Limiting Non-owners on an HOA Board

Started by RichardD22 • 14 replies • 332 views

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RichardD22 (Florida)
Posts: 5

Posted:

Are there standard approaches to limiting the number of non-owners on an HOA board? For example, if it is desired to have a majority of the BOD members be owners, what would be the standard approach when the annual election results in a majority of the Board to be renters (non-owners). Since this would not be known in advance of the election, how would the appropriate number of newly-elected BOD members who are renters be removed/replaced with owners after the election results are determined.

KerryL1 (California)
Posts: 14,550

Posted:

Almost all association Bylaws state that members of the board of directors must be owners. What do your Bylaws say? Make sure you see the difference between directors/board members and officers. Officers usually are NOT elected by the owners. These roles are discussed in two different sections of your Bylaws. You might read your Articles of Incorporation too, assuming your association is a corporation.

Directors/board members are elected by the association members/owners. Once elected, the new board meets in an organizational meeting and it chooses or elects the officers e.g., president, treasurer, etc. Your Bylaws say whether officers must be owners. Typically, the president must be an owner/director. Often other officers might be non-directors or even renters. It depend on what your Bylaws say about qualifications for officers, if any.

I don't know about all associations, but many that I've read about send out ballot materials a long time before the election. There's usually a state-required deadline. There typically is a statement or information about each candidate written by the candidate. Ours, for example, has the owner's name and HOA address on the top of the candidate's page or statement.

In our HOA, because like most, directors are required to be owners, when candidates turn in their information page or their "Candidate Statement" to the Board or to the management site, a Nomination Committee, which our HOA no longer requires, makes sure that the candidate is an owner. Now our property manager does that task.

Do you think you have directors now who aren't owners? If so, how do you know? How many directors are on your Board? Are you a condo assoc. or detached homes?

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By RichardD22 on 07/23/2023 1:47 PM
Are there standard approaches to limiting the number of non-owners on an HOA board?

Yes, it is called arranging for a vote of all owners to amend either the bylaws, Articles of Incorporation, the Declaration (of covenants), or a combination of these, such that a requirement for eligibility to serve on the board is that the candidate be an owner.

Is this a condominium? Not a condominium? Or something else?

What year was the HOA's Declaration recorded with the county?

Can you please quote verbatim the bylaw or covenant that states non-owners can serve on the board?

Prediction: This is a condominium with a high probability that it was converted from apartments.

KerryL1 (California)
Posts: 14,550

Posted:

Ball’s in your court, Richard. What do your Bylaws say about requirements to be a director/board member in your assoc.?

MelissaP1 (Alabama)
Posts: 13,836

Posted:

My question is why do you want non-members to be on your board? Not enough members who want to be? They can be on committees but don't really hold any voting power.

Former HOA President

SheliaH (Indiana)
Posts: 6,964

Posted:

Personally, I don't know why anyone would want a non-owner to be on a HOA board. They don't share in the expenses by paying assessments, so they have nothing to gain or lose if work is deferred or someone (or several) don't pay assessments in full and on time. this also goes for renters - although you can argue they pay assessments indirectly through the rent, they can still decide to leave tomorrow (with or without proper notice to the owner-landlord). The owner has a contract with the HOA by being an association member, not the tenant, so if the tenant wants a bigger say in how the community is run, he or she should buy the unit from the owner or someone else and become an official member.

NOTE: I think having renters on social committees to do things like organize a block party is ok and I don't have an issue with a tenant advising the property manager of an issue with the common areas - the ones in my community do that all the time, and some are more on the ball about that than the owner-landlord, who sometimes can't pick the location of the community off Google Maps).

Anyway, your documents should tell you who can and can't be on the board and if there's nothing about non-owners at all, they don't get to join. You may be able to amend the documents to address situations where the owner has been declared incompetent and someone's been appointed legal guardian, but I don't see the purpose beyond that.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

KerryL1 (California)
Posts: 14,550

Posted:

To add to Shelia's point about committees. If an HOA has qualifications for committees, they might approve renters as members of the Social Committee--we do. Or maybe the Landscape Committee. We don't. But most if not all HOAs make ownership a qualification for their Architectural Committee or Finance Committee and perhaps others.

KerryL1 (California)
Posts: 14,550

Posted:

RichardD22 (Florida)
Posts: 5

Posted:

24Jul2023
Hi Everyone and thanks for your input!
To get to the specific feedback/ideas I am soliciting here, please assume (which will be true but is not right now), that the HOA bylaws permit non-owner residents who meet other qualifications to serve as a director on the Board of Directors.
This HOA is in Florida by the way, whose statutes do not prohibit non-owners from being on the Board of Directors per my/our best understanding.
This is a small (<25 homes), intentional community called Cohousing; we self-govern and know all our neighbors very well; the motivation to allow non-owner residents is therefore quite appropriate at this time. The proposed qualifications being considered for the bylaw change to allow this will required a community consensus vote on a case by case basis and will only allow it for a limited time per person(~3 years) that will need to be renewed (and it will obviously be terminated if the non-resident stops living in the community). Thus, in my opinion, the concerns about non-owners on the Board are much less relevant to our situation (at least currently) than to a typical HOA in our area/state.
So given all that, we are nevertheless considering different ways of ensuring that a majority of the Board will be owners. We are basically considering to do this either (1) at the Board-nomination stage of the annual election or (2) immediately after the election results are known, during the qualification stage.
I was just wondering if there are precedents from other HOAs for how to effect/maintain that a majority of Board members as owners, in case looking at those precedents would help us decide how to proceed.
Appreciate any thoughts or feedback.
Best,
RichardD22

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By RichardD22 on 07/24/2023 3:49 PM
I was just wondering if there are precedents from other HOAs for how to effect/maintain that a majority of Board members as owners, in case looking at those precedents would help us decide how to proceed.

