When you point your finger at someone, three fingers are pointing back at you. -Anonymous
The largest asset we will purchase in our lifetime is a home.
Unlike purchasing a single-family home in the ‘burbs, when acquiring a home Downtown, we purchase a unit in a condominium project; furthermore, we invest in a nonprofit mutual benefit corporation – a homeowners association.
Yet as a potential member of the corporation, do you request a copy of the building’s Declaration of the Covenants, Conditions and Restrictions (CC&Rs), Bylaws, Rules and Regulations, meeting notes, current and past budgets and reserve studies prior signing your life away? Don’t be embarrassed if you answer “No,” since most individuals rarely weigh all the liabilities of investing in community living.
In today’s world, the liabilities can outweigh the asset.
Unfortunately most members of the corporation don’t want to be bothered with volunteering their time to ensure adequate protection of their important asset.
This leaves many homeowners associations with elected representatives with little or no business experience or qualification, those with personal vendettas or agendas, those with “uber-zealot” personalities, and those who are coaxed, prodded, or begged to serve.
You ask, “How can this affect my investment?” The officers of the corporation have control of the checkbook. They can underfund reserves, spend money frivolously on their “pet” projects, or dip into reserves for capital improvements.
Then, it happens. The hot water boiler needs repair, there’s a break in common area plumbing causing a flood, or too many owners face financial problems and the first thing cut is their homeowners association fees. This leads me back to the introductory quote.
I ask… How many fingers are pointing back at you?
Several members in our neighborhoods have selflessly served their building’s community and found the true meaning of altruism.
Being a fairly new resident of Discovery, Jerry Schad wanted to learn how the building functioned so he chose to serve on the community’s board. He believes it’s important to be educated in order to make good decisions now and in the future. Jerry likes being involved, but readily admits, “It’s a lot of work, but worth it.”
As a financial advisor and businessperson, David McQuade (Electra) found satisfaction as a board member in preventing proposed expenses that were unnecessary and holding the monthly HOA fees steady for several years at his former residence, the Grande South. He affirms, “It’s a fairly thankless job but if your experience in business can lend to better ideas to your community then the time you have given was not wasted.”
Richard Zizian has served on HOA boards for 35 years and has a thorough grasp of the complexities and challenges. Richard believes that “volunteering is a great way to set up a core of like-minded people in the community.” Though no longer the President of the Grande North, he continues to serve as the Building Committee Chair.
The next time you point your finger ask yourself, when was the last time you attended a HOA meeting, when did you volunteer to serve on the board or a committee, and what are you truly doing to look after your greatest asset?-March 2009