Chances are if you’re a resident in a co-op, condo, or HOA community, you’re familiar with your property’s board of directors (or trustees, or managers, depending on what part of the country you live in). Boards are usually made up of volunteers, or members appointed by the community’s initial developer, depending on the property’s age and type. As one might imagine, the stakes are very high. Not only the money, but quite literally the homes of those who call the property home can and will be affected by the functionality and decision-making capabilities of the board. Everything from a leaking roof to the legality of a unit owner subleasing their home is subject to the scrutiny of the board.
Often referred to as the cornerstone of any residential community, the people who hold the various positions on their board have not only an ethical duty, but a fiduciary one as well to make sure that the residents they serve can enjoy both the financial and social benefits of multifamily living. To this end, most boards are made up of a few different and equally important positions with a clear and concise aim to help the board function more smoothly as a whole, and ensure that the choices made have the interests of the entire community at heart.
Well-defined roles help a board to delegate tasks, provide checks and balances, get and give constructive internal feedback, and spare any one board member from having to shoulder an unfair number of duties. Although different buildings and associations can and do create different positions with different titles and jurisdictions, the most common are president, vice president, treasurer, and secretary. These are the most basic and common positions on a board and more than likely the ones your own board uses.
According to Mindy Stern, an attorney with Schwartz Sladkus Reich Greenberg Atlas LLP, a law firm based in New York City, “Typically officers are also directors (if it is a cooperative) or managers (if it is a condominium), but this is dictated by what the bylaws of the corporation or condominium permit. And if the co-op or condo is occupied by a significant number of non-owner occupants—especially if those units are still owned by the sponsor—it’s common for officers to be affiliated with the sponsor or the managing agent, rather than resident members of the board. Individual officers report to the board, and bylaws typically govern how they are elected and when and how they can be removed and replaced, but ultimately they answer to the shareholders and unit owners who elect them.”
Each and every officer of the board who gains a seat on the board assumes the weight of the expectations of the not only the rest of the board, but the residents as well. These positions also have responsibilities that are more or less unique to the position undertaken. Commonly, the positions and their respective duties are usually outlined in the bylaws of that particular building or association. Bylaws are rules made up by a company or community to regulate itself as allowed or provided by local, state, and federal authority, and help outline and convey how the board must function, including but not limited to the delegation of powers to officers, how often the board must hold meetings both among its members and the residents at large, and the way in which a board must reach decisions, such as a simple majority vote, a quorum, or with the input of all members of the community.
Roles and Rules
According to Mark Swets, executive director of the Association of Condominium, Townhouse and Homeowners Association (ACTHA), a national organization that provides education and networking for HOA members and unit owners, “It’s always a best practice to have position descriptions for each board member written and detailed so when somebody comes into that role, they have something to refer to and use as a guide during their tenure on the board.”
The responsibilities and duties of individual officers on a board vary specifically because of the way the bylaws for a given association delegates authority. “Board member responsibilities can vary from association depending on whether or not the association has professional management or is self managed,” says Swets, “and also due to the size and function of the association overall.” That said, there are aspects of the primary board offices that are pretty universal:
Prez and VP
The president of the board presides over all board meetings, as well as annual and other resident meetings. The president usually also represents the community in signing contracts and all other legal documents, and will co-sign all checks over a certain amount, as provided for by a given community’s bylaws. In short, the board president is in charge of the administration of the association. A president also may be able to order certain actions to further benefit a board and its shareholders. This is someone who serves as the will of the board and can be removed if the majority of the board feels they should be. “The president doesn’t usually take action without running it by his or her board to make sure that the board of directors is fully informed and has total transparency,” says Albert Pennisi, special counsel with the law firm of Daniels Norelli Cecere and Tavel, P.C., which has offices in New York and New Jersey. “The president is not an officer unto themselves.” In some associations, other board positions may even be implemented into the role of the president.
The board’s vice president is usually vested with all the powers the president holds, but which are activated only when the president is unable to perform their duties due to sickness, absence or some other circumstance. The vice president may also act as the head of one or more committees consisting of shareholders assembled to helm tasks or projects that need to be performed for the association. Committees – often including the board VP - meet with and talk to any professionals involved with a longer-term project, whether it be a roof repair, a lobby remodel, or a special event being hosted by the building or HOA.
Secretary and Treasurer
The board secretary for a co-op, condo, or HOA is not to be confused with your everyday clerical position. In a housing context, the board secretary gives notice of upcoming meetings and keeps and maintains records of them, including the minutes. They also work closely with the board president to develop the aim or agenda for every meeting. This person is also responsible for sensitive information, such as records of residents in arrears, and a history of maintenance performed throughout the building. These records should be stored in such a way that access to them is easy to obtain by authorized parties while still keeping sensitive or confidential information secure. Some secretaries even pen a community newsletter for their associations.
Treasurers, as you may have guessed, handle the money for an association paid in or out, which also of course includes bills. They make sure the services secured by the cooperative or condo association are satisfactory before they pay out. Audits of association books and dues are also usually overseen by this individual. Payments are also issued to those approved by the entirety of the board. The treasurer also prepares the annual budget as well as an income and expenditure report for both the board and non-board residents.
Some properties – particularly ones of substantial size – may name more than just these four main officers, or may divide up duties differently depending on the needs and expectations of their community. Depending on a given property’s governing documents, there may be permanent committees requiring committee chairs, or other positions to handle intra-community communications and outreach, activities, or other aspects of day-to-day business.
It should be stated that this is in no way an entire list of responsibilities that you may find yourself facing should you become a member of your association’s board. The conduct of any and all board members should reflect the best interests of the building or association’s residents at all times. Even being appointed or elected president of one’s board in no way, shape or form gives that person absolute power, or means they can rule with impunity. As an officer, you are subject to observance of your fellow board members and you answer to your fellow residents, so it’s vital that you interact in a way that conveys that you want what is best for everyone.
“The board really runs the community,” Pennisi says. “The tenant shareholders have input. If they aren’t happy with the board, they vote them out. They can bring a proceeding to remove them.” That’s easier said than done, of course – but it serves as a warning that regardless of title, a board member should be someone who is willing to work to make decisions with the board as a whole, or risk losing his or her position of leadership. Remember that to be on the board is a responsibility and a legitimate (if unpaid) job.
Oba Gathing is a freelance writer and regular contributor to The New Jersey Cooperator.