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Powers of the Board?

Started by JanaC • 17 replies • 1894 views

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JanaC (Tennessee)
Posts: 31
Posted:
Section 11 - Powers of the Board says...

the Board of Directors shall power to:

Exercise for the Association all powers, duties and authority vested in or delegated to this Association and not reserved to the membership by other provisions of these By Laws, the Articles of Incorporation , or the Declaration

What exactly is this saying?
(and not reserved to the membership by other provisions of these By Laws, the Articles of Incorporation , or the Declaration)

Thanks
JanaC
RogerB (Colorado)
Posts: 5,067
Posted:
Jana,
Stating it in another way, it means the Board does not have authority to do things which must be done by members of the association which are specified in the Declaration and By-laws. For example, the Board may not amend the Declartion and usually is not allowed to amend the By-laws. Whereas, the Board is given the authority in the Declaration to establish Rules and Regulations and given authority in the By-laws to establish committees.
DonN (Michigan)
Posts: 357
Posted:
JanaC

Association and board powers are the causes of many of the problems in POAs. Typically, the Articles of Incorporation and the Bylaws give very broad powers to the association, which usually include a provision such as "to act in the general welfare of the members". This gives the association powers to do almost anything unless forbidden by law. Developers, who write such provisions in the initial governing documents, want those powers during the time period in which the developer controls the association. After transition, those powers are still there and can be easily misused.

The problems become compounded by the broad powers then given to the board, such as by the language used in the bylaws of your association. Acting in concert with a POA attorney, the board justifies just about any action. Some of the resulting actions can be intrusive and punitive.

My recommendation is amend the Articles and Bylaws to define specific and limited powers, such as "The purposes of the Association shall be limited and shall only be (1) to provide stewardship for the common interests as defined in the CC&Rs, (2) to protect the rights of the owners/members, and (3) to provide those functions required by law.  The Association shall be of the members, by the members and for the members." This statement of purpose should also be in the CC&Rs. If the members want the association to have more powers, then the members should amend the CC&Rs which keeps the members in control.

The powers of the board should also be specific and limited as defined in the bylaws. Specific and limited powers and obligations of the board define a "contract" between the members and the board and help to establish common expectations (builds trust). They also reduce the workload on the board. My recommendations for "Obligations and Authorities for the Board of Directors" is posted at
http://swagman.typepad.com/poa_governance/2006/01/obligations_and.htmlindex.html. Only a few powers are needed by the board to conduct the limited affairs of the association.

Most states have laws governing municipalities which limit their powers, and for good reason. Unfortunately, state laws generally don't provide such limitations for POAs. So the residents in POAs are generally on their own, and to make matters worse are hamstrung by the initial governing documents from the developer. Members in POAs such as your have the power to amend the governing documents to incorporate specific and limited powers, and then enjoy the benefits of having done so.
AsunteW (North Carolina)
Posts: 6
Posted:
I am on the Board of Directors in my community. It means no prior provisions such as the developer/ builder can overthrow this provision by the current holder of HOA. All power is vested in them as the duly responsibility of the neighborhood. Which means the decisions of the Board has nothing to do with the Association which are the people who live in the community, but the few who serve on the Board. To express your concerns, go to each meeting as of the association. You can also contact the Board and its presiding officials for concerns. But all power is of the members you elect. No one and nothing else. Decisions can be made wihout the concensus of the neighborhood.
JanaC (Tennessee)
Posts: 31
Posted:
I was under the understanding that as long as it didn't effect my rights as stated in the Declarations? AS I am 1 vot and I retain that vote. Never did I give up my vote to any board. What law allowed them to change that, isn't it that when there is a conflict it falls back to the Declarations? As stated I am a Class A member entitle for 1 vote. When the developer gave the Assoc. over to the Homeowners, yes they can vote to change things, such as adding "Chain lenght fencing" but not over through my powers specified in the Declarations. Someone help me here.

JanaC.
AsunteW (North Carolina)
Posts: 6
Posted:
We do go by the declarations that are the basic legislation for what you are allowed as a homeowner. But when it comes to decsion making- that authority does belong to the Board of the Association- thanks
JanaC (Tennessee)
Posts: 31
Posted:
What happen to the Powers of the Association?

Article of Incorportations

Article III
Purpose and Powers of the Association-

A. states exercise all the powers $ privileges and to perform all of the duties and obligations of the Association as set forth in the Declarations.

Then it has B - C of what we can do. right...(following me?)

Article VI
Board of Directors: Selection Term of Office

Section 11 gives their powers and states this..

a. The Board of Dircectors shall have powers to: adopt and publish rules and regulations ect.....(NOT Change them)

b. suspend voting rights....ect....

c. exercise for the assoc. all powers, duties, and authority vested in or delegated to this Assoc. and NOT RESERVED TO THE MEMBERSHIP BY OTHER PROVISIONS OF THE BY LAWS, ARTICLES OF INC. OR THE DECLARATIONS.

then it goes on to the duties and so fourth. Never at anytime in either paper does it states that we give up our rights to vote or that we give up our rights to be duly notifed of such meetings. Without 75% of every member/ homeowner agree to change a thing, the board can not change it according to the Articles of Inc but only ADD to the Articles. which is stated in Article XV- Amendments of these Articles shall require the assent of 75% of the entire membership. This meaning to me that the board can not contol the changes as already stated in the Declarations, Articles that already exist.

