Condo Residents Demand – Show Me The Money!

By Bob Gourley

The image of Cuba Gooding, Jr. as Rod Tidwell screaming at Tom Cruise as the titular character in the 1996 movie “Jerry McGuire” is a powerful cinematic moment that launched the catchphrase, “Show Me The Money”! All these later, I barely remember the movie but the catchphrase lingers as virtually everyone I know has said “Show Me The Money” at one time or another. While it is taken entirely out of context here, you had better believe that condominium residents expect you to show them where their money is going. How well you tell that story can be the difference between ending your story with “…and they all lived happily ever after” and “… and so the hull of theTitanic lies sunken on the ocean floor”!

Let’s begin with the state your community’s finances are currently in. Hopefully, they are in good order with all of your residents paying their fees and assessments, all of your vendors being paid on time, a healthy reserve fund, and no lingering financial clouds of doom. That is an easy story to tell – everything is just fine – happy beginning, very little drama in the middle, and a happy ending. While I wish such an ending for each and every community, the reality of hard times has jumped from the national headlines and landed in many communities across the country. If your community is experiencing financial challenges like so many, may I suggest that you get in front of the story and use your communication skills to keep residents informed and avoid adding to the problems by not telling your financial story.

The good news is that there is light at the end of the tunnel. The bad news is that light may be further away than most of us would care for. Many economists are convinced that the days of bailouts, Bernie Madoff scandals, high unemployment, etc. are set to scale back, meaning a lull in the bad news which may allow the economy to stabilize before rebounding. Many associations find themselves facing the unenviable task of taking action against residents – late fees, liens against property, even foreclosure. While these actions may seem harsh or drastic, many BODs find they are bound by their governing documents to take these actions in order to protect the rest of the citizenry. This is a great time to explain to residents how the system works. They can read the full details in the condominium documents but it is a great idea to reiterate the basic concepts so they can fully appreciate what actions are taken against their neighbors. This can go a long way to alleviate fears that the association finances are about to collapse or that some homeowners are being unfairly targeted by the Board.

Many associations are opting to borrow money to meet their financial responsibilities. Again, there is a very positive story to tell about such action. Borrowed monies ensure that the business of the association continues, even though the current economy appears sluggish. Borrowed monies are repaid over a period of years. Surely, all of us have lived through the ups and downs of the American economy before. There is no reason to think that things are not going to get better. A loan is simply an investment in tomorrow being a better day.

Finally, it is a great time to talk about your community’s accounting efforts. Bookkeepers, auditors, CPAs and others are constantly working to assess and manage your association’s finances. Choose a few selected items from your balance sheet and see if there isn’t a positive story to be told. In my community, our insurance premiums DIDN’T go up this year. After several years of increases, I thought this was a story worth telling. We locked in a two year agreement with our property management company so those fees won’t be going up this year either. These may not seem like big deals but for me they were the difference between ending our last newsletter with a listing of delinquent commons fees (where we sink to the ocean floor) and a happy ending (where we all live happily ever after). Look for your happy ending when telling your community’s financial story. And don’t be afraid when they say “Show Me The Money”. Offer them your thanks for continuing to pay their fees and assessments and look forward to your own happy ending.

When a Community Has No Newsletter…

By Bob Gourley

A colleague recently asked for comments on a communication issue within an HOA. A non-Board Member volunteer offered to create an electronic newsletter for the community. Here are my comments.

I have been publishing community newsletters since 2004, paper and electronic. May I assume that part of this person’s request comes from a lack of an existing community newsletter? If so, I would suggest that the Board begin producing regularly scheduled newsletters either on their own or (pardon the plug) via an outside firm, such as MyEZCondo.

Whether the newsletter is hard copy and/or electronic is secondary to the importance of keeping residents informed of the important decisions being made on behalf of their community.

As a BOD president, I would like to echo Ruth’s sentiments of accepting volunteer help any day. In fact, there are very few BOD members that didn’t begin their service as volunteers for their communities. Today’s volunteer is likely to be tomorrow’s active BOD member, maybe even the future president. I wrote an article for Condo Management magazine that addresses much of the issue. If anyone is interested, the full PDF is on my website – http://www.myezcondo.com/News-Feb05.pdf

Using Better Communications to Attract Community Leaders

By Bob Gourley

Excellent community governance is the difference between a good community and a great one. Poor community governance can lead to the downfall or outright collapse of a community association. Finding and keeping qualified and interested volunteers within your community is a real challenge. Are you using your communication tools to help with this daunting task?

Is there a more difficult story to share with your fellow homeowners than the story of governance? How many times have you heard about the Board needing volunteers for this project or that committee? How often have you heard about a seat on the BOD going vacant for lack of interest? Used properly, your community newsletter and website can be a crucial tool in finding and developing your community’s future leaders.

