In this series, we ask our experts for their advice on real-life situations that residents and board members of a homeowners’ association (HOA) are currently facing. Read on to learn this HOA’s dilemma and what our experts advise.
HOA Dilemma: Tennis Courts: For Work or Play?
There’s a homeowner in our HOA who makes their living as a tennis coach, giving lessons using HOA courts. This coach has a contract with the HOA. In the contract, it details the hours in which the coach can reserve courts for lessons and how far in advance they can reserve them. In return, the coach is required to pay the HOA a portion of their revenue. However, there’s no independent oversight of the revenue they report, and the board lets this person make reservations outside of the times allotted on the contract. They’re also allowed to reserve courts much farther in advance than other homeowners, so there aren’t many remaining slots for private play. How do we move forward so that other homeowners get fair play opportunities and the HOA is fairly compensated?
Manager’s Advice: Update the Contract
“If there are breaches of contract occurring on both sides, the board must change the contract so that expectations, opportunities, and restrictions can be reset. Some obvious solutions here are implementing a clock or check-in application to track the time when the court is being used for a reservation, so that revenues and reservations can be audited. You can also set expectations for a maximum period or set times of use for reservations. The time given to book reservations should be equal for all parties. For a fair and equal opportunity for the tennis coach and unit owners, discuss the situation among board members. If appropriate, follow up with homeowner input. Consider sending a poll to unit owners to help find a solution that works for everyone.
This is a great opportunity for the tennis coach to use the courts and generate revenue for the community; however, it is critical to note that all unit owners pay for the maintenance and repairs of the tennis court through dues, so they technically own the court. Even though it sounds like a good deal for the community, the financial boost may not be all it’s cut up to be.”
- Ben Sloman, CMCA®, AMS®, PCAM®, Director of Community Management, Colorado Association Services
How to Do It: Changing a Contract
Successfully running an HOA is a group effort. To maintain a well-functioning community, it takes an engaged board, involved homeowners, and a team of trusted professionals. The right partnership can optimize spending, while the wrong relationship can cause homeowner discontent and financial loss.
That’s why it’s so important to be mindful of who you do business with—verify credentials, call references, and, most importantly, review every detail in the contract before signing on the dotted line. Make sure to involve your association lawyer, take your time, and ask questions. The contract should detail how changes to agreed-upon restrictions and services will be approved, who approves them, and when they’ll be executed.
Manager’s Advice: Create a Policy and Committee
“I would advise the board of directors to respond to the situation by first referencing the governing documents to ensure they’re working within the scope of their authority. Then, together with an attorney, adopt an administrative policy resolution that outlines the process allowed for any tennis coach, detailing factors like payment structures, time restrictions, and reservation notices. I would also recommend forming a tennis court committee made up of homeowners to help manage and enforce the restrictions within the policy. Maybe one committee member would be responsible for providing oversight on the revenue portion while another monitors compliance of court use. The coach should have the same reservation requirements as homeowners to be fair. Finally, this process and policy would need to be communicated to all homeowners and coaches. Communication to owners is key for excellent service.”
- Karla Strader, CMCA®, AMS®, PCAM®, Community Director, Colorado Association Services
How to Do It: Creating a Committee
Committees are essential to a successful HOA. They consist of homeowners who volunteer their time and efforts to consider, investigate, and take action on HOA-related tasks that require group oversight.
While some governing documents specifically name mandatory committees, an association’s board usually has the power to adopt additional committees they deem appropriate, such as a tennis court committee.
When forming a committee, determine the basis for establishment, call for volunteers, define the decision-maker, get the big picture, and set to-dos and reporting structures.
Management Corner: Understanding HOA Budgets, Reserves & Assessments
It’s often difficult to fully comprehend the financials of an association. Where is the revenue coming from? How are assessments impacted? What does the budget look like now? To learn more about budgets, reserves, and assessments and how they impact a homeowner’s expectations, read our article “Management Corner: Understanding HOA Budgets, Reserves & Assessments”.