People seem to have a love-hate relationship with homeowners associations. More often than not, the people that love them respect and feel protected by rules, and the people that hate them don't like the rules - these are also the people who are usually violating the rules.
When a member is violating the HOA rules, do HOAs have the ability to enforce the rules by fining the member?
Many HOA board members get into trouble due to not understanding the operating fund and reserve fund in a homeowners Association. If these two funds aren’t properly maintained, a Board can unintentionally cause the Association to fail financially. Therefore, it’s crucial that Boards understand how to correctly use the operating fund and reserve fund.
Groups that are run by volunteers that handle money are particularly vulnerable to fraud, embezzlement, illegal activities, and scams. HOA boards are no exception. Access to funds is a temptation that some cannot resist.
Homeowners associations are like little governments. They have an HOA board of directors that govern and oversee the association and that Board does have some powers. But where does the Board get these powers and authority to enforce their documents and rules?
Each Association is unique, but more often than not your Association has at some point in the past – or will in the future – experience questions similar to the real-life issues addressed below. Continue reading to see if any of these real-life questions and expert answers from an HOA manager apply to your Association.
Sometimes it's confusing for volunteers to know and understand their place on the HOA board. Each board member must hold an officer position, but if you have a Board of Directors comprised of more than five individuals, you may have a position called “member at large.” The duties and position of the member at large can often be confusing, and while it may look different for each association, there is general agreement of what the position consists of.
When you become a member of a homeowners association, you receive a copy of the governing documents. By living in the HOA, you also agree to abide by them, so it's important to read them and understand what they say. However, these documents often use a lot of jargon and can be difficult to understand. Here's a snapshot of the purpose of the Bylaws in an association.
A common question asked among residents in a homeowners association is, how many board members should an association have? The answer is that it really depends on what the association's governing documents state. Typically, the number of HOA board members an association should have is found in the bylaws of the association. But in general, you should have a three- or five-member board of directors. Some have more, depending on the size of the association. A good starting place is to consult your bylaws.
The Board of Directors for your homeowners association has an immense financial obligation to the community. One of the HOA board's most important jobs is to keep legible and accurate financial reports and records. These reports and records provide an overview of your community’s revenue and expenses against its financial projections or budget.
An HOA board of directors has a fiduciary responsibility to the association. They're tasked with upholding the governing documents and the rules of the association. There's also the business judgment rule that says if the board receives expert advice on a topic, and they follow that expert advice, it provides them with a level of protection if there's a lawsuit against the board or the association.