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Community Leadership Roles: Directors, Officers, Committees, Managers and the Professionals

What each role in a community association is actually for, whom the attorney represents, where the roles blur, and how a board routes a question to the right person.

A community association runs on six or seven distinct roles, and almost every recurring dispute inside a board comes from two of them being confused. Directors decide. Officers execute. Committees advise unless the board says otherwise. The manager implements. The attorney, the accountant, the engineer and the insurance agent each answer one kind of question and should not be asked the others. Here is what each role actually is, and how to route a question to the right one.

Directors: the decision-makers, collectively

The board of administration, or board of directors, holds the association's governing power. Directors exercise it together, by majority vote, at a properly noticed meeting. An individual director has no operational authority and cannot direct a vendor, promise an owner an outcome, or commit association funds.

Directors carry a fiduciary relationship to the owners. Section 718.111(1)(a) states it for condominiums and § 720.303(1) for homeowners associations, both applying the standard in § 617.0830: act in good faith, with the care an ordinary prudent person in a like position would reasonably believe appropriate under similar circumstances, in a manner reasonably believed to be in the association's best interests.

What a director owes in practice is attention and independence. Read the packet. Ask before voting. Disclose a conflict rather than sitting quietly through it. And accept the outcome of a vote you lost, because a board that relitigates every decision in the parking lot does not function.

Officers: execution, not authority

A condominium board has a president, a secretary and a treasurer, who perform the duties customarily performed by corporate officers. § 718.112(2)(b). The critical provision is § 617.0841: each officer has the authority and performs the duties set forth in the bylaws, or, consistent with the bylaws, the duties prescribed by the board. That is the entire grant. An officer's title carries no implied power to decide anything.

  • President. Presides at meetings, signs instruments the board has authorized, and acts as the board's point of contact with the manager. The president does not hire, fire, settle, waive or spend without a board vote or a recorded delegation.
  • Vice president. Whatever the bylaws assign, usually acting in the president's absence.
  • Secretary. Custodian of the official records, responsible for notices and for minutes, and the person to whom director certifications are filed.
  • Treasurer. Oversees financial records and reporting, works with the accountant, and presents the financial position to the board. The treasurer does not approve expenditures alone unless the board has delegated a stated dollar authority.

Delegation is legitimate and should be explicit. A board can vote to authorize the president to execute an approved contract, or the treasurer to approve change orders up to a stated amount. State the limit in the motion and record it in the minutes. An unwritten understanding that an officer "handles it" is not a delegation and offers no protection to anyone.

Committees: advisory by default

A committee has only the authority the governing documents or the board gives it. Most committees are advisory: they study, gather bids, interview candidates and recommend. The board decides.

Two committees are different because the statute treats them differently. A fining and suspension committee must have at least three members appointed by the board who are not officers, directors or employees, or the spouse, parent, child, brother or sister of an officer, director or employee. § 718.303(3)(b); § 720.305(2)(b). That committee does not decide guilt; it confirms or rejects the fine or suspension the board proposed, and if it rejects, the fine cannot be imposed.

Committees that take final action on behalf of the association, or that make recommendations to the board regarding the budget, are generally subject to the same notice and open-meeting requirements as the board itself. A committee that has drifted into deciding things has usually done so without a grant, and the fix is a written charter. Our guides on committee authority and committee charters cover how to write one.

The manager and the management company

A licensed community association manager implements board decisions and runs the association day to day: notices, packets, vendor coordination, work orders, owner correspondence, collections administration, and financial record maintenance. The management company is the manager's employer and is separately licensed as a firm.

Section 468.4334(1) sets the standard a manager or firm owes the association: discharge duties loyally, skillfully and diligently, dealing honestly and fairly, in good faith, with care and full disclosure to the community association, accounting for all funds, and not charging unreasonable or excessive fees.

Section 468.4335 governs conflicts. A manager or firm must disclose any activity that may reasonably be construed as a conflict of interest, including a proposal to provide services beyond the management contract or a financial interest in a business transacting with the association, and the proposed activity must appear on the agenda of the next board meeting with the related contracts and documents attached. Where a manager solicits bids on the association's behalf, multiple bids are required for work exceeding $2,500. A violation makes the management contract voidable, and the association may terminate it owing only the reasonable value of services rendered, without a termination fee.

