Not enforcing rules may create liability
Question: Our association must make rules and regulations to be friendly neighbors, but these rules must be enforced.
As an elected board member, part of my fiduciary duty is to safeguard and enhance property values. It is also my duty to file liens on the homes of owners who don’t pay their dues.
Homeowners complain that board members don’t get fines. The reason for that is they haven’t broken any rules, not that they are getting special treatment.
Right now our appointed committees are making some bad decisions, and if the board doesn’t support their decisions, the committees begin to feel that their jobs are unimportant and irrelevant. If they disband, it makes my job harder.
How can I continue to enhance the property values and enforce the responsibilities of the homeowners if the other board members aren’t cooperating in the effort?
Answer: By law, the common interest development is managed by the association. The association is managed by the board. Board members are charged with fulfilling their fiduciary duties to the board, the association and the titleholders.
The association is responsible for the repair, replacement and maintenance of the common areas. The association and individual board members are not responsible for enhancing the owners’ property values. This protects board members in case property values go down and a homeowner decides the board was at fault.
Directors are fiduciaries for the titleholders who have entrusted their money to the board. Nowhere in the Davis-Stirling Act does it state a board must create rules and regulations, only that if they do, they must be circulated to all the homeowners.
A change in the law, which was effective Jan. 1, gives homeowners the right to call a special meeting to overturn rules and regulations that are not to their liking. For every rule there must be enforcement. Making rules and enforcing them does not make for friendly neighbors, but it can make for liabilities and lawsuits.
Selective enforcement of rules results in dissension, conflicting factions and waste of association funds. Such enforcement may also be a breach of the board member’s duty of loyalty and trust.
Knowingly supporting committees that make bad decisions ignores the duty owed to titleholders to act reasonably. Unreasonable actions, such as not overturning bad committee decisions, have been the basis for director and association liability.
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