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Each year, numerous homeowners are elected to the boards of directors of their homeowners associations. Most directors blindly accept a position on the board with little explanation of their duties as a board member and without appreciation for the significance of the position. Instead of leaving new directors in the dark, associations should conduct an orientation meeting for new board members to provide basic information on homeowner associations and the responsibilities of a director. The following are suggested topics of discussion at a board of directors orientation.
HOA 101: Often new directors have little or no experience acting on a board of directors or running a homeowners association. One goal of a board of directors orientation is to provide new directors with basic terminology and definitions that are vital to understanding the operations and governance of a homeowners association. In addition, orientation should include basic information such as the purpose and collection of assessments, insurance, common property versus private property, maintenance of both common property and private property, and, perhaps most importantly, a close review of the documents that govern the association.
Governing Documents: Homeowners associations are bound by both federal and state law and their own governing documents. New directors should be introduced to the hierarchy of laws that regulate the association and should become familiar with the association’s governing documents. At the highest level, the association must act in accordance with federal and state law. However, usually the most important and most relevant tool for governing an association is the declaration. A declaration, also known as the CC&Rs, is the primary governing document that creates the rights and obligations of owners in a homeowners association. Covenants within the declaration are binding on all owners. In addition to the declaration, many associations have bylaws that govern the operations of the association. Furthermore, previous boards of directors may have adopted rules and resolutions that are binding on all owners. It is imperative that new directors become knowledgeable about their association’s governing documents so that they may efficiently and effectively govern the association.
Responsibilities of Board Members: New directors should also be given an overview of their responsibilities. In general, board member responsibilities include maintaining, repairing, replacing, and supervising common property; designating and collecting assessments; paying common expenses; hiring and firing personnel who care for and operate common property; adopting and enforcing rules and regulations; and enforcing governing documents. Additionally, board members owe a fiduciary duty of good faith, fair dealing and loyalty to the association. Adherence to the fiduciary duty requires board members to, among other things, attend board meetings, actively participate in the board meeting by fully disclosing all relevant information to other board members, and to fully inform themselves about the board’s decisions.
In short, a board of directors orientation is an excellent opportunity for an association to introduce new directors to homeowner association governance and impress upon them the seriousness and importance of their position, and at the same time promote uniform governance of the association and assure a smooth transition between boards of directors.
Christopher M. Tingey
Attorney at Law