An association’s board of directors generally has the power to “delegate the management of the activities of the [association] to any person or persons, management company, or committee however composed, provided that the activities and affairs of the [association] shall be managed and all corporate powers shall be exercised under the ultimate direction of the board.” (Corp. Code § 7210.) Because of the limitations placed on the board’s ability to conduct association business (i.e., the prohibition on actions without a meeting), as well as the fact that directors serve in the capacity of unpaid volunteers, a large portion of the board’s duties, powers and authority in managing the association are often delegated to other parties such as the association’s managing agent or committees of the association that assist with the association’s day-to-day operations.
There are certain duties and powers of the board which may not be delegated to other persons, either as a result of an explicit legal requirement and/or in order to avoid liability. Those non-delegable duties generally include:
- Voting to a record a delinquent assessment lien. (Civ. Code § 5673.)
- Voting to initiate foreclosure of a delinquent assessment lien. (Civ. Code § 5705(c).)
- Selecting officers of the association. (Corp. Code § 7213(b).)
- Filling vacancies on the board. (Corp. Code § 7212(a)(2).)
- Appointing executive committees or other committees (Corp. Code § 7212(a)(6).)
- Attending board meetings and voting on board motions.
- Approving settlement agreements on behalf of the association. (Elnekave v. Via Dolce HOA (2006) 142 Cal. App. 4th 1193.)
Delegating “Items of Business”
The “Common Interest Development Open Meeting Act” (“Open Meeting Act”) is codified at Civil Code Sections 4900 through 4955. One of the Open Meeting Act’s provisions prohibits HOA boards from “tak[ing] action on any item of business outside of a board meeting.” (Civ. Code § 4910(a) (Emphasis added).) Because of the various notice requirements applicable to board meetings, this “no action without a meeting” requirement may inhibit the board’s ability to act on time-sensitive matters or other issues that arise between the board’s scheduled meetings.
The term “item of business” used in Civil Code Section 4910 is significant. “Item of business” is defined as:
“…any action within the authority of the board, except those actions that the board has validly delegated to any other person or persons, managing agent, officer of the association, or committee of the board comprising less than a quorum of the board.” (Civ. Code § 4155 (Emphasis added).)
The ability to delegate certain board actions to the association’s managing agent or a committee of the association (i.e., an architectural committee, construction committee, etc.) is thus a common tool utilized by boards to circumvent the “no action without a meeting” requirement.
Related Case Law
- Elnekave v. Via Dolce Homeowners Association
(2006) 142 Cal.App.4th 1193
[Delegating Authority; Settlement] A decision to enter into settlement may be invalidated where it was not made in cooperation with the HOA’s Directors.