Association governing documents and Civil Code § 4765(a) generally require association approval before a homeowner may make any physical improvement or modification to their property or to the association’s common area. The process for obtaining that approval varies from each association, but there are similarities which persist throughout the industry. For instance, every homeowner’s association board of directors has the ability to appoint committees and delegate certain responsibilities to them, and one of the most important committees in this area that boards can rely upon is the architectural review committee. The job of reviewing, approving, and denying applications and plans for proposed architectural modifications can be one of the most time-consuming activities for a volunteer board of directors, and the ability to outsource some or all of that responsibility to a separate committee can make an otherwise unwieldy volunteer position much more manageable. Even though most homeowner association governing documents provide the board with this authority, there is almost always a fallback provision which states that, if the board fails to appoint an architectural review committee, then the board itself shall serve in the role of that committee. Thus, there is typically always going to exist an architectural review committee in every association, even if that committee’s identity is not readily apparent.
Similarly, the architectural review committee’s authority can vary greatly depending on the association’s governing documents. The architectural committee may either have the authority to only make recommendations to the board, or the committee could have direct authority to approve or disapprove applications. However, even if the governing documents give the architectural committee independent decision-making authority, the board often still retains some level of control. In most cases the board is the final arbiter of committee decisions, handling the appeal process when the committee’s decision is disputed by the homeowner. Also, since committees and their members typically serve at the pleasure of the board and may be removed at any time, the board retains control through the appointment and removal of the committee members. However, there are some uncommon circumstances when an architectural committee may be established by the express written terms of the governing documents and the committee members elected by the association’s membership separate from the board. In that situation committee members may only be removed by way of a recall election, unless the governing documents provide otherwise.
When any committee is established the primary concern should be the protection of the persons serving on the committee from personal liability. Regardless of how a committee was formed, by statute association board members have a high level of protection from personal liability for their decisions, and proper Directors & Officers (D&O) insurance coverage is necessary. It is common for committee members to have similar protections provided to them under the association’s governing documents and/or its insurance policies, but this should be reviewed and confirmed by the board and the association’s insurer. Also, committee charters should be adopted so that the members serving on the committee understand their roles and responsibilities. The association’s governing documents can also be amended if needed to protect committee members. Ideally, the association’s D&O policy should cover all current and former directors and officers, all committee members, all other community volunteers, the association’s employees, and if possible, the association’s managing agents. The association’s governing documents should similarly provide indemnity for the directors, officers, and committee members.
If the board is serving as the default architectural review committee then there are certain procedural considerations which must be considered. Primarily, anytime a majority of the board is serving on a committee, the committee meetings then become board meetings by definition. Civil Code § 4090(a) defines a board meeting as any “congregation, at the same time and place, of a sufficient number of directors to establish a quorum of the board, to hear, discuss, or deliberate upon any item of business that is within the authority of the board.” Therefore, the board would need to properly notice each committee meeting, otherwise the board would be in violation of the Open Meeting Act as set forth in Civil Code § 4900, et seq. Also, with a majority of the board on the committee, the committee meetings would need to follow all other procedural requirements for board meetings, including keeping minutes and allowing time for a homeowner forum as required in Civil Code § 4925. Thus, having the board serve as the architectural review committee simply means extra meetings for the association’s directors, and/or extra time spent in each meeting. Conversely, there is no legal requirement that non-board committees hold open meetings, keep minutes, or post agendas. A non-board architectural review committee is only required to keep a written record of its decisions. The Open Meeting Act and its requirements only applies to meetings of the board, not to the association’s non-board committees.
The best course of conduct, if permitted by the governing documents, is for the board to establish an architectural review committee such that the committee reports to and serves at the pleasure of the board. The committee should have little to no decision-making authority, instead it should offer recommendations to the board, and the board should render decisions on architectural approvals. Finally, regardless of how the committee is structured, the board should make sure the committee and its members are covered under the association’s insurance policies. It may be necessary to amend the association’s governing documents and to revise the association’s insurance coverage to make this possible.