While there are many benefits to living in an HOA, it’s essential to know who your association’s key community members are. Whether you are brand new to an HOA or you’re a member seeking guidance on who to contact, we’re here to help you identify the who’s who in your community. Read the article……………………………..
Removing Officers and Directors Require Different Procedures (FL)
Q: Our homeowners’ association board president has not been responsive. He is also over two months overdue on assessments. Can he be replaced and what are the steps for that process? Read the Q&A……………………………..
Heavy Is the Head That Wears the Crown: Board of Director Authority in a Community Association (NC)
The Board of Directors for a Community Association functions in a very similar capacity as the Board of a standard corporation. Approximately 95% of all decisions to be made on behalf of a Community Association will be made by its Board of Directors. Read the article…………………………….
Does My Association Really Need Director and Officer (D&O) Liability Insurance?
Based upon many years of serving as counsel for and defending associations in all types of litigation, my answer to the above question is yes. However, exactly what is Director & Officer (D&O) Liability Insurance, and what does it cover? Read the article………………………….
Most associations should have 5 directors (FL)
We see a few Condominium or Homeowners’ Associations with only three directors serving a one year term and some larger Associations with seven or nine directors. There is a benefit to larger Master Homeowners’ Associations, with many neighborhoods and condominiums, to have many directors so that each of the various sub-communities have a representative on […]
Difference Between Directors and Officers
One of the more misunderstood concepts of community associations is the difference between a director and an officer. Under Ohio law, all condominium and planned communities must be administered by an owners association. The board of directors is the governing body that is responsible for the administration of the owners association. The individuals who serve […]
What did you get yourself into? Top ten tips for new directors
I’m often asked to give advice to new directors, especially first time directors. It is a difficult question to answer because the advice depends on a number of factors, such as the experience level of the director, whether or not the condominium has a manager, and the age of the condominium. In hopes of reducing […]
Directors Voting – Dispelling Myths (FL)
Every director who sits on the board of a homeowners association gets a voice in the operations of the association. The questions I receive are more about how that voice is exercised through a vote. For instance, some directors travel quite a bit, whether for work or play is irrelevant. The directors however are entitled […]
How to Deal with HOA Bullies
Does your board president rule with an iron first? You don’t have to put up with it. Maybe she’s been running the association single-handedly forever. Or perhaps he’s been a big shot in the business world and is certain the community needs his iron fist. Whatever the motivation, the homeowners association president becomes a dictator. […]
Continuing to serve after resignation? (FL)
Q: The president of my condominium association resigned verbally at a board meeting both as a director and as president. A few hours later he sent out a written notice expressing his desire to resign effective immediately. A newsletter was sent by the association to the entire community advising all the members of the resignation. […]
The Importance of D&O Coverage
Personal liability for board members is always a concern. The CIOA requires associations to purchase property insurance, flood insurance (when applicable), commercial general liability insurance and fidelity insurance, but it is silent on the issue of Directors’ & Officers’ coverage. Even the Non-Stock Corporation Act does not mandate the coverage. Frankly, it’s one of the […]
Managing Board Conflict: How to Maintain Harmony
In a community association, it falls on the board to put out any fires that ignite among the property’s residents. But what happens when that blaze springs up between the board members themselves? Read the article…………………
Community Association Directors, Officers Are Protected from Frivolous Lawsuits (FL)
There are many objections to board service that are often cited by unit owners who are reluctant to serve on their community association’s board of directors. While the time commitment is a prevalent concern, some believe that the post also brings with it an unreasonable level of liability and exposure to lawsuits by disgruntled unit […]
Can a director resign for any reason? (FL)
Q: My condominium association has one owner who is a malcontent. He is always objecting to everything the Board tries to do and his constant vocal complaining has caused the Board much stress. Two of the directors resigned as a result of this disgruntled owner. Is this a proper basis for directors to resign? Do […]
HOA Homefront: Questions on removal of presidents, and the PUD myth (CA)
Q: The president of our HOA was recently removed as president (with no explanation and at an unposted meeting), but she is still on the board, referred to as director at large, with no duties. Someone said she is not eligible to vote in that capacity. Is that true? Read the Q&A…………….
