Homeowners associations (HOAs) have broad authority to make decisions without owner approval, including borrowing funds for renovations. The board can divert annual assessments for loan repayment if it aligns with governing documents and serves a community purpose, safeguarded under the business judgment rule. If members believe the board has overstepped—like adding new amenities not previously existing or misallocating funds—they may have grounds for legal action. However, the legal protections for board actions make it difficult for owners to contest such decisions effectively without clear violations.
In a homeowners association, the board generally doesn’t need owner approval for renovations, as long as actions align with governing documents and are in good faith.
The business judgment rule protects HOA boards making decisions in good faith according to their governing documents, which can include borrowing for community renovations.
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