Board Training – Presentation Outline

September 6, 2017

Presented by: Jennifer Bishop with FirstService Residential

OBJECTIVES

A summary of this Board Training, an overview of key board roles, activities and responsibilities; designed to help

new board members as well as those who want to improve their procedures.

Roles & Responsibilities

Meeting types & purposes

Board Culture, Governance & Building Community

ASSOCIATION TEAM

FirstService MISSION STATEMENT

Deliver exceptional service and solutions that enhance the value of every property and the lifestyle of every resi-dent in the communities we manage.

Does your association have one?

A mission statement can provide the framework and context to help guide the board’s strategies and actions by spelling out the association's overall goals.

See sample Mission Statement and Code of Conduct in packet

SERVICE STANDARDS

Consider creating service standards or a code of conduct.

FirstService Service Standards

We respond to all communication by the end of the next business day. When a resolution cannot be provided immediately, we provide a clear set of expectations and a timeline.

Correspondence and verbal interactions are always professional, accurate, clear, and grammatically correct.

We show respect and appreciation for our customers and put them first in everything we do while recognizing the impact our actions have on their homes and lifestyles.

We seek honest and timely feedback on how to continuously improve the quality of our service and ourselves.

BOARD OF DIRECTORS RESPONSIBILITY

Make sound financial decisions - It’s up to community leaders to make sure all dues and assess-ments are paid on time. If individual homeowners have hardship situations, they should be provided assistance to find arrangements to help them meet their financial commitments.

Review and approve - Thoroughly review all financial statements, review and approve bids, approve special projects, and bind association into contracts.

Fulfill the association’s chartered purpose - Be well-versed about the community’s governing doc-uments, applicable laws and regulations. Stay up-to-date on all revisions and changes.

Enforce the association's legal documents - Be fair, reasonable and consistent.

Satisfy - State Statute requirements (if applicable) and any other applicable laws.

Act in the best interests of the entire association - HOA leaders and property management team members are obligated to lead operations and uphold fiduciary duties to protect the community’s val-ue and lifestyle. They must make decisions in the best interests of the association, and utilize best practices and proven solutions to help achieve the association’s goals and vision.

Be transparent - Homeowners are entitled to receive copies of all appropriate records and docu-ments upon request. Association leaders should frequently communicate to members - after all, en-gaged residents create stronger, happier communities.

Emails

Flyers

Newsletters

Website

Build community - A focus on creating fun, educational, social and/or entertaining events can build friendships, strengthen loyalty and foster a sense of neighborliness, community-wide. As a bonus, it will also fortify the associate as a whole.

FIDUCIARY DUTY

In performing the duties of a director, a director is entitled to rely on information provided by:

A reliable and competent board member

A consultant or other professional

A qualified committee member

BOARD OF DIRECTORS ROLES

Typical association boards will have:

President. This person leads and manages the board.

Vice President. This person serves in the leadership role when the President is absent.

Secretary. This person is charged with maintaining records, acting as an association historian and protecting the association from liability.

Treasurer. This person’s focus is the association’s financial stability.

Some smaller boards one person acts as both Secretary and Treasurer

Member at Large. The purpose of this role is to act as a tie-breaker in votes and may have addi-tional responsibilities if the board is dealing with a lot of projects.

Refer to “Board Basics: The Essential Five People on Your Association Board” in packet for more detailed information about each role

CHARACTERISTICS OF A STRONG BOARD

Function like a team

No one board member has greater authority than another

Policies, procedures, rules, and regulations are consistently enforced

Decisions are based on facts, not emotions or assumptions

Board members hold themselves and each other accountable

CONFLICT OF INTEREST

Board member has an interest that could compromise the duty of loyalty

Duty of loyalty requires board members to act honestly and be guided in decision making by primary allegiance to the association

“Interested” board member may not serve own interest except to extent coincides with best interests of the association

Refer to “Recognizing and Preventing Conflicts of Interest” in packet STAYING OUT OF TROUBLE

Comply with conflict of interest policy and any other board policies

Document any conflicts in minutes

Use independent advisors/consultants as professional advice is needed

Ensure accuracy of financial statements

If in doubt, consider how enforcement agents, aggressive owners or media staff would characterize the events

BUILDING A SUCCESSFUL BOARD CULTURE

One of the greatest challenges your board and community will face is reconciling the thoughts, ideas, & per-ceptions of each individual Director & the owners into a single management plan supported by all.

SUCCESSFUL BOARD CULTURE

Shape association objectives to reward the community

Mutual respect and courtesy

Work in a climate of trust, candor and willingness to openly share with each other

Give uniform direction to those implementing policy - “speaking with one voice”

Board sets policies & directives together

No single board members directs staff or vendors

Other owners approaching individual directors “Thank you, but that’s a topic for the board to discuss”

Implement policy-drive governance

POLICY-DRIVEN GOVERNANCE

Defined written strategies to develop the business plan (governance NOT management)

Implemented by professional management

Successful & positive board transition

Clearly defined governance structure for the owners, management and committees

Set policies for the future:

Fee waiver

Fine waiver

Neighbor complaint

Architectural features

EMPOWERING COMITTEES

Involve the community by forming committees

Adopt a charter

Appoint a board liaison

Provide a budget if applicable

Involve your committees

MAKE VOLUNTEERS ACCOUNTABLE

Provide deadlines

Voice expectations

Be honest about time commitment

Articulate the importance

If they don’t perform - ask them to step aside

CELEBRATE THE OUTCOME!

No matter the outcome …. celebrate!

