I have, on rare instances, seen By-Law provisions that allow the appointment of officers who are not Board Members. Also, on rare occasions, I have seen By-Laws that allow spouses of Owners to run for the Board. Both are very unusual. Such provisions are problematic, however, because the Condominium Act speaks in terms of meetings of “members”, which would not include non-owners. This creates the anomaly that a person could be elected to serve on the Board, but would not be able to attend the meeting at which he/she is elected. In addition, it creates the anomaly of a Board member voting on the budget, who would not be responsible for contributing to it.
Robert C. Griffin, Esq.
Griffin Alexander, P.C.
309 Fellowship Road
East Gate Center, Suite 200
Mount Laurel, NJ 08054
Often, a set of by-laws will provide that the initial board members do not have to be owners within the community because developer appointed board members usually do not reside in the community. Instead, they are usually affiliated with the developmental entity through employment or marriage, not, though, as residents within the community.
After the developer appointed board members have been replaced, though, by a member elected, as opposed to a developer appointed, board, most sets of by-laws that I have reviewed will require that only owners are permitted to be board members.
BNC Bank Corporate Center, Suite 300
3751 Robert M. Grissom Parkway
Myrtle Beach, SC 29577
While it is more common for members of the board of directors for a homeowners association to be owners within the community, it is not unusual for them to be non-owners either. It is most common for the Bylaws to either say nothing about who can serve on the board or to say something along the lines of (1) “board members must be residents of the community” or (2) “board members need not be members of the association.” Each of these variations results in a different eligibility to be on the board. In the first example, anybody who lives in the community can be a board member. In the second example, board membership is not limited to only “members” of the homeowners association, usually defined as a property owner. Getting back to the original question here, if a community is looking to limit board membership to only property owners then the natural result will be to reduce the pool of potential board members. Given the apathy that exists in many communities that might not be the result you are looking for. The obvious selling point in limiting board members to only owners is to require them to have some sort of vested interest. However, even this requirement does not necessarily mean that the owner will live in the community, which is often what community members feel is important to representing their interests. I have seen excellent board members who do not live in the community and equally excellent board members who live in the community but are not owners. At the end of the day, familiarity with the community’s documents, commitment to enforcing the community restrictions, treating all homeowners equally, and willingness to listen and empathize with homeowners are all probably more important characteristics in a potential board member than whether they own property in the community.
David C. Wilson
Black, Slaughter & Black , P.A.
1927 S. Tryon St., Suite 100
Charlotte, NC 28203
It is not unusual for non-resident co-owners to be eligible for board membership. That is because the initial bylaws that were drafted by the developer who envisioned having non-residents on the board to work with the developer’s scheme. The developer sees himself on the board, maybe his construction manager or maybe his spouse or mother. None of these people would likely be residents.
This scheme loses relevance after control of the board passes to the residents. The status of board members assumes an evident division between residents and non-residents. The non-residents may be criticized on a general level because “they don’t live here and don’t know what is going on” or “they just don’t care about much except enhancing their profits.” If the resident co-owners have a large enough block to call the tune on this issue, they may see to the passage of an amendment to the bylaws that will exclude non-resident co-owners from board membership. It is not unusual to see such a measure proposed when an association works on amending its bylaws.
Zelmanski, Danner & Fioritto, PLLC
Attorneys at Law
44670 Ann Arbor Road, Suite 170
Plymouth, Michigan 48170
(734) 459-0062 Fax: (734) 459-5313
Yes, it would be accurate to say that it is unusual for Board members not to be unit owners. However, I have a few associations that have been discussing a amendment to their governing documents to permit and encourage one or two independent and qualified professionals who are not unit owners to serve on the association Board (either as elected representatives or as appointed professionals). Specifically, these associations hope to the “test the waters” of having an independent Attorney, CPA/Banker, Architect/Engineer or other related professional on their Board because these individuals may be less inclined to be emotionally or politically influenced on business matters and therefore perhaps able to see things more objectively (or from a different perspective) than unit owners who might be influenced by their own financial situation and/or more willing to make exceptions to rules/protocols or more likely to make decisions that benefit their neighbors or personal friends. The independent non-owner Board member(s) would be paid a stipend for their service and their Board term would be the same as any other Board member, i.e. serving either one, two or three years on that governing body. Whether the association has a five (5) member Board or a seven (7) member Board, the independent professional Board members would always represent a minority interest of the governing Board.
Ed Zehfuss, CPM/CMCA
President, Arnheim & Neely Inc.
Pittsburgh, PA | Philadelphia, PA | NY, NY
It is uncommon for non-unit owners to be allowed on the Board. Most governing documents are written such that unit owners are members of the Association, are empowered with voting rights, and are allowed to run for the Board.
Wilkin Management Group, Inc.
