Until you serve as a board member, it’s hard to comprehend just how much these volunteers are expected to do.
While we will stick to the “basics” or core responsibilities, we also appreciate that there are dozens of little things board members do that go unnoticed. So thank you all for putting so much work into making your community a great place to live!
Table of contents
Why do HOAs need a board?
An HOA board is tasked with making decisions and taking action on behalf of the association. Without an elected board to govern the development, the community would just be an average neighborhood.
You can think of the board as a small city council. They do what they believe is best for the HOA as a whole in order to maintain property values, comply with legal requirements, and keep members happy.
Individual board responsibilities
Typically, HOA boards have three to seven members. If the board is small, there will be a president, a secretary, and a treasurer.
A larger board will also have a vice president and a general member.
Each member is assigned unique tasks, but they must all work together for the HOA to succeed.
President – The HOA president is responsible for overseeing projects and presiding over meetings. They must track board resolutions to make sure they’re well executed. Some people believe that the president has the final say on decisions, but they should not be treated as “the boss.” They still only have one vote, and it shouldn’t hold more weight than the vote of any other board member.
The HOA president must understand bylaws and regulations very well in order to have all the insights required to make informed decisions.
Summary of duties
- Oversee the association’s activities
- Make informed decisions
- Preside over meetings
Vice president – The vice president will work closely with the president and take over the role when the president isn’t able to carry out their duties.
Aside from acting on the president’s behalf, the vice president might be responsible for projects and oversee specific areas of HOA operations.
Summary of duties
- Acting on behalf of the president when the president is away
- Oversee large projects
Secretary – The secretary handles documentation for the association. This might include maintaining documents, updating records, submitting forms, and managing legal paperwork.
The secretary will also notify the board and residents of upcoming meetings, record meeting minutes, and make them available to the association.
Summary of duties
- Maintain the HOA’s documents and records
- Take meeting minutes
- Remind members about upcoming meetings
Treasurer – The treasurer takes on the very challenging role of financial management. They must understand and report how funds are being handled. In addition, they maintain financial records, conduct regular audits, look after payroll, pay taxes and create budgets.
The treasurer may also be asked to oversee insurance matters and ensure the association is properly protected.
Summary of duties
- Track and manage the association’s finances
- Prepare budgets
- Maintain records
- Handle payroll
Eligibility
The HOA’s governing documents will spell out the eligibility requirements for candidates, but in most cases, a candidate must:
- Be at least 18 years old
- Not be in bankruptcy
- Not have a lien registered against them that has not been discharged 90 days prior to elections
- Be in good standing with the association (no outstanding fines or fees)
Collective responsibilities
Fiduciary duties
Recognizing that board members serve in a position of trust, every state’s law imposes a fiduciary duty on their board of directors, requiring them to act in the best interests of the association.
Directors of nonprofit organizations, including HOAs, are considered fiduciaries who are required to exercise their powers responsibly, in accordance with the duties imposed by the state and the association. They must act in good faith, keeping three standards in mind.
Duty of care
An HOA board member must make informed decisions, meaning they conduct a reasonable amount of research, or consult with professionals or owners, before making choices that will impact the community.
For example, before fining an owner for a rule violation, the board must know exactly what rule was broken, and ensure they follow the association’s process for managing violations, before issuing a fine. That might mean providing the owner with a warning, and a certain amount of time to resolve the issue before resorting to fines.
HOA board members must also use sound judgment and be conscious of how their choices will impact the community.
Duty of loyalty
The duty of loyalty requires board members to act fairly, in good faith, in the interest of the HOA as a whole.
We have all heard stories of rogue board members who do things for personal gain. These types of actions are not only harmful to the HOA, but they could easily result in the removal of that board member.
Board members should also avoid getting tangled in conflicts of interest by disclosing any potential conflicts before they become problematic. Finally, they should protect members’ confidentiality, and keep private information private.
Duty to act within the scope of its authority
Board members are not permitted to make up bylaws or arbitrarily exclude certain members from meetings. The authority of an HOA is established by state laws, and the development’s governing documents. That means board members can only do so much.
Facilitate effective communication
Communication is often cited as the primary issue plaguing HOAs. Poor communication can lead to misunderstandings and mistakes, which ultimately cost the association money.
Board members need to understand each other when delegating tasks or proposing resolutions, and they need to be consistent when sharing information with owners.
If owners feel excluded from board activities, or like their opinions don’t matter, they are less likely to care about the community and more likely to disengage or rebel.
A good multichannel communication system can make it easier for boards to effectively share news, information and documents with owners. HOAs can use websites, software, or email to connect with owners.
Communication is so important to HOA operations that some states have now made it a requirement for HOAs to maintain community websites and post certain documents for owners to access.
Maintain common areas
The board is obligated to maintain and repair common areas. This may include things like clubhouses, tennis courts, parks, sidewalks, roads, street lamps, trees, and more.
Maintenance expenses are paid using the fees or dues collected from owners.
Not only does regular maintenance preserve the value of the development, but it also minimizes accidents and injuries.
Establish reliable fiscal policies
There are several reasons why board members need to create strong financial policies. From allocating funds to the reserve account to approving contractor payments, money is always coming and going.
It can be easy to make a mistake, but proper documentation helps board members correct errors and uphold transparency.
Furthermore, while embezzlement does not occur often, there have been a handful of individuals who have stolen from an HOA. Having proper checks and balances, and including multiple people in financial responsibilities, will make it more challenging for anyone to steal from the community.
Collecting fees/dues
Having an effective policy for collecting fees is an important part of being fiscally responsible. After all, most of the HOA’s revenue comes from owner fees, sometimes referred to as regular assessments.
It’s not enough to inform an owner of their responsibility to pay assessments. The board must take steps to ensure that delinquent fees are collected so that there is a consistent cash flow to pay for operational expenses, insurance, etc.
Attend board meetings
Board members must be available to attend different types of HOA meetings throughout the year. Of course life happens, and it’s okay for a member to miss a couple of scheduled meetings, but the HOA needs the board to be actively involved in debates and votes. Otherwise, there may be a constant failure to reach quorum, which means HOA business gets delayed and projects fall behind.
Enforce laws and rules
Fair and consistent rule enforcement also falls under collective HOA board duties. Do not give any special treatment to owners who you might know better than others.
When implementing rules or carrying out penalties, board members must act justly. Though it can be hard, they can’t let their personal feelings sway their decisions.
If the board finds that a few rules are too broad, or no longer effective, they can amend them so that they are clearer or more relevant.
Conclusion
Now you have a better understanding of the individual and collective responsibilities of HOA board members. The tasks may feel endless at times, but hiring an HOA manager, or using HOA management software, can reduce several inefficiencies and free up hours of valuable time. The key is to work smarter, not harder, and these resources can help boards achieve that goal.