7 Effective Methods to Running an HOA

Running a homeowners’ association is a complex task with plenty of difficulties and obstacles and the HOA must take effective methods to succeed. Leadership must juggle the interests of individual community members with the needs of the community as a whole. It is a particularly tricky task when common liabilities emerge.

Seven Suggestions for the HOA

The following seven strategies — along with directors & officers liability insurance — can protect HOA board members from these risks.

Consider Directors & Officers Liability Insurance

One of the first ways HOA leaders can make their efforts more effective is by investing in a customized insurance policy. This type of coverage offers protection against litigation, monetary mismanagement claims, and other liabilities that every HOA must contend with.

The HOA Should Set Clear Community Objectives

In addition to protecting an HOA from common risks, leadership must proactively develop goals to guide the organization’s efforts. One of the best methods for running an HOA is creating collaborative plans with help from residents. HOAs are more likely to achieve their objectives when everybody has an opportunity to provide input.

The HOA Should Engage Community Members in Issues

Community members must also be able to offer their input on important community matters. Board members cannot prioritize their interests or promote policies for their benefit. Instead, the voice of homeowners must have representation when any community issue is at hand.

Create More Efficient Board Meetings

Effective HOA management also demands that board meetings be efficient and engaging. According to statistics, 95% of meetings attendees will lose focus at some point. Meetings should have a purpose with a clear agenda that board members address promptly.

Prioritize Transparency in the Budget

An HOA’s budget is one of its most significant sources of liability. Indeed, mismanagement of funds or violation of fiduciary duty is two of the most common accusations against HOAs. These allegations can result in legal action and substantial financial fallout in both cases. HOAs must be transparent and maintain accountability to prevent this.

Enforce Policies With Care and Consistency

The inconsistent application of policies is yet another common liability facing HOAs. Unfortunately, it’s not uncommon for community members to see selective enforcement. In addition to the apparent problem of allowing infractions to continue, this may lead to the accusation of discrimination, another significant liability that HOAs should avoid.

Connect With a Directors & Officers Liability Insurance Agent

Many HOA members invest in directors & officers liability insurance and assume they don’t need to worry about liabilities. This policy offers protection, but HOA members can further mitigate risk by establishing a relationship with their insurer. This connection can help HOAs apply better risk management strategies.

About Kevin Davis Insurance Services

For over 35 years, Kevin Davis Insurance Services has built an impressive reputation as a strong wholesale broker offering insurance products for the community association industry. Our president Kevin Davis and his team take pride in offering committed services to the community association market and providing them with unparalleled access to high-quality coverage, competitive premiums, superior markets, and detailed customer service. To learn more about the coverage we offer, contact us toll-free at (855)-790-7393 to speak with one of our representatives.