Recognize ALL volunteers

Give plaques, certificates or a unique gift

Reward owners with a sense of “community”

TIPS FOR BEING A SUCCESSFUL DIRECTOR

Reduce resistance and defenses in yourself

Reduce resistance and defenses in others

Use active listening skills

Exhibit respect/empathy/understanding

Use eye contact

Do your homework - review agenda and materials

BOARD MEETINGS

Three types:

1. Board Meetings - Open to membership 2. Annual Meetings - Required by state law

Conduct elections

Present financial information

Committee reports

Address business required by the governing documents

Build sense of community

3. Special Meetings - Called to handle specific concerns, suggestions or to discuss problems that arise between routine meetings

Provides a forum for homeowners to discuss particular issue/project

Build consensus around particular issue/project

Present information to homeowners CONDUCTING A BOARD MEETING

Quorum of Directors - a simple majority to hold a meeting and conduct business

Use parliamentary procedure (Robert’s Rules of Order are most prevalent)

Decide issues through a motion, a second and a vote

No second to a motion means the item will not be discussed

Follow the agenda

Discuss one subject at a time

Give each board member a chance to speak

Speak only on the issue being discussed

Keep them orderly, fair and productive Refer to “How to Run an Effective Board Meeting,” and sample Agenda and Minutes in packet OPEN FORUM

Board President should conduct forum

Let each homeowner speak (maximum time of 3 minutes or 20 total is typical)

Keep comments orderly, brief and focused

Encourage owners with maintenance issues to call management company for immediate re-sponse

Tell each owner what steps are planned to resolve concern

OPEN MEETING REQUIREMENT

Per State Statutes, Board Meetings must be open to all members to attend

Does NOT automatically permit members to participate in discussions or votes

Homeowners should participate during the Open Forum

Establish clear guidelines

After open forum, members not serving on the board can stay (unless it’s a closed meet-ing), but may not participate unless invited to do so by the board.

CLOSED MEETINGS

The board is only permitted to hold closed session meetings to discuss:

Litigation (or potential litigation)

Violations

Collections

Personnel Matters

Closed meetings protect the privacy of members

Quorum of board members gathering to discuss the business of the association is considered a board meeting

MEETING OVERVIEW

Unfinished Business

New Business

Motion to Adjourn

MAINTAINING CONTROL AND FOCUS

If homeowners interject a comment, question or complaint about an issue under discussion by

the Board, the presider should amicably, but firmly, advise the owners that while they are wel-

come to attend and observe the meeting, they are not Board members and are therefore not enti-

tled to participate in the meeting.

Stay on track. Use the agenda as the guide to the discussion, informally allocating a specific

amount of time to each item on the agenda.

If discussion veers off course, the presider should guide the discussion back to the agenda item

at issue.

If a discussion is going too far “into the weeds,” the presider should “pull it back on track.”

If discussion is becoming circular or a decision seems to hinge on information the Board does not

have, bring the discussion to a close.

BOARD MEETING MINUTES

Keep them simple - see sample

Legal record of the association - review them closely

MAINTAIN THE ASSET

It is the Boards Primary responsibility to Maintain the Asset…….your community!

Nowhere in your HOA Documents does it state that a board has the responsibility to keep assessments low,

or even comparatively low to other associations. This is a typical misunderstanding when Boards begin con-

fusing legal responsibilities to political or personal wishes.

The Board is responsible to Preserve, Protect, Maintain and Enhance the Association, even if that means

increasing the annual dues or implementing a special Assessment.

Additional documents to reference in your packet: “Community Association Terms You Should Know: and

“Roberts Rules Cheat Sheet”.

Should Contain: Should NOT Contain:

Type of meeting, date, time & location Open forum comments

Attendees (board members) names Personal comments made during meeting

Approval/correction of previous minutes Full discussion details

Officer & Committee reports

Motions and outcomes

Adjournment time

Our Mission and Values – Foundations of Service Excellence

Across our organization, every member of our team shares a unified commitment to service – part of our mission to deliver

exceptional service and solutions that add value and enhance the lifestyles of every property and resident we serve. Our goal is to

make a difference, every day, for those in our care, and we have become the HOA management industry leader by adhering to the

values upon which our company was founded four decades ago.

Mission Deliver exceptional service and solutions that enhance the value of every property and the lifestyle of every resident in the

communities we manage.

Values

Our

We take pride in serving each and every one of our communities. Whether it’s opening a door with a friendly smile or tackling a problem, being genuinely helpful is what defines us.

We are passionate about being the best at what we do. By attracting, training and retaining great people, we set the standard for service and professionalism in our industry.

Our clients trust us to do what’s best for their community. We are guided by our ethics and clients’ Interests in everything we do.

Each of us is accountable. When facing any challenge, we see it through to resolution with perseverance, integrity and open communication.

We learn from our experiences. We are open-minded, collaborative and continuously looking for ways to improve.

Relationships based on respect, trust and effective communication are the cornerstone of our success.

Our mission:

To be a respectful community of excellence building economic value for homeowners and creating a foundation for a high quality of life.

We serve the broad interests of the community by:

Effective long term planning to protect and enhance our property and provide sound, prudent finan-

cial management

Fostering a safe and secure environment

Selecting and evaluating performance of service providers

Encouraging community involvement

Communicating openly and affirmatively with the community and its service providers

ABC COMMUNITY ASSOCIATION

Mission Statement

Adopted by ABC COMMUNITY ASSOCIATION Board of Directors on DATE

Members of the ABC COMMUNTY ASSOCIATION Board of Directors have adopted this “Code of Conduct & Eth-ics” (Code) to govern the conduct of the Board of Directors to ensure that its business is conducted with honesty and integrity. Board members are expected to act in accordance with the highest personal and ethical standards and comply with all applicable laws, regulations, rules and association policies.

This Code governs the conduct of the Board’s work and each Board member should become familiar with its provi-sions. The requirements of this Code are mandatory and the following rules of conduct should be observed in all activities of the Board:

Board members must represent, with unconflicted loyalty, the interests of the Association membership

as a whole. This accountability supersedes any conflicting loyalty such as that to advocacy or special interest groups, membership on other Boards or organizations and/or the personal interests of any Board member acting as an individual Homeowner.

Board members must avoid any conflict of interest with respect to their fiduciary responsibility. A conflict

of interest occurs when a Board member’s personal or financial interest, direct or indirect, interferes or appears to interfere with the interests of the Association or adversely affects the Board member’s obli-gation to exercise his/her best judgment when considering the interests of the Association. For example, the supplying of goods or services to the Association by a Board member, his/her business affiliate or by any member of his/her immediate family must be on customary and reasonable business terms and subject to the same procedures and processes as other suppliers or providers.

The ABC COMMUNITY ASSOCIATION Board of Directors is committed to dealing fairly with its ven-

dors, Management Company and Homeowners. No Board member may take unfair advantage of any-one through manipulation, concealment, abuse of confidential information, misrepresentation of material facts or any other intentional unfair practice. There must be no self-dealing or any conduct of private business or personal services between Board members and the Association except as procedurally controlled to assure openness, competitive opportunity, and equal access to "inside" information.

