It’s a constant refrain in multifamily governance and management: open, transparent communication between boards, managers, and residents is vital to running a building or HOA effectively and equitably. Unresponsive, disconnected leadership makes for apathetic, even resentful residents—and that leads to all kinds of problems, from rule-breaking all the way to litigation. 

But should all the details of a community’s administrative life and governance be available to all? Of course not. Individual members’ personal confidential information must be protected, as well as some of the boards’ communications and decision-making. But outside of those specific contexts, for effective management of a community’s business, transparency must be not only the byword, but the everyday practice.

Why Complain?

There’s an old adage that says, in short, “If you don’t vote, you can’t complain.” In shared interest communities, which are essentially mini-democracies, there’s plenty of voting—and plenty of complaining. While residents can (and do) find just about anything to complain about, lack of transparency is often at the root of many gripes.

“In my experience,” says Kris Kasten, a partner with Chicago-based law firm Bartzen Rosenlund Kasten, “owners generally complain about the board either for not doing something, or not doing things properly. One of the most significant factors leading to owner complaints is lack of communication, or communication that’s unclear. Timely and effective communication, whether through technology or using old fashioned paper, will greatly increase transparency.”

Scott Wolf, CEO of Boston-based management firm BRIGS, fills in the picture of where owners are coming from on this issue: “They just want to know what’s going on,” he says. “They may not necessarily want minute details, but they want to be kept in the loop. For instance, we’ve found that owners appreciate it when boards distribute monthly income statements. Why? Because they know where their money is going.”  

Yotam Cohen, CEO of Daisey, a management firm based in New York City, agrees.  “A building’s ecosystem is built on trust,” he says. “Trust comes from transparency, responsiveness and clear communications. We believe transparency is the foundation of good community relations between the board and the members. The alternative is mistrust, and upset owners.”

“In addition to transparency, timeliness is a big issue,” adds Scott Piekarsky, a principal with the law firm of Offit Kurman in Hackensack, New Jersey. “Many times though, residents want instant gratification when they ask a question or make a complaint. They want full disclosure, and they become impatient.” 

Of course, sometimes that’s easier said than done. Governance in shared interest communities is carried out by volunteers, and between jobs, families, and just busy lives in general, their response time can often be slower than residents would like. That doesn’t mean that a board has abdicated its duties, says Piekarsky.  “Boards aren’t dragging their feet purposefully,” he notes—they may be gathering information or looking into a situation in order to render a more informed, substantive answer to a member’s query or complaint. 

Common Complaints & Mistakes 

Multifamily residents voice complaints over a wide range of issues, often revolving around what the board is not doing. Among the most common grievances are boards holding meetings without giving owners adequate (or any) notice, not holding open meetings, or drafting and adopting budgets without any input from the residents footing the bill. Quality-of-life complaints are also rife; everything from noise issues to lax access control can lead to much larger conflicts if not dealt with proactively. 

“One of the most difficult aspects of dealing with owner complaints is their subjectivity,” says Kasten. “Sometimes an owner raises a legitimate issue impacting the community that the board should address. Unfortunately however, sometimes owners complain unreasonably about situations that simply cannot be avoided when many people live in close proximity to each other. Take sound transference for example. The construction of a building may make it nearly impossible to eliminate all sounds coming from neighboring units. For a very sensitive owner, even faint sounds, barely audible unless there is complete silence, can be a source of complaints. The board should treat all complaints seriously and the same. However, a complaining owner who is very sensitive may never be satisfied. In those situations, the board, with advice from its attorney, will have to make a decision as to when it has taken sufficient action and can close the file.”

Cohen notes that in his experience, “There are two types of board members.  Either they see transparency as a double-edged sword and don’t like it, or they are comfortable with it. The former type can lead to conflict with the residents. We prefer to work with the latter type, but we don’t pick the board; the community members do. We believe transparency is the right way—really the only way—to run a community.”

What Not to Share

As previously mentioned, upholding a policy of information sharing doesn’t mean that non-board residents have the right to demand access to every document or decision the board makes. Some items, like residents who may be in arrears, or who have their own litigation pending with the board, management, or other residents, should be discussed in closed session, and otherwise kept confidential. 

“Boards and board members must show discretion about what they say and do,” says Wolf. “We go to private or executive session meetings to discuss issues that require discretion like fines or arrearages, things the board can’t talk about publicly. During the executive session, we cover issues and topics that require discretion and privacy. 

