HOAleader.com - Tip of the Week - December 16, 2016
Published: Fri, 12/16/16
=================================================================
Two Associations Were Sued, But Only One Made Mistakes
=================================================================
In this week’s tip, we share the secrets of a lawyer who’s defended more association boards than he can probably count.
Terrance Bostic is senior counsel at Marshall Dennehey Warner Coleman & Goggin in Tampa, Fla. Over his career, he’s handled all kinds of cases for condos and HOAs, and he says some board members just think they can do what they want.
“Some people, when they’re elected to the board, the phrase I’ve used is that they don’t understand they’re not the king,” explains Bostic. “They don’t understand they have statutory duties they have to follow. They feel they’re free to do mostly whatever they want to do.
“But they need to have counsel, and they need to have a manager,” contends Bostic. “They need to understand what their duties are and what they can and can’t do, especially in smaller associations where there are limited resources. They often don’t have the ability, perhaps the financial ability, to have the support they need.”
That said, Bostic’s first case study is the flip side of that coin; it deals with what’s alleged to be a breach of the HOA board’s fiduciary duty based on an allegation that the board overstepped its authority. But Bostic sees the case a little differently. “I think the actual allegation is that the board didn’t use good business judgment,” he states.
The case involves a small, 16-unit association. One owner had fallen behind in assessments, and the board was tolerant, like most associations are, notes Bostic.
“They tried normal collection efforts,” he recalls. “Those were unsuccessful, so they ended up filing a lien. That didn’t get the owner’s attention, so they hired a lawyer to file a foreclosure action. I think they have a fiduciary duty to do that. When you have someone who’s not paying, you can’t sit back and let them continue without limits. To not bring an action would be a breach of the board’s fiduciary duty.”
The owner hired an attorney, and Bostic says it’s been scorched-earth litigation since. The association has racked up $30,000 in attorneys’ fees, and it had to pass a special assessment of just under $2,000 a unit to cover those fees. Still, there’s no end in sight.
“Then along comes another one of the owners, who files a complaint alleging the board didn’t use good business judgment in bringing the foreclosure action based on the value of the property, the amount of the mortgage, and the attorneys’ fees,” states Bostic. “The owner says that was a breach of the board’s fiduciary duty.”
Bostic has filed a motion to dismiss the second owner’s case. Hear about his argument and the lesson of this case and another one he says is worth boards hearing about in our new article: http://www.hoaleader.com/members/2475.cfm
Best regards,
Matt Humphrey
President
=================================================================
Free Upgrade to Group Membership
=================================================================
HOAleader.com members can now get a complimentary upgrade to group membership.
With a group membership, the rest of your HOA or condo board--up to 9 additional members--will get their own member accounts.
Plus, when you register for a webinar, your entire group can register for the price of one person. Everyone gets their own dial-in information, no need to huddle in one location.
It's a fantastic value.
Make your job easier. Help the rest of your board get up to speed on HOA management best practices by adding them to your HOAleader.com membership today for no cost.
Already a member? Create complimentary accounts for the other members of your HOA board now: http://www.hoaleader.com/members/main.cfm
Not a member yet? Sign up now with our low individual rates and then add your fellow board members for no additional cost: http://www.hoaleader.com/details.cfm
=================================================================
Recent articles posted at HOAleader.com:
=================================================================
Case Studies in HOA Liability: A Defense Lawyer Speaks
Sometimes, you just don't realize you're doing something that can get your HOA in trouble. Other times, you do everything right, and your HOA still gets smacked with a lawsuit. Terrance Bostic is senior counsel at Marshall Dennehey Warner Coleman & Goggin in Tampa, Fla. Over his career, he's handled all kinds of cases for condos and HOAs, and he says some board members just think they can do what they want.
Click here to read full article: http://www.hoaleader.com/members/Case-Studies-in-HOA-Liability-Defense-Lawyer-Speaks.cfm
=================================================================
HOA Elections: A Step-by-Step Guide to Plan, Properly Notice, and Execute Successful Elections at Your Homeowner Association
Watch this in-depth on-demand webinar led by two community association lawyers who've devoted their extensive--and impressive--careers to solving the challenges HOAs face every day. You'll log out of the webinar with valuable, workable tactics you can implement immediately to make your election process smoother, more successful, and less contentious.
Click here to read full article: http://www.hoaleader.com/products/hoa-elections-guide-webinar-b.cfm
=================================================================
Want to Dump an Amenity? Tread Carefully
In this week's tip, we answer a reader's question dealing with that thorny issue of whether boards have the authority to pave over their pool or turn their tennis court into a greenbelt. There's a twist, however. Our reader wants to know if a board can eliminate amenities by getting rid of equipment necessary for amenities, rather than taking the more noticeable step of getting rid of the amenity altogether.
Click here to read full article: http://www.hoaleader.com/public/Want-Dump-Amenity-Tread-Carefully.cfm
=================================================================
Can You Eliminate Equipment for Amenities But Not the Amenities?
An HOAleader.com reader writes, "Has anyone eliminated amenities, such as a tennis court (taking down tennis net) or gym? I'm under the impression that the board can vote to eliminate this type of amenity as long as they are in line with the business judgment rule. We're in Florida.
Click here to read full article: http://www.hoaleader.com/members/Can-You-Eliminate-Equipment-for-Amenities-But-Not-Amenities.cfm
=================================================================
What You Need to Know About Grievance Committees
In the October HOAleader.com webinar on protecting your HOA from the neighborhood sociopath, community association manager and panelist Lisa Smith mentioned grievance committees as an internal tool to help owners resolve disputes. Here's a brief overview on what they typically cover and how well they work.
Click here to read full article: http://www.hoaleader.com/members/What-You-Need-Know-About-Grievance-Committees.cfm
=================================================================
Get your own copy!
Subscribe to the HOAleader.com Tip of the Week at: http://www.hoaleader.com/public/department49.cfm
=================================================================
Please feel free to forward the *entire text* of this email to others.
Copyright 2016, Plain-English Media, LLC
(866) 641-4548
http://www.hoaleader.com