duties of a trustee in an hoa

Started by DorothyL1 • 15 replies • 355 views

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DorothyL1 (Florida)
Posts: 7

Posted:

We have recently added a trustee to our HOA BOD. I tried to research this and did not find a lot on the net. The most I could gather was that
a trustee is more of an executive, overseeing the overall goals of the community.... the President, VP, treasurer and secretary have pretty
defined duties. It seems the trustee is responsible for setting policy and for carrying out their fiduciary duty to all homeowners and maintaining
the property as a whole. Is this correct? CAn anyone refer me to any material on this subject?
Thanks. Dorothyin Florida

ElleN (Idaho)
Posts: 4,420

Posted:

Is this a condominium, subject to FS 718? Because FS 718 speaks of a "termination trustee."

Or is your association a subdivision of stand-alone homes, subject to FS 720?

Has your association had serious financial troubles, requiring appointment by a court of what is normally called a "receiver"?

Can you quote exactly what your declaration says, if anything, about a "trustee" serving on the board?

Please try to answer all questions people here ask you.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Some Associations will call their Directors trustees.

Directors and Officers are two different positions.

Typically, the duties of officers are defined within the governing documents.
Typically, the duties of Directors are not defined within the governing documents.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Here are some resources:

What is a Board of Trustees (Versus a Board of Directors)? From Nolo

Board of Trustees vs. the Board of Directors: What Are the Differences? article from a management software company

Frequently Asked Questions: Board of Directors (or Trustees) from an Associations website.

Dorthy,

Looking at this differently - when you say that you added a Trustee to the board, are you saying:

a) A new position was created called a trustee?

b) A trust owns a unit/lot and the trustee of that trust was appointed to the board?

c) There was a vacancy on the board and when the seat was filled, the board said we have a new trustee?

DorothyL1 (Florida)
Posts: 7

Posted:

Our HOA is governed by FS 720, as itis single family homes. Our by-laws say nothing about trustees.

Directors and Officers are two different positions.

Typically, the duties of officers are defined within the governing documents.
Typically, the duties of Directors are not defined within the governing documents.

I find this interesting as the duties of officers make sense- the usual.... a President, VP,
treasurer and secretary.

We had 4 people on the board the entire time I have lived in this community.... which now is
7 years. Last year at our election it was announced all of a sudden that we were going to have
5 people on the board. There was no explanation why or for what extra position.

I just found out yesterday the 5th person is a "trustee". I asked at the meeting what a trustee
does and the answer was "kind of like an FBI or CIA type guy". It made no sense to me, which is
why I'm trying to get some data.

If there isn't such a position as trustee outlined in our governing documents, it seems we should
not have such a person, or we should create an amendment which says what that person's duties are.

Is there a "typical" job description for a Director?

Thank you. Dorothy in Florida

TimB4 (Tennessee)
Posts: 21,059

Posted:

Sounds like the "Trustee" is simply a Director and your Association is using the terms interchangeably.

Directors make the decisions for the Association.

Officers (who typically are appointed from amongst the directors), implement those decisions and carry out the day to day tasks of running an Association.

DorothyL1 (Florida)
Posts: 7

Posted:

Yes, a new position was created called a trustee. We had four officers previously. We now have five,
with no explanation as to why or what that person does.

Whether the trustee is a Director or an Officer, I'd still like to know the usual functions and duties
of a trustee...

TimB4 (Tennessee)
Posts: 21,059

Posted:

What does your bylaws, perhaps your CC&Rs, say about the number of directors?

DorothyL1 (Florida)
Posts: 7

Posted:

At the first annual meeting, the members shall elect one director for a term of one year, one director for a term of two years, and
one director for a term of three years, and at each annual meeting thereafter, the members shall elect one director for a term of three
years, provided, however, that if at such first annual meeting, or at any subsequent meeting, owners other than the declarant are entitled
to elect at least one director, then the number of directors on the Board will automatically increase to five, one of whom will serve for a
one year term and one of whom will serve for a two year term. In such event, at each annual meeting thereafter, the members shall elect each
director for a term of three years.

This was written in 2000 and the community is now composed of only homeowners, no developers, and no classes of membership. Each household
has one vote.

My understanding of this is that owners can elect a fifth director, but there was no discussion and this was arbitrarily done with BOD
members only. Since we now have 5 people on the board, I would at least like to understand the purpose and duties of this fifth person.

