Q: The developer of our community has sold all of the lots and turned control of the homeowners’ association (“HOA”) over to the homeowners. The bylaws for our HOA refer to “officers” and also to “directors” and “the board of directors.” Aren’t they the same thing? How are they elected?
A: Almost all HOAs are established as nonprofit corporations that are created under state law. For-profit corporations have shareholders, whereas nonprofit corporations have members. Your HOA is required to hold a meeting of the members at least once per year – known as the “annual meeting.” It is at this annual meeting that the members elect the board of directors. Your HOA’s bylaws should specify the number of directors, the length of their terms, and their qualifications, as well as their powers and duties. Most HOA boards meet monthly, or at least quarterly, and make decisions (based on majority vote) on all matters affecting the functions of the association.
The officers of a corporation include the president, vice president, secretary and treasurer – and possibly a few assistants, depending on need. For most HOAs, the board of directors appoints the officers (without a vote of the members), usually at the first board meeting following the annual meeting of the HOA. The bylaws will describe the qualifications, powers, and duties of the officers, which are typically executive functions. For example, the president signs checks and contracts; the vice president fills in for the president when he or she is not available; the treasurer handles the HOA’s finances; and the secretary keeps the records and takes minutes of meetings. Though it is very rare, I have seen HOAs with bylaws that require the officers to be elected by the members rather than be appointed by the board of directors. Many of the administrative functions can be handled by a professional association management company, but decision-making should be the sole province of the board of directors.
Directors may or may not have to be members of the association. Similarly, officers may or may not have to be members of the board, or even members of the association. Your bylaws will provide specific guidance on these points.
This column was originally published in the Charlotte Observer on June 3, 2017. © All rights reserved.