Real Estate & Property Law

DOES A CONDO COMPLEX HAVE TO HAVE A BOARD?

The following is a question I received recently.

"Does a condo complex have to have a board? Why can't we just abolish the board and simply hire a property manager as apartment complexes do? Where can I find info about this concept?"

A COA (Condo Owners Association) - and the same applies to an HOA (Homeowners Association) can decide collectively that it wants to do away with a board but I would not recommend it. It would probably require an amendment of the Bylaws as I have not seen any that do not provide for a board. I have seen the chaos when there is a lack of strong leadership in any community. Take the chaos times ten if there is no board.

There are exceptions of course, in some smaller communities, where the owners have taken it upon themselve to manage the COA. In that case, the owners are essentially acting as the Board, collectively. The Bylaws can be amended to provide that all owners are board members. Again, I have a hard time recommending that simply because I have seen the chaos and fighting when there is no strong and decisive leadership. In any COA that is working, that is what you will find, strong and decisive leadership with the capacity to gain consensus.

A COA can hire a manager and pass on much of the daily duty type of stuff, but it cannot pass on the liability for errors and so if a board or COA hires a manager and tells them to "run with it" without providing any guidance or oversight, that, too, can lead to problems.

That said, many COAs and HOAs are experiencing difficulty in getting anyone to serve. If unmanaged or self-managed, it might be easier to get board members to serve if there is an intermediary doing the research, learning the lay of the land, and advising the Board on the proper way to manage the HOA, and running interference with (or providing a buffer from, depending on whether you are a "half empty" or "half full kind" of thinker) the deadbeats, rules violators, etc.

I also would caution any COA or HOA that lets itself cross the line trying to be like an apartment. Landlords generally carry more risk of liability for what happens in any of the units than an HOA Board.

What is needed is some kind of reasonable leadership, and/or some money to pay for a manager. And that will have to come from the membership.

But thanks for sharing your concerns. You are not alone.

Full post as published by California Condo & HOA Law on January 28, 2009 (boomark / email).