“Board Member Tidbits” – FCAP Managers Report

“Board Member Tidbits” – FCAP Managers Report

For this article, I thought I would jump around and discuss various items regarding board members, board meetings and a few association operational issues that keep popping up as questions and issues.

Board member certification.

Let’s start with the board member certification requirement, which applies to condominiums, homeowner associations and cooperative association board members.

  • Within 90 days after being elected or appointed to the board, the board member must certify in writing to the secretary that he or she has read and understands the governing documents and will faithfully discharge his or her fiduciary responsibility.
  • In lieu of this certification, a board member may submit certification of satisfactory completion of the education curriculum administered by a division-approved condominium educational provider taken within one (1) year before or 90 days after being elected or appointed.
  • The certification is valid for as long as the board member continuously serves on the board.
  • Associations must maintain the certificates for five years after the election.  In a condominium association, the association must maintain the certificates for five years after the election or for the duration of the board member’s term, whichever is longer.
  • Failure to either certify in writing to the secretary or submit certification of satisfactory completion of the education curriculum means that the director is suspended from service on the board until he or she complies.
  • The board may temporarily fill the vacancy during the period of suspension.
  • Any vacancy created based on a director being suspended may be filled according to law until the end of the period of the suspension or the end of the director’s term of office, whichever occurs first.
  • Once the director complies with the certification requirements, he or she is back on the board, and the replacement director is no longer on the board.

Basic Board Meeting Questions

  • Do members have the right to speak at board meetings?
    Yes, on agenda items.
  • Do non-members, such as tenants or guests, have the right to speak at, or even attend, board meetings?
    Unless the right is specifically in your governing documents, no.  However, the association must apply this uniformly, and sometimes that is not a simple as it sounds.  For example, if only one spouse is on the deed, that spouse is the “member”.  The other spouse is technically not a “member,” unless your documents specifically provide otherwise.  In such a scenario, the member spouse may be allowed to attend and speak, while the non-member spouse may not.  If the association does not allow non-members to participate in meetings, that would include spouses who are not on the deed.
  • Can the association promulgate rules on owners’ participation at board meetings?
    Yes, and I strongly encourage them to do so.  Rules can cover such things as how long a member may speak on agenda items, how many times a member may speak on one item, directions regarding audio and video recordings so as to not disturb or disrupt the conduct of the meeting, etc.
  • Can a member discuss items at a board meeting that are not on the agenda?
    Without the board’s permission, generally no.  Some board have what is referred to as good and welfare, open forum, etc., where members are given the opportunity to address items that are not on the agenda with the board.  If the board has such open forums, it is important that all board members be present to give legitimacy to such interactions.
  • Can the board remove a board member from the board?
    No.  Only the membership can remove a board member from the board.  The board can remove a board member from an officer position at any time at a duly noticed meeting where the item is on the agenda.  Board members can always reapportion board officer positions at a duly noticed meeting where the item is on the agenda.  There may be an exception if your association members vote directly for the officers of the association, but that is extremely rare.  In the vast majority of cases, the board members vote for the board officers.

Basic Reserve Questions

  • Are condominium and cooperative reserves required to be fully funded?
    Yes, unless the membership has properly waived funding of reserves.
  • Can required reserves be partially waived?  For example, can the membership vote to only fund 25 percent, or 50 percent, of the required reserves?
    Yes.
  • Can the board use reserve funds for other than intended purposes?  For example, if there is only $50,000 in the roof reserve, the roof needs to be replaced now, and the cost of the roof replacement is $100,000, can the board borrow $50,000 from other reserve items to pay for the roof repairs?
    If your reserves are set up utilizing the straight-line reserve method, absolutely not.  Only the members can vote to use reserves for other than intended purposes, which must occur at a duly noticed meeting where the item is on the agenda.  If your reserves are set up under the pooled method, while you still have individual categories and allocations, all funds in the pool can be used to pay for any reserve item.  Pooled reserves can be complicated so an association should confer with its accountant before setting up pooled reserves.
  • Can the board borrow from the reserves to pay for unanticipated operating expenses or operating deficits?
    Absolutely not.  This would fall under the same scenario as above, where the reserves are being utilized for other than intended purposes.
  • Is the association required to give members the option to waive reserves?
    No.  Whether or not members are given the option to waive reserves is up to the board.
  • Can the board convert regular (straight-line) reserves into a pooled reserve?
    No. Existing straight-line reserves can only be converted into pooled reserves upon a vote of the membership.  The board can decide on its own to begin pooling reserves moving forward; in that case, the existing straight-line reserves remain in their straight-line configuration, while future reserves would go into the pool.  Generally, when a board is converting to pooled reserves, the membership will vote on whether or not to convert the existing reserves to pooled reserves so there is only one type of reserves.

To read the original  FCAP Managers Report article, please click here.

Howard Perl is Board Certified in Condominium & Planned Development Law, is a certified facilitator of continuing education for Community Association Managers, and serves as a Shareholder at Becker & Poliakoff. To learn more about Howard, please click here.