What a manager is not: a lawyer, a decision-maker, or the board's employer. A manager who says a proposed rule is unenforceable is offering a useful observation and not a legal opinion, and a board that treats it as one is relying on something the manager is not licensed to provide. Our checklist for reviewing the management agreement covers scope, fees, term, termination and what the firm may and may not do.

The association's attorney, and whom the attorney represents

The client is the association. Not the president who makes the calls, not the director who disagrees with the board, not the owner who is unhappy. Under Rule 4-1.13 of the Rules Regulating The Florida Bar, a lawyer retained by an organization represents the organization acting through its duly authorized constituents.

Several things follow that directors find counterintuitive.

  • Counsel takes direction from the board, as a body, not from individual directors. A single director cannot instruct the attorney to open a matter, and a board should decide who is authorized to contact counsel between meetings.
  • The privilege belongs to the association. Records protected by the lawyer-client privilege and attorney work product prepared in connection with litigation are exempt from owner inspection under § 718.111(12)(c)5.a., but that protection can be compromised if a director forwards the memo to owners or reads it into the record at an open meeting.
  • Counsel is not the director's personal lawyer. If a director's interests diverge from the association's, counsel cannot advise both, and the director may need separate representation.
  • Meetings with counsel about proposed or pending litigation may be closed. The exception is narrow. For a condominium the session must be with the association's attorney, must concern proposed or pending litigation, and must be held for the purpose of seeking or rendering legal advice. § 718.112(2)(c)5.a. The HOA provision is in similar terms. § 720.303(2)(a). A general strategy session with no lawyer in the room and no litigation in prospect does not qualify. Whether the board may vote in the closed portion is a question the statutes do not answer. Neither § 718.112(2)(c) nor § 720.303(2) contains any language about voting or taking action in a closed session, and neither mentions minutes of one. Nothing in them prohibits a vote. Practitioners differ, and some counsel prefer that the board reconvene and take the vote in the open portion so the action shows in the minutes. In our view that is a practice preference rather than a statutory requirement.

Used well, counsel is consulted before the decision. Used poorly, counsel is retained after the demand letter to defend a decision that a fifteen-minute call would have changed. Our note on when to call the association attorney gives the practical test, and our guide to confidentiality and privilege covers what a director may repeat.

The accountant, the engineer and the insurance agent

Three outside professionals answer three specific questions, and each is commonly asked the wrong one.

  • The accountant or CPA prepares the annual financial report at the level the association's revenue requires and files the tax return. For condominiums, § 718.111(13) sets the tiers: a report of cash receipts and expenditures below $150,000 in annual revenue, compiled statements from $150,000 to just under $300,000, reviewed statements from $300,000 to just under $500,000, and audited statements at $500,000 or more. The report must be prepared within 90 days after the fiscal year ends and delivered within 21 days of completion, and in no event later than 180 days after year end.
  • The engineer performs the milestone inspection under § 553.899, the structural integrity reserve study under § 718.112(2)(g), and the specifications and construction administration for major work. The engineer is also the right person to tell a board that a contractor's proposal is inadequate, which is worth far more than the fee.
  • The insurance agent places the coverage, explains what responds to what, and should produce a plain-language coverage summary annually. Ask the agent for the deductible in dollars, the valuation basis, and what is excluded.

The mistake to avoid is asking the wrong professional a question because that one is easiest to reach. An insurance agent's view of whether the association is responsible for a repair is not a substitute for reading the declaration. An engineer's opinion about whether a change is a material alteration is not a legal conclusion. Our guidance on engineering and construction contracts covers how the engineer's role fits alongside counsel's on a major project.

Where the roles blur, and what it costs

Four patterns account for most of the friction we see.

  1. The president who governs alone. Decisions get made between meetings, the board learns about them afterward, and the minutes do not reflect any of it. The cost appears when a decision is challenged and there is no record of the board ever making it.
  2. The manager who sets policy. A capable manager fills a vacuum an unengaged board leaves. The manager is then blamed for decisions the board never made and never documented. The cure is a board that decides and a manager who implements.
  3. The committee that decides. An architectural or covenants committee starts approving and denying applications on its own authority. If the documents give it that authority, fine. If not, every approval and denial is exposed.
  4. The director who calls counsel privately. Legal fees appear that the board did not authorize, and advice circulates that the board never received as a body. Decide at a meeting who may contact counsel and on what subjects.

Routing a question to the right person

Use the consequence of being wrong as the routing rule.

