Serving on a homeowner's association (HOA) board is no small task. Board members juggle various responsibilities, from financial oversight to community leadership. Understanding the key principles that guide your role is vital for effectively maintaining harmony. Here's a concise guide to help board members confidently navigate their duties and responsibilities.

Understanding Your Role

Director's Responsibilities

Community association board members wear many hats: community leaders, budget managers, covenant enforcers, and occasionally, mediators. Each board member has equal voting power on community business issues, and they are elected by the association members. Officer positions, like president, vice president, secretary, and treasurer, are decided by the board itself—not the membership, and the responsibilities for these roles are generally outlined in the association's bylaws. The board can delegate actions to its management agent by establishing policies; however, it can never delegate its fiduciary responsibility.

Standard of Care

Board members are fiduciaries of the association, meaning they must act in good faith and prioritize the community's best interests over personal agendas. Key principles include:

• Uniformity: Treat all members equally to avoid conflicts, legal issues, and potential Fair Housing Act violations.
• Business Judgment Rule: Make decisions based solely on sound business practices rather than personal relationships or preferences.

Legal Protections

Being a board member comes with legal protections—if you act in good faith:

• Indemnification: Many governing documents require the association to defend board members if sued.
• Directors and Officers Insurance (D&O): Ensures legal defense coverage for actions taken as part of your board duties.

However, these protections may not apply if actions were taken for personal gain or if the board member is compensated. Be sure to consult with the association's insurance agent to review coverage annually, and ask the attorney if there is ever a question about the right course of action to be taken on behalf of the association.

Running Effective Board Meetings

Board meetings are key for decision-making. Here are best practices to ensure meetings are productive:

• Stick to an Agenda: Follow a prepared agenda and use Robert's Rules of Order to maintain structure.
• Prepare Ahead: Review financial statements, contracts, and other relevant documents before the meeting.
• Time Management: Start and end on time and "park" off-topic conversations for later discussion.

Compliance with Governing Documents

Board members are tasked with uniformly enforcing the community's governing documents, rules, and covenants. Here's how to do so effectively:

Due Process

When addressing non-compliance, follow due process:

• Notify the homeowner in writing about the violation.
• Allow a reasonable timeframe (e.g., 10 days) for the homeowner to correct the issue.
• Provide opportunities for the homeowner to be heard, especially before levying fines.

Options for Enforcement

• Fines are the most cost-effective and common method of gaining compliance. Many state laws and governing documents authorize this.
• Injunctive Relief: Involves court action to compel compliance but should be a last resort due to cost and time.
• Avoid "DIY Enforcement": Entering a homeowner's property to resolve violations yourself can lead to legal complications and potential safety issues.

Architectural Review Basics

Architectural Review Committees (ARCs) or boards themselves handle aesthetic and structural requests. Keep these points in mind:

• Understand Governing Documents: Be familiar with rules related to architectural changes.
• 30-Day Rule: Respond to ARC requests within the specified time, or they may be automatically approved (unless your documents state otherwise).
• Document Denials: Provide detailed written explanations for denied requests and suggest possible alternatives that would be approved.
• Be fair and consistent when approving or denying requests to avoid any appearance of bias.

Key Pitfalls to Avoid

Stay vigilant against these common board member missteps:

• Acting Without Formality: Always operate through proper business meetings and maintain accurate records.
• The Rogue Board Member: Avoid unilateral actions or decisions by individual board members. Once a majority of board members have made a decision, always present a united front to the membership.
• Neglecting Professional Advice: When in doubt, consult attorneys, financial experts, reserve specialists, or community managers.
• Favoritism: Always aim for fairness and transparency in decision-making.

Serving as an HOA board member is a demanding but rewarding role. Understanding your responsibilities, adhering to best practices, and prioritizing the community's well-being can foster harmony and success within your association.

About Community Association Management Services
 In business since 1991, CAMS has grown to become North and South Carolina's premier community management company. With experienced local managers in each of its nine regions, CAMS provides innovative solutions to the community associations it serves. To learn more, visit www.camsmgt.com/choose-cams.