I’m often asked for a quick 5 minute summary of what board members need to know to stay out of trouble while they are serving on their board. Here is a quick overview of a board member’s responsibilities.
1. Run the association as a business (for example, use licensed, bonded and insured vendors).
2. Follow your association’s documents and the law (you will need to be familiar with Arizona and federal laws).
3. When making decisions as a board member, always act in the best interests of the association (use care in your decision making and rely on your trusted advisers, don’t personally profit from your time on the board and keep confidential information obtained in executive session confidential).
4. Be transparent and provide open communication to the membership via newsletter, bulletin board, website, etc. Provide meeting minutes or Zoom videos for those owners who cannot attend meetings. In my experience, associations that communicate the best are successful and have the fewest problems.
5. Prepare an annual budget and adhere to the budget. Having a reserve study completed and adequate funds to fund the reserve if the board chooses, or if required by the documents.
6. Have financial records audited or reviewed yearly as stated in the governing documents and pursuant to Arizona law, A.R.S. 33-1810/A.R.S. 33-1243.
7. Protect the association and board by having the required insurances in adequate amount.
8. Maintain active corporate status by paying the annual renewal fee and filing the required annual report with the Arizona Corporation Commission.
9. Conduct an Annual Meeting once a year. Conduct regular board meetings in compliance with the Arizona Open Meeting Law for HOAs and condos.
10. File state and federal taxes annually (Due March 15, 2021 for businesses), and, if a planned community, pay property taxes for common areas in a timely manner.
Our firm’s website at www.mulcahylawfirm.com has a wealth of free information for Board Members, Owners and managers – over 60 Cheat Sheets, virtual seminar listings and a variety of videos on topics that help Boards/Associations run more effectively. Don’t forget to “like” us on Facebook where we are constantly sharing valuable information.
Please reach out to our law firm at firstname.lastname@example.org if your board/association need advice or assistance in the future. We are here for you and we want to help you and your association!