Board members must protect the Association’s assets that are under their control and ensure their right-

ful use. All such assets must be used only for legitimate business purposes.

Board members must not use their positions to obtain for themselves, family members, or close associ-

ates, preferential treatment or consideration as it relates to services provided, contractual agreements, Association rules and regulations, or any other governing documents or principles of the Association.

Should a Board member be considered for employment by the Association’s Management Company,

he/she must temporarily withdraw from Board deliberations, voting, and access to applicable Board in-formation.

Board members may not attempt to exercise individual authority over the Board of Directors, Manage-

ment Company staff, or other Homeowners except as explicitly set forth in Board by-laws, rules and reg-ulations, and policies.

Board members must protect the privacy and confidentiality of Homeowner information. No Board

member will access, use or disclose Homeowner records or reports or disclose any information about Homeowner communications unless required to do so by law.

A violation of this Code, including failure to report a known or suspected violation, may result in discipli-nary measures against the offender. Such measures may include censure or dismissal from the Board. Violations of law or regulations may be reported to legal or regulatory authorities for further action.

ACKNOWLEDGEMENT

Once each year, or upon any revision of this Code, every Board member must acknowledge and certify (as follows) stating the Board member’s understanding of the Code’s requirements and agreement to comply. New Board mem-bers must sign the written acknowledgement at the time service begins.

I, ___________________________________, acknowledge receipt of and understanding of the “Code of Conduct and Ethics of the ABC COMMUNITY ASSOCIATION Board of Directors” and agree to comply with its provisions as a member of the Board of Directors on this date__________________.

ABC COMMUNITY ASSOCIATION

Board Member - Code of Conduct & Ethics

Member’s Code of Conduct for HOA Meetings

The Association conducts annual meeting of Members, regular meetings of the Board

of Directors, and committee meetings as necessary.

The Board welcomes the presence of all Members at these meeting however, it is es-

sential for the efficient and effective transaction of Association business at these

meetings that all Members of the Association conduct themselves in a businesslike,

ethical and appropriate manner that serves the best interests of the Association as a

whole.

All Members are expected to adhere to the following Code of Conduct using any means

available under the governing documents of state law. This Code of Conduct shall apply

to all meetings.

1. Members must maintain decorum, sit quietly, and refrain from speaking until

recognized by the meeting chair.

2. Members must not interrupt anyone who validly has the floor, or otherwise

disrupt the meeting.

3. When speaking, members must refrain from engaging in personal oral attacks

on either Board Members or fellow Association Members.

4. Members must address all remarks to the meeting chair.

5. Members must confine their comments to things germane to the agenda

item being discussed.

6. Members should not speak for a second time until everyone who wants to

speak has been given a chance to speak once.

7. Members must at all times behave with common courtesy and civility, and re-

frain from the use of abusive, rude, threatening, or crude language.

8. Members should not speak once the open session is over allowing the Board

Members to conduct their business meeting without interruption.

BOARD BASICS: The Essential Five People on Your Association Board

It takes a lot to build a great community. You need committed residents, a dedicated board of directors and a clear understanding of everybody’s roles and responsibilities.

At its best, your community association board will offer a complete vision for proper stewardship of the community. But its responsibilities go beyond that. In a practical, hands-on sense, the board is tasked with protecting the interests of the association, maintaining the common areas of the com-munity, and enhancing the living experience for all residents. To make this happen, goals must be set, governing documents must be followed and meetings must be conducted.

Yet the underpinnings of your board will be the people who are part of it. Understanding their roles and responsibilities will help make your board more effective – and your community a more enjoya-ble place to live. Let’s start with the typical five essential people on your HOA board:

PRESIDENT

As an elected representative of the association, the president must act democratically, as their role is very similar to that of a town mayor. The president’s responsibilities in-clude important procedural roles as well as essential leadership functions. The presi-dent is required to fulfill many different roles, but their primary role is to be a leader. Sometimes this requires setting aside personal roles such as neighbor or friend in order to do what is right for the association. As this can feel unpleasant and awkward at times, explaining this position to friends and neighbors will hopefully get them to un-derstand that the president is entrusted to make decisions based on what’s best for the overall community.

Most common responsibilities of a president:

Strong, confident leader. Confidence comes with knowledge. HOA presidents must be familiar with the governing documents and promote compliance in all regards. They are called upon to lead discussions based on a number of topics and therefore must understand the param-eters within which the association can be most effective. The president is perceived as the community expert so they spend a lot of time (especially up front) studying the governing documents to best address each issue.

Facilitate meetings. During meetings, the president maintains order, proposes questions, calls votes, announces outcomes and recognizes those who are about to speak on the floor. The president also calls the meeting to order, announces the agenda and ensures that everyone adheres to it. At times, meetings can turn into heated debates, so the president must take control while giving everyone the opportunity to express their opinion, it can be a delicate balance. It is the president’s responsibility to ensure meetings are productive and efficient.

Liaison between association and property manager. The president is the liaison between your property management company and the association. He or she must understand the full scope of the manager’s responsibilities and have frequent communication to promote success and ensure the contractual obligations are being met. When speak-ing on behalf of the association, the president’s decisions must be consistent with the board and they must always report back to the board with the content of these communications.

Oversees and advocates for volunteers. There can be circumstances that prevent a board from effectively handling the workload. In this case, associations can create committees to efficiently share the burden. The president may appoint committees if dictated by the bylaws and help the committee to understand their tasks. Energy, leadership and vision can be instrumental in inciting support for the objectives your community wants to achieve. It is in the president’s best interest to help develop volunteers’ skills as team members to continue making people want to volunteer their valuable time on the board and its committees.

Works with professional partners. There are times when the board’s abilities are limited and the need arises to contract professional services such as an attorney or archi-tect. The president approves and enters into agreements with professional service providers.

Collaborate. It’s typically not a good idea to make unilateral decisions, even though it might be the quickest means to an end-result. Operating on democratic principles by seeking board input and approvals eliminate residents’ questioning true intentions and person-al agendas. The president works closely with the treasurer to prepare the operating budget and ensure the association adheres to the associations spending limitations and guidelines.

NOTE…….A good president assists in defining and prioritizing the association’s goals, which in turn, helps to direct the board’s efforts and contributes to the success and quality of life in the community.

