Ask the HOA Expert: The Board's Authority

Written by Posted On Thursday, 10 August 2023 00:00

Question: An owner recently died and several board members believe the HOA should waive the monthly assessment for the widow. Is this permissible?

Answer: The board has authority to make reasonable compromises on payment of HOA debts. But there is no debt issue here. So, if the board feels strongly about this, it should pass the hat to raise private money for the widow. The money should not come from the HOA pot.

Question: Is it okay for an HOA to buy a unit in the complex and rent it out for income? The return would be much higher than any CD or money market account.

Answer: Larger condominiums are often designed with a manager's unit. But buying a unit for investment purposes would expand the common elements and require a vote of the members (which could be up 100% of them depending how the governing documents read). Also, the typical HOA does not have hundreds of thousands of extra dollars which could be locked up in such a relatively illiquid investment like real estate. Virtually all reserves are earmarked for future repair and replacement projects. To pay for those projects, reserve funds are typically invested in Certificates of Deposit so the money can be readily available when needed.

Question: We have a member that requested copies of HOA records which, granted, he is entitled to see. He was quoted a reasonable price per page of 10 cents which includes the copies and the manager's time to produce the copies. He showed up at the next board meeting claiming he was entitled to the information for no charge.

Answer: It is reasonable for the HOA to charge a fee for photocopies. His grandstanding at a board meeting doesn't change the fact that this is a special request and not routine HOA business. As such, he should pay a reasonable cost. Of course, he could save the money by simply reviewing the records he's interested in. Requesting piles of paper is a common intimidation tactic.

Question: Our board consists of five directors. In past elections, it has been difficult to get people to run for the board which may not be the case in coming elections. The bylaws state: "The number of directors shall be designated by resolution of the owners from time to time but shall in no event be less than three nor more than nine directors, and shall always be an odd number". The current board majority stated that it has no desire to increase the number of directors.

1. Can a resolution to increase the number of directors be included in the Notice of Meeting and to be voted at the meeting by the membership?

2. Can a resolution be proposed at the Annual Meeting by any member to increase the number of directors?

Answer: It's fine for the board majority to express its opinion on this matter but it has no special authority to control the outcome of a vote. As your bylaws clearly state, changing the number of directors requires a vote of the members. Such an amendment needs to be noticed in advance of the Annual Meeting in the Agenda so all members are aware of it and have the opportunity to vote. This proposal cannot be first announced at the Annual Meeting itself since members that are not present will have no knowledge of it nor be able to cast a vote.

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