Board Member Emergency Expenditures

Not sure about Arizona, but the Florida Statutes also say nothing. It's something that should be addressed in the association's financial and accounting procedures. Those should be board-approved, and then they can be followed without needing a board vote on every single expenditure. Ours has an explicit section on emergency expenditures that total not more than X dollars, etc. Maybe in AZ a similar arrangement is possible.

Funny. I've had both of these things happen in your example. I just called a few board members that were available to have them vote to approve the emergency expense. Went to the accountant and explained the need for the check and approval. When the meeting came up, informed everyone the expense and need.

Most people won't complain about those examples as they effect everyone. A pool pump not working on the 4th of July will most definitely be met with "Why can't we get this fixed ASAP?". It's kind of an expected maintenance item. Just like providing for safety with proper locks.

I don't think it's up to the individual board member. It's up President to ultimately contact the accountant because they should be the signatory. We had 2 signatory requirement for checks and balances. So if we did write an emergency check, there was 2 signatures.

In my opinion both of these items are Reserve Fund expenses. These types of repairs should fall under a set of rules for spending out of that account. I would say that if it is a Reserve item and the life expectancy is within 1 or 2 years and it fails and the reserves are in place your PM or board president should be able to approve without question. As a board president I would always try and bring another board member into the situation and make them aware.

Spending on anything other than repairs is a different story. Our PM has spending authority up to $1,000 but she should only use that in emergency situations. In our case I think this should be lower for out of pocket non emergency things.

These are repairs and replacements that need fast replacement to maintain service to dues payers. If you are the president of the HOA, I would have no problem w/ you approving repairs that maintain critical services as part of your operations budget.

It really....truly....really depends on the reputation and trust built-up by a board between dues payers and between themselves.

With my board's tenure and relationships, the pool pump and gate lock would both be wholly replaced and the board notified of the failure, the plan to address the failure and the benefit of moving quickly. However, I'm board president and thus absorb most of the problem reports.

Don't do this if you're a non-officer of the board out of respect for the board. Consult and report to the board but I consider this routine repair and maintenance.

Are gate repairs and pool equipment repairs not contemplated in the budget? If there are general dollars budgeted for repairs, just make the repairs. You don’t call a board meeting to approve buying each stamp to mail each letter, you budget for admin expenses. Similarly, you budget for gate rapids, you budget for equipment repairs and when the need arises, you make the repairs.

The management contract between me and the HOA gives me the ability to spend up to $1000 on unbudgeted, non emergency maintenance. If I needed the board to sign off on every single maintenance issue nothing would ever get done.

Just an anecdote - I have had boards who did not want me to spend a penny without their approval. In one case, a common area tree fell over, and ended up in the street. While the board dithered for three days over whether $400 was the cheapest possible price for removal, a homeowner, driving at night, crashed into the tree and his car was totaled and he was injured. The HOA insurance ended up paying for that, with the resultant increase in premiums.

I had another board who had their pool permit revoked and their pool vendor fire them as a client because they would not allow me to authorize repairs as needed.

If you don’t trust your vendors to be honest about what needs to be done, or trust your manager or board members to approve common sense repairs, your association is fundamentally dysfunctional.

Welcome to the forum, NpB. It seems you're new to board service an/or not very familiar with your HOA's bylaws and AZ HOA and corporate statutes. One reason for my assumption is your misuse of HOA lingo, e.g., "it is generally accepted that email constitutes a quorum of the Board and that voting on Board issues should not take place via email unless there is unanimous written consent of all Board members." The word, "quorum," though, means a certain % of directors, often a simple majority.

But I believe it's the law (not "generally accepted") that: All directors must agree to the action in writing. This, as someone points out is called action without a meeting. But, NpS, you say is too difficult to get all to agree in writing on short notice.

Instead, then, simply call an emergency meeting of your board. That way, you only need a quorum AND you only need agreement by a majority of a quorum. Directors are permitted to attend by phone in AZ, I believe. See your bylaws for info on emergency meeting of the board, or AZ statutes. Remember that something these are spelled out in a state's corporations code Vs. some sort of state HOA statutes.

I agree with Sue: "Not sure why ONE board member is calling the shots on an emergency maintenance issues....Both of these issues sound like maintenance jobs. Not the call of one person or the wrong person to decide." On our HOA's board every director would be the "wrong" person to decide.

There's no Property Manager, right NpB? Then, as some suggested, your board needs to set some guidelines and vote on them re: how to handle these types of very likely occurrences. who? How much is authorized? Etc. As NpS points out, to wait for (actual) emergencies is dangerous.

Most likely the gate repair would be funded from the operations budget. (gate replacement probably is a reserves item) The pool pump should be a reserves component. To make the decison alone to replace the pump entirely is, imo, overstepping your authority. In addition, in CA there must be two board signatures on checks to spend reserves funds. What about AZ? What do your bylaws say, NpB?

In addition, pool pump failure is hardly an "emergency," which in CA HOAs must imperil the property or immediate safety & security etc. Our pool or spa pumps have been down and both closed for a couple of day occasionally waiting for parts, etc. AZ probably defines emergency in HOAs. I'd also suggest, NpB, you carefully reread the business judgement rule to argue that's what you'd be practicing.

It may seem I'm being overly critical but am trying to reply to some generic questions that arise frequently that are embedded in Npb's post.