VICE PRESIDENT

The vice president shares many of the responsibilities as the president and serves in the leadership capacity when the president is absent. This individu-al is tasked with helping to maintain order during parliamentary procedures, keeping the flow of business moving efficiently and acting as a knowledgea-ble source when it comes to the rules of the association. The vice president should stay informed about all association businesses so that he or she is prepared to facilitate a meeting in an emergency absence.

SECRETARY

You can think of this person as the association historian. The secretary’s role is to record all of the actions of the board so they can be referenced later. This ensures clarity – imagine how often you’ve had a conversation with an-other party, only to find there were two different interpre-tations of the outcome after the fact. Now multiply that by every member of your association, and you understand how important good records are. The secretary’s functions eliminate those “Oh, I thought you meant...” scenarios by keeping accurate minutes during meetings and acting as the custodian of all records. The secretary will also sign the minutes of all meetings and other important community documents. Although the specific tasks are typically spelled out in a community’s bylaws, here are the main functions of an association secretary:

Meeting Minutes. This may not sound like an important task, but Meeting Minutes are a big deal as they summarize any motions made and all actions taken. During all formal association meetings, the board secretary must carefully and accurately note three key

things: 1.) All actions of the association; 2.) Reasons behind each action; and 3.) Every board member’s vote on each action.

Record Keeping. The secretary is responsible for maintaining a record of all board meetings and ensuring all official association documents are kept in a manner that complies with local laws and regulations. They are also accountable for ensuring access to these documents and meeting minutes by homeowners and authorized representatives. Some of the documents include: governing documents, bylaws, articles of incorporation, declaration of covenants, and vendor contracts.

Legal Concerns. Being the board secretary can sometimes feel like being a notary: they act as a witness when essential documents need signatures and they affix the corporate seal when required. They will also find themselves filing requisite forms with the appropriate govern-ment entities.

Board Elections. In accordance to the governing documents and applicable laws, the secretary coordinates the distribution and collection of ballots and proxies during the Board election process.

Communications. The association’s secretary coordinates the preparation and distribution of HOA meeting announcements and minutes according to the governing documents and pur-suant to applicable laws. The secretary also facilitates the communication of correspond-ence to the members of the association.

Additional Tasks. Every association is different and in some cases, additional tasks might be required of the board secretary. This could include typing documents, mailing materials, proofreading correspondence, drafting letters, and purging files.

TREASURER

The effectiveness of your board is dictated largely by your budget. This makes the treasurer’s role essential. He or she is responsible for maintaining the finances and ensuring financial growth. Look to the treasurer to submit financial records in the case of an audit, and to authorize any dis-bursement of funds. The treasurer is also the primary check signer for community payables. Every board member serves many important leadership functions, but it is essential that all board members are congruent in their understanding of the roles and responsibilities of the treasurer.

The treasurer has a voice. Boards are made up of different people, all with different priorities. Maybe it’s safety. Maybe it’s quality of life. Maybe it’s compliance. But for your treasurer, the main priority is financial health. This person must always be the voice for financial sta-bility in your association. As such, he or she will function as the liaison to the auditor, the manager or the management company, the financing committee, the accountants and bookkeepers, the bankers, the reserve specialists, the investment advisors and more.

The treasurer is looking at an association’s long-term financial health. Though your treasurer may serve a variety of functions, his or her primary duties will include: the development and ongoing review of the annual operating budget; overseeing the association’s reserve funding plan; investment of the association’s funds and collection of assessments. The treasurer must also ensure that assets are secure and proper internal controls are in place.

The treasurer is an educator. Board members and association members may not have a clear understanding of the role that reserve funds play in the future of the community. Some-times, treasurers are the only members who truly understand that these funds are set aside for future capital expenditures, not alternate operating funds or contingencies. It’s up to the treasurer to educate the board and membership as to the proper use of these funds and apply them appropriately.

Beyond the big picture, the treasurer focuses on brass tacks. Make no mistake: the treasur-er is integral to the ongoing financial health of the association. At the same time, it’s his or her duty to take charge of the finer points of financial management, including record keeping, insurance maintenance, investments, collections and delinquencies.

The treasurer is a manager, not a doer. Just keep in mind that, though many functions fall under the treasurer’s purview, it’s not up to him or her to complete those tasks person-ally. Instead, they will oversee the diligent execution of these responsibilities by the appropriate vendors, such as the association’s CPA, and together they will work to de-termine how taxes are filed, when annual audits are completed, etc.

MANAGER

As an outside party bound to your association by contract, it’s important that your manager comes from a reputable property management company. This means that your manager has the additional resources necessary including the knowledge and expertise to deliver the best service to your community and board.

Though the specifics of his or her duties vary by contract, all managers typically execute the policies dictated by the board and administer all of the services, operations and programs of the association. Your manager should also be an important source of information and insight. In fact, many boards become more effective through training provided by an experienced manager.

As with many boards, the individuals elected to their roles will bring strengths and talents all their own. It’s important to allow those strengths to come to the forefront – the board will benefit from it. Yet understanding the basics of each role will help make sure the essential functions are covered and enable the board to function as a team. It’s important to clearly understand the roles of the association Board and your property management company to ensure objectives are met and nothing slips through the cracks. Here are some stead-fast rules to remember to keep every-one on track and prevent duplication of effort:

The board sets the vision. Board members have the privilege of providing the leadership and inspiration for the association, creating a sense of community, onboarding committee members, keeping homeowners committed and engaged in upholding the community standards, and fostering a sense of wellbeing.

The association management company facilitates the action item list and sets the vision in mo-tion. The property management firm should have the expertise to lay the foundation to fulfill the Board’s overall plan. Need to reduce expenditures? The best property management com-pany will have the capability to leverage their relationships with vendors and renegotiate con-tracts. How about promoting a greater sense of community? A good property management company can bring different groups of people together, like homeowners, and help the com-munication process to share ideas with greater efficiency.

The board operates in an administrative capacity. Board members are often the authority on covenants, codes and regulations. Along with any association committees, the board helps the community stay true to the guidelines.

The property manager operates in an executive capacity. The enforcement of covenants, codes and regulations falls to the property manager. It is their responsibility to send violation letters, ensure that recorded amendments are incorporated into the governing documents and distributed to homeowners as required by law, and they’re the professional resident’s call with an issue or concern.

