What Are an HOA Board Member’s Responsibilities?

An HOA board member’s responsibilities come down to three things: run the association’s business, follow and enforce the governing documents, and put the interests of the whole membership ahead of your own. Day to day, HOA board member responsibilities include adopting the budget, collecting assessments, maintaining the common areas, funding reserves, buying insurance, overseeing vendors, holding meetings and elections, and keeping records.

Most directors are unpaid volunteers, but the law still treats them as fiduciaries, meaning people trusted to manage money and property that belong to someone else. This article covers what the board does as a group, what each officer does, and the fiduciary duties that apply to every director. It ends with a section on California law.

HOA Board Member Responsibilities: What the Board Does

The exact list comes from your state’s statutes and your association’s governing documents, so it differs from one community to the next. In most associations, the board is expected to:

• Enforce the governing documents. The board applies the CC&Rs, bylaws and rules to every owner in the same way, including to directors. If you are not sure which document says what, start with our explanation of HOA governing documents.
• Adopt the budget and collect assessments. The board estimates the year’s costs, sets assessments at the level the documents and state law allow, and follows up on accounts that fall behind. See planning your HOA budget for how that process works.
• Maintain the common areas. Roofs, roads, pools, landscaping and other shared property have to be inspected, repaired and eventually replaced.
• Fund the reserves. A reserve fund pays for large future repairs so that owners are not surprised by a special assessment when the roof or the paving wears out.
• Carry insurance. The association needs property and liability coverage, and usually directors and officers coverage and a fidelity (crime) policy as well.
• Hire and oversee help. Managers, landscapers, attorneys, accountants and reserve specialists work for the association. The board approves their contracts and checks their work.
• Set policies and rules. Within the limits of the governing documents, the board adopts policies on matters such as collections, architectural review and use of the amenities.
• Hold meetings and elections and keep records. Decisions are made at properly noticed meetings, recorded in minutes, and kept where future boards and owners can find them.
• Keep owners informed. Members should hear from the board about budgets, rule changes, major projects and changes in the law that affect them.
• Decide on legal action. The decision to sue, settle a claim or send an account to collection belongs to the board, not to a manager or a single director.

The board carries these responsibilities as a group. A single director, including the president, has no power to bind the association unless the board or the governing documents gave that authority. The board can hand the daily work to a manager or a committee, but delegating a task does not transfer the responsibility for it. The board still has to check that the work is done.

Officers of the Association

Most associations have a president, a secretary and a treasurer, and many add a vice president. State law and the bylaws decide which offices are required and whether one person may hold more than one. In most associations the directors choose the officers from among themselves, and an officer serves for as long as the board wants that person in the role. An officer title adds tasks. It does not add votes, because every director has one vote.

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President

The president chairs board and membership meetings, works with the manager to set the agenda, and signs contracts and other documents the board has approved. The president usually speaks for the association with owners, vendors and the association’s attorney. The role does not come with the power to decide matters alone. The president carries out what the board has voted to do.

When signing for the association, the president should sign with the title and the association’s name, for example “Maria Lopez, President, Oak Glen Homeowners Association.” That makes it clear that the association is the party to the contract and the individual is not.

Vice President

The vice president fills in when the president is absent or unable to act, with the same duties and the same limits. The rest of the time, the vice president is a regular voting director who often takes assignments from the board, such as chairing a committee or leading a project, and serves as a sounding board for the president.

Secretary

The secretary is responsible for the association’s official records. That means making sure meeting notices go out on time, minutes are taken at every board and membership meeting, and the minutes, governing documents and membership list are kept in order. Minutes should record what was decided and how the vote went. They do not need to be a transcript of who said what.

A manager often does the note-taking and filing, but the secretary remains responsible for seeing that the records are accurate and that members and directors can get the records they are entitled to see.

Treasurer

The treasurer watches the association’s money: the bank accounts, the reserve fund, the financial reports and the budget. If the association uses a management company or a bookkeeper, the treasurer does not keep the books personally. The treasurer reviews the monthly statements, compares spending with the budget, and asks questions when something looks off.

Unless the bylaws say otherwise, the treasurer usually leads the work on the proposed annual budget and presents the financial report to the board and the members. The treasurer does not carry this duty alone. Every director is responsible for understanding the association’s finances.

The Fiduciary Duties of HOA Board Members

A fiduciary is someone who manages money or property for the benefit of others and is held to a high standard of honesty and care in doing it. Directors are fiduciaries for the association and its members, and being a volunteer for a nonprofit does not lower the standard. In most states, the law describes a director’s obligations as two duties, the duty of care and the duty of loyalty. When a board decision is challenged, courts generally review it under a standard called the business judgment rule.

Duty of Care

The duty of care requires you to act in good faith and to be as careful and informed as a reasonably prudent person would be in the same position. In practice, that means:

• Reading the governing documents, the agenda packet and the financial reports before you vote.
• Attending meetings and taking part in the discussion.
• Asking questions and looking into warning signs, such as a leak that keeps coming back or a bank balance that does not match the report. This is what the law calls reasonable inquiry.
• Getting advice from an attorney, accountant, engineer or reserve specialist when a decision calls for expertise the board does not have.
• Enforcing the rules and maintaining the property instead of ignoring problems because they are unpleasant or expensive.

The duty of care is about how a decision is made. A director who prepared, asked sensible questions and relied on qualified advice has generally met the duty even if the result is disappointing.

Duty of Loyalty

The duty of loyalty requires you to act for the benefit of the association, not for yourself, your family, your friends or your business. The clearest violation is self-dealing, which means using your position to steer a benefit to yourself. Examples include voting to hire your own company or a relative’s company, accepting gifts from a vendor that is bidding on association work, and voting on a violation or an architectural request that involves your own home.

