Self Assessment Tool

Community Association Self-Assessment Tool

Below is a list of items that will help evaluate the health of your association.  Answer each question yes or no.  Count each yes and see the ratings for scores at the end of the list.

  1. _____The Board of Directors has clear, concise, written goals.
  2. _____The roles of each Board office and the directors is defined in writing.
  3. _____The management company’s duties is defined by written contract.
  4. _____Board members receive regular training to improve association business.
  5. _____New board members receive an orientation about the governing documents, policies and critical issues.
  6. _____Each board member has a copy of an operations manual with basic need-to-know information.
  7. _____The Board has the directors required by the governing documents.
  8. _____Board avoids all conflicts of interest (no self dealing, nepotism, etc.).
  9. _____Governing documents conform to state statute and include:
    1. _____How and when notices for board meetings are made.
    2. _____How board members are elected, appointed and removed.
    3. _____What director terms limits are.
    4. _____Quorum requirement for business decisions.
  10. _____There is a written procedure for handling emergencies.
  11. _____Board members serve without compensation.
  12. _____There is a written calendar of events and meetings.
  13. _____Board meeting attendance is mandatory for all directors unless excused by the President.
  14. _____Meetings have written agendas and supporting information provided to directors in advance.
  15. _____Board Meetings are open to all owners and held in a visitor friendly location.
  16. _____Meeting minutes are recorded and promptly distributed to all owners.
  17. _____Timely monthly financial reports are prepared, reviewed by the Board and made available to owners.
  18. _____Physical assets are properly maintained.
  19. _____The association has all necessary insurance coverages:
    1. _____Directors & Officers Liability
    2. _____General Liability
    3. _____General Hazard Insurance with Guaranteed Replacement Cost
    4. _____Employee Dishonesty
    5. _____Building Ordinance & Law
    6. _____Earthquake
  20. _____Fraud prevention methods are in place to guard against embezzlement.
    1. _____Bank reconciliations are reviewed and approved by the board of directors.
    2. _____All reserve account checks require two signatures.
    3. _____Checks are issued only with properly approved invoice or check request.
    4. _____No checks are made payable to “Cash”.
    5. _____No checks are presigned.
  21. _____There is a written delinquency collection policy.
  22. _____All delinquencies are pursued in a timely manner.
  23. _____All filings are current:
    1. _____Annual Registration
    2. _____Articles of Incorporation
    3. _____IRS tax filings and reports
  24. _____The association has a professionally performed reserve analysis and a long range plan for funding repairs and replacement.
  25. _____The Board conducts an annual operating and reserve budget review and formally adopts a new budget each year.
  26. _____The Board adopts an Annual Management Plan that prioritizes goals and sets timetables.
  27. _____All rules are relevant.
  28. _____Rules and policies are written.
  29. _____Rules are enforced uniformly.
  30. _____There is a violation appeal process.
  31. _____The association sends out regular and informative newsletters.

How did you score?  If you answered “Yes” to:
41-46 Questions:  EXCELLENT Still room for improvement.
36-40 Questions:  VERY GOOD You’re close, but roll up your sleeves and close the gap.
31-35 Questions:  GOOD You’ve got serious work to do.
30 or less Questions:  DANGER

HOAs – A Family Business

Running Homeowner Associations Like Family Business

by Richard Thompson

While homeowner associations are clearly business enterprises, some feel they should be run and have the feel of healthy family…a kinder, gentler corporation.  But even families have to deal with their internal issues and the outside world in order to survive and prosper.

For example, homeowners that undertake remodeling must deal with bids, contracts, know how to negotiate, deal with problems in contractor performance, etc.  Budgeting for short and long-term expenses, managing cash flow and bank accounts, paying taxes, understanding financial statements related to investments and net worth, purchasing insurance, etc., are things that families and homeowner associations alike must deal with.  Ditto for managing physical assets like roofing, decks, paint and other things that require repairs and preventive maintenance and periodic replacement.

Healthy families have rules, duties, mutual expectations of courtesy and consideration, and accountability amongst members.  These things may be unwritten, but still play a significant role in day-to-day life, just as with homeowner associations.  Some families function via consensus and have family meetings, processes common with associations.  Further, family members require education and training, just like boards and committee members.

Accomplishing objectives and maintaining harmony requires listening skills, compassion and the powers of logic and persuasion.  Dictatorial, selfish and abusive treatment produces the same negative results in both environments.  And there are unpleasant extremes in both environments — Jimmy Cagney in the lead role of the movie “One, Two, Three” ran his family just like he ran his business.  His domineering style worked with the business but not the family.

Perhaps the most notable distinctions between homeowner associations and families are assessment collections and the use of professional overseers.  Although with the latter, some say that is why God created in-laws.

Professional Management

What Can A Professional Property Manager Do For You?

Historically, renting your home has been considered a relatively simple and low risk undertaking.  However, in recent years, this apparently simple task has become progressively more complex and the risks associated with becoming a landlord far greater.  While managing your rental is certainly within the abilities of most property owners, the time and effort involved in management may be greater than the cost of hiring a professional property manager.