Be specific about priorities and expectations. The board’s role is to think big picture, but it’s essential they’re clear with the property manager about how they see their role and elimi-nate any potential misunderstandings from the start. Get on the same page. Your property manager is likely a talented multi-tasker, but prioritizing your community’s most important needs can help the manager attack the most pressing issues first.

The property management company should have the resources and skills to fully and effi-ciently support the board and community. The property management company will lead meetings, post notices about the meetings and file the minutes from each meeting. Your manager will also conduct regular inspections, and troubleshoot potential maintenance issues. They’ll leverage relationships with banks, insurance companies, maintenance companies, landscape companies, security companies and more, just to make sure you have well-negotiated rates and receive excellent service. They’ll distribute financial pack-ages and help you stay compliant with the city ordinances and building codes. They’ll take those late-night calls and meet service people early in the morning if needed. A great property management company will provide your community with a technology that allows residents, board members, committee members and staff to communicate in one place – and get important community information and updates, too.

CONCLUSION

At the end of the day, collaboration between boards and property management companies is essential to the well-being of a community and its residents. By working together, you can maximize the potential of both organiza-tions – and that’s a pretty powerful combination, indeed.

FirstService Residential…..who are we?

FirstService Residential is North America’s largest manager of residential communities and the preferred partner of HOAs, community associations and strata corporations in the U.S. and Canada. FirstService Resi-dential’ s managed communities include low-, mid- and high-rise condominiums and cooperatives, single-family homes, master-planned, lifestyle and active adult communities, and rental and commercial proper-ties. With an unmatched combination of deep industry experience, local market expertise and personalized attention, FirstService Residential delivers proven solutions and exceptional service that add value, enhance lifestyles and make a difference, every day, for every resident and community it manages. FirstService Resi-dential is a subsidiary of FirstService Corporation, a North American leader in the property services sector.

Recognizing and Preventing Conflicts of Interest The phrase “conflict of interest” tends to get thrown around without much thought, but in reality it can cause real threats to your homeowners association if any conflicts go unrecognized. Understanding what the phrase means and knowing how to recognize when these instances may be happening is an important re-sponsibility as a board member and will go a long way toward ensuring the strength and stability of your community. 1. What does it mean? A conflict of interest arises when outside or personal interests adversely affect an individual’s ability to make an impartial decision. EXAMPLE: A board member owns a landscaping company and wants his or her company to bid on the as-sociation’s grounds contract; that represents a potential conflict of interest. If the association grants that landscaping company with the grounds contract, it becomes an actual conflict of interest and necessitates that certain actions are taken. 2. Recognize conflicts before they happen. There will be times when conflicts arise on the Board of Directors. When they occur, take some time to ask a few questions: 1. Are there outside or personal influences that may affect the transaction? 2. Do I have out-side or personal interests that should be disclosed to my fellow board members? Do I have duties to outside interests that may affect my decision-making? If you answer “no” to all the questions, then it’s likely no con-flict of interest is at stake. 3. Understand your duties. All board members have a legal fiduciary obligation to the association: a duty of care, which requires you to provide stewardship as a reasonable person, and a duty of loyalty, which requires you to hold the associa-tion as your top priority. Always exercise proper judgment to distinguish between both. 4. Information can lead to conflict. In some cases, boards may have access to privileged information. When that information is exploited for per-sonal financial gain, it represents a conflict of interest. EXAMPLE: A board member finds out that a homeowner who has had trouble paying assessments wants to sell his or her home. Based on this information, that board member is interested in purchasing the property. However, if the board has a legal first right of refusal and the board member does not disclose his or her in-terest in the purchase up front, then a conflict of interested is created. In other words, that board member has a personal interest in the board passing on the sale so he or she can benefit from the purchasing opportunity. Individual Directors must allow the board to make its decision first and in a way that’s unencumbered by personal interests. 5. The rules are rules. Everyone must follow the rules – even board members. The rules are there for a reason and if you allow board members to live outside the covenants (such as parking in restricted spaces or owning too many pets), then it opens up all board members to potential liability. 6. Watch the budget. During the budgeting process (and beyond), beware of personal biases that influence behavior counter to the interests of the community. EXAMPLE: Board members campaign for election because they personally believe the assessments are too high and want to have them reduced. So when it’s time to determine the budget for the next fiscal year, they cut spending across the board to attain their personal goal. While reducing assessments may be a popular thought among the community, cutting spending will likely reduce the community services and therefore, the association runs the risk of not meeting the standards of the community and adversely affect property values. These select board members have put their personal finances and beliefs ahead of the overall well-being of the community, resulting in a conflict of interest.

7. Communicate. Different states have specific laws on how board members should conduct themselves. Generally, dealing with conflict should involve revealing the fact that a potential conflict exists, documenting all transactions where board members could benefit, evaluating bids openly and honestly, and voting on all contracts after reviewing all material. Document all activities in meeting minutes so that there is a written record of all activity. Abstention in the voting process by an interested director is generally good practice and may be required un-der governing law. 8. Developer Boards are also accountable. During the development phase of an association, some of the Board of Directors may be developer-appointed which may lead to challenges. The board should still be acting with the association’s best interest in mind, however, the appointed members may feel pressure from their relationship with the developer. As such, when a developer wishes to place assessments at an unrealistically low level to attract buyers or forego collection procedures against the developer, the board member is faced with a conflict. It should be noted that develop-er-appointed board members are often held to an even higher scrutiny to ensure that they are putting the good of the association first and foremost. 9. Managers are accountable too. A reputable property management company should make this clear but it’s important that all members of the association realize that, to the property manager, the true client is the association as a whole. Therefore, the property manager should be acting in the interest of the community association, not in the interest of specific board members. It’s also very important that property managers refuse gifts or favors from board members and also those do-ing business with the association or seeking to do business with the association – think vendors and contrac-tors, avoid self-dealing or acts that are self-beneficial and refuse to engage in activities that conflict with other clients. Further, if a property manager engages in a contract with an individual homeowner in the association, that relationship should be disclosed to the board. Board members and property managers should always act ethically, openly and in the best interest of the as-sociation. By doing so and keeping these nine tips in mind, community associations can easily avoid the prob-lems that conflicts of interest can bring.

