Real Estate & Property Law

Who Appoints Committees in HOAs & Condos & How Much Power Do They Get?

Who appoints committees in an HOA or Condo Association? How much authority do they have - and can they spend association funds?

I get asked these questions in various emails and have decided to answer the questions all in one. The authority for committees comes from the governing documents - first, and then if there is not anything in there, the law can be of help if the HOA or Condo Association is incorporated (and most in California are incorporated).

So, first, take a look at the governing documents of your association. The Bylaws are the most likely place to find authority on appointing committees. Some say committees can be appointed by the President and others might say it takes two or more directors, or a majority of the board to appoint a committee. Some documents even set up structure for specific committees; others are quite general.

If the documents do not say how committees get appointed, and if the HOA or Condo Association is incorporated, then California Corporations Code Section 7212 applies and it says:

"The board may, by resolution adopted by a majority of the number of directors then in office, provided that a quorum is present, create one or more committees, each consisting of two or more directors, to serve at the pleasure of the board. Appointments to such committees shall be by a majority vote of the directors then in office, unless the articles or bylaws require a majority vote of the number of directors authorized in the articles or bylaws. The bylaws may authorize one or more committees, each consisting of two or more directors, and may provide that a specified officer or officers who are also directors of the corporation shall be a member or members of such committee or committees. The board may appoint one or more directors as alternate members of any committee, who may replace any absent member at any meeting of the committee. "

As to the authority of the committee, again, one first has to look to the HOA or Condo documents because they generally control. Absent any language, the law says:

"Any such committee, to the extent provided in the resolution of the board or in the bylaws, shall have all the authority of the board, except with respect to:
(1) The approval of any action for which this part also requires approval of the members (Section 5034) or approval of a majority of all members (Section 5033).
(2) The filling of vacancies on the board or in any committee which has the authority of the board.
(3) The fixing of compensation of the directors for serving on the board or on any committee.
(4) The amendment or repeal of bylaws or the adoption of new bylaws.
(5) The amendment or repeal of any resolution of the board which by its express terms is not so amendable or repealable.
(6) The appointment of committees of the board or the members thereof.
(7) The expenditure of corporate funds to support a nominee for director after there are more people nominated for director than can be elected.
(8) With respect to any assets held in charitable trust, the approval of any self-dealing transaction except as provided in paragraph (3) of subdivision (d) of Section 5233."

But wait! There is a cavaet in the law. See Section (b) of 7212:

"(b) Subdivision (a) shall not apply to any committee which does not exercise the authority of the board."

What the heck does that mean? It means some committees are charged with carrying out tasks which would otherwise be accomplished by the board, such as finding association vendors, getting estimates or bids for work, reviewing architectural applications, etc. If the committee is going to be charged with some board tasks, it is limited per the language in the statute in what it can be authorized to do.

What about a social planning committee, a newsletter committee, a finance committee, etc.?

The Board should set out parameters in a written resolution for the committee. It may have authorization to commit some association funds; however, it is usually best if the requisitions from the committee come through proper channels so no one but already authorized personnel or board members are able to sign the checks.

Before I would give any opinion related to the power to appoint and authority of any specific committees, I would want to review the documents of the HOA or Condo Association, and if no guidance was there I would turn to the Corporations Code Section which has some guidance on appointing committees (7212). This law can be found at the state website at www.ca.gov.

I have done other blogs on committees to approve minutes, etc. And, there are some Primers available that discuss committees, appointments, minutes, etc. in much more detail at the California Condo Guru Site on the publications page and in the Webstore.

Full post as published by California Condo & HOA Law on August 18, 2009 (boomark / email).