Board Walk: Help Associations Understand Ethical and Unethical Behavior

Article excerpt

Ten years ago I switched from managing executive high rise rental buildings and commercial properties to managing homeowners associations (HOAs) or common interest developments (CIDs). Very quickly, rather than dealing with renters or business tenants, I was interacting with homeowners who had careers in law, medicine and the highest levels of business management. In this management arena, I found individuals--even whole boards--who were unaware of the ethical issues facing them everyday in their homeowner's association.

Owners often run for board positions because they want to use their influence to change vendors, get contracts for family members or friends, or change the operations on the property.

To avoid this situation, associations should include clauses in the association rules and regulations to say that vendors, owners and personal friends cannot be invited to submit bids on the property or consider working on the site. Creating such a working relationship is unethical for the manager, staff and board members.

In relation to choosing the right vendors or contractors, be sure to seek out three competitive bids, and evaluate them carefully with the board and others as appropriate. No matter how hard you are pressed by a vendor or contractor to share the other competitors' pricing, remain professional and do not share that information.

I've also learned along the way that board members and owners unknowingly behave unethically without understanding the impact. Here are some examples and advice on correcting this situation:

* Board members may be unaware of the confidentiality of board meetings. It is best to tell board members that what is discussed in the board meeting should stay with the board, especially in regard to major decisions made during the meeting.

* Many times unit owners will give keys and security codes to maids, contractors and friends. …