SAMPLE

COMMITTEE OVERVIEW

CURRENT COMMITTEES:

Welcome Committee

names here

names here

names here

Landscaping and Grounds Committee

names here

names here

names here

Architectural Control Committee

names here

names here

names here

Social Committee

names here

names here

names here

SELECTION PROCESS: Volunteer indicates interest by sending an email to any of the Board

members or Property Manager indicating which committee he/she would like to volunteer for.

Volunteer provides brief background, describing how he/she could serve the committee.

Board reviews and makes decision.

Committee Chairman is also a member of the Board. Committee Members are responsi-

ble for preparing agendas of meetings and minutes afterwards to provide to Board.

Term of office of committee members shall be a minimum of 1 year.

COMMITTEE REQUIREMENTS:

Committees and their Members are appointed by or at the direction of the Board of Di-

rectors.

Committees may have a maximum of 3 Members serving on the said Committee.

Committees may have an unlimited number of homeowners serve as volunteers on the

Committee.

A Board Member needs to serve as one of the three Members on the Committee.

Committee Members must be in Good Standing with the HOA and may be removed at

any time by the Board of Directors.

Committee Members may not be party to any litigation related to the HOA. If in the

event, the Member becomes party to a lawsuit, the Member must immediately tender

their resignation to the Committee Chair and HOA Board.

Committee Members must perform their duties in good faith, in a manner that is in the

best interest of the HOA, and with the care that a reasonably careful person would un-

der the circumstances.

In the event of vacancies on a Committee, the Board of Directors shall have the power

to fill such vacancies on the said Committee.

The Committee Chair must present their Committee Report to the Board at least 10

business days in advance of the next Board or HOA Meeting to be included in the

Board Packet.

ADHOC OR SPECIAL COMMITTEE:

Special or Adhoc Committees are temporary committees established by the Board of

Directors to address specific issues.

Adhoc Committees have limited duration

Committee Members and Chairmen can be removed by the Board without prior

notice and without cause.

Entire Committees may be dissolved or decommissioned at any time with or

without prior notice or cause.

Committees cease to exist automatically whenever a new board is elected.

COMMITTEE REPORTS:

During the Board Meeting the Committee Report will be discussed. These reports are provided to the Board in ad-vance of the meeting and are part of the Board Packet. Not every committee will have a report during the meeting. If a committee chairperson would like to speak in detail to their report, they will be provided 5-10 minutes to do so. The Board asks that the committee chairperson notify the Board prior to the meeting if they will need time to discuss their report.

SAMPLE

Social Committee Charter

Charter

Introduction: The Social Committee has the responsibility to plan and implement social activities

for the community under the direction of the Board of Directors. This is considered a standing

committee with meetings held as needed.

The Committee’s responsibilities encompass the following:

Conduct periodic informal parties for the purpose of bringing residents together.

Take responsibility for gatherings for a specific purpose, such as holiday feasts, honoring

volunteers, recognizing a special event or theme dinners, etc.

Plan for, or assist in, any activity which will enhance the volunteer involvement of residents.

Work with the Finance Management Committee and Management to prepare an annual budg-

et for Board review and consideration during the budget preparation season.

Submit a Committee Report for every HOA and/or Board Meeting.

How to Run an Effective Board Meeting Community associations operate like a business, which means they must hold regular meetings of their offic-ers (board members) and shareholders (homeowners). So, love ‘em or hate ‘em, board and association meet-ings are a necessary part of community association governance. As anyone who has ever attended a board meeting knows, they can become a contentious gathering, not everyone always sees eye-to-eye, some voices are louder than others, and occasionally you might feel like nothing was accomplished. When the board meets, it’s time to get things done. There’s an art and science to a productive meeting, but it boils down to a few simple processes. Let’s get started. 1. Designate a Chair First, make sure you designate a meeting chair. This person drives the meeting and helps everyone stick to the agenda and facilitate a successful outcome. It is their job to stop irrelevant discussions before they derail the entire conversation. Everyone should assume responsibility for maintaining efficiency – that means keep-ing comments succinct and being prepared by reading the agenda beforehand. You can also keep things un-der control by restricting (or at least minimizing) the introduction of items not on the agenda. Tip: For optimal efficiency, the agenda should include a strict format, such as roll call, minutes, reports, motions and voting, with ample time for discussion and questions. At the conclusion of the meeting, the chairperson should sum up what was discussed so everyone’s clear on all decisions made. Identify the next steps on an ‘Action Item List’ that includes deadlines. The right associa-tion manager will have the ability to review the action item list with the board, inspire confidence and increase board unity. 2. Follow Parliamentary Procedure As its name implies, parliamentary procedure was introduced by the Parliaments of England in the 16th centu-ry. If you’ve attended a board meeting lately, you know that it’s still widely utilized to facilitate meetings today. Parliamentary procedure establishes rules and methods for meeting discussions and debate, thereby main-taining order and allowing all participants to be heard. The most commonly used is Robert’s Rules of Order – a “how to” guide for conducting business in democratically elected organizations. Its enduring popularity is based, in part, on how well it prescribes guidelines and formalizes meeting procedures and conduct – and that helps ensure your meetings are fair, inclusive and efficient. 3. Go Formal Choose a business-type setting as your venue - a community meeting room is ideal for this purpose. Don’t have one? Check out your local library options, or, if you’re managed by FirstService Residential, inquire about our meeting location options available to clients. It’s not recommended to hold a meeting in someone’s home because an informal tone and setting can make it challenging for the board to resolve difficult or divisive issues. Even if you’re friendly with your fellow board members – and if you are, lucky you – don’t lose sight of the fact that board meetings are not social gatherings. And when gossip, off-topic conversation and other distractions veer discussions away from association business, little gets accomplished. Tip: Hold social hour until the end, after you’ve accomplished all of your association business. 4. Motions, Not Emotions Boards are typically made up of residents who display a passionate attitude about their community. And that’s a good thing. But it’s important to remember that board meetings are business meetings, which leaves little room for emotion. To keep the spirit of the meeting as professional as possible, encourage board members to present motions, and then allow a second to the motion. Rather than speaking openly (and at length) about a specific topic, allow others to give constructive input. Structuring your meeting in a way that’s business-minded can help keep emotions in check, and that makes for more productive interactions and exchanges of ideas. If you don’t have a code of conduct, talk to FirstService Residential about developing one for your board.

