The first year is critical in the planning and operation of an association. The following are steps that must be taken immediately to assure a successful start:
1. The board of directors convenes and elects officers.
2. The board selects or reaffirms the existing management company. Whether it is the board itself, an individual or a professional company, financial management must commence immediately. Even if a board is self-managed, independent financial consultation must be sought to guarantee establishing proper procedures and to make sure enough money is being collected to pay the bills.
3. Selection of legal counsel. A qualified and experienced attorney must be selected. A board has a dual role of operating a business funded by other peoples’ money and running a government (passing and administering laws) and must have competent advice when questions arise. Because board members have potential exposure for personal liability, they should seek an attorney experienced in dealing with associations to get the right answers.
4. Selection of an accountant. A prompt independent review of all financial records is a must at the initial stage. A qualified, experienced accountant can determine whether the developer has paid his fair share and that all monies are properly accounted for.
5. Establishment of committees. Standing committees that act as advisory commissions to the board will make the board’s job much easier. Buildings and grounds, finance, recreation, rules and regulations, etc. are some areas well suited to committee formation. The committees are also the logical training ground for future board members.
6. Additional tasks. In addition, the new board should be looking to implement the following:
– Adopt rules and regulations
– Inspect the property, compile list of defects in common properties, review working drawings and punch lists for unremedied builder defects and warranty claims
– Review all existing contracts to assure that they are up to date and performed satisfactorily
– Engage an architectural/engineering firm to inspect the buildings and common areas and assist in preparing a reserve study
– Review all insurance coverage with the insurance company’s representative
– Establish strict policies on the frequency and conduct of board meetings
Once all of the foregoing areas are addressed and procedures are in place for a smooth and efficiently operating association, the board will be able to fulfill its primary objectives, i.e., to preserve, protect and enhance property values, maintain the quality of life for its members and act on their behalf to promote the safety and welfare of the property.
NorthPoint Property Management’s ‘Condo & Homeowner Board Member Handbook’ (pgs. 7-8)