Reader Questions - The CID Act and the Old HOA, Presidential Power

Dear Mr. Richardson,

I recently discovered your “HOA Homefront” column in the newspaper and find it very valuable.

Your mention of the Davis Stirling Act has had me reading it for days but has not answered my question of whether or not my HOA is bound by its terms. My HOA documents were created in the early ’70’s and have not been changed since at least 1983, if ever. However, my association on occasion refers to sections of the Civil Code incorporating the Davis-Stirling Act in their legal notices. Can the Board, who are otherwise not governed by this Act, voluntarily adopt this Act? If they want to, don’t they have to put it to a vote of the members as it definitely changes our current CC&Rs etc?

Your help is greatly appreciated. Sincerely,

T.G., Santa Ana

Dear T.G.,

Generally speaking, the first line of authority comes from your governing documents. However, the Davis-Stirling Common Interest Development Act (“CID Act”) controls on topics including board meeting procedure, member discipline process, reserve disclosures, and assessment collection, and so often overrides outdated documents. In other topics, the Act defers to your governing documents, and fills in the blanks when your documents do not adequately cover something. The law controls even upon associations established long before the Act’s first version (1985). If your documents are that old, chances are you need a lot of legal assistance to determine what the HOA is legally required to do.

Your association would benefit greatly from having its attorney help create an updated set of documents, reflecting current law and customized to the needs of your community.

Good luck, and thanks for your question,
Kelly

Dear Mr. Richardson,

I found your articles very interesting and informative. Thank you.

Although a non-volunteer President may have some greater authority than a volunteer President, it seems to me that the powers of the President of our association under our Bylaws has somewhat greater authority than your article contends, as follows:

President: “The President shall be the chief executive officer of the Association and shall, subject to the control of the Board, have general supervision, direction and control of the affairs of the Association. He … shall have the general powers and duties of management usually vested in the office of the President of a corporation…”

Are these above powers unusual for a non-profit mutual benefit corporation, or they contemplated in your discussion?

D.A., Long Beach

Dear D.A.,

It is difficult to comment upon your HOA bylaws without being able to review them in their entirety. However, note the key phrase there.. “subject to the control of the Board..”, which helps show that the President by itself only has what power the board allows. I often see this language in bylaws, which can lead a president to misunderstand the power (or lack of power). Often, bylaws or a board will delegate certain specific matters to the president, such as calling and chairing meetings, communicating with legal counsel, and the like. Board delegations should be very explicit and in the minutes of an open meeting.

HOAs (or CIDs as the law calls them) are non-profit mutual benefit corporations (if they are incorporated). The HOA president is not the “boss” but is the leader. There is a difference.

Thanks,
Kelly

Written by Kelly G. Richardson

Kelly G. Richardson Esq., CCAL, is a Fellow of the College of Community Association Lawyers and a Partner of Richardson | Ober | DeNichilo LLP, a California law firm known for community association advice. Submit questions to [email protected]. Past columns at www.hoahomefront.com. All rights reserved®.