HOAs play a crucial role in maintaining residential communities, ensuring they operate smoothly and preserve property values. Central to the functioning of an HOA is its Board of Directors, comprised of volunteers elected by members of the association (owners). This article provides a comprehensive guide to understanding HOA board members’ roles and responsibilities.
What is a homeowners association board?
A homeowner association board of directors is a group of volunteers elected by members of the association. These individuals are entrusted to represent the community in managing community affairs and helping protect property value. This includes overseeing finances and community amenities, and enforcing rules and regulations.
In Illinois, these boards are governed by either the Common Interest Community Association Act (CICAA) or the Condominium Property Act (CPA). From there, HOA boards have a set of governing documents that detail how everything in the association will work. It is the board’s job to oversee those documents, make amendments as needed, and ensure that both the board and association members adhere to them.
How many board members should an HOA have?
In Illinois, as Not for Profits, HOA boards are required to have at least three directors, and commonly up to nine. The ideal number of board members for an HOA depends on various factors, including the size and complexity of the community. Aim to strike a balance between representation and efficiency to ensure effective decision-making. Your homeowners association’s governing documents will indicate its number of board members and service term length.
Homeowners association budget
As part of being responsible for the operation and administration of the association, an HOA board prepares and distributes the annual budget for the community. This involves allocating funds for maintenance, repairs, amenities, and other community services. This budget is funded through member dues and, occasionally, special assessments. There are rules around how the budget must be communicated each year to association members, and the types of meetings the board must hold to create and adopt the budget.
What do HOA board members do?
HOA board members have a range of responsibilities, including presiding over meetings, approving contracts, creating and enforcing rules and policies, and fostering community engagement through committees and initiatives.
Do HOA board members get paid?
HOA board members serve on a voluntary basis without compensation for their services. However, it is legal in Illinois for the community’s governing documents to define a compensation for board members. Specifically, some HOAs may offer stipends or reimbursements for certain expenses incurred while carrying out board duties.
Fiduciary responsibility of HOA board members
The main caution with paying board members is that it may create a conflict of interest. The board members have a fiduciary duty to act in the best interest of the community, particularly for financial decisions. If they got paid for being on the board, they may be motivated to make decisions for their own financial gain instead.
Should you run for the HOA board?
If you have an interest in protecting and maintaining the value of your community, you may consider running for an HOA board seat. Consider the amount of free time you have available, and discuss with other board members the schedule so you can make a realistic assessment of your ability to commit.
Requirements for HOA board members
While a background in finance or experience on other boards like for banks or schools is quite useful for board members to have, it is not required. However, the role of an HOA board member is not to be taken lightly. Potential board members should generally be homeowners in good standing and willing to commit to serve the community. Running a community association can be complex, and there are a lot of governing documents to adhere to. The Illinois Department of Financial and Professional Regulation (IDFPR) states,
Members of association boards must be well-prepared and well-informed to “govern” their respective communities.
Serving on an HOA board can be a rewarding experience for individuals passionate about maintaining their community and protecting property values. By understanding the roles, responsibilities, and considerations outlined in this guide, prospective board members can make informed decisions about their involvement in HOA governance.
