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HOW BOARDS SHOULD WORK
• Kathleen Profitt, Profitt Law PC• Troy Rudd, Superior Community
Management• Karen Moore, Belmont Place
Condominium
Overview
• Levels of Authority• Duties of the Board• Powers of the Board• Board Conducting Association
Business• Meetings• Q & A
Board Authority – Levels of Authority
• State Statutes (But don’t forget about Federal law!)
• Governing Documents• Rules are trumped by Statutes,
Declarations and Bylaws• Statutes, Declaration and Bylaws
may create intermediate steps before court enforcement
State StatutesHOA/Planned Community Condominium-Oregon Planned Community -Oregon Condominium
Act Act (ORS 94) (ORS 100)
-Washington Homeowner’s -Washington “Old” Horizontal
Association Act (RCW 64.38) Property Regimes Act (RCW 64.32) (1963)
- Washington “New” Condo Act (RCW 64.34) (7/01/90)
State Statutes continued…
Oregon Nonprofit Corporations Act(ORS 65)
Washington Nonprofit Corporations Act(RCW 24.03)
Duties of the Board• Administration of the Association
and its assets• Maintenance of common property• Levying assessments to pay for the
Association’s common expenses• Enforcing the Declaration, Bylaws
and Rules
Standard of Conduct• Fiduciary Duty (legal term of art)• Nonprofit Corporation Act defines
standard– A director shall discharge the duties of a director,
including the directors duties as a member of a committee:(a) In good faith;(b) With the care an ordinarily prudent person in a like position would exercise under similar circumstances;
(c) In a manner the director reasonably believes to be in the best interests of the corporation.
Powers of the Board
• Adopt and enforce rules• Impose late fees• Levy reasonable fines (after notice
and opportunity to be heard)• Review Financial Statements• Exercise powers necessary and
proper• Duty of Officers and differences from
Director duties
Key Components for Conducting Efficient
Board Business• Reserve Study• Maintenance Plan• Rules and Regulations• Resolutions and Policies• Manager or Management Company• Business Judgment Rule – Indemnity
Conducting Association Business
• Board Meetings– Properly Noticed and Open to Owners• Executive Session Exception (legal advice, personnel
matters, collection, negotiating contracts )
– Decisions Made in Meetings – (not emails)– Emergency Meetings – (Telephone ok)
• Annual Homeowner Meeting– Elect the Board–WA ratify budget
Conducting Association Business
• Committee Work– ARC may have authority separate from the
Board, other committees are at discretion of Board
• Manager Tasks– Variable on scope of contract– Full service liaison for the Board– Facilitate day in day out business of
association
Association and Board Meetings
• Notice to Owners• Agenda• Establishing Quorum• Robert’s Rules of Order• Meeting Minutes
Methods of Communication
• Meetings• Written Notices per Documents• Newsletters- general community info• Electronic Communication
– Dissemination of information– Meeting notices as allowed by governing documents– No decisions. Do not say “I vote. . .”– Can be effective for urgent matters– Beneficial for communication with management team outside of
meeting schedule
Due Process• Notice and opportunity to be heard
– In writing– Notice should describe the alleged violation, the rule
and the authority in detail, set forth the fine or action to be taken and offer an opportunity to request a hearing (Tip: require the owner to request a hearing in writing)
– Notice should be drafted to diffuse emotions and offer an explanation
– Levels of Written Notice: Warning with opportunity to correct, Notice of Fine, Subsequent Notice
• Declaration or Bylaws often provide the process details
Due Process continued• Hearings
– At a meeting with a quorum of Board members or before a designated committee if allowed within governing documents
– Adopt hearing procedures by Board Resolution and disseminate them to owners along with a fine and fee schedule
– Give an owner a reasonable time to explain their side. Avoid debate and keep minutes
– Provide concise written decision to the owner in a reasonable time frame
Fines• Must adopt and mail any fine schedule to
each owner• Fines must be reasonable and simple to apply• Must not conflict with state statutes or
governing documents• Keep an accurate and current ledger• Fines are assessments and included in the
lien• Generally, must offer mediation prior to filing
suit on fines
Closing the Loop
• Assembling and using the HOA’s team• Tools to increase accountability and
forward momentum• Building community with homeowners• Addressing community issues with
transparency and invitations for involvement
Questions?
THANK YOU !
Kathleen Profitt, Profitt Law PC
Troy Rudd, Superior Community [email protected]
Karen Moore, Belmont Place [email protected]
