Serving on an association board can be a very rewarding endeavor. However there is a lot to learn early on, and if you are not properly prepared taking on the responsibilities of a board role can feel a bit overwhelming.

It’s always good idea to get a general understanding of the fundamental functions your board plays as a governing body to your community.  Before running for a board seat, it is important you familiarize yourself with the duties of the individual position you are running for, as well as the  what your contribution to the board should be, but also get an understanding of short and long term missions of your board overall.  .

Since board members are volunteers, it’s easy for the job to start feeling like a burden. And we know how much there is a lot to learn when you are just starting out so we broke down need-to-know topics to help you have a smooth transition into your new role.

 

You will receive educating training on insightful topics like:

  • Fiduciary relationship between board members and their communities

  • How to read financial documents like budgets, expense reports, and balance sheets

  • And how to get the most out of reading your By-Laws and your reserve study

This 90-minute session brings together experts who will get you up to speed on the “Do’s & Don’t” of serving on a community board and will immerse you in your role so you’ll have valuable insight and experience before your first day.

“The residents who assume positions of responsibility as officers and directors of homeowners associations will be the key to its success or the catalyst for its failure.”

– Peter M. Dunbar, Esq

Duties and Fiduciary Duties of Board Officers

I. Officers

President – The president of an association is vested with all the powers generally given to the chief executive officer of a corporation. While specific by-law provisions may vary, it is generally presumed that the President will preside over meetings of the board and the membership.

The President also assumes general charge of the day-to-day administration of the association and has the authority to order specific actions in furtherance of the board’s policies. He or she will execute contracts, orders and other documents in the name of the association, and serves as spokesman for the board of directors in most matters relating to general association business. Like all officers of the association, the president has an affirmative duty to carry out the responsibilities of the office in the best interests of the association.

Vice President – The vice-president is vested with all the powers which are required to perform the duties of the association president in the absence of the president. The vice president does not automatically possess inherent powers to act in the capacity of the chief executive officer, and may act for the president only when the president is actually absent or otherwise unable to act. The vice-president may assume such additional duties as are defined by the board of directors. Often, the vice-president will chair one or more substantive committees like that of architectural review.

Secretary – The secretary of the association is responsible for keeping and maintaining a record of all meetings of the board and the membership and is the custodian for most of the official records of the association. The position of secretary is not simply a clerical position. In many cases, the secretary will not actually keep the minutes of the meetings, but will be responsible for obtaining someone who will do so as a recorder or assistant secretary. As the custodian for the minutes and other official records of the association, the secretary is responsible for insuring access to those records by the members of the association and their authorized representatives.

Treasurer – The treasurer is the custodian of the funds, securities and financial records of the association. When the association has a manager or management company that actually handles the funds on a daily basis, the treasurer’s duties will include overseeing the appropriate people to ensure that the financial records and reports are properly kept and maintained. Unless the by-laws otherwise specify, the treasurer is responsible for coordinating the development of the proposed annual budget and for preparing and giving the annual financial report on the financial status of the association.

The treasurer does not have the authority to bind the association or the board of directors in dealings with third parties unless the board has provided express authority for the treasurer to do so. As with the association’s secretary, the treasurer does not have to perform the day-to-day record keeping functions of the association when this responsibility is transferred to a management company, but the treasurer will ultimately be responsible for insuring that the financial records of the association have been maintained properly in accordance with sound accounting practices.

I. Officer’s Fiduciary Relationship and Responsibility

The members of the board of directors and each officer of the association have a fiduciary relationship with the members of the association. This fiduciary relationship imposes obligations of trust and confidence in favor of the corporation and its members. It requires the members of the board to act in good faith and in the best interests of the members of the association. It means that board members must exercise due care and diligence when acting for the community, and it requires them to act within the scope of their authority.

The fact that the association is a not-for-profit corporation, or that the members of the board are volunteers and unpaid, does not relieve them from the high standards of trust and responsibility that the fiduciary relationship requires. When a member accepts a position on the board of directors, he or she is presumed to have knowledge of the duties and responsibilities of a board member. Board members cannot be excused from improper action on the grounds of ignorance or inexperience and liability of board members for negligence and mismanagement exists in favor of the association and the property owners.

Each board member must recognize the fiduciary relationship and the responsibilities that the board has to the association and each of its members. The board’s duties must be performed with the care and responsibility that an ordinary prudent person would exercise under similar circumstances, and the ultimate responsibilities of these unique positions cannot be delegated to a manager, a management company or other third party.

*NOTICE: All information above is for reference only. All officers and duties listed above may not be necessary for your neighborhood association.

DISCLOSURE

Advisors of the Intelligent Capital Reserve Group offer securities and investment advisory services through SagePoint Financial, Inc., Member FINRA/SIPC.  Insurance services offered through Intelligent Capital Reserve Group, LLC, which is not affiliated with SagePoint Financial, Inc.  SagePoint Financial Inc. does not provide tax or legal advice.  All other listed entities are unaffiliated.

This communication is strictly intended for individuals residing in the states of FL, MI, NC, TX and WA. No offers may be made or accepted from any resident outside the specific state(s) referenced.

IMPORTANT CONSUMER INFORMATION

A broker-dealer, investment adviser, BD agent, or IA rep may only transact business in a state if first registered or is excluded or exempt from state broker/dealer, investment adviser, BD agent, or IA registration requirements as appropriate. Follow-up, individualized responses to persons in a state by such a firm or individual that involve either effecting or attempting to effect transactions in securities, or the rendering of personalized investment advice for compensation, will not be made without first complying with appropriate registration requirements, or an applicable exemption or exclusion. For information concerning the licensing status or disciplinary history of a broker-dealer, investment, adviser, BD agent, or IA rep, a consumer should contact his or her state securities law administrator.