Sometimes when a new member joins a community association board, they come in with new fresh ideas. That is great! Other times a community can elect an entirely new board, with few or no holdovers from prior boards. This can happen as a result of a transition in ownership, an influx of new ideas that sweeps the new board members into office, lack of popularity of the prior board, or just several openings occurring on the board at once. Any or all of these can be very positive situations for a community: new and enthusiastic board members, and board members representing the popular and majority opinions of the neighborhood, can provide a valuable new direction and a great spark for the condominium or HOA.
The trap that these and many other boards can fall prey to, however, is failing to realize that there might well be some accumulated wisdom within the association – the institutional memory. Novel ideas and zealous new leadership is very healthy for a community, but sometimes those new folks can waste quite a bit of time and resources trying to accomplish something that their predecessors have already done. They “reinvent the wheel,” and spend time that could have been better used elsewhere.
The Problem
The problem can be that these new board members do not realize they are taking over an institution that has existed for a long time. There were many boards before them, and while you might disagree with how they did things, the simple fact is that they had years of experience. They talked to vendors. They answered owner questions. They set a budget and collected assessments. And each of those tasks and events gave them some experience. They provided information. They created things to remember. They establish an institutional memory. But this new board, without the benefit of the members who were serving at the time, may not have access to it. The memory of your institution has been wiped clean. Here are some strategies to avoid this board brain-drain.
Filling the Memory Banks
The process starts with keeping good records – building an institutional memory can only happen if you work at it. Maintaining the minutes, bills, bank statements, and vendor contracts is critical; be sure that your board is compiling these records in an organized and thorough manner. If you have a management company doing this for you, check to be certain that the information you want is being retained, and in a format and organizational system that future boards can access and understand.
But there is more to it than that. So much correspondence these days is done via email; forward-thinking boards can set up an email address to be used by board members for association business. This ensures that a searchable record of correspondence is created for the association and can be transferred along with the board as it changes. Consider creating an online database, such as a Google drive, to store relevant documents.
Beyond the correspondence, policies and procedures are very important. If you change a rule – say you reduce the number of pets allowed per unit or change the fence and shed materials that are permitted – be sure to leave a clear note of why that decision was made. Avoid the cycle of oscillating back and forth between two extremes for years; keep a record of what worked (and what didn’t) in the past.
Finally, if there is ever a dispute between the association and an owner, the process and the decision should be stored in a fashion where future boards are aware of it. The dispute resolution procedures should have been codified (per the paragraph above). Were they followed in this instance? Did they lead to any particularly positive or negative results? What was the final decision of the board, and what was it based upon? Were prior decisions, rules and resolutions, or relevant state/county law at the time a deciding factor?
Using What We have Learned
Once you have this treasure trove of information, the next question becomes: What is institutional memory good for? It turns out, quite a bit.
First, if you build this database correctly, it can assist you with commonly asked questions. Say a husband and wife couple who owns a unit wants to run for two different board seats. Is that allowed? You could go back and read your documents and ask your attorney for an opinion. But your predecessors on the board may already have been faced with this question and done the same thing. Check your data resources first.
Second, this institutional memory can do some of your work for you. Have past boards issued email statements or membership blasts on a particular topic that keeps coming up? Do you need to notify your membership about their rights or obligations? Is there a problem that specifically affects your association every year, or once every four years? Have prior boards already notified owners in a way that you can borrow?
Third, if your board is using this institutional memory to answer questions from owners uniformly, you can avoid the game of telephone that so often gets played in associations. “Well President Jones lives next to me and he told me that you don’t have to apply for approval of a fence if it looks like your neighbor’s.” Perhaps President Jones did say this, or perhaps this is some answer that was part speculation and offhanded by a board member in conversation. To avoid this, use the same language and communication vehicles that past boards have used. When the message is consistent and provided clearly to all owners, there is a lot less room for misunderstanding.
Finally, the resources you build up here can be invaluable in dealing with and resolving disputes. They can provide a framework for how to go about resolving the dispute (or a lesson in what not to do, depending on how it went the first time). They can give guidance toward a resolution or settlement that can help the parties avoid litigation. Or they could provide you with the right precedent to justify your decision and enforce the document provision at issue.
What to Watch Out For
Like in most situations, there are pitfalls to avoid when relying on institutional memory.
There is a difference between “this is the precedent we have set and we are following our policy,” and the infinitely worse “this is how we have always done it, so we are not changing.” Be sure to regularly review and inspect your policies to make certain they are keeping up with the times, and not simply policy for policy’s sake.
Establishing and using this institutional memory is important because it can also be used against you. Just as we talked about the new board member who comes on with fresh new ideas above, similarly board members often fall into the trap of saying, “well I think we should ban this type of fence, and I don’t care what prior boards did because I wasn’t on them.”
Not so fast my friend.
While many association documents have nonwaiver provisions and other clauses that purport to say that prior board actions are not binding or precedential, the simple fact is that this only goes so far, and must be balanced against homeowners’ and unit owners’ rights. Selective enforcement of covenants is not permitted, and can be tenaciously litigated by an aggrieved owner. So if you are going to break from the prior board’s decision, you should (a) know what the basis for that prior decision was and (b) have a good reason (such as change in law or subsequently discovered facts) for the deviation.
Furthermore, the law treats the association as one entity, despite the fact that individual board members may change. So if your predecessor made a promise, or signed a contract, or waived a late fee, the present board is probably bound to those decisions. The association as an entity made those agreements.
Summing it up
There is an awful lot for board members to know, and to keep track of, and to decide. Utilizing the concept of institutional memory can be helpful in speeding the process along, in not reinventing the wheel, and in avoiding claims of unfair or disparate treatment. Put a policy in place for how to preserve and keep this information handy, and then use it wisely.