5. Create a Code Encourage all board members to be familiar with (and adhere to) a code of conduct. This helps everyone be clear on the “rules of engagement” during a meeting. Disrespect and a lack of courtesy have no place in any community, but that’s especially true at board meetings. It’s a place of business, and all board members should treat their time with the board the same way they would treat a meeting at their own place of business. If you don’t have a code of conduct, talk to FirstService Residential about developing one for your board. 6. Time Management Ahhh, the three-hour meeting. It’s enough to test the patience of even the most well-meaning board member. Typically, the longer a meeting lasts, the more quality of decision-making is diminished. Regular board meet-ings should not exceed two hours, ideally meetings can be kept to one hour. Board meetings should be more focused on strategy, upcoming projects, challenging decisions, and im-portant policies. If one person is controlling the discussion, the chairperson or manager must step in and en-courage the group to move on to the next item. Everyone should be allowed to discuss legitimate concerns, but it’s also important that no single individual gets to dominate the entire meeting. Tip: Set time limits and put them on each agenda item. 7. Sidestep Division One thing that makes a strong board is the variety in personalities and professions. But, this can also aide in creating a division between board members on certain issues. “A Board Meeting can take a quick turn for the worse if not well managed,” says Jennifer Bishop, Property Manager of FirstService Residential. “A meeting can be running smoothly until a specific topic hits a nerve. One member’s personal emotions can easily get a meeting off track.” When disagreements happen – and they will – try to control the environment by present-ing a neutral position and getting everyone back on the same page. The best property management profes-sionals are extremely experienced and should be able to make recommendations and offer expertise without taking sides. 8. Prevent the Vent Sometimes you just have to let it out. That’s not being unreasonable; it’s just being human. Just remember that a board meeting isn’t the place to do it. Empower fellow board members to keep one another in check should a person start to go off on a tangent. Speaking up can stop poor behavior in its tracks. Just remember that “respect” is the watchword here... let a venting board member know that their opinion (and passion) is valued, but the board meeting may not be the ideal venue to be heard. 9. Make Minutes Count The Board Secretary is responsible for taking the minutes at each meeting and reading the minutes from the previous meeting as part of the proceedings. Minutes serve as an official record of meetings for the associa-tion – and most community association bylaws and/or state statutes give unit owners the right to see them. Tip: Minutes are a summary of motions made and actions taken, NOT a verbatim transcript of everything that was said. Finally, don’t tolerate disruptive behavior of any kind, and remember that you have the authority to expel any person exhibiting unruly behavior from the meeting. Board meetings will be much more organized and effi-cient if you establish ground rules and create an agenda – and stick to them. Poorly run board meetings can make it difficult to achieve your association’s goals and thwart your efforts to recruit new volunteer board members in the future.

SAMPLE Board of Directors Meeting Agenda

April 26, 2017 6:00 pm – 7:30 pm Community Room

I. Welcome Comments / Open Forum: Open to all residents 6:00 - 6:20 (20 min)

Question and answer session for residents

II. Call to Order / Roll Call: Meeting closed to resident comments 6:20 - 6:25 (5 min)

III. Secretary’s Report: First Last, Secretary 6:25 - 6:30 (5 min)

Review and approval of March 22, 2017 board meeting minutes

IV. Treasurer’s Report: First Last, Treasurer 6:30 - 6:40 (10 min)

Review and approval of March 2017 financial statement

V. President’s Report: First Last, President 6:40 - 6:45 (5 min)

Miscellaneous items

VI. Management Report: First Last, FirstService Residential 6:45 - 6:55 (10 min)

Recent updates from management

VII. Old Business: All board members 6:55 - 7:10 (15 min)

Update on interior design status and schedule

Update on discussions with Developer

VIII. New Business: All board members 7:10 - 7:30 (20 min)

Annual elections rescheduled to February 2018

Miscellaneous items

IX. Adjournment: 7:35 PM

Next scheduled board work session is on Wednesday, May 17, 2017 at 6:30 pm.

Next scheduled board meeting is on Wednesday May 31, 2017 at 6 pm.

SAMPLE ASSOCIATION

Board of Directors

Minutes of Regular <OR Special OR Emergency> Meeting

<meeting date>

<<NOTE: The formatting of minutes varies from association to association and is a matter of per-sonal style. For example, some Secretaries use Roman numerals (I., II., III.) and others do not. The for-mat is useful for readability but not critical. What IS important is the information contained in the minutes.>> 1. CALL TO ORDER President <> called the meeting to order at 6:30 p.m. at <location>. 2. ROLL CALL A. Board Members <name>, President <name>, Vice President <name>, Secretary <name>, Treasurer (absent) <name>, Member at Large participated by telephone B. Others Present <name>, Manager <name>, Association attorney 3. OPEN FORUM 4. APPROVAL OF MINUTES The minutes of the <date> meeting were approved as submitted.

5. FINANCIAL REPORT Since the Treasurer is on vacation, <name> gave the Treasurer's report as follows: A. Total Assets as of <date> B. Operating $ C. Reserves $ D. Delinquencies <$> E. Lien on APN <> approved by the Board. [NOTE: Failure to include this in the minutes could be the basis for a legal challenge to a foreclosure action.] 6. MANAGERS REPORT A. Front Entrance Resurfacing - work is complete. B. Planter Repair - waterproofing complete, painting scheduled for next week. C. Recreation Room Television - a 46” tv and wall mount purchased & installed. E. Fire Sprinklers - inspected by Fire Department and signed off. G. Plumbing Consultant- 3 firms contacted re investigation of plumbing complaints. Currently awaiting responses.

7. UNFINISHED BUSINESS A. Fountain. The Board discussed a revised proposal to install a water fountain in the clubhouse. After discussion, the request was not approved because only two bids were submitted and they exceed-ed the amount budgeted for the work. The board sent the project back to committee for further review and recommendations.

8. NEW BUSINESS

A. Wheel Chair Ramp. A homeowner requested permission to install a temporary wheelchair ramp at his

expense to accommodate an upcoming surgery. So as to reasonably accommodate the request and per rec-

ommendations of the association's legal counsel, the Board approved the request subject to proof that the

owner's contractor is licensed and insured. Motion made by NAME and second by NAME, all in favor to ap-

prove.

B. Reserve Study. Since annual reserve updates are required by law and since the association's reserve

specialist prepared the study now being used by the association, the board reviewed and approved the pro-

posal by <name of reserve specialist> to update last year's study at a cost of <$___>. Motion made by NAME

and second by NAME, all in favor to approve.

