Florida Community Association Board Basics: A Practical Guide for New Directors, Part I

Congratulations! You’ve just been elected or appointed to your community association’s board of directors. Maybe you volunteered because you wanted to help improve the neighborhood. Maybe you were “voluntold” because nobody else raised a hand. Either way, serving on a Florida association board is a real responsibility, and understanding the basics can help keep the role from taking over your life.

Whether you serve on a homeowners’ association (“HOA,” governed by Chapter 720 of the Florida Statutes) or a condominium association (governed by Chapter 718), you are now helping run a Florida corporation. The association may not be as large as some corporations you can think of, but it still has a corporate structure, legal obligations, records, budgets, and a board of directors. Unlike a for-profit corporation, however, your association is generally organized as a not-for-profit corporation, meaning its purpose is not to generate profit for shareholders. As a director, you are no longer just a property owner; you are now a decision-maker with legal duties and responsibilities.

What does a Florida association director actually do?

Before discussing what a director does, it helps to understand how a director is expected to act. A director owes a fiduciary duty to the association, which means the director must act in good faith, use the care and judgment of an ordinarily prudent person, and put the association’s financial and operational interests ahead of personal preferences. The association’s best interest is not always the same as the best interest of one owner, one group of owners, or even the director personally. Sometimes, a director may need to support a decision that is reasonable, prudent, and appropriate for the association even if it is not the director’s preferred outcome.

That is the standard of care directors must use when carrying out their duties. But what are those duties? In general, the board of directors makes decisions by voting on how to run the association. In the broadest sense, a director’s job is to cast informed votes on corporate issues affecting the community. A director does not always have to make the “right” decision in hindsight, so long as the director was informed and voted in what they reasonably believed to be the association’s best interests at the time.

Some of the issues a director will be asked to consider include:

1. Financial Issues: The board, through its directors, must approve annual budgets and is ultimately responsible for collecting assessments, maintaining reserve accounts, and reviewing monthly account statements.
2. Maintenance: The board is responsible for ensuring that the common areas or common elements of the association are maintained in accordance with Florida law and the association’s own governing documents. This could include repairs or maintenance for the common pools, roofs, roadways, clubhouses, etc. 
3. Enforcement: Enforcing the restrictions and rules within the community can be one of the most challenging parts of board service. The board is ultimately responsible for enforcing community restrictions, architectural guidelines, rental and sale approval requirements, and any other activity outlined in the association’s governing documents. Those restrictions must be enforced fairly, consistently, and without prejudice or favoritism. 
4. Contracting: One of the board’s most important responsibilities is soliciting, reviewing, and approving vendor contracts. When selecting a landscaper, internet provider, road maintenance company, community association manager (“CAM”), attorney, or any other sort of vendor, the board is ultimately responsible for choosing appropriate vendors and ensuring the related agreements are properly negotiated, approved, executed, and signed. 

Any one of those tasks, by itself, could be overwhelming for any director or board. Thankfully, boards can use CAMs, lawyers, accountants, engineers, or other qualified professionals to assist with their decision-making and execution of their duties. CAMs, lawyers, and accountants are three of the most useful professionals for a board to have on speed dial, as they can assist with some of the more important, and often emergent, issues a board can face. 

Part II  of this ongoing series to assist new directors will be coming soon and will discuss the various “governing documents” that each association has, the purpose of each, and what a new director needs to know from the outset regarding each.