Article Originally Published On Nolo.com – Written By Beth Ross
Many people love living in planned unit developments (PUDs) for the great amenities offered, such as common swimming pools, clubhouses, and tennis courts. And, unlike owning your own pool or tennis court, you can enjoy the development’s common amenities without lifting a finger to maintain them!
Developments cannot function, however, unless there are dedicated homeowners willing to help run the community by serving on its homeowners’ association (HOA) board of directors (the “board”). You might hesitate to serve on your HOA’s board if you don’t know what a board member does, or what’s expected. This article will help you understand what’s commonly involved with serving on an HOA board.
What Is an HOA Board of Directors? Almost all developments have an HOA, which bears the responsibility to operate, repair, replace, and maintain the development’s common areas, such as parks and clubhouses, owned in common by all the development’s home owners. Most HOAs are nonprofit corporations, and typically, when you buy a home in a planned community, you automatically become a member of its HOA. Most HOAs are run by a board, usually made up of a small number of HOA members, elected by a vote of the other HOA members.
What Laws and Rules Cover HOAs and Their Boards? To find out the responsibilities and powers of your HOA (and its board), review your development’s governing documents, specifically the HOA’s articles of incorporation and bylaws, and the declaration of conditions, covenants, and restrictions (CC&Rs) and easements. In connection with its responsibility for the common areas, most HOAs are required to adopt an annual budget, and collect dues and assessments from the development’s homeowners to pay for the budget. Beyond that, many HOAs also have the power to adopt and enforce rules and regulations, and to hire personnel (or a management company) to help carry out HOA responsibilities (for details, see HOA Board Member Duties , below).
If you don’t already have a copy of your development’s governing documents, you can request one from your HOA (or the development’s manager, if there is one). Copies are also on file in your county’s public records.
Your state’s corporate laws relating to nonprofit corporations, as well as any specific state laws governing planned developments, might also have something to say about the responsibilities and authority of your HOA and its board. You can obtain a copy of relevant laws from your HOA’s attorney (if it has one). If not, current board members might help point you to the relevant laws. You can also search online to turn up the corporate codes and other relevant laws; Nolo’s Laws and Legal Research center provides information on doing this.
Your Fiduciary Obligation as an HOA Board Member In general, corporate law gives board members of a nonprofit corporation the fiduciary duty to the other members of the HOA (all the other homeowners). In practice, this means that HOA board members must:
act in good faith
act in the best interests of the HOA as a whole (and avoid any conflict of interests)
be informed prior to acting
not take any actions without proper authority, and
not take negligent, or willfully harmful actions.
Other HOA Board Member Duties Beyond your fiduciary obligation (and any other applicable state law requirements), the specific duties and responsibilities of HOA board members depend on your development’s governing documents.
HOA Board Membership and Meetings Typically HOA articles and bylaws require that HOAs have a minimum number of board members, each of whom serves for a specific term. The governing documents describe who can serve on the board, and how board members are elected. The documents also determine required meetings, and describe meeting and voting procedures.
HOA Officers Most boards are also required (or allowed) to elect officers. These commonly include a President, Vice President, Secretary and Treasurer. Each officer has different responsibilities, for example, the President typically sets the agenda, and the Secretary takes meeting minutes. You can choose whether you wish to serve in an official office, or as a general board member.
Budgeting A key responsibility of almost all HOA boards is to set the annual budget for the operation and maintenance of the development. Again, procedures for adopting the budget are determined by the governing documents’ requirements, but typically, a board vote is necessary. As an HOA board member, you’ll need to familiarize yourself with the expenses involved with running the community, and make responsible, informed decisions on budget matters.
HOA Board Powers HOA board members have various powers under the development’s governing documents. These include the following:
The authority to assess and collect periodic dues from each homeowner to pay for the budget.
The authority to levy special assessments for items outside the budget —for example, to pay for unforeseen repairs needed to the clubhouse roof after a huge storm.
The power to adopt rules and regulations. As an HOA board member you might help create and adopt rules on anything from subletting, to lawn maintenance, to what color homes are allowed in the development.
Enforcement powers, such as the right to assess fees for delinquent dues or for rule violations. The governing documents might also grant the HOA the power to place a lien on a delinquent owner’s property for unpaid dues, or to enter a homeowner’s property to fix a rule violation. For example, if a homeowner is violating a maintenance rule by failing to mow his or her lawn regularly, the HOA might have the power to assess fines against the violating owner, as well as the authority to hire a lawn service and bill the homeowner for a mowing. As a board member, your informed vote will help determine what enforcement actions the HOA takes.
Traits of a Good Board Member Unfortunately, no HOA board can always please every owner. When an HOA fines a neglectful homeowner for lot mowing, for example, the owner will likely grumble and complain. Because of this occasional tension, one of the most important board member qualities is diplomacy. To be a good board member, you’ll need to act as a proactive team player, who uses discussion and negotiation rather than contentious confrontation.
Although serving on an HOA board can be difficult at times, it can also be rewarding. Volunteer board members are essential to the harmonious functioning of planned developments. If you are interested in serving on the board of your HOA, give it a try. You just might like it!
