COMMUNICATION: (ke myoo’ne ka shen) noun. 1. The act of transmitting information 2. a giving or exchange of ideas, by verbal or written medium 3. the art of expressing and imparting knowledge to others.
This description is truly the essence of community association living. In its definition we see one of the easiest solutions to a peaceful way of life in a common interest development. If we were to communicate in a clear and concise manner with our family, neighbors, maybe even the board of directors, (nah, that’s really asking too much) we might experience a smoother and more efficient lifestyle.
When it comes to the financial side of life in a community association, it is likely that communications exist in the form of occasional signature cards and annual budgets. Not to mention the uproar when the Board decides to increase the monthly fees. Since the finances and long term reserves are the life-blood of an association, vital information about [<How>], (how are we doing so far) as well as How Much, (do we have vs how much do we need) When, (do we need to use it), Where (does anyone know where the money is) and Why (aren’t we earning more), should be communicated not only between the board members, but, yes Marge, to the homeowners as well at appropriate times.
With this type of communication the board maintains complete control over the day-to-day operating activity of the association as well as the future planning, investments and implementation of reserve replacements and the disbursement of funds for these requirements.
Communication between the board and Management Company is also vital to ensure a smooth flow of funds, and maximum advantage of investment opportunities. This is easily accomplished if the board has a designated contact for all communications between their investment advisor and/or the Management Company.
Furthermore, when these members are up for re-election or the board is due to change, an alternate or back up should be designated to assist or fill in for the appointed individual. This way a smooth transition and constant communication is maintained throughout the board and the association as a whole.
Since the financial status of an association is it’s daily bread and butter, it makes sense to keep in contact with several experts like your CPA, tax advisor and Investment Specialist for any changes that may affect the overall operation.
Keep up to date on legislation that may affect your association, communicate with your local representatives who are in constant contact with elected officials and monitor the pulse of community association living.
By communicating both internally, with your own board members, as well as externally, with the management company, specialists and your homeowners, you will see a definite improvement in your operations and quality of life.
Remember, if you are a board member, you control in most cases, a multi-million dollar Corporation… and many corporations have prospered and grown through excellent communications, or withered and died from the lack of it. In addition to your voluntary effort, you have taken on an enormous responsibility and a fiduciary duty, but in the end…The choice is yours.
Helping You Build a Firm Financial Foundation For Your Future
Nico F. March is the Managing Director for The March Group, LLC. He has worked with Community Associations since 1974 and has served on several Boards, including the Board of Directors for the Community Association Institute (CAI), San Diego Chapter. His team has specialized in Corporate Cash and Association Financial Management since 1982 and has assisted over 1000 Associations, Nonprofits and Timeshares invest over $4 Billion in reserve, operating and reconstruction funds. Nico and his team work out of their San Diego and Wyoming offices and may be reached at 888.811.6501 or email [email protected] for further information and consultations.
The March Group is not a tax or legal advisor. We will be glad to work with your professional CPA and Attorney to help you with your financial goals. Neither the information contained herein nor any opinion expressed shall be construed to constitute an offer to sell or a solicitation to buy any securities mentioned herein. Securities offered through LPL Financial, Member FINRA/SIPC.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual or organization.