Your homeowner’s association has a board, and owners are generally allowed to attend meetings. But you may hear several acronyms tossed around making a discussion hard to follow. This guide will help you understand some basic terminology.
Since HOAs follow certain procedures in conducting a meeting, questions of clarification from the audience may be out of order. Also, each association operates a bit different, but there is general information at the end about the board’s decision-making process under the law.
Terms You May Hear During an HOA Meeting
Assessments/HOA Fees – Monthly fees owners pay the homeowners association to help cover maintenance services and amenities.
Bylaws – the governing guides of how the HOA operates as an organization. They should cover things like how often you have meetings, how many people are on the board, how often you have to have membership meetings, and what’s a quorum.
CC&Rs – Covenants, Conditions and Restrictions are limitations and rules placed on a group of homes by a builder, developer, neighborhood association and/or homeowners association that govern what an owner may, may not, or must do with respect to the real estate property.
Fiduciary Duty – is the highest standard of care imposed under law, and it occurs when one or more persons are responsible for the money or property of another. The fiduciary is expected to be honest, free from fraud and faithful to his or her obligations; an ethical and a legal obligation the HOA board has to make decisions in the best interests of the entire Association.
HOA manager – a professional who provides guidance to the Board and members of the Association, handles the day-to-day issues that arise for the homeowners association, provides assistance to the Board, and typically manages the financials, business needs, some communications, operations, and compliance with the law for the HOA.
HOA Rules & Regulations – an extension of the CC&Rs, the HOA rules and regulations tend to be a primary document for laying out expected conduct within the community and are set in place by the HOA board for the best interest of the Association community as a whole.
Homeowners association – an organization of homeowners in a specific subdivision, condominium or planned unit development, who all have a common interest where they’re living. The purpose of a homeowners association is to protect, maintain and enhance the homes and property.
Quorum – A quorum is the minimum number of members who must be at a meeting before business can be transacted.
Reserve Study – A reserve study is a complex document that projects when numerous major components in a homeowners association will need to be replaced, what it will cost to replace them, and how much the association will need to set aside each year to pay for the upkeep when necessary. This could include roads, roofs, painting, swimming pool upkeep, landscape replacement or any long-term assets that require periodic maintenance.
Special Assessment – required extra fees that are collected from owners when the Association needs to make essential repairs, improvements or additions to the common elements, but lacks extra reserve funds to cover the costs.
Can the HOA board make important decisions without owner input?
Homeowners associations are private entities homeowners join when they purchase a property. Home buyers sign agreements to be governed by the association and abide by the decisions of the duly appointed/elected HOA board of directors.
In a word, yes, the board can and does make decisions on behalf of owners.
However, Hawaii State law provides many avenues for owners to participate.
First, it is important to understand the two main types of HOA meetings- Association meetings and Board meetings. Association meetings are for the general membership including owners. There is an annual association meeting where the board is selected and the annual budget is approved. There may be other association meetings during the year if the board needs or is required to get input from owners.
An HOA board meeting is a little different. All members may attend a board meeting. However, at a board meeting, the board decides if and how to take input from owners. The board may also adjourn to a private executive session to discuss certain topics such as legal actions, contracts and personnel matters
While the board may delegate certain authority to officers, a managing agent, resident manager or committee, they cannot delegate their responsibility and can be held liable for the actions of others who carry out the board’s duties.
Staying informed is an important part of living in a home owners association. Attending or reading minutes from HOA board meetings and participating in the annual association meeting are the best ways to stay in the loop.
This is just a very brief overview, and just a portion of HOA owner rights and responsibilities. You can read a more comprehensive document from the Hawaii Department of Commerce and Consumer Affairs HERE.