Does the Board Need an HOA Code of Ethics?

It is not mandatory, strictly speaking, for HOA boards to develop written codes of ethics. With that said, it is certainly not a bad idea, nor is it a waste of your board’s time. Should a serious question of ethical breach arise within your organization, it could take some time to sort it out, and it could even lead to a loss of trust among community members; better to simply get ethical expectations in writing and minimize the chances of such unpleasantness!

What is an HOA code of ethics, exactly? It does not need to be a lengthy list of rules and commandments, nor does it need to replace the basic judgment of HOA board members. Rather, the code of ethics should be an addition to the community’s Rules and Regulations, and it should do nothing more or less than codify the basic moral expectations of board members.

An HOA code of ethics can prove helpful in maintaining community-wide trust and good faith, but it can also come in handy from a legal standpoint. Suppose that a board member takes action without consulting the rest of the board, and that said action turns out to be irresponsible, or somehow damaging to the community. A code of ethics can clarify how the board might move forward.

A great example of how HOA boards often make use of codes of ethics: What happens if a board member hires an outside contractor or vendor who he or she knows personally, but does not run it by the other board members. The ramifications, both legal and financial, can be profound. It is prudent to warn against this in an official, written code of ethics.

And ultimately, that is what the code of ethics is all about: The board putting its best judgment to use, protecting itself and protecting the entire community.

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Bryan Kuester

Bryan Kuester

Bryan is the CEO of Kuester Management Group. He has over 15 years of managing community associations throughout North and South Carolina.

His specialties include Community Association Management - maintenance, budgeting for operational and reserve funding, long-range planning, covenant enforcement, amenity management, onsite management, large scale management.