Re: Dividing authority between the Board and the Membership of a HOA
From: Evdavwes (Evdavwesaol.com)
Date: Sun, 19 Feb 2006 04:24:55 -0800 (PST)
Hello, All,
 
Sharon Villenes wrote re the legal responsibility of her Condo  Association's 
Board:
 
"Depending on how you are incorporated, your board  members are the people 
who are legally responsible for various damages or bad  decisions."
 
 At Westwood in Asheville, we are still trying to figure out how best  to 
make decisions and what sort of governance suits us.  It seems that  legally we 
are set up as a conventional housing development where the Board has  the 
authority for making most decisions.  Those who wrote the bylaws I  think 
wanted to 
give the membership some legal authority to make decisions  about rules and 
regulations.  However, in my opinion the bylaws ended  up being  written in 
such a way that the membership has no authority beyond  what owners in a 
traditional development have:  power to elect the board or  remove board 
members, 
change the bylaws and declaration, and approve the  budget.
 
All corporations have some division of power between the board and the  
membership.  For example, the membership may approve the budget.  That  means 
that 
the board cannot be sued for the fact that a particular budget was  approved 
(unless, of course, there were some procedural irregularities).  I  would think 
(as a non-lawyer who thinks the law should make sense) that if the  bylaws 
were set up such that the membership had authority over the rules and  
regulations, the Association might be sued over a particular decision relating  
to the 
rules and regulations, but not the Board.
 
If you have a legal setup where the Board is legally responsible for the  
rules and regulations, but the membership expects to participate (by 
consensus!)  
in the decision-making process, what process do various cohousing communities 
 actually follow in making decisions? 
 
As a possibility, the members could come to consensus on some policy, then  
forward it to the Board, which might want to get legal counsel and  then either 
veto or change the policy because the Board would be  responsible for 
enforcing and would not want to adopt an illegal or  unenforceable rule.  (I 
note 
that the Community Association Institute's  literature recommends having any 
proposed rules/policies be reviewed by a  lawyer  before being adopted.)  An 
example of another way of  doing things: only the Board could propose rules or 
policies, but they would be  subject to veto by the members (if consensus could 
not be reached).  If  vetoed, they would be sent back to the Board to be 
rewritten.
 
I would love to hear how other communities have set up their bylaws to  
allocate authority between the board and the membership (especially if this is  
done in an "unconventional"way).  I'd love to have copies of the actual  bylaws 
and/or declarations to study.  We will be considering rewriting our  bylaws to 
accurately reflect our practice and our vision of what we want to  be.
 
Thanks for any help.  Please feel free to communicate off-list as  well.
 
David Clements
 
 
 
 
 
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David Clements, Evan  Richardson, Wesley Clements, Lila Richardson
43 Vermont Court,  #G24
Asheville, NC 28806
828-285-0601

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