It’s the continued job of the board of directors to maintain the beauty and harmony within their association. One way many board members do this is by assessing risks and doing their best to prevent, or if prevision isn’t possible, solve any developing issues.
But sometimes it’s easy to miss the hidden risks that can cost an association money. In the event that a situation arises within your HOA, it’s important that board members are not only aware of these risks, but know what to do to prevent or solve them.
1) Resident disputes and lawsuits
Whether it’s a dispute among residents or with the HOA, upset homeowners can quickly lead to problems for the association if the situation escalates. While most disputes can be settled outside the courtroom, it is always advisable to take every necessary precaution in order to prevent any lawsuits from homeowners or visitors of the community.
The best case of action for preventing any occurrences is with routine maintenance of the community and by consistently reviewing the association’s governing documents whenever making HOA decisions. Beyond that, it’s important to remember to pick your battles wisely, and refrain from becoming involved in personal or emotional disputes between homeowners.
2) Hiring a bad vendor
When it comes to hiring a vendor to work in your community, making sure your find a reliable contender is a must. Always work with your community manager, community coordinator, or property management company to find reputable workers who follow the best practices of their industry.
Knowing upfront whether a vendor is trustworthy is the best way to prevent any unsatisfactory work that the association would then have to pay to fix.
3) Outdated systems or processes
Outdated systems or processes can unknowingly cost HOAs a lot of money. If your HOA keeps important files on paper in a storage facility and have not transferred to an online storage option, chances are you are paying much more than you should be.
Consider looking into alternatives for things like data storage or online processes.
4) Under insured
It is always in the HOA’s best interest to maintain regular reserve studies, as a community never wants to be underinsured in case of emergencies. With the recent soar in inflation, having a new reserve study done for your community is highly recommended by most, if not all, insurance professionals.
To learn more about Reserve Studies and how to set up a new one for your community, read our article Why Your HOA’s Reserve Study May Be Out of Date.
When life throws unexpected curveballs at your community, it’s important to know and understand the steps needed to take action. As board members, you work hard to create a great place for your homeowners to live. Making sure you are aware of any hidden risks is a great way to start building a brighter future for your HOA!