A community association is truly just that – a group comprised of representatives of the entire community with the community’s best interest in mind. It’s a simple but important distinction, since opinion on the specific role of a community association can vary.
There are three forms of management:
- Volunteer or self-management, where the board and committees manage the entire association themselves. With this type of management, it is important that members keep up with current legal requirements and have proper insurances in place.
- Association-employed manager, in which a dedicated manager is employed through an employment contract and with the assistance of additional onsite staff.
- Professional management company, which meets the needs of most associations and is much more affordable than an onsite manager and staff. A professional management company typically manages more than one association through management contracts.
Generally speaking, the association is charged with maintaining common elements and ensuring compliance with the association’s governing documents through three bodies of community governance: owners, the board of directors and committees.
Owners are responsible for paying assessments in a timely manner. This is an important role because it ensures the financial stability of the association. Owners who follow the rules and regulations of the association promote harmony within a community.
Beyond that, owners have the power of the vote. They can vote on directors, amendments and certain special assessments, and perhaps ratifying the budget, approving assessment increases and other specific items outlined in each association’s governing documents.
It’s a power that can have lasting impacts, so owners should make sure they are informed voters and only cast their ballots after learning about board candidates and carefully considering the issues.
Remember - once board members are elected, they will be making many decisions on behalf of the association. Volunteer to serve on the board or help the board on committees or special projects, especially in areas of personal expertise.
Board of Directors
The board, of course, has the most direct power to govern and manage the affairs of the association. State statutes and governing documents (i.e., Declaration of Covenants, Conditions and Restrictions or Declaration of Condominium, articles of incorporation, bylaws and state statutes) set the responsibilities and power of the board.
More simply put, the board’s job is to make most of the decisions for the association. The board should always use the “business judgment rule” and exercise sound business reason when making decisions.
The board is also responsible for the care, maintenance and enhancement of common property, as well as community finances and risk management, including proper insurance and funding reserves for future capital repairs and replacements of common elements.
It must establish, enforce and interpret rules and regulations, and oversee employees, management companies and volunteers.
Perhaps most importantly, the board has a fiduciary duty to act for the benefit of the community as a whole and cannot act in self-interest.
Committee are created by the board to study specific issues. Committee members’ function, then, is to make informed recommendations to the board of directors, which will then decide on the issue.
Essentially, committees operate under the direction of the board and have no power themselves, unless the governing documents state otherwise.
An added benefit of committees is they can often serve as a training ground of sorts for potential future board members. Committee members are usually appointed by the board.
It is a good rule of thumb for committees to have charters that define their roles and authority, since it’s critical for the board to know what committee members are doing. A member of the board of directors could serve as a committee liaison to communicate between a committee and his or her fellow board members. However, it is not recommended that the board member actually serve on the committee, unless the governing documents state otherwise.