HOAleader.com - Tip of the Week - March 18, 2012
Published: Sun, 03/11/12
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HOA Board Member Responds: Rules Can be Broken
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In this week's tip, we discuss whether you should have a
"no harm, no foul" rule for following your own governing
documents.
The topic arose because an HOAleader.com reader had a
bone to pick with one our experts, Nancy Polomis. In
HOA Boards' Biggest Mistakes: Have You Made These Nine
Blunders?, Polomis said it's a mistake for a board to
knowingly violate its own rules.
Our reader agrees it's a good idea for an HOA board
to follow its own rules. But he adds, "My objection
is that for many rule violations, there is unlikely
to ever be any adverse outcome even if a member ever
challenged the board.... It's not enough to say you
should follow the rules 'just because,' when there's
no real penalty for bending them a bit for a better
result. (Yes, we could try to amend the bylaws, which
would be nice except we can't get two-thirds vote for
anything, no matter how hard we tried.)"
(Read the full discussion forum post and responses.)
Polomis feels our reader's pain. "I read his comments
and was chuckling at some points," she says. "I agree
that it's frustrating that statutes or documents impose
all these mandates with no stated consequence for not
following them. The Minnesota Common Interest
Ownership Act has many, many mandates for what the
builders and the association must do, but at the end
of the day, there are very few, 'This is what happens
if you don't do them' provisions. That leaves the
aggrieved party nothing but to sue."
That's also the case in Florida. "There are certain
things in Florida that there are no penalties for,"
says Dennis J. Eisinger, a partner at Eisinger, Brown,
Lewis & Frankel PA in Hollywood, Fla., who represents
more than 500 condo and HOA associations. "A good
example may be failing to hold an election when
you're supposed to. Under the Florida HOA statute,
there's no remedy if you violate it. In the condo
statue, there's no remedy per se. However, if
the board doesn't do what it's supposed to do,
it's subject to a fine. But that probably wouldn't
happen. So the reader is correct that the penalties
are nil."
But the issue doesn't end there. Find out the risks
your board takes by assuming a "no harm, no foul"
attitude--including the risk of personal liability
for damages--by reading our new article, HOA Board:
"We Don't Follow Our Own Rules. Sue Us!"
http://www.hoaleader.com/members/693.cfm
Best regards,
Matt Humphrey
President
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