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Just One Big, Happy Family...? Remedies for Dysfunctional Boards

Just One Big, Happy Family...?

Finding the right balance of involvement between HOAs and condo boards and residents can be like maintaining a healthy relationship with a significant other—you want to be compassionate, responsive and attentive, but not too needy, nosy or aggressive.

With our busy and hectic schedules, associations and boards might run the risk of being apathetic and disinterested in the status and well-being of the building, leading to unbalanced reserve budgets or broken lights in common areas.

While this lethargy can be an annoyance to those who would like a more dynamic and proactive voice regarding the comfort of their home, the opposite side of the spectrum can also be cause for serious concern. An association or board that oversteps its boundaries, intrudes on the privacy of individual residents and pushes the legal envelope can cause internal sickness, leading to tension, arguments and the end of what should be a long relationship life span.

Power to the People?

Board powers don’t have to be a mystery, as Jane Bolin, founding partner of Peyton Bolin PL, a national association law firm with offices in Tampa, Fort Lauderdale, New York City and Jersey City, New Jersey, explains.

“The association board member powers are actually subject to their governing documents, which include the declaration, the bylaws and the articles of incorporation. And also [Chapter 617], which is the Corporations Not for Profit statute in Florida, governs organizations. [Board member powers] are also subject to [Chapter] 718 or [Chapter] 720, whichever chapter may apply to them—[Chapter] 719 if it’s cooperatives.”

While basic position requirements are laid out in the association’s documents, Bolin finds that a lot of board members do not fully grasp the responsibility their positions require. “I think most boards don’t understand that they’re actually running a not for profit corporation, so they treat it likes it’s a volunteer position that doesn’t have these fiduciary duty ties to it.”

This unawareness, she says, is the underlying cause for a lot of board dysfunction. Another leading cause of dysfunction is the desire for power, Kirk Bliss, the president and CEO of Homeside Properties, Inc., says. Bliss was formerly president and CEO of Community Management Concepts in Florida) an Associa company, and he is now located in Alpharetta, GA.

“Another dysfunction that boards have is power, meaning people get on the board and they become power hungry. As a result, they clash with each other,” Bliss says. “Their egos will get in the way. One of the big things that we run into with associations is, board members who don’t get along with each other, and there’s fighting among themselves.”

What are the Symptoms?

Some of the most common kinds of dysfunction residential boards are prone to are usually based around the interpersonal relationships between members and the varying (and sometimes clashing) personalities of individual residents.

Steven Weil, PhD, EA, LCAM, the president of Royale Management Services in Fort Lauderdale, has seen his fair share of recurring conflicts on boards. So much so that he’s established his own set of Jungian-like archetypes.

The Ghost

Despite the name, the only ghoulish thing about The Ghost is his or her complete lack of involvement or interest. “When you send communication to the board, you never really know whether he actually got it, because you never hear a response,” Weil says. “No matter when you schedule a board meeting, he's never there. And we kind of think of those guys as the ones that wanted their name on the letterhead— that's an issue. If you've got a strong board where you've got three people on a five-member board that are already pretty good at getting together and making a decision, not really a problem. It's an issue when you've got a board that's split, and the guy in the middle just doesn't show up ever to break the tie.”

The Friendly

While friendliness is always an added bonus, it shouldn’t get in the way of making decisions.

“There's the split board: We're five members, and two on the left, two on the right, and one who wants to be everybody's friend and hence never makes a decision with either side,” Weil says. “We call that guy ‘The Friendly.’ ‘I'm friendly with everybody— I don't want to piss anybody off. And I can see it from both sides, but because I'm not willing to take a side, a decision never happens. And we just go on discussing the same thing meeting after meeting until hell freezes over,’” Weil says, explaining the inner dialogue of a Friendly.

The King

With his or her god complex, it’s easy to confuse The King with Kanye West.

As Weil explains, The King maintains the belief that, “‘I'm the president, which makes me God, and I get to decide when the meetings are. I get to decide who speaks at the meetings.’” “In many cases, these are people with strong personalities that, whether the rules are with them or against them, can run over everybody else in the room, including their fellow board members. Sometimes just their presence is intimidating—sometimes intended sometimes not.”

The Pleaser

Compromise is essential in every relationship, boards included. But there’s a limit. Trying to please everyone is a fruitless pursuit that will only limit decision-making.

The Pleaser operates under the idea that, “ ‘Every time something comes up, we should poll the unit owners, we should see what the unit owners think. Let's see if we can get everybody on our side before we do anything.’” And that often means that you don't get stuff done that needs to be done,” Weil says. “Plus, unit owners aren't in the same position necessarily as a board member. They're not required to take the time to learn all the facts that go with an issue, and to make the informed decision based on the material that board members are presented with.”

Troublemakers like the above can mean that quarterly meetings get very awkward, or it could be more damaging. Dysfunctional boards can negatively impact the community they are supposed to be governing, Weil warns.