In a small community, conflicts of interest are hard to avoid entirely. The best plumber in town may be a director’s brother-in-law. What matters is how the conflict is handled. Disclose the relationship to the full board before the discussion, stay out of the deliberation and the vote, and make sure the minutes record that you did.

The duty of loyalty also covers keeping confidential information confidential and treating all owners even-handedly, with no favors for allies and no penalties for critics.

The Business Judgment Rule

The business judgment rule is not a third duty. It is the standard most courts apply when someone challenges a board decision. Under the rule, a court generally will not second-guess a decision that the board made in good faith, after reasonable inquiry, within its authority and without a conflict of interest, even if the decision turns out badly. The court looks at the process the board followed, not at whether hindsight shows a better choice.

The rule has limits. It generally does not protect a board that acts outside the authority its governing documents give it, ignores a requirement in those documents or in state law, decides without looking into the facts, or acts out of self-interest. A board that can show its work in the minutes (the bids it compared, the expert it consulted, the reasons for its choice) is in a much stronger position than one that cannot.

In California

California associations are governed by the Davis-Stirling Common Interest Development Act, and most are also nonprofit mutual benefit corporations under the Corporations Code. Our overview of California HOA law explains how the two fit together. For director duties, these are the provisions to know:

• Standard of care. Corporations Code section 7231 requires a director to act in good faith, in a manner the director believes to be in the best interests of the corporation, and with the care, including reasonable inquiry, that an ordinarily prudent person in a like position would use under similar circumstances. The same section lets a director rely on information and reports from officers and employees the director believes to be reliable and competent, from attorneys, accountants and other experts on matters within their expertise, and from a board committee the director does not serve on. The reliance has to be in good faith, after reasonable inquiry when the circumstances call for it, and without knowledge that would make it unwarranted. A director who meets this standard has no liability based on an alleged failure to discharge the obligations of a director.
• Judicial deference to board decisions. In Lamden v. La Jolla Shores Clubdominium Homeowners Assn. (1999) 21 Cal.4th 249, the California Supreme Court held that courts should defer to a duly constituted board’s authority and presumed expertise when the board, upon reasonable investigation, in good faith and with regard for the best interests of the association and its members, exercises discretion within the scope of its authority in choosing how to maintain and repair the common areas. The court treated this as a rule of deference similar to the business judgment rule, not as the corporate business judgment rule itself.
• Volunteer liability. Civil Code section 5800 limits the personal liability of a volunteer officer or director of a residential or mixed-use association for tort claims that exceed the association’s insurance coverage. The act has to be within the scope of the person’s association duties, in good faith, and not willful, wanton or grossly negligent. The association must also have had general liability coverage and directors and officers coverage in force, both when the act occurred and when the claim is made, of at least $500,000 if the development has 100 or fewer separate interests or $1,000,000 if it has more. The protection applies only to a volunteer who is a tenant of a residential separate interest or who owns no more than two separate interests, all of them residential. It does not reduce the association’s own liability.
• Conflicts of interest. Civil Code section 5350 applies the Corporations Code rules on interested-director transactions, sections 7233 and 7234, to contracts and transactions approved by the board or a board committee. It also bars a director or committee member from voting on that person’s own discipline, an assessment against that person for damage to the common area, that person’s request for a payment plan on overdue assessments, a decision whether to foreclose a lien on that person’s separate interest, a proposed physical change to that person’s separate interest, or a grant of exclusive use common area to that person. Under Corporations Code section 7233, a contract in which a director has a material financial interest is protected from challenge when the material facts were disclosed, the board approved it in good faith by a vote that was sufficient without counting the interested director, and the contract was just and reasonable to the corporation at the time. Good-faith approval by the members after full disclosure, with the interested director’s membership not voting, is another route. If neither approval was obtained, the person defending the contract has to prove it was just and reasonable to the corporation.
• Financial oversight. Civil Code section 5500 requires the board to review certain items at least monthly, unless the governing documents set a stricter standard. The items are current reconciliations of the operating and reserve accounts, actual operating revenues and expenses compared with the budget, the latest account statements from the financial institutions, an income and expense statement for the operating and reserve accounts, and the check register, monthly general ledger and delinquent assessment receivable reports.
• Delegation and officers. Corporations Code section 7210 lets the board delegate management of the association’s activities to a person, a management company or a committee, but the association’s affairs must still be managed under the ultimate direction of the board. Under Corporations Code section 7213, the board chooses the officers and they serve at the pleasure of the board, unless the articles or bylaws say otherwise.

How to Meet Your Responsibilities as a Director

None of this requires a law degree. It requires steady habits:

• Read the CC&Rs, bylaws, rules and current budget in your first month, and keep them where you can reach them during meetings.
• Read the agenda packet before each meeting and come with your questions.
• Put decisions and the reasons for them in the minutes, including the bids and professional advice the board relied on.
• Disclose conflicts early and step out of the discussion and the vote.
• Ask for the association’s insurance summary and confirm that directors and officers coverage is in force.
• Stay inside your authority. When the documents are silent or unclear, ask the association’s attorney before acting.
• Apply the rules the same way to everyone, including yourself and your friends.

For the procedures that govern the board itself, including meeting, conflict of interest and financial rules, see the rules for an HOA board of directors. More articles for directors are collected in our HOA board member section.

The Law Behind This Article

Every legal point in this article comes from the official text. Each link below opens it in a new tab.

Civil Code sections: 5350 · 5500 · 5800

Corporations Code sections: 7210 · 7213 · 7231 · 7233

This article is general educational information, not legal advice. Laws vary by state and your association’s governing documents control many of these questions, so check with your association’s attorney or another qualified professional about your situation.