Real Estate Investing Basics

Working with Homeowner Associations and Other Boards

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HomeownerAssociationsDealing with different personalities, points of view and agendas when working with any board or committee can be very challenging. People join the boards and committees of non profits, government, and other organizations for many reasons. Without these boards, the organizations would be in constant chaos; sometimes they are in constant chaos with the boards!

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A Homeowner’s Association is a good example of a Board that can present these challenges. The board can also be challenged while dealing with the people that they are serving.

Jackie: Every real estate investor has faced the challenge of dealing with individuals that for whatever reason, seem to be hard to work with and are constantly pushing and prodding until they become a real “thorn in your side”.

Bill: I think of many of them as a real pain “somewhere South of my side”! We are currently experiencing this issue with our Condominium Association. As we built a custom condo for a woman moving from Washington state, we suspected that she might be one of these pains. Along with hearing about her battles with her car dealership, movers, and veterinarian, we would get constant complaints about her lender and suppliers or any subcontractors she came in contact with. She would tell us how beautiful our condo development was and how much she liked the design and construction while at the same time complaining about everyone else. We knew that at some time or another, it would be our turn.

Jackie: The big issue came up with the association soon after winter set in. Here in S.W. Michigan, snow and slippery roads are a fact of winter. Lake effect snow is responsible for a boost to our local economy every winter. The snowplow companies are busy most nights as well as the auto body and repair shops from the “fender benders” until drivers remember how to drive on snow and ice.

With the first major snowfall, we got an e-mail from her stating…….."As I drove out today I did 1/2 of a 180* – I guess that's a 60*". She is now on a mission to have the Association salt all of the roads, drives and walks every time it snows. After checking with the snow plowing contractor, we explained to her that this would increase the Association member's fees $39 per month, and would have a negative impact on the environment. Our development is green built and has a "Green Designed" storm water management plan. The salt runoff would be detrimental to our wetlands, lawns and landscaping.

Bill: She cites her experience as a member on numerous boards and has expressed her interest in being on our HOA board. After learning that ½ of a 180 deg. is a 60 deg. I am hoping that she does not want to get involved with the budget! Now I understand the “Thank You” note that we got from the condo HOA on the West coast (where she was a board member), when she moved here!

To make a long story short, she has flooded everyone’s e-mail with complaints about the snow & ice and the upcoming transition from Developer to Owner control of the Association.

So, how do we deal with this situation?

We have been professional in our responses to her inaccurate and antagonizing e-mails. We have consistently referred her to the Condominium and Association By-Laws for direction as to how to address and resolve the issues that she has raised. We asked for a committee to research the snow and ice issue and to have them report their findings to us so that the Association as a whole could vote on a resolution.

Working with Planning, Zoning, Historical, HOA & other Boards

Jackie: There are many other instances where investors need to work with different personalities and points of view. Historical District boards can dictate how your property looks and is used. If you’re doing a remodel, they can dictate how it must be done, and even in some cases what exterior colors you can use. Planning and Zoning boards, direct you on the usage of your property and Inspection Departments oversee your compliance with housing and building codes. As investors, we need to form good working relationships with these groups. Even if we don’t agree with the regulations or interpretations of codes and ordinances, we need to be professional in attempting to present our points of view and achieve what we want. We feel that by doing so, you will be much more likely to achieve your goals.

Bill: With both of us having served on many of these boards ourselves, we have seen many reasons why individuals want to serve as board members. The majority of them are truly trying to support and improve whatever group or organization they are members of. Some have a personal agenda that they are trying to promote. There are also a few that just want the recognition of serving on a board and the “perceived” control that they have. We have also seen many people come before these boards with complaints or petitions that were unreasonable, did not follow ordinances, etc. Through education and “majority rules” most issues get resolved — often not to every one’s liking, but resolved none the less.

Learning how to respond to these different personalities and points of view can make a big impact on achieving the results that you are looking for. Try to avoid personal attacks, stick to facts and be open to other points of view. Present your position in an orderly fashion with documentation supporting your point of view. From our experience, this will get the best results.

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