Hoaleader.com - Tip of the Week - May 18, 2012
Published: Fri, 05/18/12
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Should This HOA Board Member Resign?
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This week's tip addresses a foreclosure-related question from an
HOAleader.com reader: "We live in a small townhouse community of
17 units. The vice president's townhouse has been in foreclosure
for over a year. The association is named party to the
foreclosure lawsuit. Association annual dues appear to be paid.
The association has been reluctant to notify the homeowners of
this foreclosure listed on county records. My question is whether
the vice president is required to resign his post due to a
statute or conflict of interest."
"I haven't seen this precise question yet, and it's an
interesting one," says Elizabeth White, a shareholder and head
of the community associations practice at the law firm of
LeClairRyan in Williamsburg, Va. "We had a similar situation in
our local county, where public notice of foreclosures is
required. One of the county supervisors had her home foreclosed.
The local press got wind of it, and there was a big public
debate about whether she should resign. The sad part was that
she was a really good supervisor. At the time, I wondered what
would happen if the same situation arose on one of our boards."
Why is there even a concern? "The problem in many states is that
foreclosure will wipe out any assessments owed to the
association, and the board member may nolonger be a member if he
doesn't own property in the community," says White. "It also
goes back to fiduciary duty. A board member owes a duty to the
corporation over and above his own self interest. This puts the
board member in a really, really difficult bind because he'll
say he's going to be objective or will abstain from any board
discussion about the foreclosure. But then you've got less than
a full board."
Matthew A. Drewes, a partner at Thomsen & Nybeck PA in Edina,
Minn., who represents associations, also sees the potential for
problems. "I'm not completely shocked an owner would have some
level of concern under the circumstances," he says. "But I don't
think it necessarily gives rise to a conflict of interest for
the board member."
So while problems could arise from the vice president's
foreclosure, our experts don't see them yet. In fact, Jed L.
Frankel, a partner at Eisinger, Brown, Lewis, Frankel & Chaiet
PA in Hollywood, Fla., who advises community associations, is
pretty impressed with this vice president. "I think he's a great
member," Frankel explains "You know who owners stop paying
first? The association, not their mortgage company. So here's a
guy who's facing losing his home, and he's still paying his
dues and volunteering to help the HOA. I wish we had other
people like that."
What about the answers to our reader's questions? Does the HOA
need to disclose the foreclosure to members? And does the VP
need to resign? Find out in our new article:
http://www.hoaleader.com/members/717.cfm
Best regards,
Matt Humphrey
President
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Recent articles posted at HOAleader.com:
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Hoarders: It's Reality at Some HOAs
In this week's tip, we explain that hoarding isn't just a
can't-look-away TV issue. It's a real danger in associations
because of the increased risk of fire in multi-family buildings
like condos.
Click here to read full article:
http://www.hoaleader.com/public/Hoarders-Its-Reality-at-Some-HOAs.cfm
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What Should Your HOA Do to Prevent Hoarding?
Hoarding is a growing problem for associations because of the
increased risk of fire in multi-family buildings like condos.
Click here to read full article:
http://www.hoaleader.com/public/What-Should-Your-HOA-Do-to-Prevent-Hoarding.cfm
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Trayvon Martin Tragedy Hits Close to Home for HOAs
In this week's tip, we offer lessons for HOAs from the very sad
death of Trayvon Martin.
Click here to read full article:
http://www.hoaleader.com/public/Trayvon-Martin-Tragedy-Hits-Close-to-Home-for-HOAs.cfm
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What Should HOAs Learn from the Trayvon Martin Tragedy?
What does the tragic death of Trayvon Martin have to do with
HOAs? The Feb. 26, 2012, fatal shooting of the teenager by an
informal neighborhood watch leader, George Zimmerman, occurred
on the grounds of The Retreat at Twin Lakes Association, a
Sandford, Fla., homeowners association where Martin was visiting
and Zimmerman lived.
Martin's death has triggered soul-searching throughout the
country. It should also prompt reevaluation among HOA boards if,
as many news outlets have reported, Martin's parents are
contemplating a lawsuit against the HOA because it allegedly
endorsed Zimmerman's crimewatch activities.
Why is that a problem? What should HOAs do when it comes to
crimewatch programs? Here are some answers.
Click here to read full article:
http://www.hoaleader.com/members/What-Should-HOAs-Learn-from-the-Trayvon-Martin-Tragedy.cfm
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Discussion Forum Follow-Up:
Seriously, Can You Buy Lotto Tickets for Owners?
An HOAleader.com reader writes: "The HOA's social committee
hosted a party. Eight lottery tickets were bought with social
committee funds and placed on each table as a favor. Is this
opening the door for possible litigation (either from homeowners
not involved or possible winners of a lottery prize)? This issue
has caused disagreement among members."
Click here to read full article:
http://www.hoaleader.com/members/Discussion-Forum-FollowUp-Seriously-Can-You-Buy-Lotto-Tickets-for-Owners.cfm
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