Can a renter be on the BOD?

Started by CarolynS1 • 6 replies • 1311 views

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CarolynS1 (California)
Posts: 6

Posted:

One of our board members was removed from the board for not being a homewoner. Our management company advised us to do so, due to the fact that this creates conflict with our insurance. Is that right?

DonnaS (Tennessee)
Posts: 5,671

Posted:

Carolyn,
The statement that the M.C said that the renter was removed from being a Board member because of your insurance company? Unless the M.C was referring to your D.and O. policy which insures the Board against liability, that is absolutely absurd.
First of all, renters are not considered "Members" of the association and therefore cannot serve on the Board. And then, how did this person get on the Board? , Elected or appointed? California has some fairly good resatrictions on Board member requirements and I doubt that renters can be Board members.

CarolynS1 (California)
Posts: 6

Posted:

Thanks! This is going to help me a lot! This person insists on being on the board. He has served on it for 7 years! Now he claims that even though he is not a homeowner, he has "earned" the position, for all that he has done for the community...

As you can see, Donna, there is a lot going on on our Board. I am just trying to make sure that everything is legally done, and in the event of any special situacion, we are 100% covered....

RogerB (Colorado)
Posts: 5,067

Posted:

Carolyn, your management company was not correct; there is no conflict with your insurance. Often the controlling documents do not require Board members to be owners because in the initial stages the Developer put their non-owner cronies on his Board. Therefore, look at your controlling documents to determine if Board members need to be owners. If not then the renter could serve, but it is not a good idea IMO.

MicheleD (Kentucky)
Posts: 4,491

Posted:

DonnaS said: " First of all, renters are not considered "Members" of the association and therefore cannot serve on the Board."

Please don't make this blanket statement and CarolynS, PLEASE don't rely on it without FIRST CHECKING your governing documents!

Our governing documents allow for anyone, regardless of membership status or home ownership, to be on the board of directors.

All the person needs to do is be nominated and voted in.

Many HOAs have similar allowances.

If the management company advised doing so due to alleged insurance reasons, and apparently NOT because of a conflict with the governing documents, then I would question the management company's input.

It is the virtue of one's role as a director, legally per the governing documents, and not one's ownership status in the HOA that the board member is covered.

Please refer to your by-laws and/or CC&Rs to confirm the eligibility of board directors.

ShawnaF (Colorado)
Posts: 84

Posted:

Lol CarolynS - "earned" it...

Sorry I can't be anywhere nearly as helpful as the folks who are helping you already, but yes, check your docs to see if a non-owner is allowed.

In the meantime, I'm loving the "I earned it" statement - that's fabulous and certainly gave me the giggles.

Good luck to you - the folks here are fabulous and you can't go wrong!

GeraldT4
Posts: 1,022

Posted:

CarolynS1 - It's illegal for a non-owner to be on your Board unless your governing documents allow it. ALL actions taken and voted upon by the non-owner during the time the non-owner was on the Board would need to be reviewed and probably re-voted upon. That can be handled very simply by itemizing all actions taken and making a simple motion during an open meeting to re-ratify all those actions and votes. Now that the Board is aware, failure to act cannot be considered an oversight, or a harmless error therefore your PM is correct that insurance wise there may be an issue with the D & O insurance.

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