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Berding | Weil Community Association ALERT Newsletter
Legal News and Comments for Community Association Boards and Managers Issue #70 • May 2011
Community Association Decision Making
Who Decides — The Board, the Members or the Legislature?
by Steven S. Weil, Esq.
Introduction
Community associations are said to be a bit like governments. “Citizens” (owners) elect “officials” (directors) to make both small and large decisions affecting their lives and assets. These decisions relate to property values, membership safety, long-term financial planning, property restrictions and maintenance of common areas and amenities. The decisions must be based on a structure of written principles (Governing Documents) serving the function of legislatively mandated law.
Sometimes, the members disagree with the decisions made by directors and call special meetings to remove the board, to challenge its authority or to reverse its decisions. Community association attorneys are often called upon to analyze these challenges and determine a question that goes to the very heart of how a community operates: who has the authority to make decisions for a community association—the board or the members; a better question is: which decisions are made by the board, which by the members, which by either and which by none because the legislature has mandated how a community must operate.
Decision-Making Authority—The Basics
Corporations Code §7210, applicable to non profit mutual benefit corporations (which includes most California homeowner associations) says in part that “the activities and affairs of a corporation shall be conducted and all corporate powers shall be exercised by or under the direction of the board” unless the bylaws or articles otherwise provide. This statutory “default” is frequently found in association bylaws. These legal principles mean that, unless the members are given the specific right to vote on an issue, all decisions of a community association can be made by, and solely by, the board. At least, those are the principles that traditionally governed the “corporate” side of association operations. Sometimes, rules governing real estate require specific membership approval. And, more and more, the legislature itself has decided to emasculate the power of both to decide how an association should function as discussed in more detail below.
Governing Documents and Statutory Law—Specific Allocations of Authority
Most bylaws and CC&Rs identify which decisions are to be made by the board and those which are to be made by the members. The Corporations Code and the Davis-Stirling Common Interest Development Act also allocate certain voting rights as between the board and the members as do the regulations of the Department of Real Estate which dictate requirements for the original set of an association's Governing Documents.
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