Association Terminology Edit page

WHO'S WHO

The Board of Directors

The affairs of the Association shall be conducted by the Board of Directors and such officers as the Board of Directors may elect or appoint in accordance with the Articles or the Bylaws.  The Board of Directors may also appoint committees and managers and agents who shall, subject to the general direction of the Board of Directors, be responsible for the day-to-day operation of the Association.

President

• Chief executive officer and leader of the association
• Presides at all meetings of the board and membership
• Executes legal documents on behalf of the association
• Sets meeting agendas and controls all meetings
• Represents the board before the residents
• May have nominating, if not appointment, responsibility for all committees

Vice President

• Performs all of the duties of the president in his/her absence
• Typically shares some of the burden of the president regarding appearances, liaison, public hearings, etc.
• Usually assigned liaison responsibility to specific staff or contractors, and to specific committees

Secretary

• Prepares and distributes board and membership meeting agendas, minutes, and materials referred to in minutes
• Maintains minutes and book on all meetings
• Maintains book of resolutions
• Maintains all official records, including official correspondence, contracts, membership roster, etc.
• Receives, verifies, and maintains all proxies
• Attests, by signature, to the legitimacy of certain documents

Treasurer

• Works with appropriate staff, contractors, and committees to develop and submit annual operating budget for approval
• Maintains adequate records of all association financial transactions
• Maintains roster of disbursement of funds, as authorized
• Prepares period financial reports
• Arranges, subject to board approval, an independent audit of financial affairs

PERSPECTIVES OF BOARD, HOMEOWNER, AND MANAGER

Board of Directors Perspective

• Maintaining the value of the property and a good quality of life for the residential community
• Governing smoothly
• Enforces rules
• Establishing and keeping budget

Homeowners Perspective

• Most care a great deal about residences
• Will want service from manager and decisions from Board that will provide a good quality of life
• Problems may arise when expectations are too high or not realistic; this can occur when interests are too specialized or unique

GOVERNING DOCUMENTS

• All documents that regulate the community life
• Documents may vary depending on type of Association (condo, townhome, etc.)
  • State law
  • Declaration of Covenants or Master Deed
  • Conditions and Restrictions
  • Bylaws
  • Rules and Regulations
  • Plats of Survey and Easement Agreements (may be separate, often included in the declaration)

Legal Docs for Homeowner Associations and the Hierarchy of such Documents

• Subdivision Plat-describes the location and nature of the common property and the individual lots
• Property Deeds-comprise the individual lot deeds and the deeds to common property which give a legal description of the property
• The Declaration of Covenants, Conditions, and Restrictions-the declaration of CC&R's is the collection of covenants imposed on all property within the development and provides:
  • For automatic association membership of all owners and the basis for voting rights
  • The obligation of each owner to share in funding the cost of association operations
  • Certain restrictions (architectural control and other rules) on the use of the property and the association's enforcement powers
  • Sets forth the power and authority of the association to own and maintain the common property and to make and enforce rules
• Articles of Incorporation-creates the association as a legal entity under state corporate statute; defines the board powers and responsibilities of the association and its membership; and, sets forth the process for creating the board of directors, voting system, etc.
• Bylaws-implements, in specific detail, the provisions of the CC&R's and the Articles of Incorporation regarding the association operations, including delineation of the meeting process, election procedures, powers and duties, board meetings, committees, insurance requirements, rule-making and enforcement process
• Rules and Regulations-sets forth the operational powers or provisions and the use restrictions adopted by the association

• Accrual Method of Accounting-keeps track of all financial activities, including revenue as it is earned (as opposed to when it is received) and expenses as the obligation is incurred (as opposed to when it is paid). This makes possible a more accurate determination of the financial condition of the association at any point in time. Also, this is a better method for multi-year tracking of capital reserves credits and deficiencies. The primary disadvantage is the greater complexity and technical knowledge that is needed to maintain the records, understand the reports, etc.
• Capital Reserves-the Board has the obligation to repair and replace major capital facilities, buildings, and equipment of the association. The ideal method of providing for these future expenses is the establishment of a capital reserves system and budget to assure that such funds are available when needed. With knowledge that the future holds predictable major expenditures for repair and replacement of facilities and equipment, the association could begin the gradual accumulation of funds through a reserve account to meet all or a portion of that expense when it comes due.