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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).

Membership Rights. The rights/powers reserved to association members 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
  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). (Corp. Code §300.) Boards and individual directors have limited authority and are held to a higher standard as fiduciaries. Unless the governing documents provide otherwise, boards have authority 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