COA or HOA Boards Term Limits: Everything You Need to Know

The stability of a Condominium Owners Association (COA) or Homeowners Association (HOA) ensures a decent environment and proper maintenance of properties within the community. It's advisable to change the board members regularly to improve accountability and offer a different approach to service delivery. As such, HOAs/COAs should hold elections regularly to fill in vacant board positions and usher in new leadership. Some HOA/COA bylaws include varying term limits to nurture succession planning and smooth transition. Let's explore the different arguments for term limits.    

What's a COA/HOA Term Limit?

Board term limits refer to the maximum amount of time a member of a COA (Condominium Owners Association) or HOA (Homeowners Association) board can consecutively serve in a leadership role. These limits are designed to set clear boundaries on how long a board member can hold a position before needing to step down or be re-elected.

Why Are Term Limits Important?

• Promote Leadership Rotation: Term limits encourage fresh perspectives and new ideas by allowing different community members the opportunity to serve on the board.
• Enhance Accountability: Regular turnover ensures that board members remain accountable to homeowners and do not grow complacent in their roles.
• Prevent Power Concentration: They help prevent any one individual or group from holding disproportionate influence over the association’s decisions for extended periods.

How Are Term Limits Enforced?

Term limits are typically outlined in the association’s governing documents, such as bylaws, and may vary based on:

• State Laws: Some states have specific statutes regulating HOA and COA board terms.
• Association Bylaws: Individual associations set their own rules regarding the length of terms, maximum consecutive terms, and re-election processes.

Once a member reaches their term limit, they must step down from their role but may often seek re-election after a designated period, depending on the association’s rules.

Advantages of Term Limits

• Multiple Leadership Opportunities: The term limits create positions when the term of the current board members expires. It opens a doorway of opportunities for homeowners to exercise leadership, implement ideas, and solve community challenges.

• Injecting Fresh Ideas: A community with term limits can benefit from the unique strengths, qualifications, and networks of incoming board members. If HOA bylaws require a change of the president after five years, it's an opportunity for change. A community can benefit from a resident who just obtained an engineering or landscaping certification. Ultimately, the association benefits from unique qualifications and diverse thoughts from different board members.

• Opportunity to Audit: Undefined terms can create a comfort zone for the current crop of leaders, who in turn can misuse resources. To that end, the regular change of board members is a caution to the existing board. The incoming board members bring ideas from a neutral perspective that puts a check on previous potential mismanagement.

• Breaks Potential Autocracy: Just like nations, the health of HOA/COA comes from democracy and consensus. The lack of term limits can create a board with absolute power leading to poor services, lack of transparency, and a disgruntled community.

Disadvantages of Term Limits

• Loss of Valuable Board Members: It takes time and a bit of luck to find board members who offer value and serve with dedication. Unfortunately, when their term expires, the members go with the ideas, experience, and commitment. That said, the community can benefit from a relatively long term because it offers stability and enough time to implement plans.
• Lost Momentum: Anytime there is a change of guard, and a new board comes in, there is a disconnect in planning and direction. When the new board members take over leadership, they will need to connect with suppliers, create rapport with homeowners and service providers. The speed of executing the plans of the association decreases before the new board members fully understand the system.
• Cost of Replacement: It's challenging to find new board members— sometimes, there may be no one willing to take over. Failure or delay to replace board members can negatively affect service delivery.

Overcoming the Challenges of COA/HOA Board Term Limits

Term limits ensure leadership rotation but can result in the loss of valuable experience. Associations can address this by implementing mentorship programs, allowing outgoing board members to guide and support their successors for a smooth transition.

Creating non-voting advisory roles for former members enables them to share expertise without conflicting with term limit policies. Additionally, encouraging past members to join committees or special projects retains their insights and fosters continued community involvement. These strategies balance fresh leadership with the benefits of experienced guidance, ensuring effective governance.

Minimizing Lost Momentum

Changes in the board can sometimes cause hiccups.  For that reason, effective transition planning is essential to maintaining momentum when COA/HOA board members reach their term limits. Transition plans that include detailed documentation of ongoing projects, established goals, and key contacts help ensure a smooth handover of leadership. This clarity allows incoming members to quickly understand their responsibilities and maintain continuity in the association’s operations.

Implementing staggered term limits is another critical strategy to prevent complete board turnover at once. By staggering terms, some experienced members remain on the board, offering valuable guidance to new members and providing stability during transitions.

Regular communication between outgoing and incoming board members further supports continuity. Scheduled meetings or overlap periods allow for the exchange of institutional knowledge and insights, ensuring the association’s operations proceed seamlessly. Together, these measures help associations minimize disruptions and maintain steady progress toward their goals.

Addressing the Cost of Replacement

Replacing board members can be challenging, so it's important to be as proactive as possible. By identifying and engaging potential board members well before term limits are reached, associations can cultivate a pool of qualified candidates who are familiar with the community’s needs and operations.

Offering incentives or recognition can also encourage more homeowners to volunteer for board positions. Public acknowledgment, such as highlighting contributions in newsletters or community meetings, or providing small perks like event discounts, can make the role more appealing.

Additionally, setting up a candidate pool or leadership pipeline ensures a steady supply of willing candidates. Encouraging homeowners to participate in committees or attend board meetings can prepare them for future leadership roles, ensuring smooth transitions and reducing the cost of replacements. These strategies help maintain effective governance while minimizing disruptions caused by board member turnover.

Who Sets the COA or HOA Board Term Limits?

Most community associations have bylaws that stipulate the maximum period that a board member can serve. The bylaws also provide for an annual election to replace officials. Nonetheless, the annual elections do not always include the replacement of the president.

Here are a few points to consider when setting term limits:

• State Laws: The prerogative to determine the term limit does not always fall on the HOA or COA. Some states have enacted legislation to cap the number of years that a board can serve. In Florida, a board member can only serve a maximum of four consecutive 2-year terms. It's therefore essential to check any available legislation that puts a cap on term limits.

• HOA Discretion: The association should endeavor to create a flexible law that improves the welfare of homeowners. It could look into the possibility of extending term limits to 5-8 years to give board members enough time to settle and offer quality services.

The term limits of HOA/COA boards shape service delivery and harmonious living within a community— it's, therefore, crucial to get it right. However, it may be challenging to navigate this issue without expert advice. That said, RealManage is here to offer more information on board term limits, inclusive of the pros and cons. We have over 17 years of experience, which puts us in a prime position in the management of HOAs. Contact us today to speak with one of our professional representatives.