Q: We are considering the purchase of a condominium but we do not understand the role of the association. How is the board of directors formed after all of the units are sold? Who enforces the rules? What happens if the board of directors fails to run the association fairly?
A: An association's legal documents set forth its responsibilities and guidelines for its operation.
The governing body, usually called the board of directors, is given the responsibility of upholding and enforcing the legal documents, including the declaration of covenants, conditions and restrictions (CC&Rs), the bylaws and the rules and regulations. The declaration gives the board specific powers and authority.
The board of directors is initially composed of people appointed by the developer of the new association. Even during the development phase, the board must conduct the business of the association in the best interests of the entire association and abide by the CC&Rs.
After the developer sells a majority of the units, or homes, to the new buyers, volunteer homeowners are elected to the board until the association is put under the control of owner volunteers who serve on the board and run the association.
The board has a duty to run the association according to the legal documents. If the board does not do so, the rest of the association members can petition for a recall election or wait for the next annual membership meeting and elect other directors who will be better representatives. I prefer the latter solution since recall elections cause a great deal of controversy and resentment.
When a board of directors flagrantly disregards the association's legal documents or laws, owners have the right to file legal action against the board. All boards should have directors' and officers' liability insurance to protect against lawsuits. However, most insurance carriers will not defend the board if the board action has been of a criminal nature or grossly negligent.
\o7 Hickenbottom is past president of the Greater Los Angeles chapter of the Community Associations Institute (CAI), a national nonprofit research and educational organization. She welcomes readers' questions, but cannot answer them individually. Readers can write to her in care of "Condo Q&A," Box 5068, Thousand Oaks, Calif. 91360.\f7