HOA Board Duties: What To Expect From Your BOD

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Residents of a homeowners association should familiarize themselves with HOA board duties. This way, they know what to expect from board members and understand the roles they must fulfill if they volunteer to serve on the board.

What Are HOA Board Duties?

Every homeowners association has a set of leaders—the HOA board of directors. The board is made up of volunteer homeowners who are elected into office by the membership. While exact HOA board responsibilities can vary from one association to another, depending on the governing documents, they generally fall under the same categories.

The primary goal of an HOA board is to ensure that the community operates smoothly to maintain curb appeal and preserve property values. To achieve this goal, board members must fulfill various tasks and obligations to the association.

Here are the typical HOA board of directors responsibilities.

1. Common Area Maintenance

Most HOA communities have common areas, whether hallways, elevators, or amenities and facilities. These common areas or elements don’t just maintain themselves, though. The HOA is generally responsible for ensuring proper maintenance and repairs. And the burden of hiring maintenance companies, budgeting for repairs, and scheduling work falls on the HOA board.

2. Financial Management

The HOA board is responsible for managing the association’s finances. This includes planning the annual budget, collecting homeowners’ dues, approving invoices and expenditures, preparing financial reports, and filing tax returns. Without this crucial aspect of HOA management, a community would cease to function.

3. Vendor Management

The HOA board is responsible for hiring, coordinating, and managing vendors. While some HOAs have in-house employees, most employ third-party vendors to handle various tasks such as cleaning, maintenance, repairs, and landscaping. Board members must carefully vet and select vendors, oversee their work to ensure quality, and coordinate with them for scheduling.

4. Rule Enforcement

Homeowners associations always have rules and regulations that residents must follow. The HOA board enforces these rules and imposes penalties for violations. Of course, the HOA board should adhere to proper procedures when enforcing rules. 

In California, for instance, Section 5855 of the Davis-Stirling Act requires HOAs to schedule a hearing for violations before taking disciplinary action. The HOA must also provide 10 days’ written notice before the hearing. If state laws are silent, board members should refer to their governing documents.

5. Homeowner Communication

The HOA board is also responsible for communicating with homeowners and updating them on association matters. This includes sending notices, posting announcements, and conducting open board meetings. In California, board meetings must be open to all members except for meetings held in executive sessions.

Understanding HOA Board Roles

In addition to the HOA board’s duties as a whole, individual board members have their own roles to fulfill. Here are the individual HOA board member duties.

HOA President Duties

The HOA president leads the entire board and association. They are in charge of overseeing the HOA’s operations and decisions. 

The HOA president’s responsibilities are as follows:

  • Overseeing the association’s activities
  • Making decisions (even having the final say on split decisions)
  • Presiding over HOA meetings
  • Signing contracts and other legal documents
  • Co-signing checks, statements, and invoices with the treasurer

HOA Vice President Duties

The vice president assumes the role of the president when the latter is not around. As such, they should understand all of the duties of the president and be capable of fulfilling them. The VP assists the president in all matters, with exact responsibilities typically outlined in the bylaws.

The HOA vice president’s responsibilities are as follows:

  • Helping the president carry out their duties
  • Taking over the role of president if the president is unable to
  • Managing committees (in some HOAs)

HOA Secretary Duties

The secretary handles everything related to documentation and recording. They play a critical role in the continued success of an HOA.

The HOA secretary’s responsibilities are as follows:

  • Managing all of the association’s records and documents
  • Taking minutes of the meetings
  • Preparing meeting agendas (with the help of other board members)
  • Communicating with board members and homeowners
  • Ensuring records remain up-to-date and accurate
  • Submitting forms
  • Handling paperwork

HOA Treasurer Duties

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The treasurer is responsible for the HOA’s finances. They oversee the financial management aspect of running an association and sometimes obtain and update insurance policies.

