Directors & Officers

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Condominiums and Conflicts of Interest: How to interpret the rebuttable presumption (FL)

The legislature recently amended Chapter 718 of the Florida Statues, relating to condominiums, to create a rebuttable presumption that a conflict of interest exist in certain situations.[1] A conflict of interest is a real or seeming incompatibility between one’s private

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Problem Boards: What to Do When Your Board Breaks the Rules

A condominium, cooperative, or homeowners’ association elects a board for a specific purpose: to manage the community’s day-to-day business, oversee special projects, and draft and uphold the rules and regulations that keep life orderly and harmonious. In fact, the board

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A Guide To HOA Board Responsibilities

Serving on the board of a homeowner association is a high calling. Well meaning volunteers are elected to roles that are critical to the well being of the HOA. But what exactly is a board member supposed to do to

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FAQs on HOA Board Member Roles and Responsibilities

The president leads the Board and is responsible for overseeing and handling many of its procedural duties. In order to succeed in this role, the Board president must be knowledgeable about the community’s CC&Rs and governing documents and understand how

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The Condo Association Board Prosecutor Profile

Is your community lawless? Are your rules out of date and unenforced? If so, that means you probably don’t have a Condo Association Board Prosecutor. This week’s Condo Association Board personality profile is the Prosecutor. The Prosecutor wants to live

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Recruiting Directors In Your HOA

From time to time, it is necessary or desirable to recruit new directors. It may due to a vacancy or an upcoming election. Often volunteers are reluctant to commit until they fully understand the scope of the job and time

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Being a Condo Association Board Mentor

You’ve done it. Several years – maybe even multiple terms – as a Condo Association Board member and you’re suddenly an accomplished veteran. You have multiple major projects under your belt, and you’ve improved your community – maybe by starting

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East Bay Panel Update – Director Liability

Two weeks ago, I met with a great group of ECHO members at our East Bay Resource Panel. We were gathered to talk about the recent Parth case and how it affects the personal liability of HOA directors. Ann Marquis-Fisher,

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What’s the difference between HOA officers and directors?

Q: The developer of our community has sold all of the lots and turned control of the homeowners’ association (“HOA”) over to the homeowners. The bylaws for our HOA refer to “officers” and also to “directors” and “the board of

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What’s in Your Wallet? Why HOA Boards Can’t Take Liability Insurance Lightly.

A Homeowner’s Association (HOA) is made up of a group of volunteer homeowners. It’s often a thankless task, where the only guaranteed reward is knowing they’ve helped maintain and improve the value of their neighborhood. The last thing your volunteer

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“What’s in a Name?” Quite a bit, particularly for Association Board Members who have been Defamed

When Shakespeare coined the phrase “the slings and arrows of outrageous fortune” in Hamlet, he probably wasn’t envisioning that sentiment could apply centuries later to volunteer board members. However, the Bard was opining that bad things can happen to a

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Condo board members not personally liable for bad decision

Q: Our condo is having some work done, and the job will cost substantially more than what the board told us. Now it looks like there will be another special assessment to cover the additional costs. I think the board

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HOA Directors in California – WATCH OUT! READ THIS!

Rogue Directors – Beware – HOA Director Liability -What is Happening in California?  Here’s the general question of importance in this blog:  Are California HOA Board Directors protected in California for their actions on the Board? Does the “business judgment

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What Does it Mean to be a Fiduciary?

In simplest terms, to be a fiduciary to another person or party is to be in a position of trust. For example, a patient trusts her doctor to make the correct diagnosis. A parishioner trusts his priest to keep his

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Through A Condo Owner’s Looking Glass – A Shade Of Green – Or Is That Gray?