1655 Valley Road, Suite 300
Wayne, NJ 07470
Direct Tel: 201.824.4504
Office Tel: 201.560.0900
That is absolutely INACCURATE, and I am a case study to that point. My partner and I bought our unit in 1997 as new constructions and he was the sole owner. At that time the Board consisted of three members all selected by, and friends with the builder. Once all units were built and sold we had a transition study done which resulted in a $1 million plus cost to cure. Unfortunately, the Board was not pressing to get the work done and the clock was running. The general membership voted (almost unanimously) to remove the Board and install a new Board. I was one of those elected and my fellow Board members elected me president. Me and my Board immediately started putting pressure on the builder, mostly through the township, and managed to get the work done and saved the association tens of thousands of dollars in repair work and legal fees.
During the four years on the Board I joined CAI and subsequently started my own Management company. Over the last twenty years I have earned my CMCA, AMS, and PCAM. My ownership, or lack thereof, had nothing to do with my qualifications, abilities, or commitment to my community. Would you want me on your Board?
P.S. – we still live there
Somerset Management Group, LLC
1215 Livingston Ave Ste 306
North Brunswick, NJ 08902-3834
Yes. The majority of Associations require Board members to be owners.
Sara A. Austin
Austin Law Firm LLC
226 E. Market St.
York, PA 17403
It’s quite common for By-laws to include that provision. It’s usually intended to avoid arguments as to whether the spouse or child of a homeowner, the president of an LLC or Trustee of a trust homeowner, or a sponsor employee is eligible to serve. Despite how broadly the provision is written, though, it would be highly unusual for someone who does not have an interest in the Association to run for the Board, and even odder if the community decided to elect him. So I would not expend Board capital to amend this provision unless it were part of a much more important effort.
Smith Buss & Jacobs LLP
733 Yonkers Ave
Yonkers, NY 10704-2635
(212) 688-2400 ext 4102
Before making a statement that nonresidents serving on the board is not typical, I would use some information data and statistics from Cai regarding the percentage of board members who are owners.
I would also state that unless there is a significant reason for a non-owner to serve on the board , such as a particularly complicated financial issue facing the board or a particularly contentious legal matter, having a non member service, It is definitely less desirable than having an owner as a board member.
Typically having owners as board members and encouraging resident owners to serve on the board provides a more participatory environment. In addition owners have more of a base of information about the community then non-owners.
Therefore , a full explanation to members about why it is not the preferred procedure to encourage that non-owners be seated on board.
In in summary making a statement that typically non owners do not serve on boards except in specific situations, it is certainly valid noting that in some communities the owners do not volunteer to be on the board and asking a manager accountant or attorney to serve may be appropriate options.
Regency Management Group, LLC
605 Candlewood Commons
Howell, NJ 07731-2173
It’s very unusual for non owners to be Board Members. Not sure what type of community you are but I have only seen this in Coops. Not sure why a non owner would want to serve on a Board as they really have no interest. I am sure you will get the owners consent to change this bylaw as they wouldn’t want someone without interest in the community make decisions for them.
Spinnaker Management, LLC
3104 State Route 208
Wallkill, NY 12589-4432
It’s not unusual, but it is certainly a small minority
Thrasher Buschmann & Voelkel, P.C.
151 N Delaware St #1900
Indianapolis, IN 46204
Yes. It is very unusual. In my 30 years of hoa experience, I have never had
a non-owner be a board member.
However, we have seen homeowner interest in being a board member plummet
dramatically. Therefore, I would leave that language in your documents as a
Acri Realty, Inc.
290 Perry Highway
Pgh, PA 15229
It is correct for you to advise your owners that it is unusual for non-owner/members to serve as board members in a community association. Most community association by-laws are written with the requirement that to qualify to serve on the board, an individual must be an owner/member of the association. However, a review of relevant law in New Jersey finds that there is no requirement that community association Board members must be owners and/or members of the association.
The Planned Real Estate Development Full Disclosure Act (“PREDFDA”) at N.J.A.C. 5:26-8.3(b) provides, that “[t]he members of the executive board appointed by the developer shall be liable as fiduciaries to the owners for their acts or omissions.” This provision contemplates non-owner/members will be appointed by the developer to the Board. The Radburn Act signed into law in July of 2017, amended and clarified PREDFDA to make clear that all unit owners are members of the Association and have the right to run for the Board (so long as they are in good standing), but did not restrict board qualifications to owner/members.
It is important to note that there may be some circumstances where having non-owner/members eligible to run for the Board could be helpful. Quite often community associations experience difficulty finding owner/members to serve on their Boards. Having the option available to elect a non-owner/member may expand the pool of candidates for election. An Association should think through this type of by-law change and review its history to see if apathy among its owner/members have made it difficult in the past to fill Board seats. If it has, then you may not want to change this provision in your by-laws to leave open the possibility of electing a non-owner/member. However, practically speaking, in my experience it is very rare for communities that allow for non-owner/members to serve on the Board to find anyone interested from that pool of candidates since most by-laws also prohibit Board members from receiving compensation for their services. Therefore, making such a change may not negatively effect your community.
Arnold J. Calabrese
Becker & Poliakoff
1776 on the Green
67 Park Place, Suite 702
Morristown, NJ 07960