HOAleader.com - Tip of the Week - October 23, 2009
Published: Fri, 10/23/09
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Negotiating Contracts for Your HOA: Who Has the Authority?
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This week's tip answers a question posted on the HOAleader.com
discussion forum. Can a single board member bind a condo or
homeowners association to a contract without the rest of the
board's approval?
"It boils down to the law of actual versus apparent authority,"
explains Bob Tankel, principal at Robert L. Tankel PA in Dunedin,
Fla., a law firm that advises associations.
"Under Florida law, the president of a corporation--and in
Florida all condo associations and most homeowners associations
have to be incorporated--the common law of corporations is that
the president has apparent authority to sign a contract." Most
states follow that common law rule, but check with an attorney
in your state to know your specific law.
Bob explains what that means in lay terms. "When Bill Gates was
running Microsoft, if he'd have called me up and said, 'Bob, I
want you to do some work for Microsoft,' I could have reasonably
assumed he had the authority to bind his company," he says.
"Third parties don't have to look any further when a president of
a corporation contacts them. They have the right to rely on the
apparent authority of that president and can hold the
association's feet to the fire."
That doesn't mean the president is off the hook. "If the president
didn't have the authority to bind the corporation, the president
runs the risk of a breach of fiduciary duty action."
What if the board member isn't the HOA's president? "Third
parties who rely on anyone else do so at their danger," says Bob.
"There's specific language in Florida law that says owners have
no right to act on behalf of the association simply by virtue of
being owners. As a matter of corporate law, it's my position that
a simple director who's not the association's president has no
apparent authority, and no third party has a right to rely on any
representation from other directors."
To learn more, and to get 6 steps your HOA board can take to
control its negotiating process and reduce liability, see our new
article: http://www.hoaleader.com/members/349.cfm
Best regards,
Matt Humphrey
President
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Recent articles posted at HOAleader.com:
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HOA Contracts: Can One Board Member Contractually Bind Your
Homeowners Association?
Can one board member, without the board's knowledge, bind the
association to a contract? The short answer is yes. However, our
experts have suggested practices you can implement to prevent it
from happening at your association.
Click here to read full article:
< http://www.hoaleader.com/members/349.cfm >
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HOA Boards: Four Ways to Prevent and Ease Board Burnout
Let's face it. In many condo and homeowners associations, a
handful of people carry the load for the rest of the community.
Those heavy lifters can sometimes become burned out. What can you
do to prevent burnout? And what can you do to ease the burden
when HOA board members are feeling drained? Here are four
suggestions.
Click here to read full article:
< http://www.hoaleader.com/public/348.cfm >
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HOA Governance: How to Negotiate--and Save Money
Looking for tips that will help you negotiate more effectively
and save money on association contracts in the process? One
expert recommends you focus on a process for effective
negotiation rather than a few tactics that might help you "beat"
your opponent. Here's what he means, and how it can help your
condo or homeowners association.
Click here to read full article:
< http://www.hoaleader.com/members/345.cfm >
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HOA Facilities: Everything You Need to Know About Roofs
You can't properly maintain a vital component of your condo or
HOA facilities--the roofs--if you don't understand how they work
and the type of maintenance that's required to keep them
watertight. Here's a primer on roofs, their components, and how
your condo or homeowner association should maintain them.
Click here to read full article:
< http://www.hoaleader.com/members/344.cfm >
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HOA Rules and Free Speech: When Do Rules Restricting Speech Go
Too Far?
Could your homeowners association prohibit a resident from
placing seven Marine Corps decals on his vehicle? That's what The
Woodlands II on The Creek, an HOA in Dallas, has done, insisting
that the Marine Corps decals on Frank Larison's car are
advertisements that are prohibited by the association's governing
documents. Here's advice on how far your HOA can go in
restricting residents' free speech.
Click here to read full article:
< http://www.hoaleader.com/members/343.cfm >
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