HOAleader.com - Tip of the Week - September 9, 2011
Published: Wed, 08/31/11
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Don't Ignore the Lessons of Telford v. Sagewood Homeowners
Association
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This week's tip offers a reminder that being on an HOA board
imposes on you a fiduciary duty to make tough decisions and not
favor your friends. If you breach those duties, your HOA could
pay dearly.
A California HOA board got a reminder of those HOA facts of
life in November 2010, when a California appellate court held
in Telford v. Sagewood Homeowners Association that it may have
failed in its duties to approve and supervise an owner's
construction project, which didn't meet the board's original
guidelines, took longer than promised, and didn't conform
to the owner's promised plan.
Telford is the tale of a condo owner in the Sagewood Homeowners
Association. Ted Telford's neighbor, Daniel Lass, owned two
condos next to Telford's unit and sought approval from the HOA's
board to combine his units. His plans included converting about
1,000 square feet of common area to his exclusive use.
In December 2005, Lass submitted his architectural variance
request and preliminary plans to the HOA's architectural
committee. In February 2006, the board granted conditional
approval of the project, with final approval requiring several
more things to happen, including the creation of a procedure
for notifying neighbors of final approval, the beginning date
of construction, and interruptions in utility service; a
valuation of the common area Lass sought to convert to his use
followed by approval of the sale by 67 percent of members in
a full membership vote. At a later meeting, Lass committed to
a six-month time frame for completion of the work.
None of the conditions was met before construction began, and
the board didn't even verify that they were. The HOA didn't
require a valuation or vote on the common areas; it simply
"gifted" them to Lass. The project also took nearly two years
to complete.
In May 2007, Telford sued Lass and the HOA. He sued Lass for
nuisance, intentional and negligent infliction of emotional
distress, and negligence in conducting the construction project.
He sued the HOA for negligence, contending it failed to
adequately evaluate the project for compliance with the HOA's
governing documents. He claimed the board's approval of the
project was "unreasonable, arbitrary, and in bad faith"
resulting from the "close personal relationship" between Lass
and one or more board members. He also sued the HOA for breach
of its governing documents and its fiduciary duties.
How did the board defend itself? And how did the court rule?
Find out in our new article:
http://www.hoaleader.com/members/620.cfm
Best regards,
Matt Humphrey
President
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Recent articles posted at HOAleader.com:
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HOA Rules? We Don't Need Notice to Revise Our Stinking Rules!
Considering revising your HOA's rules? In this week's tip, we
discuss when you need to consult with owners and when you can
go forward without notice.
Click here to read full article:
< http://www.hoaleader.com/public/617.cfm >
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How to Revise Your HOA's Rules
So what do you and your homeowners association board of directors
need to know about revising rules? When do you need to consult
with owners, and when can you just go forward without notice? And
even if your state law or governing documents don't require you
to provide notice, do you need to consider the message you're
sending when you revise rule after rule--some controversial--
without a chance for owners to provide feedback? Here's a smart
process for HOA rule revisions.
Click here to read full article:
< http://www.hoaleader.com/members/616.cfm >
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Can You Save Your HOA Money By Doing Owners' Repairs?
In this week's tip, we explain how helping owners with routine
maintenance can reduce your HOA's expenses, liability, and
disputes among owners.
Click here to read full article:
< http://www.hoaleader.com/public/615.cfm >
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The 5-Step Strategy One HOA Used to Refill Its Coffers
This week's tip is culled from the true story of Lancaster
Condominium Association in Hialeah, Fla. The association went
from having more than half of its 90 units in foreclosure--with
an even greater number delinquent in assessments to the
association--to financial solvency by pursuing an aggressive
legal strategy against delinquent owners.
Click here to read full article:
< http://www.hoaleader.com/public/613.cfm >
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Is Your HOA Board Overregulating Rule Violations?
Do your HOA's board members patrol the grounds with a cautcha-
breakin'-the-rules mentality? Here, our experts explain whether
boards can be too punctilious, irritating good neighbors and even
pushing those owners away from volunteering and participating in
HOA governance. We also offer tips on knowing when to mention
violations and when to give owners time to correct the violations
themselves.
Click here to read full article:
< http://www.hoaleader.com/members/610.cfm >
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