Ok so where have I mis interput anything here? Smiles to you

I do thank you for helping me here. This is very difficult to understand.

JanaC (Tennessee)
Posts: 31
Posted:
Also what do I look for in my Declarations and Articles of Inc. for where it says The Board has all the decision making and the authority belongs to Board and not the Association. I found where it give the ASSOCIATIONS POWERS, but not full Powers to the Board...

JanaC.
GlenL (Ohio)
Posts: 5,491
Posted:
Jana the best thing to do is to make a copy of your Declarations and By-Laws then sit down with a couple of different colored hi-lighters and mark what is an Association responsibility and what is a Board responsibility. I scanned mine into a word processor and did it that way. Also many states have rules on what a Board may or may not do. Go to http://www.communityassociations.net or http://communitiesonline.org/laws/ to find the laws of
your state.
Studies show that 5 out of 4 people have problems with fractions
RogerB (Colorado)
Posts: 5,067
Posted:
Jana, start by looking at your By-laws. They normally state the powers and duties of the Board. Another approach it to start by seeing what authorities are preserved for the members and probably the rest are vested in the Board.
JanaC (Tennessee)
Posts: 31
Posted:
I have done all the above,
Correct me if I'm wrong but if this is the case, then...

As I see it, first being said in the Declarations, "I" being a homeowner is a member of the Association, "entitled to 1 vote per lot", Being the Declaration rule over all others.

If that isn't good enough...

well then in the Articles of Incorporations, (which are not separated from the BY LAWS in our Association) in other words is one document...., stating that the Association, again being each homeowner who as Described in the Declarations and in the First section of the "Articles of Incorporation" section A. state....
"The Association has the Right to exercise all the POWERS and Privileges and to perform all of the duties set forth in that certain Declaration of CC&R, (which is 1 vote per lot.)
Also under Association Powers under G. it states that the Association (being each homeowner having one vote remember) have and to exercise any and all powers, rights and privileges which a corporation organized under the NON Profit Corporation Law of the State of the Tennessee BY Laws may now or hereafter have or exercise. (So I printed that out)...

So then when researching the Powers of the board... per our Articles of Inc/By Laws (being that they are one document not two separate.) the Authorities that are preserved for Power of the board is this....

Board of Directors Powers-"The Board of Directors shall have the power to exercise for the association all powers, duties, and authority vested in or delegated to this Association and not reserved to the membership by other provision of the BY LAWS, the Articles of Inc. or the Declaration." which is
saying to me...

"that since the By Laws are not separated from the Articles of Inc., the Board of Directors shall not have POWERS OVER the Associations POWERS, due to they ARE RESERVED to EACH Association Member/homeowner.

Which then says to me that the Board not having Authorities over the members Powers can not admen the Amendments to Separate the By LAWS from the Articles of Inc,... as they are trying to do without the Written consent of 75% of the Association, those entitled to vote on the Amendment change. As stated in the Articles of Inc/Bylaws being one document.

Amending the Articles of Inc.- Amendment of these Articles shall require the assent of 75% of the ENTIRE MEMBERSHIP.

Now referring to the NON-Profit Corporation Law of the State of Tennessee, in order to change the Charter (Articles of Incorporation)which regulate the POWERS of the Association and Board of Directors, Says that A corporation wishing to amend it's charter must file "articles of amendment" with the Division of Business Services setting Forth:
If approval by members are required, a statement that the amendment was duly adopted by the incorporators/ members. and a statement that the approval was obtained.

so after all this research, what all this amounts to is this...?

AS State rules regulate Charter "Articles of Incorporation" It's the POWERs that is stated that rules, so the Board Powers are LIMITED, as I Have RESERVED POWERS as an Association Member/ Owener, and in order for us to Change or seperate the By Laws from the Articles of Incorporation, we must have not a power struggle, but have 75% of the entire membership or otherwords (40 HOME)agreeing to do so.

So you see I've been researching very much.... any input on things I am missing, or that I should be looking up?

JanaC

BarbieS
Posts: 4
Posted:
Not to get off track I have a question on the Board and Common Areas and the ACC.
Seems our Board decided to make two seprate groups. The Board 3 members and then the ACC. In the past there was always one person from the Board who was also on the ACC. Now one of the Board members says no more so they picked another person to be on the ACC. As I am on the ACC one of the Board members wants to plant trees and who knows what eles in the Green Belt area. I told him that the ACC would need to be on board for this and a meeting with the Assocation. He said no. That the ACC was only envolved with homes not the "Common Area's". Now I am a bit concerned with this not only on the aspect that they could over ride the ACC but now plant or do what ever they want with the Common Area.