LoriM15 (Florida)
Posts: 1,009

Posted:

It is typical to have an odd number of directors so there can be no ties in board decisions. In most associations I know of in Florida, there is a president, VP, treasurer and secretary. The fourth person is just a "director" and has the same rights as the other directors who have titles. In some cases the title means something - usually the president, treasurer and secretary do some work, but the VP and the remaining director don't. That would all be outlined in your bylaws or declaration.

In your association they must call that person a trustee. It may be because some non-profit organizations are called the Board of Trustees, not the Board of Directors.

If there is nothing in your documents that outlines the duties of the "trustee" then they just sit on the board and make decisions like the others.

I think someone was pulling your leg when they said the trustee had special duties.

It's better to have five - less chance that one person can dominate.

DorothyL1 (Florida)
Posts: 7

Posted:

Thanks very much, that helps a lot!
Dorothy

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By DorothyL1 on 03/20/2024 7:13 AM
At the first annual meeting, the members shall elect one director for a term of one year, one director for a term of two years, and one director for a term of three years, and at each annual meeting thereafter, the members shall elect one director for a term of three years, provided, however, that if at such first annual meeting, or at any subsequent meeting, owners other than the declarant are entitled to elect at least one director, then the number of directors on the Board will automatically increase to five, one of whom will serve for a one year term and one of whom will serve for a two year term. In such event, at each annual meeting thereafter, the members shall elect each director for a term of three years.

This was written in 2000 and the community is now composed of only homeowners, no developers, and no classes of membership.

I am going to re-write this to the way I interpret it, with regard to the number of directors:

At the first annual meeting, the members shall elect [three directors with staggered terms]. At each annual meeting thereafter, the members shall elect one director for a term of three years, with one big caveat: Once owners have the lawful right to elect at least one director (and so the declarant is almost done, per state statute and the bylaws), then the number of directors on the Board will automatically increase to five,. One of the two new directors will serve for a one year term and the other will serve for a two year term. At each annual meeting thereafter, the members shall elect each director for a term of three years.

In my opinion the board has had five board seats for some time now. Elections should have been run to fill all five board seats. But they did not, so the board is left with kind of a mess. But do understand: This "mess" is as much the owners' fault as it was the fault of prior boards. After all, the owners have a copy of the covenants. The owners could have questioned the shortage of directors at any time.

If the board just recently figured out there should be five board seats, then the board really should have run an election. Instead the board appears to have simply filled the vacancy.

I agree with the others who say that calling this apparent new director a "Trustee" is just the directors being silly and not very smart. The sarcastic remarks about this directors' duties are particularly unprofessional. The sarcasm helps no one.

DorothyL1 (Florida)
Posts: 7

Posted:

Ellen in Idaho,
Thank you. YOu have also helped me to understand the situation better. Truthfully, there are a lot of very questionable things happening
with our board. But this one question is straightening out for me. It makes sense that we should have had five directors all along. I do
think the original language could have conveyed that more clearly. The understanding I have now (which is more than I had before) is that
an odd number is good so that ties in voting can be overcome/broken and that this trustee (or whatever we want to call this person) has the
right to vote on the board. He does not have other duties. That clears up the overall picture for me, unless there is more to it that I am
missing.

KerryL1 (California)
Posts: 14,550

Posted:

It does seem that the Board just picked a name that they liked to call this director. If you don't see this word in your governing documents, especially your Bylaws, there is no such thing. But I hope the Board did NOT indicate that : "It seems the trustee is responsible for setting policy and for carrying out their fiduciary duty to all homeowners and maintaining the property as a whole."

But your Bylaws state that those tasks are the responsibility of the the Board as a whole. It discusses and makes policy with its motions and votes at board meetings. IF, for some ridiculous reason, the board members vote to confer those decision-making powers, etc. to one director, that is a terrible breach of thieir fiduciary obligation to serve their community.

From your citation, Dorothy, which appears to be from your Bylaws, there should be 5 directors.

DorothyL1 (Florida)
Posts: 7

Posted:

Thank you. I definitely get the picture better. I think the word "trustee" is being used interchangeably with "director" for whatever reason.
I did find the articles about the differences to be helpful.

KerryL1 (California)
Posts: 14,550

Posted:

Yes I'm sure the articles that Tim suggested ARE helpful. But don't worry, it's very, very common to get directors & officers mixed up.

We see now & then that directorss who aren't officers re called "directors at large," but I don't know if that's in those HOA's Bylaws or if they're just trying to make the non-officers seem more important. But ALL director are equally important re: thier obligation to serve thier cooperation and each has one vote.

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