The relationship between the HOA board and COVID-19 is not a stagnant one. The pandemic has changed the way many boards operate and will likely influence associations for years to come.
The HOA Board and COVID-19
The coronavirus pandemic has tested homeowners associations in unprecedented ways. While some boards crumbled in the face of a challenge, others exhibited strength and a steadfast attitude. Those that continued to effectively run their association did so with a clear message and a solid plan, standing tall and together amidst a crisis of a lifetime. These boards held on to their fiduciary duties and displayed consistency through word and action.
For weaker boards, there is hope yet. It is important to identify your strengths and weaknesses as a board now more than ever. Capitalize on those strengths and treat those weaknesses as an opportunity for growth. Then, together, come up with a plan to address those weaknesses and make sure to stick to that plan.
Examining Authority During Emergencies
While homeowners associations have long been compared to government bodies, they do not possess the same absolute authority.
The government can tap into emergency powers during times of crisis, but HOAs lack this option without a proper source. State laws or an association’s governing documents should clearly dictate what authorities the board has when emergencies arise.
Not all states grant homeowners associations emergency powers, though. In fact, there are only a handful of states that do so, and the declaration of a state of emergency is typically necessary. Florida is one that comes to mind, with specific statutes found under Chapter 718 and Chapter 720 detailing an association’s emergency powers.
If your HOA board does receive expanded authority as a result of an emergency, you must still uphold your fiduciary duties. These additional powers should be used for the betterment and protection of the community as well as its residents. Exploiting board authority — emergency or not — will inevitably lead to legal problems.
The Need to Amend Governing Documents
When the COVID-19 pandemic first hit the United States, homeowners associations found themselves without direction. Most had governing documents that lacked instructions for how to proceed. No guidelines existed for the closure of amenities, whether or not to postpone dues collection, and how board meetings can take place. Discussions and decisions had to be delayed as officials encouraged residents to stay home.
Boards should learn from this experience and strive to amend their governing documents to be more comprehensive. Include guidelines and procedures detailing how to deal with an emergency like this. The process for amending the association’s governing documents will vary from one association to another. Check your existing bylaws and CC&Rs for guidance on how to proceed. Many associations will require a majority vote from the membership.
The Role of Communication
Communication has always played an important role in community management. HOA boards must disseminate information in an efficient manner, making sure updates and announcements reach all homeowners equally. During a pandemic, though, communication becomes even more crucial.
Boards must keep members informed of changing policies and rules. Are amenities open for use? If so, for how long? How many people are allowed in a given common space at a time? Are homeowners allowed to stop paying dues, even if it is only temporarily?
Members likely have these questions running around in their heads. And it is the board’s responsibility to keep everyone in the loop at all times. This means utilizing various forms of communication. While some HOAs may require them, traditional mail is no longer a practical and efficient channel to distribute information. Many boards already use email and instant messages as ways to communicate and will likely continue to do so post-pandemic.
The Future of Remote Meetings
Association boards regularly hold meetings to discuss and vote on issues. State statutes and governing documents often require board members to do this in-person and in the presence of other members for the sake of transparency. With social distancing measures, though, holding face-to-face meetings is simply impossible.
Many boards turned to online platforms, holding meetings remotely and inviting owners to participate virtually. A lot of states even issued executive orders allowing HOAs to conduct meetings this way. And there are several benefits to virtual meetings.
For instance, members are likelier to attend online meetings because they are more convenient and flexible. Such meetings also eliminate the need for physical venues and promote structure through the use of type-in chats, mute functions, and hand-raising features.
Of course, there are some key practices that will help facilitate a smoother virtual experience for everyone, such as:
- Giving adequate and proper notice of the meeting;
- Send out invites via email along with the meeting agenda;
- Allowing members to listen to the discussion and offer comments when appropriate;
- Following the same guidelines as in-person meetings (i.e. follow the agenda, make and second motions, etc.)
- Holding open forums;
- Recording minutes of the meeting;
- Encouraging participants to turn their cameras on because doing so promotes a sense of community; and
- Utilizing platforms with screen-sharing capabilities.
Boards can also adjourn to the executive session by simply removing non-board members from the virtual meeting. In this case, it is important to abide by the same guidelines as in-person executive sessions.
Given the benefits of remote meetings, it is likely that some states will see legislation permanently allowing them in the future. And while virtual meetings may not totally replace face-to-face meetings, associations can’t deny their effectiveness as a management tool.
Adapting Financially Mid- and Post-Pandemic
Because of business closures and mass layoffs, many residents were left without a source of income. Staying home all the time also led to an increase in utility bills.
Boards may feel it necessary to suspend HOA dues, even if only for a short while. And although this is certainly a considerate move, it is also an impractical one.
Homeowners associations rely on member dues to continue running smoothly. Thus, taking away your HOA’s only source of funds will negatively affect the community at large. Instead, what boards can do (and have done) is to make other financial adjustments. This includes waiving late fees, offering payment plans, delaying foreclosures, and postponing non-urgent projects.
Boards should also start coming up with a financial plan in case something like this happens again in the future. It is a good idea to prepare a budget for emergencies with actual numbers. This plan should also outline how your HOA should obtain the additional funds and what items receive financial priority.
HOA Board and COVID-19: What Happens Next?
COVID-19 has certainly struck homeowners associations in the most unanticipated of ways. And board members are sure to feel its effects for years to come. The best thing your board can do, though, is to learn from this experience and let it inform your future decisions.
If your HOA board needs help managing the effects of the pandemic, an HOA management company like Clark Simson Miller is your best bet. Call us today at 865.315.7505 or contact us online to request a proposal.
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