Lets say one of the 3 gets a donated David satue to be placed in the Common Area there is no re-corse? everyone has to look upon the tushy of David? sorry I am not more forth coming but Barbie can be removed and Davids tushy might be placed right in front of the dining room window! This is just for example ;)

So in the wording "Community-Wide Standard" I would think the ACC would be involved in this and the Assocation when it come to what goes in an area which everyone has a vested interest.
RogerB (Colorado)
Posts: 5,067
Posted:
Barbie, sorry but I am on the side of the Board on this one. The ACC is subordinate to the Board.
BarbieS
Posts: 4
Posted:
If the structure of the Association is similar to a Corporation, then the Board and Officers of the Association would be held accountable by the shareholders or homeowners in this case.

The purpose of the Architectural Control Committee is to "approve" or "disapprove" any improvements to a property. It's my view that the "common areas" owned and controlled by the homeowner association would fall under ACC control for review prior to any work performed. This would apply to the Board as well. Why should the Board be exempt from following the same declarations the homeowners have too. At a minimum, the purpose of the ACC would be to provide oversight in this area as it pertains to the well being of the neighborhood.

I realize that the Articles grant certain obligations and duties to the Board to make decisions on behalf of the homeowners as it pertains to the business and affairs of the association. But what purpose does the ACC exists if the Board can do whatever they want.

What if a homeowner decided to donated trees or flowers and simply went into the green area and started planting them. I'm sure the Board would want this to be reviewed by the ACC or at a minimum review what the homeowner's plans were. So, doesn't the Board have the same responsibility to the members to follow the same rules. I realize the answer is no, they can do what they deemed necessary, but at least shouldn't the Board adopt the same procedures extended to the members of the association.

Well, Its good to know I won't be on the receiving end at the next HOA meeting. As Mr. "T" would say: "I Pitty The Fool"
CharlesW1 (Georgia)
Posts: 826
Posted:
BarbieS,

I feel that, “if” this committee finds any home in violation (i.e. homeowner or board member) they should be issued a violation letter and t all that has been implemented in such situations. That would be really sad to know that the board members (the ones setting a good example) are in violation. This would make enforcing the documents really difficult to say the least.

Is there a MC? Do they issue the violation notices? If so then the head director of this committee could send them the address where the committee has noticed the violation and on what day.

Having a MC, would takeyou, (personally) out of the situation.
Good advice

Chuck W.

Charles E. Wafer Jr.
PatrickH (California)
Posts: 204
Posted:
Jana,

Not sure what your question is about voting. Does your Board want to do something without a vote of the membership that you believe requires a vote of the membership?

As a member, you should be able to vote on the Board elections, any changes to the CC&Rs, any dues increases above what is allowed by law, any special assessments or loans taken out by the HOA and any sale of common area property. I can't think of too many other things off the top of my head.

Beyond that, the power to make other decisions affecting the HOA lies with the Board. Not happy with the landscapers, they can change companies without a membership vote. Too many late night parties at the swimming pool, they can change the closing hour from 2 AM to 10 PM without a vote of the membership. Too many people letting their dogs run free in the common areas, they can institute a leash rule without a membership vote.

Those are type of things that the Board is responsible to do on an ongoing basis. Voting for the big financial decisions as outlined above, changing your CC&R's and electing your Board of Directors are required of the entire membership.
GlenL (Ohio)
Posts: 5,491
Posted:
Barbie,
Roger is right the ACC works for the Board and the Board doesn't have to have the ACC's permission to do what it wants in this case. Because the ACC's power and direction comes from the Board not vise versa. Just like your boss where you work doesn't have to get your permission to change the color of the walls; he does however (the Board) have to answer to the stockholders (homeowners). Now that being said any Board member who takes it upon him/herself to make major changes without at least the support of their fellow Board members is an idiot.

There was a case recently where a Board member took it upon himself to get homeowners permission through fraudulent means and proceeded to destroy a hillside that was left in its natural state as a buffer/wildlife area and bulldozed it down and turned it into a park at the cost of who knows how much. The people affected took the Board to court and won and they had to restore the area to its original use at the cost of hundreds of thousands of dollars.

As far as the homeowner doing it, we've had that happen and we give them the option of putting it back the way it was or we would and they would have to pay for it.
Studies show that 5 out of 4 people have problems with fractions
RogerB (Colorado)
Posts: 5,067
Posted:
Barbie,
Perhaps this will help you. Unless your Declaration states otherwise the ACC is only responsible for approval for individual units and any approval or denial can be appealed to the Board. Denials would be appealed by the requestor while approvals might be appealed by neighbors.
Common areas usually are not included. Following are examples from a Declaration.

2. Review by Committee.
No Improvements, other than Improvements governed by the Original Construction Architectural Review Committee as provided under Article V, shall be constructed, erected, placed, planted, applied or installed upon any Unit unless complete plans and specifications therefor shall have been first submitted to and approved in writing by the Modification Architectural Review Committee ..........

4. Vote and Appeal.
A majority vote of the Modification Architectural Review Committee is required to approve a request for approval pursuant to this Article. In the event an application for architectural approval is approved or denied by the Modification Architectural Review committee, any Unit Owner shall have the right to appeal such decision to the Executive Board, if a written request for a hearing on an appeal of the same shall be submitted to the Executive Board within thirty (30) days after such approval or denial by the Committee.

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