Outline of Board Member Duties

What Are HOA Board Members Responsibilities

Composition of a Board

In an HOA, the board of directors has the responsibility to enforce regulations, manage concerns, and help their communities. Depending on the area you’re in, the contracts and bylaws can differ on what exactly those responsibilities are. Some of those usually include enforcing governing documents, establishing policies, establishing reserve funds. Other responsibilities include collecting assessments, authorizing legal action, informing members of any legal changes, and so forth.

In this article, we will outline some of the specific roles and duties of board members. We’ll outline the officer positions in the board of directors, describe their roles, and the duties the board of directors.
Officers of the Association

The Breakdown

Each HOA board has a president, secretary, and treasurer and may have a vice president. An association does not need all of these positions to operate officially, but that is dependent on the laws and the size of the HOA. Here is outline the specific duties of each member of the board and how they are unique.

President

The president of an association is entrusted with all the powers over the board of directors. They will generally be present at all meetings of the board and will execute contracts and orders. They also take general charge of day-to-day administration. The president is usually the spokesperson for the board, representing the board of directors, the HOA, and the local community in most manners.

Vice President

The vice-president is bestowed with all the powers which are required to perform the responsibilities president in their absence. The vice-president may assume additional duties, have charge of day-to-day administration. When the president is present, the vice president mostly takes on the role as the first advisor.

Secretary

The secretary helps maintain records of all meetings of the board and keeps the official records of the association. This generally includes making sure the meetings are recorded, being responsible for those meeting minutes and other official documents of the association. They ensure all records are easily accessible for members of the community and authorized representatives.

Treasurer

The treasurer helps secure funds, securities, and financial records of the association. If using a management company, the treasurer’s duties will include overseeing the activities of that company to ensure that all financial records are maintained properly. Normally, the treasurer is responsible for creating the proposed annual budget after the annual meetings and help prepare financial reports.

The Three Fiduciary Duties of HOA Board Members

Now that you understand the roles of the officers let’s touch base on the main responsibilities of all board members. The most important is the overarching “fiduciary” responsibility of the board. It basically means they have to act in the best interest of the community, to the best of their ability. The fiduciary responsibility has three main components: Duty of care, a duty of loyalty (or good faith), and duty of sound business judgment (or reasonable inquiry).

1. Duty of Care – Board members are required to exercise what is called a “duty of care.” They must be diligent and careful when carrying out their responsibilities. This means making sound judgment and informed decisions. The rules of the community must be the underlying reason for taking action. Being very familiar with the governing documents will help ensure this requirement is met, as will doing additional research when needed.

2. Duty of Loyalty (Good Faith) – Related to the duty of due care is the obligation that board members act in good faith for the benefit of the community. Board members need to be very careful when it comes to what is called “self-dealing,” which means making a decision, as a board member, which benefits that board member. This could be failing to disclose ties to a vendor the board member votes to approve.

3. The Duty of Sound Business Judgment or Reasonable Inquiry – Somewhat related to duty of care, “sound business judgment” means the board did their due diligence when making business decisions. This is particularly needed when making financial decisions or investments on behalf of the HOA.

Let’s Review

Each of the members of the board of directors has their own set of duties that they take on. This may be the secretary maintaining all the records of the community, or the treasurer overseeing the budget process. In addition, all board members have an obligation to follow their fiduciary responsibility– the duty of care, a duty of loyalty, and duty of sound business judgment.

Serving as a board member is a valuable and rewarding experience. If you are volunteering to take on this role, you likely have a serious dedication to your community being the best it can be. Being able to put the community first, and having a thorough knowledge of the governing documents are very good steps to being a successful board member.