How the Entire Community Benefits When the HOA Board Embraces Technology

Dan Stondin
CEO, homey.io

Serving as a volunteer board member on a homeowner association (HOA) board can be complex and overwhelming. Many HOA volunteers are not experts in areas they are required to navigate. Financial planning, legal proceedings, conflict resolution, and conducting effective meetings are just a few examples.

One daunting area for many board members is technology. So many HOAs underutilize or simply disregard technology solutions because of the perceived complexity, cost, and lack of expertise. Stop: This aversion costs HOAs a lot of time, money, and efficiency. We must dispel the stigma of being consumed by technology. With rising costs due to inflation and a new generation of tech-savvy, data-driven members, HOAs must evolve and embrace technology to build associations that focus on community health and not day-to-day operations.

In recent years, technology and software, in particular, have come a long way. They are much easier to use, with many people transitioning aspects of their personal and professional lives to digital solutions without even realizing it. From online banking and video conferencing to filing taxes, technology has reduced stress, improved accuracy, and saved people time and money. Technology has also given people options! Comparing auto or home insurance quotes in minutes makes insurance companies fight for your business, not the other way round.

So if we’re embracing technology in our personal and professional lives, why aren’t homeowner associations doing the same? One possibility is that associations are looking for solutions to the wrong problems. Demanding homeowners often ask for ways to easily report “issues” or post pictures online of the last community event. While nice to have, these technology applications mainly benefit homeowners while creating even more work and overhead for board members! Instead, boards should identify real pains and inefficiencies within their association, seeking out technologies that save time and money and provide additional expertise.

Tax software is an excellent example of how “expert-in-a-box” solutions have undoubtedly saved countless taxpayer hours and stress-filled days. The software elegantly guides users through the tax filing process by asking understandable and relatable questions designed for the average taxpayer, not a tax professional. In the same way, complex bookkeeping systems are rapidly moving online, enabling online deposits, vendor payments, and the production of financial reports—all requirements of a traditional business and all requirements of an effectively run homeowner association.

Associations that utilize technology provided by a management company should not simply assume the solutions are high quality and without alternatives. Often management companies will adopt software that makes sense for their business and not the association's business. It is time that associations start looking at technology solutions as a critical management decision area and regularly identify problems in the HOA and ask: Is there a technology solution out there that could resolve the issue and save money and time? Many HOA’s are using antiquated, expensive systems and services. Who on the board is charged with reviewing these technology systems and services? This is an essential role for the association. An ongoing technology review is a fiduciary role of the board.

California Corporations Code §7231 requires that board members follow the duty of loyalty and care. The duty of loyalty requires HOA board members to act in the association's best interests. This means a board member must make decisions for the good of the community, without respect to the personal impact the decision might have on them, either directly or indirectly. Also, the association must always protect confidential records, information, and data of the association and its membership as required by privacy laws, the Davis-Stirling Act, and other laws. The duty of care requires HOA board members to be diligent and informed when making decisions and performing board duties. While the Board can rely on support from managers or staff when making decisions, ultimately, the final responsibility for decisions lies with the board. In today’s world, ignoring these technological solutions is simply abdicating the board's responsibility to steward investments, minimize costs, and create community.

So, where should the board begin?

1. Recognize the real problems.
2. Accept technology review and advancement as a vital duty of the board.
3. Assign a person or committee to review technology solutions periodically.
4. Develop a strategy – starting with the squeaky wheel but most likely focused on the highest cost areas of the association.
5. Regularly audit the associations' technology and any technology provided by a management company.
6. Identify and recruit homeowners with operational technology proficiency.

What systems should be considered for technology in an HOA?

Finances

1. Budgeting
2. Collecting assessments
3. Monitoring expenses

Reserves

1. Long term forecasting
2. Tracking replacements

Communication

1. Meetings
2. Board decisions
3. Planned changes to rules, regulations, and owner obligations

Projects

1. Bids
2. Management
3. Vendor payments

Documentation

1. Minutes
2. CC&R’s
3. Warranties

Taxes & Insurance

The more an association can effectively minimize time-consuming, expensive, and stressful tasks, the more likely homeowners will be to volunteer their time, join the board and share the collective responsibilities. Start small, identify your association's most inefficient areas together, and don’t get overwhelmed.

This article is published in the ECHO Journal Issue Two 2022