The professional property manager is conversant with the applicable statutes and regulations relevant to the management of rental property.  In addition, the manager will typically perform the following tasks as part of the management service:

  • Advertisement of the rental property
  • Screening of potential residents
  • Preparation and execution of rental agreements
  • Disbursal of funds to the property owner
  • Collection of rents
  • Monthly and year-end accounting
  • Coordination of maintenance and repair work
  • Periodic property inspections
  • Disbursal of deposits in accordance with state law
  • Eviction of residents for breach of the rental agreement

Advertisement of the Rental Property

Until recent years, advertisement of an available rental meant placing a “For Rent” sign in the front yard and possibly placing an ad in the local newspaper.  Times have changed.  Today, while the old stand-bys are still used, effective advertising also includes extensive use of the internet, making availability of the property known to real estate professionals, and targeted advertising to large employers.

Screening Potential Residents

Once an application for rental is received, it must be determined if the applicant is qualified to rent the property.  Has the applicant been evicted from a prior rental?  Does the applicant earn sufficient income to pay the rent?  These questions, as well as others should be answered prior to approving the applicant.

A professional property manager will typically check four areas when screening an applicant.  These are the applicant’s credit report, income, employment, and rental history.  It has become almost universal that the applicant’s credit report be checked for late pays, judgments, liens, or bankruptcies.  The applicant’s employer is typically contacted to verify income, and the applicant’s prior landlord is contacted to verify rental history.  While there are few perfect applicants, the information gleaned through the application review process can greatly reduce the likelihood of renting to an unqualified resident.

Preparation and Execution of Rental Documents

After the applicant is qualified, the necessary rental documents must be prepared and executed.  Gone are the days of going to the local stationery store and buying a preprinted, two-page rental agreement.  Today, rental agreements are custom drafted to reflect specific state statutes, and sometimes, applicable local ordinances.  In addition to the rental agreement, any required addendums are prepared and may include an addendum relating to pets, a no smoking addendum, an addendum relating to pool use, and if the property was built prior to 1978, a lead paint addendum.  Further, a move-in inspection is completed and documented for review by the resident at execution of the rental agreement.  Ancillary forms relating to transfer of utilities and trash pick-up may also be needed depending on the location of the rental property.

Collection of Rent

Every property owner would agree that timely payment of rent is critical.  If the applicant was properly screened prior to acceptance, most poor rental risks will be eliminated.  However, circumstance beyond the possibility of screening can adversely affect the resident’s ability to timely pay rent.  These circumstances include loss of employment, injury, illness, and changes in marital status.  When the resident is unable or unwilling to pay rent, the property manager has the ability to effective move forward with the collection process, or if that fails, terminate the rental agreement and locate a new resident in the minimum amount of time.

Disbursal of Rent to the Property Owner

Typically, the property manager will receive rent on the first day of the month, with disbursal of funds to the property owner between the fifteenth and twenty-fifth of the month.  Because the property manager is required to hold all funds in trust, funds must be held until checks clear, which may take as many as ten working days.  In addition, time is required for the accounting and statement preparation process.

Monthly and Year-End Accounting

The property manager will provide you with a monthly statement showing all income and expenses associated with your rental property.  In addition, you will receive a year-end statement showing all income, and expenses broken out by category.

Coordination of Maintenance and Repairs

If you have ever had a resident at your rental property call you at 2:00 a.m. to tell you that the water heater is leaking and your rental is three inches deep in water, you will appreciate having a professional property manager.  Most property managers maintain a twenty-four hour system for receiving emergency repair calls and relationships with a variety of skilled tradesmen capable of handling any emergency.  For non-emergency repairs or preventive maintenance, you are contacted in advance to discuss the work and its potential cost to your.

Periodic Property Inspections

Does the resident have an unauthorized pet?  How about six roommates not listed on the rental agreement? These, and other similar problems, can only be found through a physical inspection of the property.  Typically, your property manager should have a representative inspect the property one to two times during the term of the rental agreement. Inspections may be conducted either as a scheduled appointment with the resident, or while repairs or scheduled maintenance is performed.

Disbursal of Security Deposits

After the resident moves out of the property, the condition of the property must be assessed and any damages charged to the resident’s security deposit.  However, the property owner is not permitted to charge for “normal wear and tear.” What can be charged for that red wine stain on the white carpet?  How much for the numerous nail holes in the living room wall?  These, and similar questions are addressed by the professional property manager every day.

Further, did you know that if the resident is not provided an itemized statement of deductions from the deposit within thirty days of termination of the rental agreement, the property owner is precluded from making any deduction for damage to the property?

Eviction For Breach of the Rental Agreement

Probably the most difficult part of owning rental property is evicting the resident who has failed to meet their obligations as stated in the rental agreement.  Typically, this means that the resident has failed to timely pay rent.  The professional property manager can handle the eviction process efficiently, while making the process far less difficult for the property owner.


The professional property manager provides a cost-effective service in the rental and management of investment property.  While the above discusses the functions performed by the property manager, it should also be noted that efficiently and competently performing these functions minimizes potential risk to the property owner and in the long term, maximizes returns from the investment property.