What Happens if There is No Condo Board?

H.C. from Howard County, Maryland writes:

Dear Mister Condo,

Our current board members want to “retire” and no one, including myself is stepping up to be a board member. What happens if there is no board?

Mister Condo replies:

H.C., I am really sorry to learn that there are no unit owners in your HOA willing to volunteer their time to serve on the Board. I am fairly certain that your governance documents do not address what happens if there is no Board so let’s talk about how the association is run and why the Board is so important. First off, with no Board there is no ability for the association to run. No one can hire or fire a management company (if you have one). No one will be able to assess or collect dues so there will be no money to pay the vendors of the association. As unit owners realize that they are no longer receiving the services they expect from the association, lawsuits suing the association for breach of contract are likely to be filed and, since there is no Board to answer for the association, the court would likely appoint a receiver, at association expense, to manage the association, collect assessments, and pay the vendors. Receivers don’t come cheap so I would expect a major increase in common fees. If unit owners don’t pay these fees in time, the receiver could recommend dissolving the association to the court, which very well could lead to massive losses and foreclosures on the part of unit owners. Bottom line, you don’t want to find yourself living in an association with no volunteer leaders. You may wish to turn over the day to day operations to a Property Manager and have a Board that does little more than agree to allow the Property Manager run the association. Living in an HOA does carry a modicum of responsibility with regards to governance. Simply having no volunteers to serve on the Board isn’t a very good option. All the best!