HOAleader.com - Tip of the Week - May 30, 2014
Published: Fri, 05/30/14
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When Disagreement is Called a Breach of a Board's Fiduciary Duty
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In this week's tip, we offer lessons on how to make petulant board members on
the "losing" side of a board decision shape up.
"The fiduciary duty of a board member depends on the context," says Bob
Diamond, a partner at the law firm Reed Smith in Falls Church, Va., who helped
write the Washington, D.C., condo act in 1976 and worked on the Uniform Condo
Act, which 24 states have adopted. "I have experience with people who are
difficult being on boards, and I've even seen some who are probably outright
certifiable.
"As a board member, you have an obligation to investigate, to question, to do
your due diligence into activities of the board and decisions the board
makes," says Diamond. "That's perfectly acceptable. That's your job, and
that's what your fiduciary duty requires. So I think it's important to make
distinctions. Assume it's a board member who says, 'I have a lot of
disagreements with what the board did, and they don't agree with me.' Then
it's inappropriate for the board member to go out into the community and say
the other board member are bad.
"On the other hand, assume one of seven board members finds out the board is
doing something in violation of the governing documents or something
that's illegal, or that the board is lying about something to the
community," explains Diamond. "That board member has an obligation to go to
the community to say, 'Your board's stealing' or 'Your board's violating
the law.' But you'd better be right.
"This is nuanced stuff," notes Diamond. "It's not all black and white."
That said, some things are more black and white. When boards have to make
judgment calls, there's often no obvious right or wrong answer. "Look at a
single decision," suggests Diamond. "We're going to hire or not hire a
manager. Or maybe we're going to move our accounts to one bank or another or
not. We discuss the issue, get proposals, and do our due diligence. Then it's
a 6-1 or 4-3 vote-I don't care the number. The fiduciary obligation of the
board members on the losing side requires them to support the board decision
and not go out and carp about it to members of the association."
Jump to our new articleto find out how to "correct" a board member's
unceasing and public trashing of fellow board members:
http://www.hoaleader.com/members/1013.cfm
Best regards,
Matt Humphrey
President
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Recent articles posted at HOAleader.com:
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How to Handle a Sulking HOA Board Member
An HOAleader.com reader asks, "What are you to do when a board member doesn't
like the way a meeting on discussing of a financial matter doesn't goes his
way and knows at the next membership meeting he will be outvoted and then
proceeds to go on our HOA website and tries to make the board look like it's not
doing its fiduciary duty?" Here our experts offer suggestions for coaching
this board member to act more professionally.
Click here to read full article:
http://www.hoaleader.com/members/How-Handle-Sulking-HOA-Board-Member.cfm
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Reality TV Calls: What's Your HOA's Answer?
Quick question: What's the name of the HOA where Vicki Gunvalson of the Real
Housewives of Orange County lives? It's Cota de Casa. Which brings us to this
week's tip. There's a growing trend of reality TV shows looking to film in
HOAs, with the premise of their shows being that living in an HOA is a pain in
the behind. If that happens at your HOA, our experts say there are issues you
should consider.
Click here to read full article:
http://www.hoaleader.com/members/Reality-TV-Calls-Whats-Your-HOAs-Answer.cfm
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The 'Real' Issues in Allowing Reality TV to Film in Your HOA
Several reality TV production companies are pitching shows in HOAs, with
the premise that living in an HOA is a pain in the behind. Could your HOA become
the next Coto de Caza, the HOA made famous because Vicki Gunvalson of the Real
Housewives of Orange County lives there?
Click here to read full article:
http://www.hoaleader.com/members/Real-Issues-in-Allowing-Reality-TV-Film-in-Your-HOA.cfm
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Owners Acting Like HOA Police Officers: How to Arrest the Problem
In this week's tip, we answer a question from a reader who wants to advice on
how to handle homeowners who've taken upon themselves to police other
residents--for example, asking to check cups for alcohol at the pool--to
the irritation of many.
Click here to read full article:
http://www.hoaleader.com/members/Owners-Acting-Like-HOA-Police-Officers-How-Arrest-Problem.cfm
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When HOA Residents Act Like Police Officers, Should the Board Step In?
An HOAleader.com reader asks, "Our residents and guests are being harassed
by a tag team match of residents when an infraction occurs, i.e., [we have] a
no-alcohol sign, but they check paper cups for alcohol. The pool is for
everyone's enjoyment, and many of the residents feel they are being watched
while at the pool. Any suggestions on how our board can handle this
situation? How do other community pools operate?"
Click here to read full article:
http://www.hoaleader.com/members/When-HOA-Residents-Act-Like-Police-Officers-Should-Board-Step-In.cfm
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