“There are also times in an open meeting when an owner may have an issue they want to discuss privately with the board,” he continues. “We can schedule a session for them and add them to the [otherwise closed] meeting. This protects their privacy.” Wolf notes that board members are made aware of what types of information are protected when they are elected, and that managers and association attorneys monitor what information is released, and why. “Discretion should be shown with personal and financial info and situations like health issues,” he says, “but otherwise transparency and more of it is a good thing.”

Improving Responsiveness

Piekarsky suggests several ways boards and managers can improve responsiveness and transparency. “Websites are an excellent way of getting information out there. Regular communications and newsletters are good alternatives, but board members are unpaid volunteers, and that requires extra effort on their part.  Boards can certainly ask their management to do a newsletter, though in some cases, the management company may charge for that.”

Another option, continues Piekarsky, is open meetings, both in-person and on virtual platforms. “I think open meetings and platforms are important,” he says. “A lot of people like an open forum where they can ask questions and be heard.  Often, just being heard may be more important than the issue itself—though that depends upon the person asking. If they have a beef with the board, they want to be heard. They want the big forum, in-person format to communicate and build consensus.”

Wolf notes that in-person and Zoom meetings are important, and that having a virtual option has made meetings easier and far more convenient for residents and board members alike to attend. “If you can sit on the couch, you’ll attend, and it can be more productive in many ways,” he says. “It’s tough to get a quorum for an in-person meeting, so Zoom is often better, because attendance is higher when it’s on a virtual platform. You can also do a hybrid meeting in-person and on Zoom. If you are talking about an insurance claim or a special assessment it doesn’t hurt to do an in person meeting. Only when the need is dire—like a huge assessment, for example—do members really tend to show up.”

As concerns board meetings specifically, Kasten believes, “Holding board meetings open to the members of the community association is incredibly important for transparency. Attending board meetings is the best way for a member to learn what their board is discussing and doing. When members think that the board is operating in secret, divisiveness and acrimony within the community may arise, especially between members and the board, and even the property manager.”

“One thing I consistently see when taking on new clients is how disorganized they are,” notes Cohen. “Often it’s chaos. Information is not easily accessible. There’s no excuse for that today. Technology has provided an easy path to much greater transparency; it makes it a lot easier to communicate. If information is not easily accessible it’s very hard to be transparent. The point I want to emphasize is that technology helps.”

Another tech-powered option for improving transparency is establishing a secure online portal accessible only by community members. The portal can be used to increase transparency by making meeting minutes, budgets, and other documents, such as reserve studies, available to members. The portals require members to have a password to access them, so any confidential or proprietary information is not available to the general public. The portal can also be used to communicate with owners about work orders, for posting meeting notices, and informing members about times and dates for when maintenance work will be done, just to name a few. 

Unique State Requirements

While transparency between boards, managers, and residents is certainly considered best practices, it’s not a matter of law. At least not everywhere. Not every state has the same requirements as every other, but a few have written requirements for boards into their lawbooks. 

For example, in Illinois, under Section 18.5 of the state’s Condominium Property Act, condominiums are required to have open board meetings; common interest community associations are required to have open board meetings under the Common Interest Community Association Act. Residential housing cooperatives incorporated as not-for-profit corporations are required to have open board meetings under the General Not For Profit Corporation Act of 1986. Therefore, not only is having open meetings a good idea, but it is also required by law.

In New Jersey, residents and boards in dispute must engage with mandatory alternative dispute resolution, or ADR, to at least try to settle conflicts before they’re allowed to file formal suits. The ADR mandate is applicable to and affects every aspect of how disputes are managed, including those around lack of transparency issues.

“ADR must be provided when there’s a dispute of any kind,” explains Piekarsky. “We are talking about a dispute between or amongst owners, as well as between owners and the association. Yes, ADR comes into play with transparency because the complainant may request certain records and if the request is not complied with, one could go to the Department of Consumer Affairs (DCA), but they could also request ADR.”

Wolf’s parting advice to boards is, “Don’t be afraid of information, and don’t be afraid to share it with the ownership—while of course keeping personal information protected. A better-informed ownership is less accusatory, and overall, that’s a good thing. We still have some difficult residents, but we can’t do anything about that. That’s the nature of the game.”

A board will never be able to make all members of the association satisfied with everything. The key is to reach the reasonable owners, and commit to making sure they’re heard, respected, and their concerns responded to within a reasonable amount of time. Transparency costs nothing, but can pay major dividends.

A.J. Sidransky is a staff writer/reporter for New England Condominium, and a published novelist. He may be reached at alan@yrinc.com.