Are Non Resident Directors Bad For The HOA?

Are Non Resident Directors Bad For The HOA?

I would say that taking a stand one way or the other without reviewing the facts about their service record would be premature. Read on.

Here is an email question I received from a reader who is concerned about non-resident owners being on the board.

“Hello, I live in a condo complex with 69 units. I am on the board with eight other people. Three of our board members do not live in our complex. They own a unit and rent out their units. What are your thoughts on this? These three board members come to the complex maybe once a month.”

I think that this 3 to 8 ratio seems to be a palatable mix of board members. Residents and non-resident directors can both have strong suits.  I think resident directors prefer other resident directors, believing them to be more interested in residential types of matters. But non-resident owners may have more business acumen or skills that can be helpful too.  And I see a difference in whether the nonresident owners lived in the complex at one time or bought it specifically for an investment. If they lived in the development before renting it out they likely have a higher sense of pride than a pure investor owner who views the property as a cash cow, or money pit.

I cannot deny that resident owners’ interests will tend to differ considerably from nonresident owners’ interests in most cases, and I have some personal experience since I have been in both situations.

If you told me there were only 3 board members and they were all non-resident owners who do not often visit the premises, there would be cause for concern, unless you told me they are the only owners that are willing to serve.

But here, the 3 directors do not hold the majority of votes on the board or, probably, the sympathy of resident owners. If such board members are an asset to the board because they come to the board meetings and participate, read the packets, ask questions, and get involved in discussions, then I would not be concerned. If they are detrimental, don’t come to meetings, cause problems at the meetings, or vote always from a self-serving position then they should not be on the board. But this easily goes for resident directors as well. There are good board members, not as good board members, and harmful board members and that is what they should be judged on, not whether they live in the complex.

So go to the board meetings and see for yourself. After all, it is the members that elect the directors. And there is nothing stopping an individual owner from finding a new candidate to help support to take the position from a nonproductive board member.

BGrimm

BGrimm

I have been a condo-homeowners association attorney for more than 24 years. I like helping people get their arms around their homeowner association problems and find a solution. A balanced attitude can go further to resolve issues than just about anything else.



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