Conflicts Between Board Members And Homeowners Part I
Homeowners and board members alike need to understand the proper role, obligations, and authority of an association's board of directors to avoid conflict.
Like any other organization, homeowners associations rely on people to make decisions and perform organizational functions. For important constitutional matters like amending an association's declaration of covenants, this usually means a vote of all HOA members. But for more day-to-day affairs, an association acts through its board of directors and officers.
Elected HOA board tasks include general administration and operation of the association, including covenants, restrictions, and rules. When running smoothly, a board serves a valuable purpose in the community, helping to maintain an orderly, peaceful neighborhood.
Unfortunately, though, friction between an HOA board and individual members, or even among board members, is not uncommon. And the resulting conflict can lead to litigation and other unpleasantness. It’s helpful for members to understand how to govern community associations, particularly the role of the board of directors, and options available for members if difficulties arise with the board.
HOA Board and Officers Roles and Duties
An HOA's board consists of a pre-determined number of board members elected by the association's homeowners. The procedure and standards for elections are outlined in the HOA's declaration, subject to any relevant state-law requirements.
Once selected, the board appoints executive officers on behalf of the board. The elected board members choose the officers in many jurisdictions and communities, but that is not always the case.
The board of directors' responsibilities generally include maintaining common areas and elements, adopting rules and bylaws relating to matters within the board's authority, calculating and collecting assessments, and enforcing community covenants and restrictions. In some communities, the board also appoints an architectural review committee (or similarly titled body) responsible for ensuring compliance with the association's aesthetic standards.
Individual board members and HOA officers generally owe what is known as a "fiduciary duty" toward the association and its homeowners. Just as officers of a for-profit corporation have a duty to act in the best interests of the business and its shareholders, so too are board members and HOA officers obliged to work in the best interest of the community. The fiduciary obligation, when correctly observed, prevents self-dealing and requires officers and board members to avoid conflicts of interest. When carrying out their duties, the board and officers must act in good faith and enforce community rules uniformly, consistently, and comply with relevant statutes.
Terms of Board Members
The "term" of a board member is the duration the board member holds the position after being elected. A state statute may set the terms defined in the association's declaration or bylaws, with individual communities sometimes varying considerably. A common approach is to have an annual election followed by a one-year term, with a board member free to serve as many terms as he or she likes as long as reelected. Other associations limit the number of consecutive times a board member can serve. Or, a more prominent association might provide for multi-year terms with staggered elections to ensure a certain amount of board continuity while still allowing for regular turn-over.
Signs of Problematic Board Members
A board member can't take any actions on behalf of the HOA, or make decisions within his or her capacity as a board member, motivated by self-interest. Any such self-dealing is contrary to the fiduciary duty and can lead to liability against the HOA and the board member personally. Further, actions taken by an association or board member with improper motives are subject to be reversed or voided by a court if challenged.
A board member can also cause problems for an association by simply failing or refusing to do his or her elected job. If members do not show up for board meetings and, therefore, a quorum is not present, the board may not take actions necessary to the association's core functions. If the board fails to collect assessments and make arrangements to maintain common property, areas of the development could fall into disrepair. Or, if a board neglects to enforce restrictions, a future board may wave the association's enforcement rights.
Likewise, a board member who ignores association rules, abuses his or her power, or singles out disliked homeowners for adverse treatment can expose the association to significant liability. In cases of egregious or intentional misconduct, the offending board member may incur individual civil liability – or even criminal charges (e.g., a board member who misappropriates association funds) – though the majority of states exempt individual board members from liability for simple negligence.
Contact Us
Next week, we will dive deeper into problematic board members and how to resolve the issues. If you have any questions or concerns about your HOA's board members, please reach out to your manager or call the main office directly. We are here to assist!