“The dissension then flows outward from the board. If you're going live in a condo, especially if you're going to be on a board, you need to learn how to disagree without becoming disagreeable,” Weil says. “The trouble is, when you have a disagreeable board, where it's name-calling, they're just nonfunctional. That flows out to the community and everybody is gathering their troops. So, you now have a community that becomes dysfunctional because, not only is the board not getting stuff done, it just breeds this mistrust in the community, and nastiness in some instances.”

Depending on the level of dysfunction, these issues can cost associations extra time and money, can delay projects and ultimately, force a management company to quit, as Weil knows from experience.

“In the end, we work for the board of directors—that's who hires us and that's who fires us. So, we can try to lead them to calmer pastures. We can certainly offer to help out but when and where help is wanted, it's great. It works well. They let us do it. But, in many cases, the sad thing is, sometimes as a manager, you have to walk away because the board is so dysfunctional that they, in effect, put your license at risk. If you, the board, who's in charge, are not willing to make the changes necessary to become functional, we can't put ourselves at risk by continuing to act as your manager, and we have to give you notice. ”

Beyond interpersonal drama, there can be legal ramifications and financial loss associated with a board in peril. According to Bolin, a defective board can lead to an increased number of potential claims of breach of fiduciary duty and/or possibly violation of various state and federal laws concerning the unit owners’ rights to use and enjoy their property.

And although it’s hard to hold a board member personally accountable in Florida due to the business judgment rule that protects boards members unless their actions are criminal, they can still suffer the ramification of litigation because all residents, including board members, are impacted when a community is sued.

Treatments and Remedies

Much like heart disease, disorganization is the silent killer of board productivity, so a main priority should be adopting structure. The first place to implement order is meetings, Weil says, which can be breeding grounds for confusion, frustration and anger. Many times, personal feelings get in the way of decision making, eventually hindering community growth and improvement.

“One of the best board exercises I have ever seen, which I wish I came up with but, was two board members disagreeing vehemently over this particular project. And the board president said, ‘I think that we should argue this out in front of everybody. But you take his position and he'll take your position,’” Weil says. “Argue the facts, not the emotion. Because it's someone's home in the condo world and in the HOA world, people argue the emotion, and that's a problem. They don't move forward, and that’s an issue,” he says.

Weil has gone so far as to hire a police officer to attend meetings in an effort to deter arguments and interruptions in a particularly hostile board. Perhaps a less expensive (and extreme) approach is to have the manager sit in on meetings and act as a meeting chair, essentially leading the meeting and ensuring all points are addressed without digressions and disruptions.

Boards more interested in self-treatment can make a few adjustments to how meetings are run to optimize efficiency, including following Robert Rules of Order and adhering to an agenda, Weil suggests.

Property managers can do their best to stage an intervention and help a floundering or hostile board get its act together, Bliss explains.

“If they're a board that’s under a management company, what we do is bring them in and have board orientations and we sit down with the board and walk them through [topics such as] what’s the role of president? What’s the role of vice president? What’s the role of the secretary or treasurer? We’ll bring them up to speed as to the statutes for each state they are different. You help them understand their documents,” Bliss says. “If they are self-managed, they can go the organizations like CAI (Community Association Institute—there’s a lot of places where they can go to get education.”

Because ignorance and confusion further perpetuates disordered boards, especially when it comes to planning community projects, Weil ensures he provides his clients with adequate resources and education. A little extra one-on-one time with a manager can mean avoiding utter disaster.

“If somebody says, ‘We're doing a concrete restoration project, and I really don't understand what the heck we're talking about’—great, why don't you make an appointment and come into the office, and we'll talk about it. If there's somebody else, maybe we have to bring in an engineer or somebody that's working on the project to go through, and do a one-on-one explanation because, the problem is that that same person is not going to sit up in front of a group and say, ‘I got this contract, but I don't understand a word of what's going on here, why we have to do this,’” Weil says.

After years of experience in dealing with less than harmonious boards, Bolin was inspired to create Peyton Bolin MBA: Mastering the Business of Your AssociationTM. The program, which will officially launch in December, addresses why associations should view themselves as businesses and how adopting this perspective will benefit their communities. The customizable program is comprised of several learning modules addressing topics such as creating a mission, vision and values, defining board member goals and responsibility, how to transition new members and legal obligations and requirements for associates in the state of Florida.

And sometimes, when all else fails, it just takes hitting rock bottom for a board to get the self-motivation needed to regain alignment, and ultimately, functionality.

“They need to get to nothing and say, “OK we have to create a plan of action together,’” Bolin says. “They made a commitment. Going to a board meeting once a month or once a quarter, if they think that’s their commitment, that’s not their commitment, that’s just the meeting. They need to actually schedule some time to get together and I would say a strategy session. What are the goals we want to accomplish? What are the issues?”

“Because right now,” she continues, “what I experience is that they’re constantly doing what’s next. Think and plan and actually look at the big picture and focus on what needs to be happening now instead of always putting out fires,” Bolin says.

Enjolie Esteve is an editorial assistant at The South Florida Cooperator.

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