In an action applying Florida law, a federal district judge ruled in favor of a Directors and Officers liability insurer, finding that the “insured versus insured” exclusion applied to bar both a defense and coverage of an underlying action. In

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When private interests infiltrate the condo board

Why does one become a director? It’s generally not the applause, the pay cheque, or the pleasure of being bombarded in the elevators by other residents’ questions. Some directors cite interest in playing their part to help their home thrive,

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Trio of Recent Decisions on the I v. I Exclusion Should Remind Policyholders to Annually Review the Language in Their Policy to Avoid Losing Coverage

D&O policies vary quite a bit from carrier to carrier, and language on “standard” exclusions can change from year to year. Accordingly, it is important to do a yearly review of your D&O policy to make sure your company has

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Texas High Court Finds for Insurer in D&O Coverage Dispute

The Texas Supreme Court recently ruled in favor of an insurer in a case that hinged on the applicability of an insured-v.-insured exclusion in the carrier’s directors and officers (D&O) liability policy.  The Court’s action reversed the ruling in Great

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When your homeowner association needs intensive care

Q. Long story short, the members have all been reluctant to get involved on our board for many years. They are all fine with someone else doing it. Our vice president resigned and then appointed herself “manager.” She paid herself

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Clarifying Board Roles: Who’s On Board?

Chances are if you’re a resident in a co-op, condo, or HOA community, you’re familiar with your property’s board of directors (or trustees, or managers, depending on what part of the country you live in). Boards are usually made up

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5 Key Items to Review in a D&O (And Why You Need One Even If Your Community Gets Along)

Every community needs directors and officers liability insurance protection which, for association boards, is insurance that covers board members and possibly people acting as extensions of the board for legal costs incurred from being sued.  It doesn’t matter how well

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Can Condo or HOA Officers be elected by secret ballot?

In general, the members (or owners) of the community vote for the board members, but the board members decide who will fill the officer positions: President, VP, Treasurer and Secretary, plus whatever other Officer Positions are defined by your community

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Why Directors and Officers (D&O) Insurance Is A Must For Homeowner Associations

Did you know that volunteering as a board member for your condo or HOA could jeopardize your personal financial security? You’re actually at risk from lawsuits against the board—whether they have merit or not. Having an indemnification clause in your

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D&O Insurance — Uncovered

Homeowner Association and Condo boards have a fiduciary duty to act in the best interest of the community as a whole, follow the law, and protect the assets and financial stability of the community. Proper insurance plays a major role

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HOAs: How to make community service fair

If the “books are balanced” and things are fair, then the officers and directors should never be personally at risk for the volunteer service they provide to their neighbors.

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Directors vs. Officers

In community associations, however, the individual board members are usually the same individuals who serve as officers.

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What Keeps Board Members Up at Night?

Condo Association and Homeowner Association Board Members deal with so many issues these days; they almost have to become instant experts at everything

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Do The Right Thing How To Avoid Personal Liability As A Condo Association Director

officers and directors of the association have a fiduciary relationship to the unit owners

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Jury awards Panama City Beach (FL) condo association $12 million

A jury has awarded nearly $12 million in damages in a lawsuit against several former directors of the association

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Conflicts of Interest Within Your HOA

the people with the power (particularly the board members) can develop conflicts of interest

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Housing Counsel: The Business Judgement Rule

The courts have consistently held that volunteer board members are not perfect, and will make decisions that are not always correct

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Getting Results Award: HOA treasurer saves his neighbors thousands (FL)

HOA Treasurer John Tenuta is this week’s Getting Results Award winner.  Tenuta saved his neighbors thousands when he noticed an accounting error on their books     Read the article…………..

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Delray (FL) associations get a leg up on liabilities

The Alliance of Delray meeting last month at the South County Civic Center featured attorneys Peter Mollengarden and Mark Keegan providing legal information regarding liabilities of community association boards.    Read the article………..

