HOAleader.com - Tip of the Week - July 8, 2011
Published: Fri, 07/01/11
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Open HOA Board Seat: Should You Appoint or Wait for an Election?
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This week's tip gives you insight on how to fill a vacant seat
on your homeowners association board of directors without
creating headaches within your HOA.
"First, look to your governing documents and state statutes
to see if there's anything about how to handle an appointment
procedurally," says Donna DiMaggio Berger, managing partner
at Katzman Garfinkel & Berger in Ft. Lauderdale, Fla.,
who advises associations. "Remember that you need to appoint
someone who's eligible to serve. So eligibility rules
will also apply."
Also look for provisions dictating how long the appointee
will serve. "Does the person serve just until the next
election or the remainder of the former board member's term?"
asks Elizabeth White, a shareholder and head of the
community associations practice at the law firm of
LeClairRyan in Williamsburg, Va. "That's determined by your
governing documents or state nonstock corporation act.
Check both because a lot of governing documents don't follow
state code."
"Outside of your governing documents or the law, there aren't
hard-fast rules," says White. "But there is an analysis."
Here are two factors to consider:
1. Don't appoint just anybody. "Some associations
really struggle to find people willing to serve on
the board," says White. "But because of your fiduciary duty,
you shouldn't appoint someone just to have a warm body."
2. Be open with members--when it's smart. "You might let
the community know you're looking to fill a vacant seat
and if owners are interested to please let the board know,"
says Berger. "That gives a lot of transparency into the
board's process and provides a feeling of inclusion."
However, that may not always be wise. "Consider whether you
should get buy in from owners or whether there are contentious
issues that will just be inflamed," advises White.
"Some boards are dealing with high-stakes litigation with
dissidents. So you have to be strategic about who fills that
vacancy because that person will be privy to confidential
information. Maybe dissidents say, 'You've got to appoint
one of us.' You may know that's not going to be in the
corporation's best interest to put a dissident you're in
litigation with on the board or to even to ask for statements
of interest. You may want to carefully screen and handpick a
person without doing calls for statements of interest."
Berger admits there are risks to asking members if they're
interested but says it still might be wise. Find out
her reasoning, along with three more factors to consider,
in our new article, http://www.hoaleader.com/members/595.cfm
Best regards,
Matt Humphrey
President
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Recent articles posted at HOAleader.com:
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Prepare Now for Aging HOA Owners
In this week's tip, we discuss your homeowner association's
responsibility to respond to the needs of aging owners.
Click here to read full article:
< http://www.hoaleader.com/public/594.cfm >
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Letters to the HOA: Should You Show Owners All?
A growing number of boards are attaching copies of all the
letters board members receive to the HOA's minutes that are
distributed. Their reasoning is that the letters inform members
of issues in the association and show them the grief--and expense-
-that some unreasonable owners cause board members and HOAs. In
this week's tip, we discuss the pros and cons.
Click here to read full article:
< http://www.hoaleader.com/public/592.cfm >
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What If Your HOA Can't Pass Necessary Amendments?
What happens if you really, truly, positively need to amend your
HOA governing documents, but your owners are so apathetic you can'
t get the supermajority your governing documents require? Can you
go to court to get a judge to amend your governing documents?
Here, we explain whether that's possible and, if not, what you
can do if you're stuck in amendment limbo.
Click here to read full article:
< http://www.hoaleader.com/members/590.cfm >
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Homeowner Associations and Aging Owners: What HOA Boards Should
Know
As the population ages, your home owner association will likely
face new challenges. What should your HOA board know about
maintaining elderly owners' rights and privacy if they begin
suffering from dementia, physical incapacitation, or inadequate
support while preserving the rights of those owners' neighbors?
Here, we provide guidance to help you begin addressing the age-
old questions you'll face.
Click here to read full article:
< http://www.hoaleader.com/members/593.cfm >
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HOA Insurance Coverage: What's the Right Amount? Discussion Forum
Follow-Up
A reader asks, "Our HOA has 22 units with no swimming pool,
tennis courts, playground, club house, etc. We now have $1
million per occurrence and $2 million aggregate on our general
liability insurance policy and a $5 million umbrella policy. What
do most HOAs our size and situation carry on general liability
and umbrella? We're discussing the possibility of increasing the
general liability to $4 million/$2 million and dropping the
umbrella or keeping the general liability of $2 million/$1
million and reducing the umbrella."
Click here to read full article:
< http://www.hoaleader.com/members/589.cfm >
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