For many associations, HOA board training can help board members understand their responsibilities and make informed decisions. While state laws may not always require training, directors still need to understand the association’s governing documents, finances, meeting procedures, and other duties. Knowing the available training options can help boards prepare directors for their roles.
Is HOA Board Training Required?
State laws and the association’s governing documents stipulate whether HOA board training is mandatory.
Most states don’t require board members to undergo training. An association’s CC&Rs and bylaws, on the other hand, may have stricter provisions. Some communities require board members to attend workshops, seminars, or certification courses.
The Importance of HOA Board Member Training
Board members are volunteers. They are homeowners who dedicate their free time managing the community. They don’t always have a background in governance, financial management, or law. Training equips them with the basic skills and knowledge they need to run the association.
Proper training helps boards follow federal, state, and local laws. Compliance shields the association and the directors themselves from potential lawsuits. Risk mitigation practices also make the association more attractive to lenders and buyers.
Additionally, training the HOA board members helps them fulfill their fiduciary duty. As leaders, board members handle community funds and must act in the best interest of the association. This means avoiding even the appearance of self-dealing or HOA fraud.
Beyond that, training supports consistent enforcement. Board members can learn how to apply the association’s rules fairly and transparently. Arbitrary or unequal enforcement can lead to legal issues, not to mention diminished trust.
What Does HOA or Condo Board Training Cover?
In general, HOA board training covers the governing documents, financial management, meeting procedures, and maintenance and vendors. That said, specifics can vary depending on the type of training. Let’s discuss each item below.
1. Governing Documents
Board members must understand their governing documents from front to back. These include the CC&Rs, bylaws, and the operating rules.
The CC&Rs outline the powers and responsibilities of both the HOA and the homeowners. Examples include architectural standards, enforcement procedures, and due process for fines. Meanwhile, the bylaws define board terms, voting rights, and election procedures.
These documents work in tandem with state laws. For instance, in Illinois, associations are required to provide notice and an opportunity to be heard before imposing penalties for violations (765 ILCS 160/1-30 for HOAs and 765 ILCS 605/18.4 for condo associations).
Noncompliance can render board decisions invalid. Moreover, owners may accuse the board of breaching its fiduciary duty, even if it was unintentional.
2. Financial Management
Board members manage the association’s finances, so it’s usually a part of every curriculum. They must know how to create the annual budget, determine dues, and generate and read financial reports to make smarter decisions.
Additionally, the HOA board is responsible for collecting dues in accordance with state laws and the association’s collection policy. For instance, if an HOA lacks the authority to impose late fees on unpaid dues, a board that imposes them anyway may face legal challenges.
Apart from that, the board must oversee the association’s reserve funds. This includes planning for capital repairs and replacements, calculating reserve contributions, and coordinating reserve studies.
3. Meeting Procedures
Board members attend meetings regularly, whether board meetings, membership meetings, or special meetings. Every association has different meeting procedures and requirements. Some follow Robert’s Rules of Order, while others stick to a basic parliamentary procedure.
Training helps board members keep meetings organized and productive. Boards must also comply with meeting rules to avoid illegal board meetings. Requirements typically include allowing homeowners to attend and sending adequate notice.
4. Maintenance and Vendors
Associations can’t operate alone. Board members must hire vendors to perform services throughout the community, but the selection process must follow strict rules. Training can help boards comply with these rules, which can include soliciting competitive bids and knowing how to evaluate them.
In addition, board members must also understand the maintenance obligations of the HOA and the homeowners. This helps them separate tasks and keep owners accountable.
What are the Options for HOA Board Training?
Training comes in many forms, including a CAI certification course, HOA management company services, online resources, and in-house programs. Associations typically use a combination of these tools.
CAI Board Leader Certificate
The Community Associations Institute provides an online HOA board member certification course. The program, which is specifically designed for homeowner leaders, covers basic leadership and finance.
Management Company Onboarding
Many HOA management companies provide training for board members. It may be included as part of an overall package or as an additional service.
Self-Study Resources
Board members can access webinars and articles online for self-study. Some local attorneys or CPA groups also offer legal and accounting guides.
In-House Training or Mentorship
There are associations that offer board training, mentorship, and leadership programs internally. These often work by pairing veteran leaders with newly elected or inexperienced directors.
Who Pays for HOA Board Training?
Typically, the cost of HOA board training is factored into the annual budget, which is covered by HOA dues.
Not all training programs are paid. If an HOA trains volunteers internally, for instance, it can save money by relying on experienced leaders. HOA management-provided training may come with an additional fee or be part of a predetermined package. Online resources, such as articles and guides, are usually free as well.
For paid courses or programs, the board usually includes the cost in budget projections. These are then used to calculate regular dues, which means homeowners indirectly shoulder the expense.
While training does cost money, it is well worth the investment. Training can help minimize board mistakes, which can ultimately cost the HOA more money and even increase its legal exposure.
The Right Way
The benefits of HOA board training generally outweigh the costs. Training helps board members understand their legal, financial, and operational responsibilities. If possible, both new and experienced directors should undergo training and ongoing education.
Hillcrest offers HOA management services to communities in Chicago. Call us today at 630-627-3303 or contact us online to request a proposal!
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