Transparency Matters in Community Associations

Community association legal observers say trust and a strong communications policy is the foundation of a strong and transparent relationship between the board and homeowners. One of the most important aspects of community association governance is trust. Building trust between HOA and condo boards means keeping residents informed, listening to concerns, and respecting their input.

For a community association to perform at a high level, the membership must have confidence that the board is going to act fairly, consistently, and in the best interest of the association, according to Adam Beaudoin, an attorney with Ward and Smith in Wilmington, N.C.

“Board transparency is key to developing and maintaining member confidence, and ultimately member trust in the board,” says Beaudoin, a fellow in CAI’s College of Community Association Lawyers (CCAL).

Being transparent is important for two reasons-it’s the law and it’s good business practice. “Most jurisdictions have very specific recordkeeping requirements and disclosure laws,” says attorney Brian S. Edlin with Jordan Price in Raleigh, N.C. “Many jurisdictions require board meetings to be open at certain intervals for members to address their concerns,” he adds.  

Transparency among board members and owners also demonstrates good faith and adds credibility to board decisions. “Conversely, secrecy and anything less than transparency in good faith can lead to mistrust and lack of respect for difficult board decisions,” according to Edlin, who also is a CCAL fellow.

Beaudoin recommends community associations adopt a communication policy that embraces transparency. This policy should establish the following goals:

• Establish the process for how residents may communicate with the association, board of directors, and/or management.
• Create minimum standards for responding to resident inquiries, including the appropriate tone and type of language.
• Effective and timely communication between the association and members and residents.
• Promote resident involvement in the community and an understanding of association issues.

“If the board stick(s) to the policies it adopts with respect to communication with the membership, (it) will go a long way to improving communication and building trust with residents,” says Beaudoin. “Communication must be a two-way street. The board should adopt communication policies with the membership it intends to follow.”

Additional tips to promote transparency include designating portions of board meetings to listen to and address owners’ concerns and respond promptly to records requests. Sending out regular electronic newsletters informing owners of important dates, events, and issues in the community is a great way to keep residents in the loop. “Listening when owners are present is imperative,” says Edlin, adding boards should empathize with owners who bring them their concerns.

Beaudoin suggests board members avoid falling into the poor communication “T-R-A-P” by being:  Transparent, Reasonable, Accessible, and Proactive. Board members should look for ways to communicate with the membership in a timely and consistent manner. Creating opportunities for residents to have in-person access to the board can go a long way to building trust. “The board shouldn’t keep secrets or withhold bad news,” he says. “Bad news is like produce, it gets more rotten the longer it sits.”