Serving as a director on a Home Owners’ Association (HOA) board is often a volunteer position, but it comes with legal and financial responsibilities that are easy to overlook. Many new directors are appointed at AGMs with little to no preparation and find themselves managing a complex, regulated environment governed by the Companies Act, not the Sectional Titles Schemes Management Act.
The decisions you make as a director don’t just affect your household; they impact the shared investment of every owner in the estate. These are five mistakes we see new directors make most often, along with ways to avoid them, including through focused home owner association director training.
Confusing HOAs with Sectional Title Schemes
It’s surprisingly common for directors to assume the rules for sectional titles also apply to HOAs. They don’t. Sectional Title Schemes are governed by the STSMA and CSOS regulations. HOAs, by contrast, are usually registered as non-profit companies and must comply with the Companies Act, the HOA’s Memorandum of Incorporation (MOI), and any registered rules.
What to do instead:
Read the HOA’s founding documents carefully. Make sure you’re aware of how the Companies Act structures your responsibilities as a director. Formal home owner association director training is advisable to understand the company law obligations that apply uniquely to HOAs.
Taking on the Role Without a Proper Handover
New directors often step into their roles without any form of orientation. They inherit financial, legal, and operational responsibilities mid-cycle and are expected to make informed decisions from day one. Without background, it’s difficult to ask the right questions, let alone make the right calls.
What to do instead:
Insist on a proper handover from outgoing directors. This should include current financials, open issues, service contracts, compliance reports, and copies of past minutes. Good home owner association director training will show you what should be in that handover and how to make the transition smoother for future boards.
Overlooking Fiduciary Duties
Both trustees in Sectional Title Schemes and directors in HOAs carry personal responsibility for the decisions they make. While the legal frameworks differ, the underlying principle is the same: act in good faith, avoid conflicts of interest, and exercise proper care and diligence.
HOA directors operate under the Companies Act, which places specific statutory duties on them as directors of a non-profit company. This includes ensuring financial oversight, compliance with the Memorandum of Incorporation (MOI), and making decisions that serve the best interests of the HOA.
What to do instead:
Take the role seriously and approach it with the same care you would apply to managing a company. Understand the scope of your legal obligations and the risks of failing to meet them. Focused home owner association director training provides guidance on how to fulfil these responsibilities within the framework of company law and real-world estate governance.
Letting Communication Break Down
Directors are expected to communicate key information to homeowners about levies, maintenance plans, rules, and major decisions. When communication is inconsistent or unclear, trust erodes. Misunderstandings follow.
What to do instead:
Create a communication policy that outlines what information should be shared and how often. Minutes should be clear, accurate, and circulated promptly. Home owner association director training often includes modules on how to manage communication between the board and residents to maintain trust and accountability.
Making Operational Decisions Without Legal or Specialist Advice
Directors sometimes get involved in approving construction projects, interpreting rules, or dismissing service providers without understanding the legal implications. These decisions can open the HOA up to liability or disputes if not properly managed.
What to do instead:
Know when to pause and seek professional advice—legal, financial or operational. A good managing agent can assist, but directors remain accountable. Training will give you a framework for knowing what falls within your scope and when to bring in experts.
Fitzanne Estates Provides Dedicated HOA Director Training
HOAs face a unique set of challenges that aren’t addressed by generic trustee programmes. Fitzanne Estates offers tailored Home Owner Association Director Training that focuses specifically on the Companies Act, MOI interpretation, director responsibilities, financial management, and regulatory compliance. Whether you’re newly appointed or looking to strengthen your board’s effectiveness, this training is built for the real-world demands of estate management.
If your HOA wants confident, capable leadership, training is essential. Contact us today.