Board of Directors 101

The board of directors is one of the most important parts of the governance of a homeowners association. Without a capable board to manage it, a community can fall into disarray.

The board is elected from the pool of homeowners in the association, by the procedure laid out in the community by-laws. The election most often takes place at the annual meeting by various guidelines like how votes must be cast, the requirement of a nominations committee, and how many votes are needed to reach quorum.

The by-laws will list how many board members are allowed, usually varying from three to seven. Most documents include wording such as a board may have no fewer than three members but no more than five, allowing room for growth if three people cannot manage the association, or reduction if five is too many. The length of a board member’s term varies by association, though many are two to three years. The election cycle is staggered, ensuring consistency by not allowing every seat to be elected in the same year. Staggering elections also allows old board members to share knowledge with new ones and the newer members to bring in fresh ideas.

After elections at the annual meeting, the board will elect the officers amongst themselves at the next board meeting. Though a board member’s term can be multiple years, officers’ terms are one year and each association is required to have a president, secretary, and treasurer. This means a board member can be elected to treasurer the first year of his term, and then serve as president the second. Some associations’ by-laws and applicable state statutes allow the positions of treasurer and secretary to be held by the same person. It is also possible to be elected a board member but not hold an officer’s position if the board of directors is larger than positions available. Officers split the responsibilities of managing the association.

The president of an HOA must have well-developed management and leadership skills. He or she should not make all of the decisions, but instead make sure all of the board members are able to state their opinions and then the resulting decision of the board as a whole is made following conclusive discussion and in the best interest of the community. The president also creates meeting agendas and then ensures all business is addresses. Most HOAs are incorporated non-profit corporations and as such, the president acts as the CEO. He or she will sign all legal documents pertaining to the association, including vendor contracts and checks.

Should the association’s by-laws require the position, the vice-president’s role is to fill in for the president if he or she is unavailable. The vice president takes on all of the responsibilities of the president until they return. He or she will also complete anything delegated to them by the president, and will sometimes work as a chairman or liaison of a committee.

An HOA’s secretary works with the president on creating meeting agendas, then sends proper notice of meetings and takes the minutes during them. He or she is also responsible for the association’s records, which must be properly stored and available to any homeowner upon request. These records include owner information and old newsletters, which the secretary often writes and distributes to keep homeowners up to date on community goings on.
The treasurer is responsible for handling all of the association’s money, collecting dues and issuing payments. He or she prepares the annual expenditure report and budget to be approved by the rest of the board. If required, the treasurer will also assist the HOA’s accountant in the audit process.

Various general responsibilities such as the creation of a community handbook, should be done as a group, with input from every board member before approving the end product.

Board members can resign at any time during their term by providing notice in writing to the rest of the board. In turn, the board can remove another member with or without cause. When a vacancy opens, the board can appoint a replacement with the standard majority vote, and if the leaving member’s notice provided a termination date, he or she may vote on their replacement as their powers have not yet expired.

Being a board member is often a difficult job and even more often, a thankless one. Anyone considering running for office should keep this in mind, as well as the best interests of the community.

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