Community associations are corporations. Its bylaws require the administration of the association by an elected board of directors. That board serves all owners in conducting the business of the association. Like any corporation, the board of directors and its officers have the sole legal authority to handle all vital functions of the business, from hiring and firing property managers, hiring repairs, and determining the adequacy of the revenue stream. of the association. .
A property manager does not have the authority to conduct the business of the association alone. No matter how good, how efficient the manager is, without the legal authority of the corporation behind him, the business would stop. Providers would not continue to provide critical services to the association if there was no one with the authority to write checks. The local government would begin to question whether a condominium project could remain habitable if no one could pay for the water or the electricity bill.
Without the board of directors, the association would cease to function. There is no alternative within a corporate framework. However, many associations find it difficult to recruit board members. Board seats are left empty waiting for volunteers. This has potentially disastrous consequences and warrants further examination. First, we will examine some of the reasons why it is so difficult to convince homeowners to serve on the board of directors of their community association, and then we will discuss the impact of that.
Reason Number 1-Lack of awareness. Many property owners in common interest developments have little knowledge of how the homeowners association works. They pay their dues when that bill comes in, but they know very little about the organization itself or its activities. They may not read the newsletter or if they do, it is just to find out the pool hours. The only budget figures that concern them is the amount of the monthly contribution. They are only remotely aware that it is the board of directors and not the management company that has legal responsibility for the association’s business decisions. They simply do not relate the functioning of the association to anything in which they have a personal interest.
Reason number 2 time constraints. There are owners who are familiar with the role of the association and its board of directors and who generally keep abreast of its activities and decisions. They read the newsletter and occasionally attend a board meeting, but see their occupations or family responsibilities as impediments to accepting the additional responsibilities required of board members.
Reason number 3: fear of responsibility. Many community association owners are well acquainted with the operations of the association and the role of the board of directors, and would otherwise have time to devote to serving on the board. The problem is that for one reason or another they fear accepting responsibility. Perhaps it is a lack of confidence in their own ability or concern about responsibility in case they make a mistake, or they are simply uncomfortable with the idea of making decisions that are critical to the financial interests of their fellow homeowners.
Reason number 4: us vs. They. This is the most difficult reason of all. Some property owners see the board of directors and the community association as an extension of government authority, but more specifically, an authority that must be challenged at every opportunity. They don’t see a board member as simply a fellow owner volunteering his time, but rather as an incompetent bureaucrat. These owners often lack the tolerance to recognize that board members are unpaid volunteers trying to do their best. This problem has the dual purpose of ensuring that the critic has no interest in serving and dissuading those who might otherwise do so. But then the critic may be right. But this should open the door to challenge an existing board member in the next election, not to provide more reasons for no one to run.
Reason number 5: the owner does not speak. When a landlord tells his tenants that they cannot smoke inside their apartments, or put satellite dishes on their balconies, or park backwards in garages, tenants generally obey the rules. When the board of directors of a community association approves similar rules, it is often met with deep resistance. Why? Tenants “own” their airspace, at least for the duration of the rental agreement, so why is their disposition towards the dictates of the owner different than that of a condo owner? Probably because landlords feel more empowered than tenants, but whatever the reason, board members, neighbors, and sometimes friends don’t want to be put in the position of landlord and be required to do. comply with the rules.
The net result of these and other reasons is that boards often have to grapple with vacant positions, and with few members willing to help run the association, it makes the jobs of the remaining board members much more. difficult, if members remain. If the corporation cannot function because it does not have members willing to be directors, the alternative is to seek help in court, often asking the court to appoint a trustee, a very expensive proposition. So there are good reasons to be concerned. There is also the argument that the whole scheme of operation and administration of the association, by voluntary owners, is essentially flawed and that the authority to manage the business of all multifamily developments of common interest should be in the hands of professionals, arguments which are difficult to disprove if the owners refuse to step up.
And that can happen one day. Developers, tired of construction and the budget litigation that invariably ensue, can retain enough property rights to allow them to manage the property for years or in perpetuity, with a fixed administration fee and an evaluation formula in government documents that allows the administrator to evaluate whatever. It is necessary to maintain the project without the vote of the members. Or, as we’ve written above, developments could be coalesced into large special districts with enough government powers, including the power to tax, to manage their incorporated developments, again without the vote of the owners.
I call these and similar ideas “de-democratization” of community associations. That sounds bad, but what good is representative democracy if there is no representative? For the democratic volunteer management system to work, there must be volunteers. But the trend is for there to be fewer, not more, people willing to serve their neighbors in this capacity. If this trend continues, the remaining funds could be depleted through legal fees and the fees of a designated receiver or the local government could have to act to protect habitability by expropriating the project. If these situations become generalized, we could see a total change in the governance of multifamily owned homes or a major change in that type of rental housing.
It seems that I am more and more a prophet of doom. But really, if the owners are not willing to govern themselves, then the condos are simply apartments, and if they are not willing to make the contributions that must be made for a community association to survive, then they must be willing to give up their interests. of property and being tenants. This is as serious a housing crisis as the current economic one, and it may be worse, because the crisis in community association governance is not likely to end in a year or two.