Trusting your Professional Service Providers

Homeowners associations are comprised of people from all walks of life, and for that very reason their boards of directors often consist of individuals who bring various levels of knowledge to the administration of the association. Some community associations will elect members to the board of directors based on their ability to offer specific areas of expertise, such as attorneys, accountants, or other trades considered to be of importance to their community. Still other association members will elect board members based more on their dedication to the community and a strong desire to serve their fellow homeowners. While these individuals may not have direct expertise in any particular area, they will often have the ability to expend the time demanded of a board member.

Regardless of the method in electing the board of directors, it is vitally important that the board members recognize that they are volunteers charged with overseeing the operation of what can sometimes be a very large organization consisting of perhaps millions of dollars in assets and affecting the daily lives of a few or hundreds or thousands of individuals living within the community. Their decisions as board members will have a direct impact on the policies of the association, upkeep and appearance of the common areas, and, ultimately, the quality of life and value of everyone’s home in the community.

In addressing their fiduciary duties to the homeowners, board members will inevitably need to retain certain trades to offer advice and perform services, and to carry out the board’s directives. These providers will likely include attorneys, accountants, insurance agents, and often association management agents. Based upon the complexity of the common elements within the community, other providers such as landscapers, pool companies, and various maintenance professionals may also be utilized. It is important that the board recognize that these service providers offer a degree of expertise in their particular area that is not expected of board members, and the board should be willing to thoroughly consider and act upon the advice offered by their professional service providers, even when that advice is not necessarily what the board members want to hear.

Whether trying to save time or money, too, often the board will be tempted to either disregard or not even seek professional advice. Sometimes board members may be so passionate about a certain association activity or issue that they believe they know what is best for the community. How often is the advice of a qualified attorney, insurance agent, community manager, or landscaper ignored (or never sought), leading to substantially increased costs or exposures to the Association? Unfortunately it does happen, such as

• The contractor’s recommendation to spend a little more initially to do a repair correctly, instead of spending substantially more later to redo an inferior job or design.
  
  
• The community manager’s advice regarding a construction defect, based upon their years of experience and likely their having addressed the identical issue in other communities.
  
  
• The association’s attorney trying to guide the board through important decisions relative to legal exposures or collection activities.

These professionals may not always be 100% correct in their advice and recommendations, but their suggestions are based on their vast experience and knowledge, and are always made in the best interest of the association members. Seeking and following this guidance from the professional service providers available to the association will not only reduce a great deal of the board’s angst and effort,, but it will also usually reduce the risk associated with many of the decisions made by the Board. This, in turn, will lead to a more efficiently and productively run organization, and ultimately a better, more cohesive community with higher values for the homeowners.

Mark Southall
PCAM®,  AMS®, CMCA®, COS®, CPM®
President & CEO
Principal Management Group of North Texas
Dallas, TX