An "ultra vires" act is one performed without legal authority; something done that is beyond the scope of a corporation's authority.
Board Actions. Associations that act outside their authority may have their actions reversed by the courts.
Where the association exceeds it scope of authority, any rule or decision resulting from such an ultra vires act is invalid whether or not it is a "reasonable" response to a particular circumstance. Where a circumstance arises which is not adequately covered by the CC&Rs, the remedy is to amend the CC&Rs. (Major v. Miraverde HOA)
Ultra vires conduct is conduct that is beyond the power of the corporation, not an individual director. (Palm Springs Villas v. Parth)
Association decisions should be upheld so long as they are, among other things, “consistent with the governing documents.” (Lamden v. La Jolla Shores Clubdominium Homeowners Ass'n (1999) 21 Cal.4th 249, 264)
Generally, courts will uphold decisions made by the governing board of an owners association so long as they represent good faith efforts to further the purposes of the common interest development, are consistent with the development's governing documents, and comply with public policy. (Nahrstedt v. Lakeside Village (1994) 8 Cal.4th 361, 374)
Director Liability. Individual directors who act without authority may become personally liable for those actions. For example, when the board decides against hiring a particular landscape company and the president signs the contract anyway, the president may lose the protections of the Business Judgment Rule and be personally liable for his acts. Although the contract may be voidable by the association, the president may be personally liable for any damages the association suffers.
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