Board members should serve their homeowners association in an honest and steadfast manner. Not everyone has the same idea of how to do this, though, especially when conflicts and ethical dilemmas come up. This is why it is important to craft your own code of ethics for HOA board members.
In this article:
Creating a Code of Ethics for HOA Board Members
A code of ethics, also known as a code of conduct, is more than just a set of guidelines. The HOA board member code of conduct outlines the core principles you must honor and lets you know when you are outside the line of propriety. It gives you a standard that you can use to compare actions and behaviors against. After all, board members are only volunteers who sometimes feel unsure how to handle certain situations.
Beyond that, a code of ethics allows your board to maintain decorum as well as the appearance of it. Even the slightest hint of misconduct from the outside can drive an angry mob of homeowners. Abiding by a code of ethics will not only protect your board and the HOA, but it will also give homeowners peace of mind.
When writing your own HOA or condo board of directors code of ethics, consider including the following:
Commit Yourself to the HOA
In many ways, serving on the HOA board is just like a job. It requires your time and commitment. Thus, if you accept the position, you should be prepared to devote a portion of your schedule to the association. That means juggling board member duties with your other responsibilities, attending all the board meetings, and just generally prioritizing your service to the HOA above all else.
Follow Your Governing Documents and Applicable Laws
Board membership requires understanding and complying with your HOA’s governing documents, and your HOA board of directors code of conduct should reflect that. Make sure to always follow the provisions set forth within your bylaws and CC&Rs as well as any relevant federal and state laws.
Remember that other members of the community look to you for guidance. If you disregard the rules, then members will think they can do the same. As a board member, you don’t receive special treatment. In fact, there is more pressure on you to follow the rules because you should set a good example for everyone else.
Disclose and Avoid Conflicts of Interest
Conflicts of interest will inevitably arise within your HOA board. Let’s say your HOA is looking for a new landscaper and your cousin happens to run a landscaping business. To avoid this HOA board of directors conflict of interest, you should remove your cousin’s company from the list of candidates.
When should a HOA board member recuse themselves?
Sometimes, when you have very few options, you are forced to consider your cousin’s company. This usually happens to HOAs in small towns or cities where the options are few and far between. In that case, if you do allow your cousin’s company to join the race, you should disclose the conflict of interest and then recuse yourself from the discussion and subsequent vote. If you do recuse yourself, make sure the board meeting minutes reflect that.
As a board member, there are certain details that only you and your fellow board members are privy to. Therefore, your code of ethics should require you to maintain HOA board member confidentiality. That means you should never discuss these matters outside the executive session of your board meetings. Examples of confidential matters include litigation proceedings between the HOA and an owner, delinquent accounts, disciplinary hearings, etc.
Discrimination in any form is never acceptable, and your HOA board member code of ethics should make that clear. This includes discriminating against homeowners or board members because of their race, color, sex, religion, and other classes outlined within the federal Fair Housing Act and state Fair Housing laws.
Your homeowners association should promote inclusivity and shun any type of bias. This will allow you to cultivate a more harmonious environment. Any board member who exhibits any kind of discriminatory conduct must be immediately removed from the HOA board.
Exhibit Professional Behavior
Professionalism and respectfulness should be the norm for your HOA board. You must always treat your fellow homeowners and board members with utmost respect and courtesy. Many problems arise just out of the way people treat or speak to each other.
If you want to have a successful board, you must encourage open dialogue between your board and the community’s residents. This also extends to the people your association works with, including but not limited to your HOA manager, attorney, accountant, vendors, employees, and the like.
Always Work Within the HOA’s Structure
Many boards make the mistake of discussing association business outside of board meetings. They might do this to get more work done or in an attempt to exclude certain board members from the vote. But, this type of practice is completely inappropriate and even goes against the law in some states.
You should only talk about and vote on HOA matters during board meetings after giving sufficient notice and establishing a quorum. Additionally, the board works as a unit and should maintain a united front even if not everyone agrees with the decision that ultimately passes.
Select Contractors According to a Standard
Your HOA will need to hire professional contractors to perform various services in the community. To avoid giving the impression of dishonesty or corruption, your board should follow a standard procedure for the contractor selection process. That means obtaining competitive bids, comparing fee structures, and doing your due diligence. Remember that you are bound by your code of ethics for HOA board members as well as your governing documents.
Homeowners association management is not a dictatorship. You might be a board member, but that does not mean you can disregard the opinions of other members of your community. In fact, seeking input from homeowners is one of the best ways you can successfully run the HOA and keep everyone happy.
Additionally, it is imperative that you communicate the HOA board code of ethics with all homeowners. In doing so, you are showing them that you value and practice transparency and accountability. This, in turn, will foster trust between the board and its constituents.
Sample HOA Code of Ethics
No two associations are made equal, so your code of ethics may not consist of similar ethical standards as your neighboring HOA’s. Although such codes may differ in language, they should contain the same basic core principles. Below is an example of a code of ethics for HOA board members.
Board members must:
- Move within the scope of their authority as determined by the law and the association’s governing documents.
- Always endeavor to serve the association’s best interests and put their own personal interests aside.
- Carry out their responsibilities with impartiality.
- Make decisions for the association using sound judgment and due diligence.
- Disclose any potential conflicts or interest and recuse themselves from the discussion and vote in case one exists.
- Allow community members the chance to voice their opinions on association matters.
- Always support the decisions made as a board even if they do not necessarily agree with them.
- Hold open, honest, and fair elections.
Board members must not:
- Support or promote any activity, action, or behavior that breaches the law or other regulatory requirement.
- Disclose confidential information to any party outside of the board unless given authorization to do so.
- Share to any third party any discussions or decisions made in the executive session of board meetings.
- Reveal personal information about any homeowner, resident, or employee.
- Use association funds for personal use without authorization.
- Exploit their position as a board member for personal gain.
- Directly or indirectly accept gifts from members of the community, suppliers, or contractors.
- Misreport or conceal facts concerning the association.
- Threaten, intimidate, or harass any board member, homeowner, resident, contractor, or employee.
- Make any promises to a bidder or contractor.
A Better Community for All
Every HOA community should have a code of ethics for HOA board members to follow. This ensures that board members will act with good intentions, in all honesty, and within the association’s best interests. It also helps eliminate or reduce any trust issues or suspicions that homeowners may have about your board.
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