THE BOARD
. . .
Sometimes, good intentions go bad.
When things go wrong, there are
always lessons to be learned. Read on.
When good
intentions
GO
BAD
N
ot all decisions are easy. Be careful not
•
Oubaai Golf Resort and Spa
What went wrong? The board had been
•
self-managed for 15 years, and away. In this litigious world, if you have aware that it was doing anything wrong. a question, seek advice. Surround the Prudent business practice would be to board with competent advisors. This obtain three bids for the job, and to stay regularly
scheduled
will make your job easier. What follows away from hiring a board member to do the throughs
to
work. that needs attention. Particularly, view
are eight real-life examples of situations faced
by boards of directors.
•
SCENARIO #1
was not
What went wrong? The board did not
to ignore a problem and hope it will go
have regular landscape walk-throughs to
view the property.
•
Lesson
to
be
learned:
Do
periodic,
landscape
discover
any
walk-
situation
Lesson to be learned: Board members landscape areas that impair driving or
must create visibility hazards. Correct them
educate
themselves
concerning
HOA issues, and must be aware of current immediately
To save money and time, the board hires issues facing boards, what to look out for, Maintain adequate insurance. Consult a
a board member to install windows at a 50- and how to avoid mistakes like this one. knowledgeable insurance broker.
unit complex. The job is estimated to cost
as
a
matter
of
safety.
R300,000. The final bill comes in at R375,000. SCENARIO #2 SCENARIO #3
The special levy amount of R3,000 per unit An estate has private streets that intersect A home owner complains of inadequate
is not enough. The board must ask for more with public streets. At one such intersection a barriers in and around the play park. Young
money. what car was making a right-hand turn. The line of children can easily escape the reach of
happened, and discover that the board did sight of the driver was blocked by a tree and parents and wander into the street. The board
not get external companies to bid for the job, bushes growing on the corner. The car hit a ignores the complaints, or does not act to
which means there was a conflict of interest. 10-year-old child on a bicycle. The child died of investigate or remedy the situation. A young
Home owners sue the board for breach of multiple head and internal injuries. toddler runs out of the park, wanders into the
Irate
members
investigate
fiduciary duty and negligence.
street and suffers permanent, serious injury.
56
INDUSTRY JOURNAL