POA board members are faced with interesting challenges. They are unpaid volunteers who, for most, give up their time with the goal to better their community for everyone. These thankless roles can often feel like fighting a war any time there is a meeting or action that needs to be taken. However, by letting the Texas law be your guide, board members can master the art of being a POA board member.
“In the midst of chaos, there is also opportunity”
Organized chaos is what many board members face. Managing budgets from tens of thousands to millions of dollars leads to many opinions from those in the community on how the money is spent. Inviting community members to be a part of some of the processes through committees can create opportunities to foster more participation and understanding into operations.
In the case of the ACC committee, Sec. 209.00506 of the Texas Property Code, requires single-family association boards to seek out community members that are not board members to form the committee. For other committees (landscaping, events, etc.), the board is better able to inform the committee members of the direction the board would like to see the committee take.
Along with committees, the board may choose to hold workshops and invite members of the community to attend. The workshops can focus on particular items, like next year’s budget, and the community can listen to the board’s thought process on items, how it is determining the portion of the assessment being contributed to those items and more.
“The wise board member avoids the battle.”
Board members often deal with sensitive personal information, conflict from residents across the community or confidential contract negotiations. Whether it is potentially something positive, such as an ACC appeal or a vendor contract negotiation, or negative, such as delinquent assessments or neighbor-to-neighbor disputes that potentially arise to deed restriction violations, the law provides a forum for this discussion to be held in private during a board meeting.
Sec.209.0051 outlines the procedure for board meetings and carves out the executive session. This forum allows the board to discuss confidential topics and owner related issues most do not want discussed during the open session of a board meeting.
The sessions are not privileged or confidential, so no minutes should be taken, and no decisions can be made.
The executive session subjects should be limited to:
- Personnel, pending or threatened litigation
- Contract negotiations
- Enforcement actions
- Confidential attorney communications
- Individual owner issues
When coming back into open session, the board should summarize the executive session, which is placed in the minutes. This summary should be in general terms, include a general explanation of expenditures approved and not breach the privacy, privilege or confidentiality of the vendors, association, or owners.
The executive session is not a time for the board to come together and gossip about the community. The executive session should be used as a time to openly discuss the items on the agenda and not worry about potential conflicts or disagreements amongst the board disrupting the community. However, board members should not approach the executive session as their opportunity to openly attack other board members.
“Who wishes to fight must first count the cost.”
Conflict among board members can have a drastically negative effect on a POA. The disagreements can lead to hurt feelings and a sense that a director or directors are not doing their job properly amongst the board and the community. But not all conflicts should result in the removal of a director. However, sometimes the conflict becomes untenable and the board or POA members are forced to take action.
A director should only be removed if they are:
- Breaching fiduciary duty
- Violating the POA’s governing documents
- Using his/her position on the Board for their own personal interests
- Neglecting their duties
The removal process is outlined in Sec. 22.211 of the Texas Business Organizations Code. Sec. 22.211 advises boards to first look to the procedure outlined by the POA’s certificate of formation or bylaws.
If there is no procedure, the POA will need to hold a vote of the membership and achieve an affirmative vote for removal equal to what is required to elect the board member to their role. The vote is held like a typical board election and must be properly noticed using the procedures outlined by Chapter 209.
Becoming a POA board member is not for the faint of heart, but every decision should not feel like you have gone 12 rounds with Muhammad Ali. Board members should focus on accomplishing their duties and trust their management teams and association lawyers when conflict arises and not try to do it all on their own.
