Board members and managers serving community associations are confronted with a daunting list of obligations. These responsibilities include budgeting and financial issues; repair, maintenance and construction issues; legal interpretations, issues and disputes; planning, evaluation and policymaking; as well as devising information systems and governance procedures to fulfill all of these functions. This article provides a brief overview of those circumstances where it is necessary and appropriate to obtain the advice of professionals to fulfill the association duties to the community.

The collective backgrounds, training, and experience of the entire board of directors and its community manager if any, will have an impact on whether and to what extent they should utilize outside professionals. The nature and magnitude of the particular issue also will determine if outside consultation is needed. If some members of the board are already experienced in budgeting or construction issues, that may lessen the need for outside consultations. On the other hand, if it is a major budgeting or construction issue, it is prudent for the board to utilize outside professionals.

The Colorado statute defining a board member’s responsibilities requires each director to fulfill his or her duties in good faith, with the care which an ordinarily prudent person in a like position would exercise under similar circumstances. The person must act in a manner the director reasonably believes to be in the best interests of the association. The same statute provides that a director is entitled to rely on information, opinions, reports, statements, including financial statements, if prepared by other members of the board or employees whom the director reasonably believes to be reliable and competent for the matters presented. The statute also specifically authorizes directors to rely upon lawyers, accountants and other reliable and competent professionals.

What does all this mean? The law recognizes that directors cannot be experts in all things, and that directors may need to rely upon others. This is permissible, and encouraged, as long as that reliance is justified. Reliance is justified if the person consulted has a reasonable basis to provide an objective opinion in the specific area of expertise. This is where the board has a responsibility to check the credentials and reputation of whomever they may be relying upon.

There is another layer of decision-making which board members and community managers have to undertake. In many circumstances, the board may properly rely upon the community manager if that manager has sufficient knowledge experience and training in the specific area. There is always going to be some cost-benefit analysis and risk benefit analysis. For example, if the specific issue is  minor repairs to fencing or a driveway, the board can usually rely upon the manager’s recommendation of a few contractors to perform the work. On the other hand, if the issue is a major reserve study to anticipate future capital construction needs, or engineering recommendations for solving a significant structural issue, the board should probably be reviewing resumes from several reserve specialists or engineering firms and investing some funds to obtain a proper report and recommendations form an outside expert.

In the latter situation, the areas requiring investigation are far beyond the ordinary expertise of any board member or community manager. The overall cost of the solution for the community, as well as the risk to the community if an incorrect solution is chosen, justify spending some amounts to retain an outside specialist to provide recommendations to the board.

The attorneys at Altitude Community Law P.C. can provide guidance to boards about whether and how to utilize outside professionals. We also can provide recommendations for many consultants who work with community associations.

Please feel free to contact us if you have any questions at 303.432.9999.

William H. Short
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