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Board
The Role of the President
Home owner association presidents are required to fulfill many roles, but the primary roles are leader and manager. Different situations will determine which role the association president assumes. Sometimes the president must set aside other roles, such as neighbor or friend, to accomplish a task or make a decision.
Association presidents gain their authority to lead a community association from state law—generally called the Common Interest Ownership Act. The president should have a basic understanding of the law pertaining to community associations, as well as the association’s governing documents—the declaration (also called Covenants, Conditions, and Restrictions—CC&Rs), bylaws (which address the association’s structure, the board, the officers, definition of a quorum, ability to enter into contracts, etc.), and the rules and regulations (the operational and behavioral laws that apply to association residents). Therefore, presidents must perceive the association as both a community and a business, as well as operate on the democratic principles of government.
OVERSEE OPERATIONS
Association presidents oversee rule and policy development and enforcement, conduct meetings, prepare agendas, and work with committees.
SPEAK FOR THE BOARD AND ASSOCIATION
The president is the official spokesperson for the board—to association members, vendors, the press, and the greater community.
WORK WITH VOLUNTEERS
The president is the leader of the board, a body that typically includes:
- The vice president—who substitutes for the president in his or her absence
- The secretary—the official keeper of the association’s official documents, books and records
- The treasurer—the chief financial officer of the association
It’s in the president’s best interest to encourage the officers’ participation in association affairs and to develop their skills as team members. The president should also attempt to identify and train potential association leaders, encourage them to join the board, and orient them to their new responsibilities.
The position of association president is not for everyone, but fortunately every president has a board from which he or she can draw support. As long as the members recognize the importance of the community that unifies them, the role of president can be very satisfying.
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The Role of the Vice President The main function of an association vice president is to act as a substitute for the president should he or she be unavailable for whatever reason. In cases of the president’s absence, someone must be available to oversee the rest of the board and association to ensure it continues to run smoothly. This can include anything from heading meetings in a long-term absence, or meeting vendors on site a morning the president cannot attend.
The vice-president also carries out any tasks assigned to him or her by the president. This can include assisting in securing bids for maintenance projects, checking in on various committees, and meeting with the management team.
Due to their position on the board and often lack of inconsistent duties, a vice-president may also serve as the liaison for one or more association committees. For communities that receive numerous architectural requests, the vice-president often acts as a liaison between the review committee and the board when the request at hands needs to be reviewed by the board as well as the committee. This gives the request an extra set of eyes and ensures it coincides with the association’s documents. The vice president can also act as chairman for other committees such as overseeing social events, landscaping, etc.
Though the job of a vice-president may seem trivial at times, for associations it can be an important one. It allows responsibilities to be handed from the president when the workload is heavy and ensures everything gets completed.
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The Role of the Secretary
The association secretary is responsible for preserving the association’s history, maintaining its records, and protecting it from liability. The secretary should be efficient, well organized, and have a commitment to the future of the association.
RECORD MINUTES FOR ALL ASSOCIATION MEETINGS
- Board meetings
- Special meetings
- Annual meetings
- Committee meetings
GUIDELINES FOR RECORDING MINUTES
- Record the association’s actions and record why they were taken
- Preserve board members’ voting records
- State the authority by which directors take a certain action and cite the documents granting that authority
- Record all matters brought before the board, whether adopted, dismissed without discussion or vote, rejected, deferred, tabled, or simply presented as information
- Remember that the association’s minutes are official records and admissible as evidence in a court of law
USE STANDARD LANGUAGE FOR RECURRING FUNCTIONS
Certain functions occur frequently in all meetings. Recording these will be easier if the secretary develops standard language to cover functions such as:
- Call to order by the presiding officer
- Proof of meeting notice or waiver of meeting notice
- Presence or lack of a quorum
- Reading and approval of the previous meeting minutes
- Reading and acceptance of various reports
- Unfinished business
- New business
- Adjournment
ANNOUNCE MEETINGS AND PREPARE AGENDAS
Notifying board members and association members of meetings is required by law. How and when notice is given is typically stated in the association’s governing documents. Agendas are essential to the success not only of the meeting, but of the association as well.
