenda of the association and how achieving those goals is progressing.

Your Keys to Success: Communication, Education for All, & Fair Governance. It’s a simple strategy that works!