HOA Terms Every Board Member Should Know

We know that being a board member isn’t your full-time occupation. You have work, a family, and projects you dream of completing. So, our goal is to make it easy for you to learn the fundamentals of being a board member in a way that doesn’t induce a migraine the size of Kentucky.

In this post, we’re giving you the low-down on five commonly misunderstood phrases used during board meetings:

Bylaws.

When you think of bylaws, think of corporate rules. Bylaws regulate the following: rules pertaining to board meetings, rules pertaining to annual meetings, the number of board members who may serve on the board, what positions board members may hold, and policies regarding the removal and replacement of board members.

The bylaws are drafted by the developer’s attorney and approved at the first board meeting (during the developer control period). While this document is often confused with the CC&Rs, the two documents are very different: the bylaws do not govern the rules or lives of homeowners, but the CC&Rs do.

CC&Rs.

Known by several different names, such as the declaration or DCCRs, the CC&Rs stand for Covenants, Conditions, and Restrictions. The CC&Rs contain the association rules that homeowners must abide by.

The CC&Rs regulate rules like whether or not farm animals are permitted in the community, how many pets a homeowner may keep, the minimum square footage of a home, what construction materials may be used on a lot, and how lot improvements are handled. (Just to name a few!)

The CC&Rs also establish quality-control measures by forming a community’s ACC (Architectural Control Committee) and by creating a lien on each lot in the association. The lien gives the HOA the authority to charge assessments and creates other financial obligations for homeowners, such as the cost of assessment billing, special assessments, etc.

Executive Session

A board meeting’s executive session is a forum that allows board members to address private or sensitive items, such as personnel matters, pending litigation, contract negotiations, enforcement actions, and certain types of legal advice. During the executive session, homeowners are not welcome to attend or provide input, though they are entitled to receive a basic (read: very basic) summary of the matters covered in the executive session.

Open Session

During open board meetings, board members can act on the ordinary, day-to-day business and operation of the association. Because of the day-to-day subject matter, these sessions must be open to members of the association; this means that advance notice must be given and that homeowners are entitled to attend and give input (though this doesn’t mean homeowners get free reign of the meeting’s proceedings). Keep in mind that notice and open session requirements vary by state. Two examples would include the 48-hour board meeting notice requirement in Arizona and the 72-hour notice requirement in Texas.

Quorum

This is the minimum number of members required for any decisions made during a meeting to be valid. For board meetings, the quorum of board members determined in the bylaws must be met, and for annual meetings, the quorum of homeowners named in the CC&Rs must be met. If quorum is not achieved, the meeting cannot take place and must be rescheduled.

We hope this brief explanation of commonly questioned HOA terms and phrases has been helpful to you. Join us next time for our discussion of top board member challenges and how to handle them!

To learn more about different  HOA Terms, visit our blog today! Boardline Academy also provides board member training courses for new and experienced HOA board members.
Related: Visit SpectrumAM for more HOA Management updates!

Related Articles

Responses