Five Traits of a Successful Community
Whether a planned community, condominium or mixed use associations, all communities share five traits for success. These five characteristics, when employed together, allow a community to operate at its highest level of efficiency and efficacy, benefiting everyone involved - the board, homeowner and management.
1. A Functioning Board of Directors:-
Because all five characteristics are affected by board actions and decisions, an effective board is set as the first priority. The most critical component of an effective board is knowledge. Board members must have a working knowledge of their community's governing documents if they are to make informed decisions during meetings.The board meeting is not a "discussion forum" or "planning session" it is a business meeting. It is imperative that board meetings are efficient and productive. The majority of official business is conducted during the board meeting.
2. A Relationship Between the Board and Management:-
The board is the ultimate decision-making authority, and the managing agent is the indispensable vehicle they utilize to implement and facilitate their vision. By understanding and leveraging the nature of this relationship, communities are well on their way to success. The managing agent serves as a repository of industry-related experience and information. As such, he or she is a professional service provider that brings stability and continuity to the Community Management, and affects all aspects of the community’s operations.
3. Communication Between All Parties:-
The number one complaint received from owners is that the association does not adequately communicate with residents. Communication and transparency are essential for a successful community. Without it, people may feel left in the dark, which can cause discord among board members and homeowners, and the management company.
4. Financial Integrity:-
The first thing new boards must learn is their fiduciary duty, a term often thrown around, and all too often misunderstood and misapplied. Fiduciary duty means that the board has an ethical and legal obligation to make decisions in the best interests of the entire association. Board members should never use their position to take advantage of the association and they must act reasonably in all their decision-making processes. The Business Judgment Rule, defined by Smith v. Van Gorkom Del. (1985)as "a presumption that in making a business decision, the directors of a corporation acted on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the company,"is cited as a useful tool for board members to use when making community decisions.
5. Community Governance:-
Finally, a successful community is effectively governed. A community association's governing documents are structured to be a representative form of government, but governing by polls is the greater good of the community.
FelixShelsher - About Author:
The time you spend working for your Association Management is in some sense also time you spend on improving your life. For more information please visit our hoamanagement.com website.
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