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President’s Report:
The Board’s Role and Responsibilities
Last month I attended a webinar on Fiduciary Duty. I understand some homeowners are new to condominium associations and are not familiar with the board’s role and responsibilities. I wanted to share with the homeowners what the board’s roles and responsibilities are and the process. First and foremost, the Kamalani governing documents (being the Declaration. Bylaws, House Rules, Design Guidelines and amendments) and Hawaii Revised Statues 514B-106(a), clearly state that the board has a fiduciary duty to the Association, not to the individual owners. In other words, the board is bound to make decisions based on what is best for the Association as a whole. The Association is the whole of the 170 Units of Kamalani. The Association is known as the Association of Unit Owners of Kamalani. Kamalani is the name of the condominium project we live in. What creates the association is the Declaration of Condominium Property Regime and Condominium Map. The Declaration, along with the By-laws, House Rules and Design Guidelines and amendments are what governs the Association. These documents are referred to as the governing documents. I encourage you read these documents. It is not all going to make sense to you, not everything is applicable to all homeowners. Read the sections that make sense and applies to you. For example, there are sections about Townhomes and there are sections about Flats. Read and understand the section that applies to you. You can skip the section about Townhomes if you live in a Flat. Ask questions about the parts that don’t make sense. People like to Google. The board must follow the governing documents. Generally, the board makes major decisions, sets overall policies, and is responsible for the overall operation and management of the association under the authority and powers described in the governing documents and the Hawaii Revised Statutes. The board does not make decisions based on its personal interests, ulterior motives and treats all members of the association equally, no matter the type of unit owned. Members are the registered owners. Registered owners are owners named in the deed, or conveyance document of title. As you know, board members are unpaid volunteers and are not on duty 24/7. The everyday hands-on and day-to-day management of the association is delegated to the managing executive and site manager. The Association hired Hawaiiana Management Company, Ltd. and Sean Housman. Marilyn Chapman is the Managing Executive from Hawaiiana and Sean Housman is the part-time Site Manager and only employee of the Association. Marilyn works in the office of Hawaiiana and Sean works on site at Kamalani. Marilyn and Sean handle all the communications with owners and respond to the questions and comments of the owners. Matters requiring board action are presented to the board at board meetings. The board can only make decisions as a group at a properly called and noticed board meeting. Registered owners are invited and encouraged to attend so they can be aware of board actions. The regular board meetings have been held generally on the third Thursday of each month, with the exception of December where there is no board meeting. The proper notice of the board meetings is posted on the bulletin boards within 72 hours of the board meeting. Owners are given an opportunity to speak at board meetings during the Owners Forum which is held before the board meeting is called to order. After the owner’s forum, the board meeting is called to order. The main purpose of the board meeting is to allow the board to complete association business. This process helps ensure that owner concerns are properly considered. When making decisions, the board’s fiduciary duty is to the association. Fiduciary Duty is to operate with: Duty of Good Faith and Fair Dealings – honest and fair Duty of Loyalty – put Association’s interest first before a board member’s personal interest Duty of Care – act with care of an ordinary prudent person Duty of Diligence – be informed, research and understand issues and consult with experts Duty of Obedience – know and follow the governing documents and Hawaii Revised Statutes The board further has a financial duty to the association’s finances to:
The Owner’s role is to also abide by the governing documents and to keep an eye on the board to ensure the board is doing what it should be. Owner’s are encouraged to attend board meetings so they can be aware of what the board is doing. I also want to encourage owners to participate by running for the board, to volunteer and help with the newsletter or a social event, if you have a professional background and would like volunteer your time. We are a community, we are Ohana. Let’s be mindful and respectful of one another and enjoy where we live. With Aloha, Desiree
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