Understanding the Role of Your Community's Board of Directors Follow

The Board of Directors for a Homeowners Association (HOA) or Condominium Association plays a crucial role in the effective management and operation of the community. Elected by the unit owners, Board members are tasked with upholding the community's governing documents and acting in the best interest of all residents. They are required to exercise the care of a fiduciary to the unit owners.

Here are the general responsibilities of a community's Board of Directors:

• Financial Management
  • Budgeting and Assessments: The Board prepares, adopts, and distributes the annual budget for the property. They are responsible for levying and collecting assessments from unit owners to fund common expenses and maintain reserves.
  • Record Keeping and Investments: Boards are required to keep detailed, accurate records of receipts and expenditures. They may also invest Association funds in appropriate accounts like certificates of deposit or money market funds.
  • Tax Matters: The Board can seek relief from real property taxes or special assessments on behalf of unit owners and charge related expenses as common expenses.
• Property Maintenance and Operations
  • Common Elements: A primary duty is the operation, care, upkeep, maintenance, replacement, and improvement of the common elements. This includes arranging and paying for services like landscaping, snow removal, and general repairs.
  • Hiring and Managing Personnel: The Board has the power to engage and remove personnel such as managers, accountants, and attorneys to assist with the operation and management of the property. They can also delegate powers to a managing agent.
  • Contract Management: Boards enter into contracts for services, improvements, maintenance, utilities, and repairs for the common elements. They are responsible for reviewing existing contracts and seeking bids for new services.
• Rule Enforcement and Architectural Standards
  • Adopting Rules: The Board adopts and amends rules and regulations for the operation and use of the property, aiming for the health, comfort, safety, and general welfare of unit owners.
  • Enforcement: They enforce these rules and can impose fines and penalties for violations of governing documents.
  • Architectural Review: For many communities, the Board or an Architectural Design Review Committee (ADRC) is responsible for reviewing and approving exterior alterations or new construction to ensure aesthetic harmony and compliance with guidelines.
• Meetings and Communication
  • Holding Meetings: Boards hold regular meetings, which are generally open to all unit owners, with proper notice provided. Certain topics, like litigation or personnel matters, may be discussed in executive session.
  • Minutes: Board meeting proceedings are recorded in minutes, which are typically available for review by Association members.
  • Communication with Residents: Boards are responsible for communicating with residents, investigating inquiries regarding violations and maintenance, and responding to owner concerns.
• Legal and Fiduciary Duties
  • Fiduciary Duty: Board members must act with the care required of a fiduciary to the members.
  • Dispute Resolution: The Board's determination is often final and binding in disputes or disagreements among unit owners regarding the property or interpretation of governing documents.
  • Compliance: The Board ensures compliance with the community's Declaration, Bylaws, and relevant laws.
• Insurance Coverage
  • The Board is responsible for obtaining adequate and appropriate kinds of insurance for the common elements. This includes public liability and property damage insurance, and may also include workers' compensation and directors' and officers' liability insurance.

Individual Board Member Roles

While Board members collectively share the responsibilities of the Association, specific officer positions carry distinct duties:

• President
  • Serves as the chief executive officer of the association.
  • Acts as the official contact between the Board of Directors and the management company.
  • Sets the agenda for Board and association meetings and presides over them.
  • Executes association contracts and other documents, often with prior Board approval.
  • Provides direction to management between board meetings and carries out decisions made by the Board.
  • It is important to note that the President does not have absolute authority beyond what is granted by the Board, except in emergencies.
• Secretary
  • Records minutes of all association meetings (Board and owner meetings).
  • Maintains the association's official records, including the declaration and all amendments, minutes, corporate records, and contracts.
  • Reads all notices required to be sent and executes or certifies amendments to the Declaration and Bylaws.
• Treasurer
  • Responsible for keeping the financial records and books of account for the association.
  • Often involved in signing financial documents, potentially countersigned by the President.

These roles work together to ensure the smooth operation, financial health, and overall well-being of the community.