HOAleader.com - Tip of the Week - June 15, 2012
Published: Fri, 06/15/12
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Time for Your Annual D&O Insurance Policy Checkup
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This week's tip reminds you that it's wise to review
your directors and officers insurance every once in
a while to be sure you're not exposing yourself to
unnecessary risk.
"There was a time when being appointed to an
association board was somewhat ceremonial and
considered an honor and a position of status,"
says Alan Chesler, a partner at Alan James Insurance
in Sunrise, Fla. "Those times, were, of course, when
associations were thriving, collecting monthly
assessments on a regular basis, and easily
maintaining services, lifestyles, and property
values. But times have changed as associations
have been plunged into financial distress."
You're now required to make tough decisions
about the management of your association,
adds Chesler, and those tough decisions have
resulted in more residents suing board members
for a variety of issues. Maybe you have to cut
services or employees because of insufficient
funds or you've voted to pursue a foreclosure
against an owner. It's those difficult decisions,
says Chesler, that trigger more claims and threats
of lawsuits.
"HOAs are under enormous amounts of financial
pressure right now," agrees Gordon Goetz, president
and CEO of Goetz Manderley, a community association
management company based in Santa Maria, Calif.,
that manages 210 associations totaling 17,000 homes
in California's San Louis Obispo, Santa Barbara, and
Kern counties. "With people not paying their dues,
HOAs don't have money to fund reserves and aren't
taking care of basic maintenance. There are home
owners who'll sue the association to perform.
Although it's not rampant yet, it's certainly
something we've seen more of than in the past.
The more struggles the board has to meet its
fiduciary obligationsbecause of financial issues,
the more potential there is for a lawsuit."
It's not enough to just have D&O insurance.
You need to be sure it covers you for all possible
risks. Typical claims can include wrongful
termination, sexual harassment, discrimination,
and mismanagementof funds, but Chesler says
policies should not only cover board members
but also association employees and committee
members or volunteers.
What types of claims should your policy cover?
And how much coverage should your HOA carry to
protect you? Find out in our new article:
http://www.hoaleader.com/members/728.cfm
Best regards,
Matt Humphrey
President
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Recent articles posted at HOAleader.com:
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Hey, HOA Manager: Shape Up or Ship Out
In this week's tip, we answer two readers' question about how to make their
management company start meeting the terms of their contract. One writer
says his HOA has written emails to the management company about the lack of
performance, and the emails have gone unanswered.
Click here to read full article:
http://www.hoaleader.com/public/Hey-HOA-Manager-Shape-Up-or-Ship-Out.cfm
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Is This Board's Waiver of Its HOA's Rules Wise?
In this week's tip, we ask whether a board's acquiescence to an owner's rule
violation is a good idea. (Hint: No.)
Click here to read full article:
http://www.hoaleader.com/public/Is-This-Boards-Waiver-of-Its-HOAs-Rules-Wise.cfm
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When Can You Waive Your HOA's Rules? Discussion Forum Follow-Up
An HOAleader.com reader writes, "A homeowner replaced his roof and chose a
color that isn't in compliance with our replacement standards. It's not
even close to the existing colors. The board stated at the community annual
meeting that the owner didn't follow the procedure of obtaining approval
through our architectural request process. The board chose to ignore the
homeowner's negligence and opted to have each of the adjoining townhomes in
his section match his noncompliant color when the time comes for them to
replace their roofs. Their reasoning is that the homeowner can't afford to
replace the new roof, and they don't believe it will affect the property
value.
Click here to read full article:
http://www.hoaleader.com/members/When-Can-You-Waive-Your-HOAs-Rules-Discussion-Forum-FollowUp.cfm
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New Federal Rules Just Gave Condos/HOAs Big Win
On March 15, 2012, the Federal Housing Finance Agency (FHFA) published its
final rule on transfer fees, handing community associations a big victory.
Here's why the rule from a seemingly obscure regulatory agency matters to
you.
Click here to read full article:
http://www.hoaleader.com/members/New-Federal-Rules-Just-Gave-Condos-HOAs-Big-Win.cfm
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Distributing Minutes: Can Your HOA Save Money?
Does your HOA print and snail mail meeting minutes? If so, is it required to do
that, or would email or posting online or in a common area do the trick and save
your HOA money? Here's some insight.
Click here to read full article:
http://www.hoaleader.com/members/Distributing-Minutes-Can-Your-HOA-Save-Money.cfm
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