HOAleader.com - Tip of the Week - August 14, 2009
Published: Fri, 08/14/09
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How Reserve Studies Can Keep Your HOA in Compliance and Protect
You From Personal Liability
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Even if your state doesn't mandate that your association do a
formal reserve study every so often, it may indirectly--and
strongly--suggest that you meet that standard.
For this tip, we spoke to Matthew A. Drewes, a partner at
Thomsen & Nybeck PA in Edina, Minn., who represents associations.
"Under Minnesota law, the reserve requirement is that the annual
budget shall provide from year to year for adequate reserve
funds to provide for those things the association is required
to replace," he told us. "If you're not bringing those funds in
based on a calculation of when those thing should be replaced,
you're failing in your efforts to adhere to the statute."
Matthew also advocates doing a reserve study to protect board
members from liability. "It's a recommended procedure if for no
other reason than to cover the board to ensure that somewhere
down the line they're not subject to potential liability."
"The standard for nonprofit boards, especially those that aren't
compensated, is set fairly low in terms of competence. They need
to act in good faith. But it's not too far of a cry to argue
that a board is failing even that standard if it isn't making
some effort to make sure adequate reserves are maintained.
Whether they have to do a reserve study to meet that standard is
debatable."
It would, however, go a long way toward protecting the board
if its competence were ever challenged.
To read more about reserve studies, see our just-posted article:
HOA Reserve Studies: What You Need to Know
http://www.hoaleader.com/members/320.cfm
Best regards,
Matt Humphrey
President
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Recent articles posted at HOAleader.com:
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HOA Reserve Studies: What You Need to Know
Just what is a reserve study? What should it include, and how
often should it be done? We've got answers.
Click here to read full article:
< http://www.hoaleader.com/members/320.cfm >
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HOA Facilities: Planning Your Association's Maintenance Program
This week's tip is about planning your HOA's maintenance
checkup.
Click here to read full article:
< http://www.hoaleader.com/public/319.cfm >
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HOA Facilities: How to Think About Maintaining Your Assets--And A
Practical HOA Maintenance Checklist
Not sure what maintenance your condo or homeowners association
property should have and when? We're here to help. Here's some
insight on how to view property maintenance, along with a list of
the inspections and work your community's assets should have.
Click here to read full article:
< http://www.hoaleader.com/members/317.cfm >
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HOA Leadership: Should I Run for the Board?
You've thought about running for the board of your condo or
homeowners association, but you're torn. Or maybe you are a
sitting board member who has been approached by owners interested
in running for the board, and you want to help them decide if it'
s a good fit. Here are questions anyone contemplating a role on
an HOA board should consider.
Click here to read full article:
< http://www.hoaleader.com/members/316.cfm >
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HOA Board Headaches: 4 Techniques to Quiet Complaining Slackers
As a leader of your condo or homeowners association, if you haven'
t had to deal with a complaining slacker in your community,
consider yourself lucky. But odds are you haven't been that
fortunate. Just about every HOA has its fair share of people who
never lift a finger to help run things but who complain
incessantly about how things are run.
Click here to read full article:
< http://www.hoaleader.com/members/315.cfm >
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