Can an HOA President Spend Money Without Board Approval?

Can an HOA President Spend Money Without Board Approval?

This summer, the HOA board in your community has been debating whether or not to invest in a new pool renovation for the neighborhood. Some are concerned that the aging pool could be a safety hazard, while others argue that the renovation cost would increase residents’ HOA fees.

As an active community member, you have been following the discussions closely and noticed that the HOA President has already begun to gather quotes from several contractors.

Wait, can the HOA President spend money without board approval?

HOA board members are responsible for acting in the community’s best interests. They are elected by fellow residents and entrusted with making important decisions for the neighborhood.

While the HOA President holds a leadership role within the board, they still must adhere to certain guidelines and protocols when it comes to spending money. In most cases, any significant expenditures or changes to the budget require board approval.

So, can the president of the HOA vote or start spending money without the board’s approval?

 

 

What Is The HOA Board’s Role?

Homeowners’ Association boards are responsible for managing the community’s finances, maintenance, and overall well-being. This includes making financial decisions that will impact residents’ dues and the neighborhood’s appearance.

The board is comprised of elected volunteers who serve in various roles, including President, Vice President, Secretary, Treasurer, and other committee chairs. Each member has a specific set of duties and responsibilities to ensure the HOA operates efficiently and effectively.

Power of the HOA President

As mentioned earlier, while the HOA President holds a leadership role within the board, they do not have unlimited power to spend money. In most cases, the President must follow the guidelines and protocols set by the board for all financial matters.

Common money issues that may arise include setting the annual budget, allocating funds for maintenance and repairs, approving expenditures for community events or projects, and collecting dues from residents.

The HOA Board Approval Process

Before any significant spending can take place, the HOA board must approve it. This typically involves creating a proposal outlining the need for the expenditure and presenting it to the board for discussion and approval.

Step 1: Creating a Proposal

The first step in the approval process is creating a proposal that details the need for the expenditure, including any relevant supporting documents or estimates. This proposal should clearly outline how much money is needed, what it will be used for, and why it is necessary.

Step 2: Presenting to the Board

Once the proposal is complete, it must be presented to the HOA board during a scheduled meeting. The board will review and discuss the proposal before deciding whether to approve or deny it.

Step 3: Obtaining Board Approval

After thoroughly discussing and considering all factors involved, the board will vote on the proposal. In most cases, a majority vote is needed for approval. If approved, the HOA President can move forward with the expenditure. However, if denied, the board may suggest revisions to the proposal or deny it altogether.

Are There Times When Board Approval Isn’t Necessary?

While many financial matters require board approval, there are some exceptions. For example, emergency repairs that pose a safety hazard or immediate threat to the community may not require prior board approval.

In these cases, the HOA President has the authority to make decisions and spend up to a certain amount of money without board approval in order to address the issue quickly. But these are rare, and a detailed report and explanation of the expenditure must still be provided to the board at the next meeting.

What If You’re Concerned About a Proposed Expenditure?

If you have concerns about a proposed expenditure, it’s important to voice your opinion and ask questions during the board meeting. This is your opportunity to learn more about the proposal and express any concerns or suggestions. Remember, as a paying member of the HOA, you have a right to be informed and involved in important financial decisions that affect your community.

If you’ve become concerned that an HOA president or board member is misusing funds or making uninformed financial decisions, you can also bring this up during the meeting and request an audit or investigation. Transparency and accountability are crucial in maintaining trust within the community.

Know Your Board’s Responsibility – and Take Action

So, should you speak up if you notice that the HOA president is moving ahead with quotes before board approval?

Absolutely. As a homeowner, you have the right to question and understand financial decisions made on your behalf by the HOA board. You also have the responsibility to hold them accountable for managing funds appropriately and in the community’s best interest.

By staying informed, attending meetings, and actively participating in discussions, you can ensure that your HOA is responsible with its finances and ultimately benefits all homeowners in the community. So don’t be afraid to speak up and ask questions—it’s your right as a member of the HOA!

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