Association Answers: Year-End Planning for Associations and Board Member Shortages

In Association Answers, KSN attorney Matthew Moodhe addresses frequently asked questions from community association board members and property managers. If you have legal concerns, please contact Matt or any of the attorneys at our law firm by calling 855-537-0500 or visiting www.ksnlaw.com/contact.

Q: Before the year ends, is there anything community associations should be preparing for or address?

The end of the year is a critical planning period for community associations and an opportunity for boards to prepare for a smooth transition into the next fiscal year. While every community is unique, here are three key areas boards should focus on before year-end.

One of the most important tasks is preparing and adopting the association’s annual budget. This includes:

• Reviewing historical expenses
• Evaluating anticipated increases in operating costs, and
• Confirming appropriate reserve contributions based on the association’s reserve study or long-term maintenance plan.

Boards should also account for any upcoming capital projects, vendor contract changes, or insurance premium adjustments. A well-prepared budget not only supports the association’s financial health but also helps avoid unexpected special assessments and demonstrates sound fiscal management.

Boards should also review their governing documents to determine whether any board elections or officer transitions are required. If elections are upcoming, the board and management should begin planning early by confirming notice requirements, timelines, and eligibility criteria for candidates. For associations with anticipated board turnover, this is also a good time to prepare for transition by organizing records, onboarding materials, and ensuring continuity in decision-making.

Finally, year-end is an ideal time to consult with the association’s attorney regarding any outstanding legal matters. This may include enforcement actions, rule violations, delinquent assessment collection issues, and vendor contract reviews. Addressing these items before the new year can help minimize risk, ensure compliance with applicable laws and governing documents while providing clarity on how to proceed with unresolved matters. Working with legal counsel at this stage allows the board to enter the new year with a clean slate and a clear path forward.

Q: What happens if an association doesn’t have enough board members?

Condominium, homeowner (HOA), and townhome community associations rely on a functioning board of directors to operate effectively and meet both legal and fiduciary obligations.

Most associations are required by their governing documents and applicable law to maintain a minimum number of board members in order to properly function. When there are not enough willing volunteers, the association may be unable to approve budgets, enforce rules, or manage vendors. Because requirements vary by state and governing documents, boards should consult with the association’s attorney to understand their specific obligations.

If an association cannot maintain a functioning board, one potential outcome in many jurisdictions is court intervention, including the appointment of a receiver or third party to manage the association’s affairs. In that scenario, the receiver steps into the role of the board and is responsible for day-to-day operations, financial decisions, and administration of the community. While this ensures continued operation, it comes at a significant cost as the receiver is paid for their services and those expenses are typically passed on to the association and its owners.

From a practical standpoint, avoiding this outcome should be a priority. Boards and management should proactively encourage owner participation, communicate the importance of board service, and emphasize that association governance directly impacts financial stability. Even a small group of engaged owners can help maintain continuity and avoid the operational and financial consequences of not having a functioning board.

Legal Resource

Do not hesitate to contact our law firm if your condominium, homeowner (HOA), or townhome community association has questions regarding board member responsibilities, owner disputes, or other legal concerns.

Please call 855-537-0500 or visit www.ksnlaw.com.

Since 1983, KSN has been a legal resource for condominium, homeowner, and townhome associations. Additionally, we represent clients in real estate transactions, collections, landlord/tenant issues, and property tax appeals. We represent thousands of clients and community associations throughout the US with offices in several states including Florida, Illinois, Indiana, and Wisconsin.

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