Community Associations Come of Age

By Kleine, Douglas M. | Journal of Property Management, September/October 1992 | Go to article overview

Community Associations Come of Age


Kleine, Douglas M., Journal of Property Management


As the modern community association movement fast approaches thirtysomething; old questions are still haunting us, old values no longer necessarily apply, and the industry is not nearly as mature as its years would indicate. Five areas in particular highlight the challenge to the industry today and point the way toward new ideas and structures for the future success of community associations.

THE CRISIS OF LEADERSHIP

There is a crisis in volunteer leadership of community associations. The social and economic prognosticators of the 1960s and '70s foresaw a leisure society with short workdays and workweeks--plenty of time left over to invest in running a community association. And if the principal breadwinner in the family did not have time, then spouses and retirees would fill the void.

Today, however, the workday is longer, heads of single-parent households try to accommodate a career and raising a family, and dual-wage-earner couples compare Daytimers to see when they both have time for a quiet conversation. Busiest of all are the "retirees" who have gone back to college, started second careers, and immersed themselves in an active stage of life. For community associations, this means fewer volunteers for boards and committees.

Some solutions are already in place. Many associations are using task forces rather than committees. Where permitted by state law, owners have amended documents to allow renters or third parties (outside directors) to sit on the board. Some attorneys are drafting documents that specify boards with only three directors.

However, more substantial and long-lasting answers to the crisis in leadership may require new governance concepts. In particular, it may be inappropriate for community associations to continue to borrow the corporate form of governance and decision making.

In many respects, the corporate model conflicts with our ideals of neighborhood governance. For example, there is nothing democratic about the weighted voting schemes often used in community associations nor in requiring the ownership of property as an absolute qualification in order for a resident to have a voice in selecting those who make rules about everyday behavior.

One response, developed by consultant David B. Wolfe, a community association pioneer of the 1970s, is a "strong mayor" form in which the association president is elected community-wide, and that person then appoints the professional manager.

Another innovation comes from attorneys who draft documents for mixed-use projects and large associations. The drafters have been using concepts of district representation and class voting to provide balance in governance structures (although class voting reached back to corporate control maneuvers).

In very small associations, some attorneys have used the "managing general partner" model, choosing one person to do it all--in effect a president with no board.

State laws need be more flexible to allow for innovation. The Australians use a government-appointed trustee or receiver in situations of failed leadership or mismanagement. The solution in the U.S. may not lie so much in government intervention as in state legislatures' loosening the requirements of existing law, particularly condominium statutes, so that there can be greater experimentation with new decisionmaking apparatuses and techniques.

The secondary mortgage market, which was the legal document standard-setter of the 1970s and '80s, must not lock us into the old ways, but rather be more tolerant of document provisions that deviate from the guidelines previously established by the federal and quasi-federal agencies.

A part of the solution also must come from community association leaders and from educational groups. Surveys by the CAI Research Foundation indicate that associations budget less than 1 percent of their income for communications. That is not enough for effective leadership.

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