Community associations are corporations. Its statutes require that the association be governed by an elected board of directors. That board serves all the owners in conducting the business of the association. Like any corporation, the board of directors and its officers have the sole legal authority to handle all vital business functions, from hiring and firing property managers to contracting for repairs and determining the adequacy of the association’s revenue stream. .
A property manager does not have the authority to conduct association business on his or her own. No matter how good, how efficient the manager is, without the legal authority of the corporation behind him, the business would come to a standstill. Providers would not continue to provide critical services to the association if there was no one with the authority to write checks. The local government would begin to question whether a condominium project could remain habitable if no one could pay the water or electricity bill.
Without the board of directors, the association would cease to function. There is no alternative within a corporate framework. However, many associations have difficulty recruiting board members. Board seats sit empty waiting for volunteers. This has potentially disastrous consequences and warrants further examination. First, we’ll examine some of the reasons why it’s so difficult to convince homeowners to serve on your community association’s board of directors, and then discuss the impact of that.
RSeason Number 1- Lack of awareness. Many property owners in common interest developments have little knowledge of how the community of owners works. They pay their fair share when the bill arrives, but know very little about the organization itself or its activities. They may not read the newsletter or if they do it is just to know the pool hours. The only budget figures that concern them is the amount of the monthly assessment. They only remotely know that it is the board of directors and not the management company that has the legal responsibility for the business decisions of the association. They simply do not relate the operation of the association to anything in which they have a personal interest.
Reason number 2-Time constraints. There are owners who are familiar with the role of the association and its board of directors and who generally keep abreast of its activities and decisions. They read the newsletter and occasionally attend a board meeting, but see their occupations or family responsibilities as impediments to accepting the additional responsibilities required of board members.
Reason Number 3-Fear of Responsibility. Many property owners in community associations are very knowledgeable about the operations of the association and the role of the board of directors, and would otherwise have time to take a seat on the board. The problem is that for one reason or another they are afraid to accept responsibility. Perhaps it is a lack of confidence in their own ability or concern about liability if they make a mistake, or they are simply uncomfortable with the idea of making decisions that are critical to the financial interests of their fellow owners.
Reason Number 4-Us vs. Them. This is the most difficult reason of all. Some owners see the board of directors and the community association as an extension of government authority, but more specifically, an authority that must be challenged at every opportunity. They don’t see a board member simply as a co-owner volunteering their time, but as an incompetent bureaucrat. These owners often lack the tolerance to recognize that board members are unpaid volunteers trying to do their best. This problem serves the dual purpose of ensuring that the reviewer has no interest in serving and deterring those who might otherwise do so. But then the critic may be right. But this should open the door to challenge an existing board member in the next election, not provide more reason for anyone to run.
Reason number 5: the owner does not speak. When a landlord tells his tenants that they can’t smoke inside their apartments, or put satellite dishes on their balconies, or park backwards in carports, the tenants generally obey the rules. When a community association’s board of directors passes similar rules, it often encounters deep resistance. Why? Tenants “own” their airspace, at least for the duration of the lease, so why is their disposition to the landlord’s dictates different than that of a condominium owner? Probably because landlords feel more empowered than tenants, but whatever the reason, board members, neighbors, and sometimes friends don’t want to be put in the landlord’s shoes and have to enforce rules. rules.
The net result of these and other reasons is that boards often have to contend with vacant positions, and with few members willing to help run the association, it makes the job of the remaining board members much harder. difficult, if there are any members left. If the corporation cannot function because it has no members willing to be directors, the alternative is to seek help from the courts, often asking the court to appoint a trustee, a very expensive proposition. So there is good reason to be concerned. There is also the argument that the entire scheme of operation and administration of the association -by voluntary owners- is fundamentally flawed and that the authority to manage the business of all multi-family developments of common interest should be vested in professionals, arguments that are difficult to refute. if the owners refuse to step up.
And that may happen one day. Developers, tired of the construction and budget litigation that invariably arise, can retain enough property rights to allow them to manage the property for years or in perpetuity, with a management fee set and an appraisal formula in the governing documents. , which allows the administrator to evaluate anything. it is necessary to maintain the project without the vote of the members. Or, as we have written before, developments could be united into large special districts with sufficient government powers, including the power to collect taxes, to manage their constituent developments, again without a vote of owners.
I call these and similar ideas the “de-democratization” of community associations. That sounds bad, but what good is representative democracy if there is no representative? For the democratic volunteer management system to work, there have to be volunteers. But the trend is for fewer, not more, people willing to serve their neighbors in this capacity. If this trend continues, remaining funds could be depleted through legal fees and a court-appointed trustee or local government fees may have to act to protect habitability by taking the project. If those situations become widespread, we could see a complete change in the governance of multi-family owned housing or a major change of that type of rental housing.
It seems that I am more and more a prophet of doom. But really, if the owners are not willing to govern themselves, then the condominiums are simply apartments, and if they are not willing to make the contributions that must be made for a community association to survive, then they must be willing to give up their property rights and being tenants. This is as serious a housing crisis as the current economic one, and it could be worse, because the crisis in community association governance probably won’t end in a year or two.