Congratulations on being elected to serve as a member of your HOA Board! Whether this is a new position for you, or ‘old hat’, keeping up with your role and responsibilities as a contributing member will be important to your success.
No matter if you are serving as board president or in a support position, here is an overview of what you can expect while working with your fellow board members to operate a compliant and effective HOA board:
This is the most important part of your role in serving as a member of the board. Maintaining compliance with all the governing documents used to operate an association is essential. Each member of the board should be familiar with the laws that apply specifically in your state. If you live in a condominium community, the laws and statutes should also be adhered to.
The governing documents, which include: CC&R’s our Declaration of Covenants, Conditions, and Restrictions, the bylaws, articles of incorporation, and rules and regulations, and any other documents that are contractually formed for the operation of an HOA, provide the guidance and directions you will need to be compliant with all state provisions. When there is a case in which the documents conflict with one another, the CC&R’s or declarations rule over all other governing documents.
The common area of a community is overseen by the HOA board. Maintenance and repair responsibilities of property, buildings, and exteriors are outlined in the declaration and/or bylaws. In most associations, the common areas of the community are shared between homeowners and maintained by the homeowners’ association. Individual owners of property within the community have an exclusive right to use their own portion in compliance with the community’s governing documents.
Most often, there is an ongoing need for repairs and maintenance throughout a community. Whether it’s the condition of the roads, fence repairs, or updates to the pool or playground equipment, members of the board must prioritize the tasks that need to be done and how they are to be performed.
The board must carefully consider the budget and financial obligations when making these determinations. Periodic inspections of the property, a schedule of various repairs, and a plan for emergency expenses should be ongoing.
Not only in regard to the common areas, but for the community as a whole, establishing a functional budget is vital to the health of the assocation. In order for the budget and monthly assessment from homeowners to be determined, members of the board must review the necessary expenses and costs associated with the HOA. The monthly assessment will be an amount identified by dividing the annual budget between the unit owners.
By reviewing past budgets and taking into consideration actual costs – in addition to the anticipated costs and expenses that may come throughout the year – and the amount that board members can reasonably expect to collect from homeowners, a monthly assessment is determined. It’s important to consider how this assessment can negatively impact the property values in relation to other HOA’s in the area if the amount is too high. At the same time, it should be enough to cover the basic needs of repairs and maintenance of the property and to have an adequate reserve for future emergencies and expenses.
Duty and Judgement
Those serving as board members have a duty to homeowners and other fellow board members to operate in a professional manner. By following the Business Judgement Rule, meaning the board members must exercise business judgment while making decisions on behalf of the association, the laws and governing documents must be strictly followed.
By applying the legally binding agreements within an HOA, all rules should be adhered to in a fair and uniform manner, acting in the best interest of the association and the community membership as a whole.
No prejudice, personal gain, or conflict of interest should exist that may influence decisions through negative motivations. All decisions should be compliant and in the best interest of the association – this is an important part of your duty as a board member.
Enforcement of Rules
Another important role as a member of the HOA board is to enforce the governing documents. The members of the board also have the authority to excuse or waive any compliance with the requirements outlined in the CC&R’s. However, there are specific actions that must be reasonably interpreted as rules and regulations to supplement, administer, and explain such enforcement.
The board must carefully review the nature and scope of an infraction and address these situations in a manner that is reasonable in relation to the violation. The purpose of enforcing the rules and regulations is not to punish the individual or individuals in violation, but to encourage full compliance for the betterment of the association membership at large. If there are consistent and/or flagrant violations that are not being addressed appropriately, the board may have no choice but to seek a court order in an effort to enforce compliance.
The HOA board represents homeowners and their interests, as they relate to the community. The board is the entity in which claims and rights of the owners with respect to the property, as a whole, are meant to be pursued. All assessments, amendments, licenses, documents, easements, concessions, and obligations of the property are to be handled by the board. This includes tax obligations and requirements for insurance. Appropriate insurance requirements are set forth in the declaration and other applicable statutes. The property should be insured against loss and casualty; liability insurance should be obtained to cover the directors and officers. In addition, insurance proceeds should be held in trust on behalf of the homeowners should the property experienced any damage.
Books and Records
As you know, there is a limited amount of time a person can serve on an HOA board. Therefore, it’s important for accurate and detailed records to be maintained. Some of the records that are to be managed and kept are:
- Articles of Incorporation
- Rules and Regulations (including any and all amendments)
- Insurance policies
- Contracts, leases, liens, and any other agreement in effect
- Survey of property
- Minutes of all board and association member meetings
- List of names and addresses of all community members
- Copies of ballots and proxies from previous elections
- Accounting of the budget including itemized expenses, receipts, and records to support financial documents
Homeowners should also have reasonable access to the records and books as consistent with the requirements of the governing documents and applicable law.
The board is not expected to protect the community members from criminal conduct and is not a police force. However, as emergency situations arise, members of the board may be in a position to minimize damage or correct any problems.
Most CC&R’s allow the board to enter an individual’s property for emergency purposes, or to protect residents from harmful conditions. However, the board should only act in regard to the emergency at-hand.
For example, if the plumbing in a condominium unit has failed, the board member may enter the unit and stop the water to minimize damage to other units and/or property. When reasonably necessary, board members should not interfere with the individual’s authority to repair or maintain their own home or unit Consider the circumstances in a particular crisis. The board should become involved only when absolutely necessary.
As the law conveys, housing and all its associated services and facilities are to be available to individuals and families without discrimination on the basis of race, religion, gender, disability, national origin, or familial status. The board is responsible for ensuring that the association does not operate unlawfully and that the rules and enforcement are consistent and unbiased.