By Tyler P. Berding, Esq.
Community associations are corporations. Their bylaws require management of the association by an elected board of directors. That board serves all of the owners by conducting the business of the association. Like any corporation, the board of directors, and its officers, have the sole legal authority to handle all of the vital functions of the enterprise—from hiring and firing property managers, to contracting for repairs, to determining the adequacy of the association's revenue stream.
A property manager does not have the authority to conduct the business of the association on its own. No matter how good, how efficient the manager, without the legal authority of the corporation behind it, business would stop. Vendors would not continue to provide critical services to the association if there was no one with the authority to write checks. Local government would begin to question whether a condominium project could continue to be habitable if no one was able to pay the water or the electric bill.
Without the board of directors, the association would cease to function. There is no alternative within a corporate framework. Yet many associations have a very difficult time recruiting board members. Board positions go unfilled waiting for volunteers. This has potentially disastrous consequences and justifies further examination. First, we'll examine some of the reasons why it is so difficult to convince owners to serve on their community association's board of directors and then discuss the impact of that.
Reason Number 1 - Lack of Awareness.
Many owners of property in common interest developments have little knowledge of the operation of the homeowners' association. They pay their dues when that bill comes, but know very little about the organization itself or its activities. They may not read the newsletter or if they do it's only to find out the pool hours. The only budget figures they are concerned about is the amount of the monthly assessment. They are only remotely aware that it is the board of directors and not the management company that has legal responsibility for the business decisions of the association. They simply do not connect the operation of the association with anything in which they have a personal interest.
Reason Number 2 - Time Constraints.
There are those owners who are familiar with the role of the association and its board of directors and who generally stay abreast of it activities and decisions. They read the newsletter, and occasionally attend a meeting of the board, but they see their occupations or family responsibilities as impediments to accepting the additional responsibilities required of members of the board of directors.
Reason Number 3 - Fear of Responsibility.
Many property owners in community associations are quite aware of the operations of the association and the function of the board of directors, and they would otherwise have the time to devote to a place on the board. The problem is that for one reason or another they are afraid to accept the responsibility. Perhaps it is a lack of confidence in their own ability or concern about liability should they make a mistake, or they are simply discomforted by the thought of making decisions that are critical to the economic interests of their fellow owners.
By Andrea L. O'Toole, Esq.
When is fining a member appropriate?
To determine when fining is appropriate - besides ensuring that there is authority to do so and that proper procedure is followed - it is helpful to understand the purposes behind fining. Enforcement of the governing documents - including the rules, regulations, and policies of the association - is one goal of fining; the idea being that the threat of having to pay a fine is enough to force compliance with those provisions. A second goal is deterrence - both of the violator and of other members who might be considering similar violations. Ultimately, the purpose is to encourage voluntary compliance with the governing documents. When fining will not accomplish that goal, other enforcement mechanisms should be utilized.
"How much can the association raise
Monthly assessments can be raised as much as 20% over the prior year without a vote of the members. By an appropriate majority, the members of the association can approve an assessment in any amount.
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