Members of a community association board face many challenges in the execution of their general responsibilities. It’s a difficult and sometimes thankless job with many complications:
- The board members themselves are often volunteers, with plenty of other demands on their time
- Their “bosses” are their friends and neighbors, living in the same community, creating an environment that can be too casual to be productive
- And sometimes, these friends and neighbors may have their own assumptions of the roles and responsibilities of a board member, pressuring board members to act outside of their area of authority
That’s why it’s essential to set clear expectations from the outset, in the association’s governing documents. But governance can seem overwhelming to a new board member. So WPM has developed the following outline of board responsibilities as a guide for community association boards.
Responsibility #1: Complying with governing documents and state law
It is the board’s responsibility to know, understand and adhere to both the bylaws of the association’s governing documents, as well as the state laws that pertain to association authority. The board must enforce the rules of the governing documents. They often have leeway in determining how fines and other punitive actions are applied.
Responsibility #2: Maintaining shared spaces
General upkeep, repairs and beautification of common areas are all responsibilities of the board. Successful boards work hard to control the costs of maintaining these spaces through strategic planning. One way that fiscally responsible boards manage cost is by securing multiple bids for maintenance services. They also conduct periodic inspections in order to catch maintenance issues before they become a more expensive problem. And truly savvy boards map out a plan for replacing aging structures without putting unnecessary last-minute strains on the association’s budget.
Because this is the board’s most visible area of responsibility, board members often find themselves receiving unsolicited advice and a steady stream of requests pertaining to the upkeep of common areas. It can be tempting to cave to the demands of the loudest voices of the membership. However, a mindful board is careful to prioritize repair and maintenance work based on what is in the best interest of the entire community, and what makes prudent sense from a financial perspective.
Responsibility #3: Creating the budget and collecting homeowners’ fees
Budgeting is obviously imperative. Board members must meet and review past actual costs and reconcile anticipated expenses with the anticipated income from homeowners’ fees.
The board must also be certain to allocate a reasonable cash reserve. These funds are available to cover emergencies, unscheduled repairs and replacements, and revenue lost due to members who fail to pay their obligations.
Finally, it is the board’s responsibility to collect homeowners’ fees. Failure of one member to pay negatively affects the entire association. Therefore, boards are permitted to pursue delinquent members via the means outlined in the bylaw provisions (e.g., liens, personal lawsuits which could include garnishing wages or bank accounts), or in court.
Responsibility #4: Serving the owners in a fiscally responsible manner according to sound business principles
Board members have a fiduciary duty to their homeowners in the same way directors of a publically traded company do to their shareholders. The board has been entrusted with the community’s funds and is expected to manage these funds using sound business judgment. This means that board members will make rational, informed decisions in good faith that provide the maximum benefit to the entire association. Good business judgment is not motivated by personal gain, revenge or other negative intentions.
Responsibility #5: Electing members and recording board business
The board must keep owners aware of its actions which may include posting meeting minutes. The owners are invited them to participate in the process of electing board members and typically the Board elects their officers.
The responsibilities of board membership can seem daunting to a new board member. But making an investment in your community and having an active voice in its success and sustainability offers rewards that more than offset the investment.