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6 Tips to Avoid D&O Liability Claims

In today’s electronic world, informality is encouraged on Facebook, email communications, texting, etc. But, when informality creeps into Board proceedings for Homeowners’ Associations (HOA), it can lead to major disputes and problems that result in liability claims. Based on our

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California Court Considers Reimbursement of Legal Fees Under D&O Policy

In its recent decision in Clark v. Travelers Cas. Ins. Co. of America, 2015 U.S. Dist. LEXIS 114877 (C.D. Cal. Aug. 28, 2015), the United States District Court for the Central District of California had occasion to consider when an

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Kentucky Court Holds D&O Policy Not Triggered By Suit Against Condo Board

In its recent decision in State Auto Prop. & Cas. Ins. Co. v. Highland Terrace Counsel of Co-Owners, Inc., 2015 U.S. Dist. LEXIS 59663 (W.D. Ky. May 7, 2015), the United States District Court for the Western District of Kentucky

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What Does this Thing Called Fiduciary Duty Mean for HOA Board Members?

As a new or current HOA board member you may often hear terms that you’re unfamiliar with. It’s important to ask questions and stay educated when something is unclear, and nothing can be more convoluted than financial jargon.  From time

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Protecting Self & Staff: Don’t Skip the Liability Coverage!

Ahhh, lawsuits. People suing people. Companies suing companies. People suing companies. Residents suing boards. A quick surf of the Internet and you can find many instances across the country where condo boards are sued. You can also find multiple lawsuits

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Directors’ Bankruptcy Does Not Relieve D&O Insurer of Obligation to Defend

The bankruptcy of insured directors did not relieve the insurer that had issued a directors and officers (D&O) endorsement to a commercial general liability (CGL) insurance policy of the obligation to defend or indemnify them, even where they had been

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Board Owner Do’s and Don’ts: What Makes a Board Successful

It only takes a few minutes of a web search to uncover the traits that make a successful person or business owner. For example, Entrepreneur magazine’s Steven Key wrote the article, “5 Qualities of Successful Persons,” which included such traits

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How to Avoid Getting Sued as a Board Member? Take These Five Steps.

Defending your cooperative or condominium association in a lawsuit can be costly and time-consuming, and may hinder your board’s ability to function effectively. Your condo or co-op board of directors is required to respond and defend the association in all

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HOA HOMEFRONT: New Year’s Resolutions Part I — The Director

This time of year so many of us make resolutions to start the new year differently. In this three part series, I suggest possible resolutions for the association director, homeowner and manager. As part of my homeowners association (HOA) board,

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How to avoid condo board breakdowns

When a condominium community goes to war, everyone loses. The owners lose trust in the board of directors’ ability to manage the condominium. Necessary repairs go undone. Not enough money is collected to pay for future repairs. Nothing gets accomplished, and

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Annual Insurance Coverage Self-Evaluation

While we can anticipate certain risks that our communities are likely to face, and set aside reserves to cover the situation when the risk becomes reality, we still must rely on insurance as an essential risk management tool. What we can do to lessen

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Mississippi Court Holds D&O Policy Not Triggered By Real Estate Scheme

In its recent decision in State Farm Fire & Cas. Co. v. Anderson, 2013 U.S. Dist. LEXIS 57837 (S.D. Miss. Apr. 23, 2013), the United States District Court for the Southern District of Mississippi had occasion to consider coverage for

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Riverdale Peaks Homeowners Ass’n v. Auto-Owners Ins. Co

Riverdale Peaks Homeowners Ass’n v. Auto-Owners Ins. Co., No.11-cv-01920-WJM-MJW, 2012 U.S. Dist. LEXIS 54180 (D. Colo. Apr. 18, 2012) An exclusion for “liability based upon any intentionally dishonest or fraudulent act or any judgment based upon any intentionally dishonest or fraudulent act” contained

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Is the Honeymoon Over for Aussie Strata Committees? (Looking at U.S. D&O claims)

Australian strata committees have enjoyed a pretty benign life for the last 50 years. They haven’t had to do too much, mostly defer to owners meetings on key decisions, rely on strata managers for most day-to-day operations and have not

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