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AUTHORITY OF BOARD & MEMBERS

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).

Homeowner Rights. The rights/powers reserved to homeowners in good standing are described in the governing documents and generally include the right to:

  1.  Access their property (ingress-egress),
  2.  Amend the CC&Rs and bylaws,
  3.  Approve significant capital improvements,
  4.  Approve regular assessments over 20%,
  5.  Approve special assessments over 5%,
  6.  Approve exclusive use easements to members,
  7.  Attend open meetings of the board,
  8.  Call special meetings of the membership for a lawful purpose,
  9.  Display noncommercial signs,
  10.  Display US flag,
  11.  Dissolve an association,
  12.  Elect a board of directors,
  13.  Enforce the CC&Rs,
  14.  Inspect the association's records,
  15.  Install drought tolerant plants,
  16.  Install electric charging stations,
  17.  Install a satellite dish,
  18.  Install solar panels,
  19.  Modify common areas for disability access,
  20.  Own a pet,
  21.  Petition the board,
  22.  Receive disclosures,
  23.  Receive due process for rules violations and reimbursement assessments,
  24.  Receive the membership list,
  25.  Remove directors from the board,
  26.  Reverse a rule change,
  27.  Serve on the board,
  28.  Use the common areas, and
  29.  Exercise any other powers reserved to the membership via the governing documents or applicable laws.

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 decisions (except for rule changes). Rather, the power to veto is indirect. If members are unhappy with board actions (or inaction), they have various options available to them.

Board Authority. Corporations must have boards of directors who are required to conduct the activities and affairs of the corporation (or association). Boards and individual directors have limited authority and are held to a higher standard as fiduciaries. Unless the governing documents provide otherwise, boards have the power to:

  1.  Adopt and enforce rules and regulations,
  2.  Appoint committees,
  3.  Appoint directors to fill vacancies,
  4.  Call membership meetings and appoint inspectors of election,
  5.  Communicate with the association's attorney,
  6.  Delegate management,
  7.  Disburse reserve monies,
  8.  Elect and remove officers,
  9.  Enforce the CC&Rs and bylaws,
  10.  Enter into contracts,
  11.  Establish architectural standards,
  12.  Exercise the powers of a corporation (Civ. Code §4805; Corp. Code §7140),
  13.  Hire and fire employees and vendors,
  14.  Initiate and defend lawsuits,
  15.  Insure the association,
  16.  Invest funds,
  17.  Levy and collect regular, special, and emergency assessments,
  18.  Make limited capital improvements,
  19.  Manage the association,
  20.  Pay expenses incurred by the association,
  21.  Prepare and adopt budgets,
  22.  Repair and maintain the common areas.

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). Members who are unhappy with board decisions always have recourse.

ASSISTANCE: Associations needing legal assistance can contact us. To stay current with issues affecting community associations, subscribe to the Davis-Stirling Newsletter.

Adams Stirling PLC