by Sheyna “The Law Diva” Burt
Dear Law Diva:
I live in a homeowners association. We just barely get by from year to year, and the only time things change is when they are getting worse. I have to look at the annual budget with one eye closed because you never know when they’re going to surprise us with a huge assessment increase. Why the surprise? And every Board meeting introduces some new project that never gets fully implemented: repaving the parking area, replacing the crumbling HVAC infrastructure, local government’s approval of road work near our entrance, hordes of kids destroying the landscaping. Why does it seem like the association bounces haplessly from crisis to crisis and what can we do about it?
Wandering in Woodbridge
Well, if there was an award for “Most Likely to Have No Direction”, it sounds like this association would win it.
For better or for worse, this association is in good company. Community associations generally are run by well-meaning volunteers and it is quite common for these organizations to drift among a sea of emergencies, always reacting to problems, hardly ever anticipating them.
My sense is that part of the solution to this “directionlessness” is to remember that the association is, as mentioned above, an organization. Sure, it has the heart of a neighborhood, but an association also has to have the brain of a business and like all businesses, to be successful it has to take a thoughtful approach to short, mid, and long term planning.
That’s right, Wandering in Woodbridge, your association needs a Strategic Plan.
A Strategic Plan at the association level creates sustainability through the articulation and implementation of a community’s vision and goals for itself. To ensure community investment, the process of planning should include the involvement of representatives of all of the association’s stakeholders – owners, renters, Board members, and management. Stakeholder buy-in will be critical in the creation of a plan that actually reflects the personality and needs of the association.
Though each community is different, an association’s Strategic Plan likely should address the following topics and questions:
- Mission and Vision
- What is the community’s identity?
- What makes it special and distinct from other communities?
- What does the community have to offer its residents?
- Structural Integrity, Maintenance, and Beautification
- This is the topic associations often do have a plan to handle, if for no reason other than the reserve study requirement imposed by the Virginia Code. Mandatory planning notwithstanding, what is the association’s strategy for addressing infrastructure?
- Does the association have other goals, e.g., respecting landscaping or signage?
- Finances (Budgeting, Collections, Revenue Generation, and Reserves)
- What are the association’s current budgeting practices? What should they be?
- What strategies and goals does the association have to minimize assessment delinquencies and bad debt?
- Are there out-of-the-box within-the-law fundraising endeavors that the association can employ?
- Governance and Governing Documents
- Does the association have a process for educating residents generally and new Board members specifically about the association’s governing documents?
- What policy or administrative resolutions are necessary for the association’s smooth functioning?
- How should the association maintain and allow access to governing documents?
- What are the existing rules about leases and tenants?
- Is it appropriate to phase in changes to the existing lease policies?
- Risk Management and Insurance
- What insurance is the association required to have?
- What insurance should it have given its peculiarities?
- Is there a process for making sure that Board members review and understand the association’s policies?
- Marketing and Public Relations
- How does the association communicate with potential and existing residents?
- What does the association communicate to potential and existing residents?
- What is the image the association wants to convey?
- Working with Vendors and Service Providers
- Does the association use a competitive bidding process and if so, for which contracts?
- Is there a systematic way of reviewing the community’s happiness with the association’s vendors and service providers?
- How does the association assign liaisons?
- Relationships with Local, State, and Federal Government
- Does the association know its community’s leaders? Do those leaders know the association?
- How does the association communicate to residents about the laws and regulations that affect their lives in the association?
- Ethics and Professionalism
- Should the association use Robert’s Rules and if so, how much?
- Does the association have policies to address conflicts of interest, complaints, and whistle-blowing?
- Would commitment forms help the Board to have a clearer understanding of its fiduciary obligations?
- Recruitment, Management, and Retention of Paid and Volunteer Staff
- How does the association use paid and volunteer staff?
- How does the association keep those folks happy?
Importantly, the Strategic Plan describes not only what should be done, but when and by whom. It will identify which projects and initiatives will be accomplished in the short (immediate to one year), mid (two years to five years), and long (six years to ten years) terms. The Strategic Plan also will spell out which individuals or teams of individuals will be responsible for the identified endeavors. And to keep everyone honest, the whole thing should include measurable goals.
Wandering in Woodbridge, the good news is that if you can rally your association’s leadership and residents around the idea of strategic planning, you can give the association some much needed direction. A Strategic Plan will make your community more competitive, proactive, healthy, and vibrant.
In addition to being a contributor to Prince William Living, Sheyna “The Law Diva” Burt is an attorney serving community associations, charitable nonprofits, and families in Virginia and DC. Have a question for the Law Diva? Sheyna can be reached at [email protected] or www.burtlaw.co.