MAINTAIN ASSOCIATION RECORDS
- Store and retrieve association documents as needed
- Devise an effective filing system, and keep files safe and accessible
- Identify and categorize all current and stored records
- Prepare and maintain a retention schedule for document disposal
WITNESS AND VERIFY SIGNATURES
Many associations have policies to safeguard assets that require two signatures on checks or a witness to verify signatures. Generally this responsibility falls to the secretary.
MAINTAIN LISTS
The secretary is responsible for maintaining lists of all association board and committee members, officers, and members, their current mailing address, and voting percentages.
VERIFY PROXIES
The secretary accepts and verifies proxies for annual or special membership meetings, and ensures that proxies and ballots are kept in the association’s records.
FILE FORMS WITH STATE AGENCIES
The secretary is responsible for filing certain forms with state agencies. These might include employment forms, incorporation documents, and other official records of the association.
MANAGE CORRESPONDENCE
- Route correspondence to appropriate association representatives: board member, committee chair, etc.
- Ensure that tone, form, and spelling of all association correspondence reflect positively on the association
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The Role of the Treasurer
The association treasurer is responsible for maintaining the finances and ensuring the financial stability of the association. He or she is the financial voice of the board and liaison to auditors, CPAs, brokers, agents, and bankers. This includes a number of duties and responsibilities.
PREPARE THE BUDGET
The most important responsibility the treasurer has is preparing the annual operating budget
MAINTAIN ASSOCIATION ACCOUNTS
The association’s documents and bylaws specify a number of financial responsibilities that the treasurer must oversee. These may include:
- Maintaining adequate insurance coverage
- Keeping financial records
- Investing association funds
- Collecting assessments and delinquencies
- Reserving funds for future needs
- Filing income tax returns
UNDERSTAND BASIC FINANCIAL STATEMENTS
The treasurer must understand at least the basic components of the financial statement:
- Assets
- Liabilities
- Members’ equity: reserves and operating fund balance
In addition, it would be advantageous to the association if the treasurer also had an understanding of the other components of the financial statement such as:
- Initial working capital
- Special project funds
- Income statement
- Statement of cash flow
REPORT TO THE BOARD
The treasurer should report at regular board meetings on the state of the association’s finances based on the following information, which may be maintained and provided by the manager or finance committee:
- Balance sheet
- Statement of income
- Cash receipts and cash disbursements activity
- Unit owner balances
- General ledger activity and journal entries
- Schedule of accounts payable
- Bank statements and bank reconciliations
IMPLEMENT A RESERVE PROGRAM
Reserves are a primary responsibility of the treasurer and the board of directors. The treasurer must:
- Conduct a reserve study.
- Update the reserve study periodically.
- Develop and implement a reserve funding schedule.
- Fund the reserve accounts appropriately.
SELECT A CPA AND CONDUCT AN AUDIT
Ensuring that the association is working with a qualified certified public accountant (CPA) is one of the treasurer’s important duties. CPAs with community association experience are better equipped to provide the expertise you need. The treasurer should work with the CPA to perform an annual audit—a very important document for a community association, the management company, and the board. Even if your association uses the services of a CPA, or if your treasurer is a CPA, all board members—especially in self-managed associations—should have a basic understanding of community association finances.
BOOKKEEPING
In smaller, self-managed communities, the treasurer’s duties may include bookkeeping.
FINANCIAL LIAISON
The treasurer is the liaison between the association board and finance committee, its subcommittees, and between the board and the members on financial matters. In addition, the treasurer is the liaison to reserve study engineers, bankers, CPAs, insurance agents, investment brokers, and auditors.
MAINTAIN RECORDS
The treasurer should make sure that important financial records are safely maintained for an appropriate time.
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