Volunteering to be on the board of your HOA is an important position that comes with a lot of responsibility. The board is tasked with making sure the community is running well and following the requirements of the governing documents. They solve problems and conflicts, handle the community’s budget, oversee maintenance and repairs, and much more.
It might seem overwhelming to be a new board member, but everyone takes on different elements and works together. To give you some background, we’ll go over the general duties of all board members, and break down what the officers of HOA boards usually handle.
General Responsibilities for All Board Members
The most important responsibility for board members is their fiduciary obligation. It’s so essential that every state has laws imposing a fiduciary duty on their HOA boards. Carrying out the fiduciary duty is not about any skill, but a commitment to put care for the community above prejudice, self-interest, or other demands. It means the basis for all decisions must be informed and – what is best for the community. It is further broken down into the duty of care, duty of loyalty, and duty to act within the scope of authority.
Duty of care requires the decision-makers to do their very best when making decisions for the community. It means doing the due-diligence to make a well-informed decision. Duty of loyalty means the member sets aside personal interests (particularly avoiding any conflict-of-interests) and puts the well-being of the community first when making decisions. So finally, a duty to act within the scope of authority is exactly what it sounds like – they must carry out the tasks they are obligated to, but can’t make decisions or regulate things outside of their authority.
A Board Members Most Important Task
To be a good board member, each one needs to be knowledgeable about their association’s governing documents (the declaration of CC&R’s, the bylaws, etc.), and any state laws that apply. One of the most significant responsibilities the board will have is creating the annual budget. While the treasurer is usually the point person and oversees the process, all Board members will likely participate in its creation and completion. Also, there might be broad projects, like a homeowner handbook, that the entire board works together to produce.
Now that the basics are covered let’s dive deeper into the responsibilities of the officers. Exactly how many officers are on a Board varies by state law and HOA documents, but most have a president, vice president, treasurer, and secretary.
The president leads the board and oversees many of the board’s procedural duties. They preside over meetings, making sure everyone gets a chance to voice their opinion and that all necessary topics are covered. So, of course, they are very well-versed in the HOA’s governing documents, and usually, need exceptional leadership and management skills. Moreover, the president is also the “CEO” of the association—they sign contracts and other legal documents, as well as cosigning the checks.
Not all boards have a vice president. If you have one, the vice president primarily is responsible for stepping in for the president when the president is not available. So the vice president must also be very familiar with all governing documents, be able to run meetings, and take on any other responsibilities. When the president is present, the vice president may be more of an advisor, lead one of the committees, and other tasks as assigned.
The treasurer oversees the finances of the HOA. They handle and document all incoming and outgoing money—collecting fees, paying vendors, monitoring investments. The treasurer not only makes sure the organization is financially sound, but that any spending and revenue follow what is allowed under the governing documents. They will usually be in charge of leading the annual budget planning, though all board members will likely participate. And when an audit is done, the treasurer will work closely with the auditor. Other financial reports, such as monthly or quarterly spending, may be requested by the board, which the treasurer would be responsible for generating.
An HOA board’s secretary is the document and record-keeper. They are responsible for the meeting minutes and any supporting documents, usually send out meeting notices and work with the president on drafting the meeting agendas. They handle all association records, such as homeowner information and maintenance records. All documents need to be easily accessible by any HOA member who wants it (within some limits), and the secretary must make sure files are organized well. The secretary is also usually responsible for making sure the HOA is meeting filing deadlines and other legal record requirements.
The most common problem a board member faces is a conflict of interest. It can be challenging not to fall into some traps that actually violate your fiduciary responsibility.
Being connected in any way to a company or person whom the HOA may hire creates is a common conflict of interest. Alternatively, a vendor may offer a free service to be considered for a new contract. Some others are things like a noise issue where the board member is the only person who is complaining, or the board considering changing regulations on parking a boat when the vice president is one of the people needing boat storage.
Any time there is a conflict, the member should disclose it and recuse themselves from any related decision-making.
While there is a lot of work and responsibility involved in being on an HOA board, there is also the satisfaction of truly helping your community run well for everyone. Also, though officers have specific duties, many elements of being a board member are done through teamwork. Doing your best to act and make the best decisions only for the good of the community, under the guidance of state law and governing documents is the most important thing you can do to be a good board member.