The board of directors of an association is granted broad authority and powers under the law and as specified in the governing documents of the association. Unless the governing documents provide otherwise, the board, on behalf of the association, may generally exercise the powers granted to a nonprofit mutual benefit corporation as enumerated in Corporations Code Section 7140, regardless of whether the association is in fact incorporated. (Civ. Code § 4805.) The powers granted to the board typically include the following:
Governance
Appoint directors to fill vacancies on the board;
Elect and remove officers;
Appoint committees;
Call membership meetings and appoint inspectors of election;
Inspect the association’s records
Financial
Manage and disburse funds from the reserve account;
Invest funds;
Levy and collect regular, special and emergency assessments;
Pay expenses incurred by the association;
Prepare and adopt budgets
Enforcement
Enforce the governing documents (i.e., the CC&Rs, bylaws and operating rules);
Adopt and amend operating rules (i.e., architectural standards, parking rules, etc.);
Collect delinquent assessments
Initiate and defend lawsuits;
Management
Manage the association;
Delegate management and certain board powers;
Maintain and repair the common areas;
Construct limited capital improvements;
Negotiate and enter into contracts;
Insure the association;
Hire and fire employees and vendors of the association
Delegate Powers
Under certain circumstances, the board has the authority to delegate certain powers of the board to the association’s manager, committees, or other persons. (See “Delegating Duties & Authority.”)
Judicial Deference
Provided that a board acts within the scope of its authority and in furtherance of its duties, courts will defer to decisions made by the board regardless of whether the board could have made a better decision. (See “Rule of Judicial Deference.”)
