Functions of an HOA Board of Directors
The most important task of a board is hiring the right management company to maintain property values in your community. We are here for you. But, what exactly are the HOA board of directors’ duties, roles, and responsibilities?
How Is the HOA Board of Directors Elected?
A board of directors is a requirement for a homeowners association to function properly. These elected volunteer officials are responsible for all operations of the association and ensuring the community governing documents are followed and enforced.
Without a capable board, partnering with an experienced and professional management company, a community’s quality of living can quickly decline. The covenants or bylaws of an association give all the information regarding a board of directors. Election procedures, the number of members, officer positions, and terms will all vary from association to association.
The board is elected from and by the homeowners of the community at the annual meeting.
The number of board members usually varies from three to seven and even then some bylaws may state a board should consist of no fewer than three members and no more than five. Terms most often range from two to three years with a staggered election cycle, preventing the entire board from changing at the same time and allowing some consistency in decisions and knowledge.
Once an HOA board is elected by their peers, the board members will convene to elect the officers. This usually takes place during the first board meeting following the annual meeting.
How Long Does the HOA Board of Directors Stay in Office?
Associations are required to have a president, secretary, and treasurer, and all officers’ terms are limited, though they may be re-elected.
Some bylaws and statutes allow the positions of secretary and treasurer to be held by the same person. In cases where there are fewer officer positions than board members, it is possible to be an elected board member but not hold an officer position.
What If a Member of the HOA Board Wants to Resign?
Any board member may resign if they so wish as long as they give written notice to the rest of the board. The board can also remove any member with or without cause at any time.
In these instances of a vacancy, the board can appoint a replacement with a majority vote. Should the resigning member’s resignation not take effect until a later date, they may participate in the selection of a replacement as they still hold all powers of their position.
HOA Board of Directors: The Role They Play in an HOA
Each of these officers has their own role to play and responsibilities to the community. Here, we hope to shed some more light on each of these roles, how they relate to each other, and how they serve their community.
In homeowners associations, effective presidents spend most of their time acting as facilitators and communicators among the other officers. This position requires excellent communication, leadership, and management skills.
They don’t make decisions on their own. Rather, the HOA board of directors president presides over meetings and make sure all members of the board have the opportunity to give their opinions. Decisions are made only after appropriate discussion and with the best interests of the community in mind.
He or she is also responsible for preparing meeting agendas and ensuring all important undertakings are accomplished. As many associations are incorporated as non-profit corporations, the president is essentially the CEO and will sign or authorize signature of all contracts and other legal documents pertaining to the association.
2. Vice President
The HOA board of directors vice president’s role is mainly to support the president. The VP stands in for the president in meetings the president is unable to attend or duties he/she is unable to fulfill. While not always an essential position, a vice president is a huge asset to boards that have them.
On many boards, the president may assign the vice president a task or duty that doesn’t typically fall under the responsibilities of another officer. For example, they may preside over securing bids for maintenance projects or act as a liaison with the management company.
If you choose to organize your board into committees, the vice president might also serve as the chairman, liaison, or representative of the president to one or more of these committees. In small communities, the role of the vice president may seem redundant. However, larger boards and communities will appreciate having the position on their boards.
Having an extra hand to fill in when needed is extremely important when there are lots to do and not enough time to do it. An effective vice president is flexible. Much like the president, he/she should be a strong communicator and can manage multiple projects at once, but he/she should also be ready to pick up the slack.
To most people, a secretary’s role isn’t as important as others. In fact, it’s one of the most critical HOA leadership roles.
Aside from delivering notice of meetings and diligently jotting down the minutes, the secretary is responsible for all association records.
Many associations are required by their governing documents to make these documents available to homeowners upon request. An effective secretary should be well-organized and can quickly produce any documents required as soon as they are requested, our management company is glad to house minutes on our web portal and provide them as requested to homeowners.
Additionally, the secretary works closely with the president to develop meeting agendas. Most secretaries also write and send the neighborhood newsletter to keep the company up-to-date on happenings and general association information.
Treasurers oversees all financial transactions of the association, both incoming and outgoing. They are responsible for overseeing the collection of assessments and the issuing of payments to vendors as needed and approved by the board.
At the end of the fiscal year, they may assist our management company with preparation of the annual budget. The treasurer should work closely with the management company for accounting services and financial reports.
The responsibility of the treasurer should not be taken lightly. Poor management of association funds could create distrust and conflict within the community. It can even result in legal action. Therefore, the treasurer should be well organized, trustworthy, and responsible.
Other HOA Board Responsibilities
Aside from knowing the basic terminologies that come with an HOA, there are a few other responsibilities the HOA board of directors must fulfill. Let’s take a look at them below:
Budgets, Assessments, and Accounting
Keeping track of the association’s financial reports is a big part of the HOA board duties. Members of the board must make sure to follow the accounting standards that have been put in place.
This includes keeping up-to-date and accurate books and generating regular financial reports. These reports help the board make decisions about the coming year’s budgets and expenditures. With HLNM web portal, these reports are maintained for historical purposes and future review of board members.
The board is also responsible for overseeing of the collecting of assessments from members of the community. How assessments are computed will normally be outlined in an HOA’s CC&Rs. In general, the projected expenses for the coming year are divided equally across all homeowners. As a board member, one must set an example and pay assessments on time.
Once the board has arrived on a figure, assessments must be collected. Residents must be treated fairly and equally, which means the HOA board of directors mustn’t play favorites or give special treatment regardless of the homeowner’s financial condition.
Uniform Enforcement of Rules
Uniform enforcement of rules also falls under HOA board duties. All homeowners must follow the governing documents and rules that apply within the community. No special treatment must be given. This means no one — not even the HOA board of directors themselves — can be exempt from the rules and regulations.
When enforcing rules or carrying out penalties, board members must act justly. They shouldn’t let their personal feelings sway their decisions. They cannot let a violation go simply because the offender is a long-time friend.
Some rules can be too broad. In such a case, the board must discuss and clarify the rules, as well as finalize standard procedures. Look to the CC&Rs for guidance.
Serving Your Community Better
Understanding how you fit into your HOA board and what you are responsible for as an officer goes a long way toward having a strong association and united community. Fulfilling these HOA board of director duties can seem like a tall order, especially to the uninitiated.
Anyone looking to run for a position on their community’s board of directors should keep in mind the job is often a thankless one and if elected they should make all decisions with the interest of the community at heart. The greatest reward will be the satisfaction of a job well done when the community prospers.
If your community’s HOA needs help in management, don’t hesitate to give us a call at (601) 326-7325. We’re more than happy to work with you in improving your community.