Generally, board directors in condos and HOAs are volunteers who live in the building and want to assist in protecting their investment. Often, however, new board members enter positions without knowing the full scope of expected responsibilities. This article will serve as a primer on what new presidents, vice presidents, secretaries, and treasurers should expect from these positions.
Although, at times, inner workings seem mysterious, boards do not operate in a vacuum. There’s a paper trail of almost everything the board does, dating back to establishment. While it may not read like a bestselling novel, the paper trail should tell a story. Learning this story is the first step a new board member should take.
“If someone wants to understand the basic concept of being on the board, I think one of the best things that they can do is seek additional information by reviewing that past year’s minutes and the financial statements,” says Robert Ferrara, president and CEO of the Armonk, New York-based Ferrara Management Group.
The financial statements provide a snapshot of the co-op or HOA’s economic health; someone with a background in bookkeeping can spot trouble areas and red flags. The minutes provide the context that fills in the blanks. “Most of the discussions and decisions do take place at meetings,” Ferrara explains. “There may be times when one or two board members aren’t as active as the others, so if they miss a board meeting they may request some information or contact another board member or the management company to ask some questions. But I feel that most boards that are working for the betterment of their properties do it at a meeting, it’s recorded in the minutes, and everything in above boards and on the table, in front of everyone.” In other words, if the board has been doing its job properly, the story is on record.
There are existential questions regarding a board’s purpose and individual roles. Though, plenty of variation exists in a city as densely populated and as diverse as New York. “It really varies building to building and board to board,” says Mark B. Levine, RAM, CAM, and a licensed real estate broker, principal and the executive vice president of Excel Bradshaw Management Group. LLC in Carle Place. “Some boards are so hands-on and involved in every single aspect of every single decision, and they weigh themselves down in a lot of the minutia. Boards that are professionally managed charge the property manager with handling a lot of the day-to-day.”