Even though homeowners associations are quasi-governmental in nature, they are not pure democracies where members can vote on all issues. Instead, they are representative democracies where powers are delegated to elected representatives (the board of directors) and limited powers are reserved to the membership. A representative democracy is the model used throughout much of the world (see blue areas on adjacent map).

Membership Authority. The rights/powers reserved to owners in good standing are described in the governing documents and generally include the right to:

• elect a board of directors
• remove directors from the board,
• call special meetings of the membership,
• amend the CC&Rs and bylaws,
• approve regular assessments over 20% and special assessments over 5%,
• attend open meetings of the board,
• access their property (ingress-egress),
• use the common areas,
• inspect the association's records, and
• petition the board.

No Veto Power. Because of the division of power between the membership and the board, members do not have a direct veto over the board's actions (except for rule changes). Rather, the power to veto is indirect. If members are unhappy with board actions (or inaction), the membership can remove the board or wait until the annual meeting and elect a new board.

Board Authority. By law, corporations must have boards of directors. Boards and individual directors have limited authority and act as fiduciaries. Unless the governing documents provide otherwise, boards typically have the power to:

• manage the association,
• hire and fire employees and vendors,
• adopt and enforce rules and regulations,
• enforce the CC&Rs and bylaws,
• approve contracts,
• levy and collect regular, special, and emergency assessments,
• pay expenses incurred by the association,
• prepare and adopt budgets,
• repair and maintain the common areas,
• insure the association,
• disburse reserve monies,
• invest funds,
• call membership meetings and appoint inspectors of election,
• appoint and remove officers,
• appoint directors to fill vacancies,
• appoint committees,
• initiate and defend against lawsuits,
• establish architectural standards (either directly or through an architectural committee),
• exercise the powers of a corporation (Civ. Code §1363(c); Corp. Code §7140)

Judicial Deference. Courts will defer to board decisions, even if the decisions are not the "best" decisions, provided the board made a reasonable investigation and its decision was in good faith with the best interests of the association in mind (Business Judgment Rule).