Residential Real Estate
Jul 9, 2024

Common Mistakes HOA Boards Should Avoid

Sponsored Content provided by Dave Orr - CEO, Community Association Management Services

Homeowner’s association (HOA) boards are critical to the success of their communities, ensuring they are safe, well-maintained, and harmonious. However, well-intentioned volunteers new to serving on a community association board of directors may encounter potential pitfalls. Here are some common mistakes that boards should avoid in order to cultivate effective governance and community trust.

1. Not Reading and Following the Governing Documents

Governing documents, such as bylaws, covenants, conditions, and restrictions (CC&Rs), are the foundation of community operations. Board members must adhere to these provisions strictly. Ignoring these parameters can result in legal issues, financial penalties, and loss of community trust. It is imperative that every board member reads, understands, and follows the governing documents to avoid potentially serious consequences. Are you stumped by a question? Refer to the documents first!

2. Working Outside Board and Scope of Authority

Each board member has a defined role and responsibilities. No single member should act on behalf of the entire board without consensus. Actions taken outside the scope of authority, especially those prohibited by governing documents, can lead to significant problems. Board members should avoid having one-on-one meetings with members, vendors, or others that could lead to unauthorized decisions or perceptions of favoritism.

3. Allowing Conflicts of Interest

Board members should avoid situations where personal interests might conflict with their duties to the HOA. Hiring friends or relatives, for instance, can lead to biased decisions and mistrust among community members. Maintaining transparency and objectivity in all board activities is crucial to prevent conflicts of interest. Full disclosure up-front is the only course of action if there is even the slightest perception of a conflict of interest.

4. Inadequate Communication

Effective communication is key to a successful community. Allow owners the opportunity to participate in community meetings, invite inclusion via surveys or polls, and use various channels to disseminate information. Update the membership promptly on important matters and share information before implementing changes that will impact owners financially or otherwise. Proper communication fosters transparency and keeps the community informed and engaged.

5. Not Collecting Assessments and Fees

Timely collection of assessments (sometimes called dues) and fees is vital for the financial health of an HOA. Delayed or inconsistent collection can disrupt financial planning and give the impression of board ambivalence. Ensuring a fair and consistent fee collection process helps maintain the association's operations and financial stability.  In the board member’s role as a fiduciary of the association, following the delinquency policy serves the interest of the community as a whole while exercising common sense when circumstances dictate that reasonable accommodations apply to a situation.

6. Neglecting to Perform an Annual Insurance Review

Insurance coverage is a critical component of risk management for your community. Insufficient coverage can lead to substantial financial burdens in case of unexpected events. Boards should review their insurance policies annually and verify renewals, coverage amounts, and the claims process to ensure adequate protection for the association.

7. Inconsistent Enforcement

Enforcement of rules and regulations should be consistent and impartial. Allowing personal feelings or friendships to influence enforcement decisions can lead to uneven application of rules, causing resentment and disputes within the community. Consistency in enforcement upholds standards and maintains community harmony by observing the rules and restrictions in place and honoring the spirit of the declaration that established the community.

8. Repeating Past Mistakes

Last but not least – learn from your mistakes! Learning from past mistakes is essential for continuous improvement. Regularly reviewing resources, like previous meeting minutes and decisions, helps board members avoid repeating errors. This practice also allows for reflection on what strategies worked and what didn’t, fostering better decision-making processes in the future and ensuring consistency in the association's operation.

In conclusion, serving on a community association board requires a commitment to fairness, transparency, and adherence to governing principles. By avoiding common mistakes, board members can ensure effective governance, maintain community trust, and promote a positive living environment for all residents.

Other Posts from Dave Orr

Ico insights

INSIGHTS

SPONSORS' CONTENT
Elizabethredenbaughheadshot300x300

Strong Families Build Strong Communities—and a Stronger Workforce

Elizabeth Redenbaugh - Coastal Horizons
Mcwhorter 0005

The Ripple Effect of the Ocean Innovation Conference

Heather McWhorter - UNCW Center for Innovation and Entrepreneurship
Img 5694

North Brunswick Chamber of Commerce Recognizes Award Winners and Welcomes New Board Members at Annual Dinner

Thom Kelly - North Brunswick Chamber of Commerce

Trending News

Tech Wilmington: Upcoming Events Calendar

Staff Reports - Aug 5, 2026

Victaulic Looks To Expand Brunswick County Facility

Emma Dill - Aug 7, 2026

Port Takes Part In Chilean Grape Pilot Program, Adds Treatment Capability

Emma Dill - Aug 6, 2026

Pender Board Recommends Denial Of Rezoning For 1,000-home Project

Emma Dill - Aug 5, 2026

Vontier Corp. Acquires Wilmington Software Firm

Cierra Noffke - Aug 6, 2026

In The Current Issue

Small Business Spotlight: Business Blooms Beyond Bouquets

The Busy Bloom is a flower shop with a spin – a creative experience shop located in Wilmington’s Cargo District, one of the owners said....


Local Artists Seek Stronger Support, Space, Coordination To Thrive

Some artists say that while the area's art scene is vibrant, they could use more community support....


Convenience Stores Expand Offerings

Some locally owned convenience stores in Wilmington have morphed into food and beverage destinations, including Bevvy Mart and Front Street...

Book On Business

The 2026 WilmingtonBiz: Book on Business is an annual publication showcasing the Wilmington region as a center of business.

Order Your Copy Today!


Galleries

Videos

2024 Power Breakfast: The Next Season