9. NEXT MEETING DATE. The next monthly Board meeting is scheduled for <date> at 6:30 p.m.

9. MEETING ADJOURNED. <time>

SECRETARY'S CERTIFICATE

I certify that the foregoing is a true and correct copy of the minutes approved by the Board of Directors.

_________________________________ ____________

Jane Smith, Secretary Date

EXECUTIVE SESSION SUMMARY

< Details of the executive session ARE NOT included in the Meeting Minutes that are distributed to Home-

owners. This is more for the use of the Board and Management. >

The Board met in Executive Session <date> at <time> and took the following actions:

1. Contracts.

a. Reviewed bids for repairing the clubhouse roof.

b. Approved a contract to paint the clubhouse.

2. Delinquencies.

a. Approved a foreclosure action against APN <#> for delinquent assessments.

b. Approved write-off of uncollectable debt of $<amount> owed on APN <#> due to bankruptcy.

3. Disciplinary Hearings.

a. A disciplinary hearing was held with an owner whose tenant is in violation of the association's nui-

sance noise restrictions.

b. Approved fine against homeowner for repeat violation.

c. Approved a fine against a homeowner, which was put waived for six (6) months pending no repeat

violation.

4. Reimbursement Hearing. Approved a reimbursement assessment against a homeowner for a plumbing

expense paid by the association and determined to be homeowner's responsibility.

8:00 p.m. Meeting adjourned.

COMMUNITY ASSOCIATION TERMS YOU SHOULD KNOW

Have you been elected to your association board? We put together some vocab you will want to be familiar with. We also recommend asking your property management company if additional specific terms might apply to your associa-tion.

Property/Association Manager.

Property/Association Managers oversee the association’s daily management and operations. They help enforce rules, regulations and bylaws, administer board-approved policies and guidelines, and facilitate important tasks such as fi-nancials, mass communications, grounds and building maintenance, and other administrative tasks.

Governing Documents.

A shorthand term for the Declarations of Covenants, Conditions and Restrictions, but may also refer to Bylaws, Arti-cles of Incorporation and/or Rules and Regulations of the association. Articles of Incorporation are the equivalent of Declarations in a cooperative, which does not have a Declaration.

Articles of Incorporation.

This document is filed with Minnesota’s Secretary of State and is what legally establishes/incorporates your Minneso-ta homeowner association, condominium, or cooperative. It addresses bringing the association corporation into exist-ence, defines its purpose and powers, and denotes the structure of its Board of Directors. Typical articles specify the purpose of the corporation, whether it is operated for profit, what officers it has and other similar items. Most master planned communities are non-profit, non-stock entities; whereas condos and co-ops are largely operated based on the corporation concept.

Bylaws.

By definition, bylaws are “rules that govern the actions of its members”. In this document, you might find topics like the requirements for membership, how often meetings are held, member voting rights, board member term length, quorum requirements, and duties of various offices of the board of directors. Bylaws are often subject to modification by the Board of Directors or by a vote of the membership of the association.

Declaration (of Covenants, Conditions and Restrictions).

This document is filed/recorded in the county where the property is located and is legally binding. This means that when you purchase a lot or a home in a neighborhood with a Declaration, you automatically become a member of that association. This document is like the constitution of the association because it defines the rights of members and the powers and authority of the association and its Board of Directors, including:

Architectural control standards, restrictions, and obligations;

Activities that promote communal harmony;

What property is owned by individual homeowners and what is owned by the community;

The relationship among all homeowners and the community for funding, governing and maintaining the development;

Transition of control of the association from the developer to the homeowners.

Recorded Plat Map.

This document is a map drawn to scale by an engineer, showing the divisions of a piece of land. Approved by the county and filed in the recorder’s office, it shows the precise layout of a condo or planned community. Recorded plats help distinguish an owner’s and community’s title to the property, as well as determine who is responsible for maintaining property.

Assessments/Association Fees.

Association Fees are what fund the operation of an association. Every member pays a pre-determined amount to cover their portion of maintenance and upkeep of the association and its common amenities like swimming pools, tennis courts, and fitness centers; and shared services like landscape maintenance, snow removal, waste and recy-cling collection, and building security. These fees also pay for intangibles such as insurance, administrative work, accounting, property taxes, among much more. Regular assessments are levied and paid on a regularly occurring schedule.

Special Assessment.

An assessment levied to finance a single project or undertaking. Distinguished from a regular assessment which is levied regularly for the regular operations of the association. Though levied only once, special assessments may nev-ertheless be paid in regular installments over a period of time. In poorly managed association, special assessments occur with some regularity.

Common Area.

Also referred to as common elements, it is those parts of the property which are not part of any individual unit and which are shared by some of all unit owners. These areas are administered by an association and the boundaries between common areas and individual units is specified in the governing documents of the association. Also see Limited Common Area.

Limited Common Area.

A part of the common area which is reserved for the use of an individual unit owner. Exterior decks are the most common example. Though reserved for the use of a specific unit, they are nonetheless part of the common area and as such may be maintained by the association.

Proxy.

The authority to cast a vote for another who is not present, usually at a meeting. The right to cast votes by proxy is not automatic, but must be authorized by the governing documents of an association or by the Board of Directors operating under authority given by the Declaration or by statute. Many declarations also contemplate the use of proxies, either explicitly or implicitly.

Quorum.

The number of persons who must be present in order to hold an official meeting and conduct business. In the case of an association, it is the number of units that must be represented, either in person or by proxy (if proxies are al-lowed), for an official meeting to be held. Quorum requirements are generally specified in the governing documents or bylaws.

Board Resolutions.

A board resolution is a motion that follows an established format and is formerly adopted by association board members. Resolutions assign rules and regulations to an association. Here are four types of resolutions for a com-munity association:

Policy: Affects owners’ rights and regulations including shared common areas, architectural require-ments, and enforcement procedures.

Administrative: Addresses internal workings of the association including operating procedures, collec-tions policies, and location of meetings, etc.

Special: Board rulings specific to an individual situation such as a violation.

General: Outlines routine, ordinary events on a community’s calendar such as adopting the annual bud-get and approving service contracts.

For more information on how to be the best board member you can be, contact FirstService Residential today.