Rarely, have I heard stories about an outstanding BOD President whose first involvement with community leadership was serving as BOD President. While there are instances where a community seems to “magically” find new leaders, it has been my experience that the best-run communities actually “grow their own” leaders. They involve community members in projects and cultivate their residents to become their future community leaders. In more vital communities, Board Members are tasked with finding future leaders from the moment they join the Board themselves. This is an excellent strategy for long term governance success.

Altruism aside, public recognition for a job well done is very motivational for most individuals. While it may not be the same as making the front page of the New York Times, being written about in the pages of a community newsletter is rewarding to those being written about. It also inspires others to contribute as they seek the same recognition for themselves. It’s just human nature to want to do well and be recognized for a job well done.

The uninformed remain the uninvolved. If you are not using the resources available to you to tell your story well, you will likely have poor results in finding new leaders. If you find that your community is lacking in leadership prospects, take a look at how you are communicating with those potential leaders. If the only communication with the typical homeowner is to remind them to send in their common fees, pick up their pet’s waste, and stop parking in the fire zones, you can’t be too surprised when they don’t volunteer to be a part of the community leadership efforts.

The well informed become the most involved. If you learn how to project a positive image within your community, you are much more likely to succeed in finding volunteers who want to be a part of that success. Most communities take on tremendous challenges and they do so in the form of volunteer efforts on the parts of Board Members and Committee volunteers. You need to tell their story and celebrate their achievements.

Your regularly scheduled communications should have at least one volunteer success story each and every issue. You should also routinely ask for new volunteers for existing and future projects. The worst thing that could happen is that you will have told a positive story and rewarded a volunteer for their efforts. The best thing that could happen is that you will find success has inspired another volunteer to come forward. That new volunteer is likely to get active and stay active. That may just be how you find your next Landscape Committee member, who also joins the Board and two years later becomes Board President. At least, that’s how it happened for me…

Community Communications in the Age of CIOA Revisions

By Bob Gourley

Community Communications in the Age of CIOA Revisions

I have had the opportunity to moderate numerous discussions between community association attorneys and concerned members of Boards of Directors from condominium associations about the impact of the revised Common Interest Ownership Act, commonly known as CIOA (pronounced like the state of “Iowa” with a hard “K” in front of it). In the state of Connecticut, it will impact nearly every common interest community in one way or another.

My primary business is producing newsletters and communication products for community associations. While CIOA does not specifically address newsletters and websites, it is clear to me that the spirit and intention of the law is to shed light on the business proceedings of the governance of condominium and community associations. Many of the provisions of the bill are designed to give homeowners access to records that are kept by the association, and, in particular those records kept by the Board of Directors, their appointed committees, and the firms that manage their properties or act on behalf of the association’s members.

I have long held to the position that a well-informed association is a content association. I have also openly declared the need for communities to have regularly scheduled newsletters, notices, website updates, and other methods of communication. It is clear to me that this new legislation also supports these ideals. It is not enough to serve in earnest on the Board of Directors. Top-notch recordkeeping and timely dissemination of important information to all association members is no longer a favor to offer. It is a legal requirement that could bring dire consequences if ignored.

To that extent, I encourage my fellow condominium Board Presidents and Members to strongly embrace the idea of openness. Not just as a requirement of law but as a best practice in governing. You volunteered to govern your community. You were elected to serve in the best interest of all residents. You should have no problem with having the “light of day” shine brightly on your governance. In fact, I would encourage you to embrace it and understand that communicating with your fellow condominium association members is an excellent way to gain consensus on projects, open yourself to new possibilities, and even foster an environment where new volunteers come forth to serve.

I acknowledge that new laws can be challenging. At 58 pages and counting, fully comprehending the new CIOA legislation is a daunting task and may best be left to your community association attorney. However, you can embrace the spirit of the law and give yourself an advantage in governing at the same time. If you don’t already have a community newsletter, there has never been a better reason to start one. If you do already have a community newsletter, there has never been a better time to give a good looking over and make sure that it is as CIOA-friendly as it should be.

You should evaluate your distribution channels as well. Newsletters and notices that are mailed to members are CIOA compliant. Website postings and emails can be CIOA compliant but open you up to the possibility of lawsuit if not received by your intended recipient. For me, that means I will continue to use email and website postings for general information disclosure but my newsletter and meeting minutes will be mailed as well. I would rather communicate too much than risk having a member sue my association for not properly disclosing information.

I am interested in your thoughts on the matter. I have posted this article on the MyEZCondo blog at www.myezcondo.com. Visit the site and search for “CIOA” to find this post. Tell me about your community’s communication challenges in the age of CIOA and how you intend to cope. Great communication efforts begin with a single conversation.