Community Association Governance: Understanding the Roles of Owners, Board Members, and Officers

Community associations are composed of different groups of people working together, including owners, board members, and officers. For effective community association governance, each group should understand their roles and responsibilities and how each interacts with the other.

OWNERS

Although board members run community associations (often with the help of a community association manager), governing documents and the law frequently reserve certain powers for the owners. For example, there are usually provisions in the governing documents and the law stating that the owners must elect the board members.

The owners also may have the power to amend particular provisions of the bylaws, such as those dealing with the assessments and sale of common property. This usually requires consent from a specified percentage of the owners.

Along with these rights come responsibilities. The owners are obligated to adhere to the restrictions imposed in the governing documents and share in the financial operation of the community by paying their assessments on time. If they do not, the association may file a lien on their home and they may lose their home through foreclosure, though these steps are only used as a last resort.

Although the owners do not have a legal obligation to actively participate, the association will not be able to function if no one participates. Therefore, it is important for the board to foster a sense of community spirit to encourage participation.

THE BOARD

The board of directors is made up of homeowner leaders who are elected to serve the association. The board oversees the community association. The board’s authority to act on behalf of the association is not, however, unlimited. The governing documents — and sometimes the law — grant the board the authority and obligation to act but also restrict the board’s ability to do so. Provisions that permit the board to act use words such as “may.” Provisions that obligate the board to act use words such as “shall.”

The role and scope of authority of the board may be broad or specific, depending on the association’s governing documents and the law. Some governing documents and state law provide the board with the same authority as a corporation. Others precisely state the powers of the board.

Examples of the powers generally granted by the governing documents and state law to the board include:

• The authority to set goals, standards, and policies for the association

• Enforcing the governing documents

• Maintaining the property

• Maintaining the association’s financial stability

• Purchasing adequate insurance

• Entering into contracts for services

• Creating and overseeing committees

• Conducting annual meetings and regular board meetings

The board holds regular meetings as defined by the governing documents. Association members not on the board should be welcomed and encouraged to attend. The board also serves as advocates for members. They are available to listen to suggestions and concerns and answer any questions they may have.

BOARD OFFICERS

A board generally has at least four officers: a president, vice president, secretary, and treasurer.

The president is the leader of the board and represents the board before the membership. They generally set meeting agendas and preside at all meetings of the board and membership. Though they may have more visibility than other officers, the president’s power and authority is no more and no less than the other board members.

The vice president performs all the duties of the president in their absence and typically shares some of the burden of the president. The vice president may be assigned as a liaison to specific association committees.

The secretary has responsibility for ensuring that board and membership meeting agendas are prepared and distributed and that the minutes and materials referred to in those minutes are prepared. They also maintain or make sure that the community association manager maintains the book of resolutions and all official records, including official correspondence, contracts, and membership roster.

The treasurer is the chief financial officer. They work with appropriate staff, contractors, and committees to ensure that the annual operating budget is developed and submitted for board or membership approval (whichever is required), and that the records of all association financial transactions and a roster of delinquent accounts are maintained. The treasurer recommends action regarding collections, receives and disburses funds as authorized, ensures the preparation of periodic financial reports, ensures the association is adequately funding replacement reserves, and authorizes an independent audit. If the association has a manager, they likely prepare the documents, but the treasurer is ultimately responsible for them.

This article has been adapted from Community Association Living: An Essential Guide for Homeowner Leaders. The free digital publication and online course is designed to help HOA residents and board members navigate community association governance, finances, and community rules with confidence.