The board members of an association have a fiduciary duty to the homeowners, and part of this duty is to make decisions in the best interests of the community. Sometimes, though, homeowners question the extent of the board’s authority when it comes to making decisions, wondering why their votes were not included in the process. So, can the board make decisions in an HOA without homeowner input?
Who Makes Decisions in an HOA?
There are two main parties within a homeowners association: the board and the homeowners. Members of the community are elected as board members to make decisions and take care of the association. They carry a number of responsibilities on their shoulders, including maintenance of community amenities, financial planning, and enforcement of rules. As such, the board often has to make decisions in order to fulfill their roles.
These decisions are not always well-received. Some homeowners disagree with the board’s resolution, be it vendor choice, amendment of rules, or something entirely different. In the process, these homeowners begin to question whether the board even has the right to make decisions alone.
So, can the board really make unilateral board decisions?
What Authority Does the HOA Board Have?
It is important to first know what authority the board possesses.To find out what powers the board has, one must look no further than state laws and the HOA’s governing documents.
Not all state laws are made equal — and the same goes for governing documents — so it is the board’s responsibility to conduct research and do their due diligence.
These two sources usually provide the board with everything they need to know about the extent of their powers. They outline what the board must do, can do, and cannot do. For example, in most states and a majority of governing documents, the board must hold annual meetings and send a notice of the meeting to all homeowners in advance.
As for what the board can and cannot do, it varies greatly per state and per association. A general example, though, would be that an HOA board can screen potential homeowners. However, the board cannot discriminate against them based on race (or color), religion, sex, national origin, familial status, or disability. To do so would be a violation of the Fair Housing Act.
What Kind of Decision Requires Specific Actions?
By now, it is clear that there are some decisions in an HOA the board can make alone, with the only requirement being a board of directors vote. But, what kind of decision needs a vote among homeowners as well?
Again, the board’s powers are usually defined by the state or the HOA’s governing documents. For instance, most states, including North Carolina, grant HOA boards authority to foreclose on a homeowner’s property within reason. Some unilateral board abilities vary from association to association, though there are common ones found in many HOAs, such as:
- Holding board meetings
- Entering into management contracts or other short-term (less than a year) contracts for the maintenance of amenities
- Preparing and approving financial reports or information such as the annual budget
- Availing of some types of insurance
On the other hand, there are some decisions in an HOA the board cannot make without consulting homeowners or requiring a membership vote. Again, this may vary from association to association, though these are some of the most common ones:
- Electing or removing board members
- Altering governing documents
When it comes to increasing regular assessments or collecting special assessments, whether the board can act alone or not depends on the state. For instance, in California, the board can make unilateral HOA decisions to increase regular assessments of up to 20% or impose special assessments of up to 5% of the budget gross expenses.
Any amount going beyond those percentages will require a vote among homeowners. In North Carolina, however, no specific requirement exists.
Protection from the Danger of Lawsuits
There is always going to be one or two homeowners who will not agree with all HOA decisions the board makes. They may call a foul, arguing that the board has no right to even make the decision without taking a membership vote.
They may even go as far as to file a lawsuit against the HOA board and, depending on the validity of their claim, win. The good news is, there are a few ways an HOA board can protect itself from lawsuits, such as:
- Know the Law. One of the easiest ways to make sure the board is covered is to know the law — federal, state, and local. For instance, according to FCC regulations, an HOA board cannot ban homeowners from installing satellite dishes. They can, however, regulate the size of the dish.
- Be Familiar with the Governing Documents. An HOA making decisions without reading its own governing documents is sure to be embroiled in legal issues. Every board member must familiarize themselves with the association’s bylaws, articles of incorporation, CC&Rs, and rules and regulations to know what they must, can, and cannot do.
- Designate an Open Comment Time. Holding an open forum at regular board meetings provides residents with an opportunity to give their opinions on matters that do not require a membership vote. By doing this, the board can get homeowner feedback which can later inform their decisions and reduce resident complaints.
- Practice Transparency. Keeping the decision-making process from homeowners can cause them to distrust their own board. HOA leaders must be transparent with members of the community. Thus, it is a good idea for the board to conduct votes in open board meetings and not executive sessions (provided the matter is not sensitive or confidential).
- Consult with a Professional. A surefire way to protect the board from lawsuits is to consult with an HOA manager or attorney prior to making any decisions.
The Bottom Line
Can the board make decisions in an HOA without consulting homeowners? In a word, yes. There are certain decisions the board can make unilaterally. On the flip side, there are also some decisions that must go through a membership vote. The limitations of an HOA board’s authority differ from one community to another. To know exactly what an HOA board must, can, and cannot do, one must look into the laws of the land and the HOA’s governing documents.
The decision-making process can be a long and complicated journey, which is why a lot of associations seek the help of an HOA management company like us for assistance. To reach out, just give us a call or shoot us an email.
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