1. A. Except as provided in the community documents or other provisions of the Homeowner Association Act, the board acts on behalf of the association. In the performance of their duties, officers and members of the board shall exercise, if appointed by the declarant, the degree of care and loyalty required of a fiduciary of the lot owners and, if elected by the lot owners, ordinary and reasonable care free from any undisclosed conflict of interest.

2. B. Within ninety days after being elected or appointed to the board, each board member shall certify in writing to the secretary of the association that the member:

   1. (1) has read the community documents;
   2. (2) will work to uphold the community documents and policies to the best of the member's ability; and
   3. (3) will faithfully discharge the member's duties to the association.
3. C. A board member who does not file the written certification pursuant to Subsection B of this section shall be suspended from the board until the member complies with Subsection B of this section.

4. D. The association shall retain each board member's written certification for inspection by lot owners for five years after the board member's election or appointment. The failure of an association to have a board member's written certification on file does not affect the validity of any action taken by the board or any protections provided to board members under the:

   1. (1) Homeowner Association Act; or
   2. (2) Nonprofit Corporation Act [Chapter 53, Article 8 NMSA 1978], if the association is organized under the Nonprofit Corporation Act.
5. E. The board or the lot owners, as provided for in the community documents, shall adopt a budget annually. Within thirty calendar days after adoption of any proposed budget for the association, the board shall provide a copy of the budget to all the lot owners.
6. F. The board shall provide to all lot owners a statement included with a copy of the annual budget listing all fees and fines that may be charged to a lot owner by the association or any management company retained by the association to act on behalf of the association, including charges for a disclosure certificate pursuant to Subsection H of Section 47-16-12 NMSA 1978.

7. G. Any management contract negotiated between the board and a management company retained by the association to act on behalf of the association shall include:

   1. (1) a disclosure to the board of any existing relationships the management company has with any vendor or contractor for the association from which a conflict of interest may arise; and
   2. (2) a list of all fees to be charged to the association or lot owners by the management company during the term of the contract.

History: Laws 2013, ch. 122, § 7; 2019, ch. 30, § 3.

ANNOTATIONS

The 2019 amendment, effective July 1, 2019, required elected or appointed board members to provide a written certification, and required management companies retained by a homeowner association to provide a conflict of interest disclosure; in Subsection A, after "ordinary and reasonable care", added "free from any undisclosed conflict of interest"; added new Subsections B through D and redesignated former Subsection B as Subsection E; and added Subsections F and G.

Compiler's notes. — Laws 2013, ch. 122, §§ 1 through 14 were erroneously compiled as 47-7E-1 through 47-7E-14 NMSA 1978, and have been recompiled as 47-16-1 through 47-16-14 NMSA 1978 by the compiler.

Planned community has not yet reached the threshold required for lot owners to elect a board member to the homeowner's association. — The Homeowner Association Act (HOAA), 47-16-1 to 47-16-18 NMSA 1978, dictates that the period of declarant control shall terminate, if not voluntarily terminated by the declarant sooner, no later than the earlier of certain specific conditions, and as the percentage of lots conveyed to lot owners increases, so too does the percentage of board members elected by the lot owners; this allows for the orderly transition of authority to control the board from the declarant to parcel owners. Determining whether a sufficient percentage of lots have been sold to someone other than the declarant must take into account the total number of parcels in the development, present and anticipated, including those owned by the declarant, and therefore, where the Picacho mountain community master plan allowed for a total of 1560 total lots, with 1493 of those lots designated for residential purposes, and, at most, only 252 lots have been transferred, the lots sold to date versus the total number of lots in the master plan does not require members of the board be elected by lot owners other than the declarant because the total number of lots sold has not reached the twenty-five percent threshold set forth in 47-16-8(E) NMSA 1978 of the HOAA. End of Exclusive Declarant Control under Home Owner Association Act (8/17/22), Att'y Gen. Adv. Ltr. 2021-05.