I'm glad to see that Richard agrees with the advice of others on this thread. I do think before NpB's board writes up anything, they need to see what AZ defines as an "emergency."

One of our directors tried for an action without a meeting and then an "emergency" meeting to permit our security officers to remove their normally-required jackets for health & safety reasons because August was approaching.

Well keep renting out the clubhouse and tell them they can't use the facilities due to a sewage issue. The people renting should be living close enough for people to go to their house to use the bathroom. Enough notice could rent a port of potty.

I believe in AZ, an emergency meeting can only be called if there is a serious threat to life or property. There is a line item in our budget for gate repairs and pool pump repairs and the pool pump/motor replacement is also in the reserve study. I disagree regarding the pool pump not being an emergency. Before I lived in an HOA, I had a house with a pool and when the housing to the pump cracked, it resulted in a large leak. When I called the repair person, he told me to turn it off because if it kept running longer, the entire system will fail and hence no functioning water recirculation system. Applying that knowledge to a semi-public pool that is used daily by owners and can be randomly inspected by the county at anytime and could fail an inspection for a non functioning water recirculation system, it is not prudent IMO to have a lengthy period of time with a bad pump.

Sometimes it takes days for Board members to answer emails and regarding a pool pump, suppose there is no unanimous written consent (with all Board members agreeing) on whether to repair the pump or buy a new pump/motor. The pool is going to get nasty fast and would fail an inspection. It might take a few weeks to have an in person open Board meeting. Same principle if a pedestrian gate or vehicle gate is stuck open. Homeowners will grumble and keep calling/emailing wondering what's going on. Both of those situations are common sense emergencies, but are not a serious threat to life or property, hence no emergency meeting can be held. My HOA Board is very divided ideologically along with personal acrimony. The likelihood of something passing via unanimous written consent is close to zero.

A former homeowner and Board member used to walk the property twice daily and was the "go to" person in the community. If the vehicle gate was stuck open, he would unilaterally call a gate repair company and then inform the Board later. I think he was using good business judgement . Under the business judgment rule, board members are presumed to have acted in good faith and in the best interest of the association as long as they've taken the steps that a reasonable person would have taken in similar circumstances.

I am now the Board member (I am also a Board officer, but based on our By-laws, it doesn't give me extra privileges), who spends the most time on the property and is the most astute on what is taking place. I know life isn't fair, but it seems like a no-win proposition to sealy for days/weeks a decision or face constant grumblings from homeowners and a demerit from the county or unilaterally make a decision and have someone find fault with it.

NbP, are you ignoring all of the replies that suggest you and board come up with a plan, guidelines, and a method by which to deal with these occurrences? Why do you dislike that idea which appears to work so well in their HOA?s

Or, despite being so "astute," do you think they won't vote for you to be the go-to guy when something important breaks? Is the "personal acrimony" towards you? On the other hand, If the board turns a blind eye towards your heroic actions without having voted for you to have that authority, it is setting itself up for trouble of many kinds. And it would not be adhering to the BJR.

When pool pumps stop working, we shut the pool involved. Why would it take "weeks" to have an open meeting?? What do your bylaws say about calling a "special meeting of the board?" But that's only until your board can agree on a commonsense procedure.

It reflects the trust of the HOA members in their board of directors and then board trust of officers who oversee the property. In my "real world," I'm with John and, knowing our budget and knowing our board, would make the replacements. If that proved to be a fatal error, I'll gladly retire.....Gladly.

I am not ignoring the suggestions given. I think they have merit. I am not the Board President, so I don't set the agenda and it would be up to him to include it on a future Board agenda.

I do not want to be the "go to guy" nor am I looking for votes. Our HOA is very small and we do have a property manager who mainly handles administrative and bookkeeping duties, but the day to day operations per the management contract are run by the Board. It would take weeks to have a Board meeting because not everyone responds to emails quickly and most Board members work and have other commitments, but love to complain. Our bylaws say nothing about the Board calling a special meeting of the Board.

If a gate or pool pump were to malfunction, the Board members who have personal acrimony toward me, would most likely disagree with my solution to fix the problem and therefore there would be no unanimous written consent--thus extending the time for the problems to be fixed and hence me receiving more complaint emails from members about the pool water or gate since most people know me vs the other Board members who have a gripe against me. If I were to unilaterally take action and address these emergency items, they would probably nit-pick and find something wrong with my decision. No-win situation.

PLEASE, tell us you're not serious?

There's a lot of overthinking going on here. Something breaks. Fix it. No need to call a constitutional convention.

I like TimB's "Another Option" the best and others recommended it too.

But the OP doesn't seem to have a enough board support for something like this. He's written, too, he dons't have enough support to get an action w/out a mtg. approved.

Does you board have a policy, NpB, that only the prez may place items on the agenda? Even so, would he object to one that's pretty open like: "formulate procedures for unexpected repairs of necessary components," or some such language?

When are your regularly scheduled board meetings? Most bylaws, I think, say some sort of time schedule , e.g., at least quarterly, like ours.

What size is your HOA? If a former director walked th property twice daily, it seems like it's not very big.

How many are on the board?

Every agenda should have a place for new business.

This is typically the time where other directors can bring things up that were not on the agenda.
If an item brought up this month under new business isn't resolved, then that issue becomes a topic of old business then next month.