No examples from the real world exist.

This is an LLC, isn't it? In which case it appears to me that Florida HOA statute FS 720 (which requires not for profit corporations) and FS 617 are unlikely to apply.

I think you should be talking to an attorney to find out what the legal structure of your "association" is.

CathyA3 (Ohio)
Posts: 6,299

Posted:

I agree with ElleN about seeing a lawyer. The little I know about Cohousing suggests that it's much less common than HOAs or condo communities. One website notes that "most Cohousing communities are structured as condominiums, but some Cohousing communities may decide to buy their property as Cooperative Housing rather than condominiums." Co-ops have a lot in common with condominiums, but the ownership structure is different. As a result of that, I would expect the two to have somewhat different requirements and limitations on the makeup of their boards. The various deeds and other legal agreements should spell out what form of ownership that community has.

If the community is structured as a condominium, then it's reasonable to assume that it would be subject to the same or similar laws. But "structured as" isn't necessarily the same as "is", which is why I think a lawyer is needed here. For example, if you're the type who values their privacy and solitude, I suspect that a garden-variety condo community would be a better fit than cohousing which appears to place an emphasis on social interaction and communal living.

(Somewhat off-topic speculation: cohousing sounds like it would be more vulnerable to the actions of the vocational dissident crowd. You get them onto the board, and boy howdy are you in for a good time. Yes, that last sentence was snark...)

TimB4 (Tennessee)
Posts: 21,062

Posted:

Quote:

Posted By KerryL1 on 07/23/2023 3:06 PM

Almost all association Bylaws state that members of the board of directors must be owners.

Actually, the initial set of bylaws typically do allow for non-members to serve on the board. This is how the Developer creates the board.
Some Associations have amended their bylaws to limit seats to members only.

I actually started to make such an amendment in my last Association. However, after knocking on doors to gather signatures I chose to drop the idea.
This was because the culture today has many individuals (married or not) only have one name on the deed (for various reasons).
Having such an amendment would have drastically dropped the available pool of individuals who could serve and potentially eliminate some very talented people from serving.
Considering membership apathy and the unwillingness of many to volunteer - I felt that such an amendment would hurt the Association more then help it.

KerryL1 (California)
Posts: 14,550

Posted:

Thanks, Tim, for the correction. I'm not sure what such Bylaws say nowadays. In addition, some states, like CA, require directors of HOAs to be owners of record.

DavidG45 (Delaware)
Posts: 994

Posted:

Quote:

Posted By RichardD22 on 07/24/2023 3:49 PM
24Jul2023
Hi Everyone and thanks for your input!
To get to the specific feedback/ideas I am soliciting here, please assume (which will be true but is not right now), that the HOA bylaws permit non-owner residents who meet other qualifications to serve as a director on the Board of Directors.
This HOA is in Florida by the way, whose statutes do not prohibit non-owners from being on the Board of Directors per my/our best understanding.
This is a small (<25 homes), intentional community called Cohousing; we self-govern and know all our neighbors very well; the motivation to allow non-owner residents is therefore quite appropriate at this time. The proposed qualifications being considered for the bylaw change to allow this will required a community consensus vote on a case by case basis and will only allow it for a limited time per person(~3 years) that will need to be renewed (and it will obviously be terminated if the non-resident stops living in the community). Thus, in my opinion, the concerns about non-owners on the Board are much less relevant to our situation (at least currently) than to a typical HOA in our area/state.
So given all that, we are nevertheless considering different ways of ensuring that a majority of the Board will be owners. We are basically considering to do this either (1) at the Board-nomination stage of the annual election or (2) immediately after the election results are known, during the qualification stage.
I was just wondering if there are precedents from other HOAs for how to effect/maintain that a majority of Board members as owners, in case looking at those precedents would help us decide how to proceed.
Appreciate any thoughts or feedback.
Best,
RichardD22

I guess we have a similar situation in ours. We have a five member board, with a stipulation in our bylaws that at least one of them must come from a subsection of our community that is reserved as a 55+ community.

Anybody can run, but the results of the election must result in at least one homeowner from the 55+ section. So if no incumbents are 55+ members, then the 55+ member with the most votes is automatically on the board.

So the answer is that the bylaws are upheld not by preventing people from running, but by adjusting the results of the election.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Personally I prefer only owners can be on a BOD. That said, I could see an non-owner, non-voting member as VP of Finance.

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