As a board member or a manager are you prepared to answer the question, “What entitles the association to do that?”  The variety of answers we have heard over the years is surprising and often wrong.  The most common wrong answer  is “we have always done it this way.” As association attorneys, that type of answer makes us cringe.  Why?  Because the answer implies that the association did not consult their governing documents to see if the action was allowed and there is the very real possibility that the association has been acting improperly for a long time.

When it comes to the association’s authority to take action, ignorance is not bliss.  Board members and managers must be aware of what the association can and cannot do.  Board members are not expected to know all the state, federal and local laws that may apply to their association, but they should understand the association’s governing documents.  Why?  Because you can bet that the owner who disputes the action taken by the association will go through the governing documents with a fine-tooth comb looking for ways to challenge the board’s action.  Understanding what  authority your association has under its governing documents can help avoid unnecessary disputes and attorneys’ fees. 

A cursory review of the governing documents is not that helpful.  We encourage managers and board members to review the documents with a purpose and highlight everywhere the words “shall” and “may” appear so that it is clear what the board and the association must do and what it has discretion to do. 

Once the board understands the association’s authority it should cite to that authority (governing documents, statutes, or rules) whenever it takes formal action.  Doing so not only confirms the board’s authority before it acts, it documents that authority for owners who might otherwise have been tempted challenge the board’s action.

Certainly, there are provisions in your governing documents that are subject to interpretation and reasonable minds can differ. 

However, a solid understanding of the authority granted and restrictions imposed by your governing documents can avoid a multitude of problems. 

Ultimately, the only time “we have always done it this way” is a permissible answer is when someone asks “Why do board resolutions always list the basis for the board’s authority?”