Do directors and officers have to worry about getting sued personally? (FL)
Around this time of year there usually is a call for candidates to submit their names to be directors of their condominium or homeowners’ association for vacant seats coming up at next year’s annual meeting. Most associations have five to seven director seats usually with either one-year terms or two-year staggered terms. Read the […]
With D&O Insurance, Do It Once and Do It Right
Your directors and officers (D&O) insurance is the main policy that covers you as a board member. D&O can come in different forms. You can add an endorsement to your main package policy or you can have a separate stand-alone D&O policy. Generally speaking, the majority of D&O coverage that is added to the main […]
Debunking the Myths of Volunteer Board Service
Congratulations! You’ve just been elected to your Board of Directors – now what? Or maybe you’ve been serving as a volunteer director for some time and you just aren’t sure which way is up. If you have been dazed and confused but still have a passionate heart to do the right thing in the best […]
Are Co-op Board Members At Risk of Being Sued? (NY)
“Board members get sued on a regular basis as an act of extortion by a plaintiff wanting to get the board to act in a particular way,” attorney Stuart Saft, the chairman of the Council of New York Cooperatives and Condominiums and a partner at Holland & Knight, tells the New York Times. Read the […]
Making Sure the Good Deed Goes Unpunished: Navigating Director and Officer Liability Insurance for Community Associations (NC)
(“Association”) acts through board members and officers who are volunteers and are generally willing to serve because they care about their communities. But in this day and age, they are often targets of member lawsuits. Accordingly, it’s recommended that all Associations obtain director and officer liability insurance to cover the costs of defending their directors, […]
What is D&O Liability Insurance?
The Directors and Officers Liability coverage is an insurance that protects officers and trustees from being held accountable for the actions they took or failed to take as members of a board. It offers liability coverage for the damages that ensued alleged wrongdoings of a member. This policy can cover the liability of officers and […]
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 interests and one’s public or fiduciary duties. Black’s Law Dictionary (10th ed. 2014). For example, […]
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 has an inflexible fiduciary duty to act in the best interests of the community as […]
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 fulfill this charge? Here’s a handy guide: Read the article………………
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 to run an effective meeting. He or she serves as the authority on all association […]
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 commitment. Here is a sample solicitation letter that outlines director duties: Read the article…………..
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 members who chose this contractor should have to pay the difference from their own pockets […]
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 confessions confidential. And if you are our client we hope you will trust us, as […]
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 the underlying action, two condominium owners – one of which was a past condominium president […]
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, others blame their neighbours’ persistence, and others are there to fix some old mistakes. Regardless […]
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 the right coverage. Three recent federal court decisions interpreting the “insured vs. insured” or “I […]
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 American Insurance Company v. Robert Primo by the Court of Appeals for the 14th District […]
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 each month as vice president, and upon becoming manager, she gave herself a raise. The […]
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 of volunteers, or members appointed by the community’s initial developer, depending on the property’s age […]
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 documents. Voting for Officers is commonly done without secret ballots and via a fairly informal […]
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 bylaws helps protect directors financially but at a greater potential cost to the condo association […]
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 in fulfilling that duty. But many board members are unsure if they have the right […]
HOAs: How to make community service fair
It is a basic truth that the risk in any venture should match the reward. High risk investments should bring high yields, while low returns may be acceptable for very secure investments. The same principle should be applied to volunteer board service. Start with the reward – what is the compensation for board (volunteer) service? […]
Do The Right Thing How To Avoid Personal Liability As A Condo Association Director
In Florida, the “officers and directors of the association have a fiduciary relationship to the unit owners.” F.S. §718.111(1)(a) In its most basic form, a fiduciary duty is an obligation to put the interest of someone else above the self-interest of the fiduciary. In the condominium director context, the director is the fiduciary and breaching […]
Housing Counsel: The Business Judgement Rule
Q: What exactly is the “business judgment rule”? I have a problem with my condominium board, and the condo attorney keeps referring to this as a defense. Can you explain? Read the article………….
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 insurer’s duty to reimburse defense costs under a D&O policy is triggered. Read the […]
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 had occasion to consider the scope of coverage afforded under a directors and officers coverage […]
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 to time you may hear that the Board of the homeowners association operates in a […]
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 in which boards are sued for possible misappropriation of funds. Read more……..
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 dismissed from the lawsuit, an appellate court in Wisconsin has ruled. Read more…….
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 as open-mindedness, unwavering passion, and a forward-looking approach. But what makes a board of trustees, […]
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 been sued very often or for very much.