The HOA treasurer’s responsibilities are as follows:

  • Managing the association’s finances
  • Planning annual budgets
  • Preparing financial statements
  • Managing and updating financial records
  • Filing tax returns and paying taxes
  • Conducting audits (or hiring someone to do so)
  • Monitoring funds and expenditures
  • Planning and managing reserves
  • Establishing and enforcing internal controls

What Are the Fiduciary Duties of HOA Board Members?

Apart from their roles and responsibilities, HOA board members also have fiduciary duties to uphold. A fiduciary duty is the board’s legal obligation to act within the association’s best interest.

Here are the fiduciary duties of the HOA board of directors: the duty of care, the duty of loyalty, and the duty to act within the scope of authority. Let’s discuss each one below.

Duty of Care

The duty of care refers to the legal obligation of HOA board members to act with diligence, prudence, and competence in managing the association’s affairs. This duty requires board members to make informed decisions, exercise reasonable judgment, and prioritize the best interests of the community and its members.

More specifically, the duty of care entails the following:

  • Informed Decision-Making. Before making decisions or taking action, board members must educate themselves about relevant laws, regulations, governing documents (such as the CC&Rs), and the specific circumstances of each issue.
  • Prudent and Reasonable Actions. Board members are expected to act in a manner consistent with sound business judgment, avoiding arbitrary or capricious behavior. This involves considering the potential consequences of their decisions and striving to achieve fair and equitable outcomes.

Duty of Loyalty

The duty of loyalty refers to HOA board members’ legal and ethical obligation to prioritize the association’s best interests and its members above their interests or biases.

More specifically, the duty of loyalty entails the following:

  • Avoiding Conflicts of Interest. Board members must not use their position for personal gain or advantage at the association’s or its members’ expense. This includes abstaining from actions or activities in which they conflict with interest unless disinterested parties fully disclose and approve such transactions.
  • Confidentiality. Board members must maintain the confidentiality of sensitive information related to the association’s affairs, including discussions during board meetings and personal information about individual homeowners.
  • Transparency and Accountability. Board members are accountable to the HOA’s members and must operate transparently in their decision-making processes. This involves providing homeowners with timely and accurate information.

Duty to Act Within the Scope of Authority

The duty to act within the scope of authority refers to the legal obligation of HOA board members to exercise their powers and make decisions within the bounds of the authority. This authority is granted to them by law, the association’s governing documents, and applicable regulations.

More specifically, the duty to act within the scope of authority entails the following:

  • Compliance With Governing Documents. HOA board members must adhere to the provisions outlined in the association’s governing documents. They must ensure that their actions are consistent with these documents and do not exceed the authority granted to them.
  • Adherence to Applicable Laws and Regulations. Board members must comply with all relevant federal, state, and local laws and regulations governing HOAs. This includes laws related to homeowners’ rights, fair housing practices, taxation, and other legal requirements that impact the association’s operation.

HOA board members must respect the boundaries of authority delegated to them by the association’s governing documents and bylaws. They should not act beyond the powers that state laws and governing documents place upon them.

Do HOA Board Members Get Paid?

There is a common misconception that HOA board members receive some form of compensation for their service to the association. However, in truth, board members do not get paid.

HOA board members are volunteers, which means these homeowners offer their time and expertise to the community without expecting anything in return. Moreover, most CC&Rs and bylaws prohibit board members from accepting any form of compensation, including discounted HOA fees or waivers of them altogether.

HOAs often suggest paying board members due to the lack of volunteers. With compensation, homeowners would have more incentive to run for positions on the board. However, using this system can be a slippery slope. 

The lack of compensation helps protect board members from personal liability. Additionally, elected board members may be tempted to increase the community’s budget and collect higher fees to give themselves a raise, which would be self-serving and a breach of fiduciary duties.

The Bottom Line

Understanding HOA board duties is essential for residents and potential volunteers alike. Each duty plays a vital role in ensuring the smooth operation of the community. Failure to fulfill these HOA board duties will only result in mismanagement and disrepair for the association.
Personalized Property Management offers expert management services to HOAs and condos in Southern California. Call us today at 760-325-9500 or email us at info@ppminternet.com to learn more!