The questionRoute toWhy
Can we do this at all?The attorneyAuthority questions turn on the statute and the declaration, and a wrong answer produces an unenforceable action and fee-shifting exposure
How do we do it operationally?The managerImplementation, scheduling, notices, vendor coordination
Is the building safe, and what will the repair cost?The engineerStructural condition, scope and specifications
Are our numbers right?The accountantFinancial statements, reporting level, tax filings
Are we covered, and for how much?The insurance agentCoverage, limits, deductibles and exclusions
Should we approve this owner's application?The board, on the committee's recommendationThe decision is the board's unless the documents delegate it
An owner is threatening to sueThe attorney, immediatelyResponse timing, preservation obligations and privilege are all in play from the first letter

Put the routing rule in writing and have the board adopt it. A one-page policy saying who contacts counsel, who instructs vendors, what the manager decides without asking, and what comes to the board costs nothing and prevents most of what is described above.

Frequently Asked Questions About Association Roles

Does the association's attorney represent individual board members?

No. The client is the association as an entity, represented through its duly authorized constituents under Rule 4-1.13 of the Rules Regulating The Florida Bar. Counsel takes direction from the board as a body. A director whose personal interests diverge from the association's needs separate counsel, and communications a director assumes are private may not be.

Can our manager tell us whether a rule is enforceable?

A manager can flag a concern and should. A manager cannot render a legal opinion, and a board that relies on one has relied on something the manager is not licensed to provide. Treat a manager's observation as a reason to ask counsel, not as the answer.

What authority does the president have on their own?

Only what the bylaws give the office or the board delegates by motion, under § 617.0841. That usually means presiding at meetings and signing what the board has authorized. It does not include hiring, firing, settling, waiving a rule or spending association funds without a vote.

Who has to be on the fining committee?

At least three members appointed by the board who are not officers, directors or employees of the association, or the spouse, parent, child, brother or sister of an officer, director or employee. The committee confirms or rejects the fine or suspension the board proposed. If it rejects, the fine or suspension cannot be imposed.

Can a board member also serve as the association's manager?

It creates a conflict that the statutes and the licensing chapter both address, and it is a structure to run past counsel before it happens. At minimum the compensation arrangement must be disclosed and approved as a conflicted transaction, and a compensated director may fall outside the § 617.0834 liability shield.

Who should sign contracts for the association?

Whoever the board authorizes by motion, usually the president, after the board has approved the terms. Record the authorization in the minutes with the scope and dollar limit stated. A signature without a recorded authorization creates a problem in two directions at once.

Contact Hamilton Mikes

Hamilton Mikes helps boards in Lee, Collier and Charlotte Counties define the line between the board, the officers, the committees and the manager, and drafts the charters and policies that hold it. Call 239-594-7227 or visit our Corporate Governance page.

Statutes and authorities referenced

  • § 718.111(1)(a), Fla. Stat. (fiduciary relationship of officers and directors; s. 617.0830 standard)
  • § 718.111(12)(c)5.a., Fla. Stat. (lawyer-client privileged records and work product exempt from owner inspection)
  • § 718.111(13), Fla. Stat. (annual financial reporting tiers; 90 days to prepare, 21 days to deliver, 180 day outside date)
  • § 718.112(2)(a)1., Fla. Stat. (board composition; president, secretary and treasurer)
  • § 718.112(2)(c), Fla. Stat. (board and committee meetings; notice; closed attorney-client sessions)
  • § 718.112(2)(g), Fla. Stat. (structural integrity reserve study)
  • § 718.303(3)(b), Fla. Stat. (fining and suspension committee composition and function)
  • § 720.303(1), (2), Fla. Stat. (HOA fiduciary standard; board and committee meetings)
  • § 720.305(2)(b), Fla. Stat. (HOA fining and suspension committee composition; 14-day notice and hearing)
  • § 617.0830, Fla. Stat. (general standards for directors)
  • § 617.0834, Fla. Stat. (immunity of uncompensated officers and directors)
  • § 617.0841, Fla. Stat. (duties of officers)
  • § 468.4334(1), Fla. Stat. (community association manager professional standards)
  • § 468.4335, Fla. Stat. (community association manager conflicts of interest; agenda disclosure; multiple bids above $2,500; voidable contract)
  • § 553.899, Fla. Stat. (milestone inspections)
  • R. Regulating Fla. Bar 4-1.13 (organization as client)

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