HOAleader.com - Tip of the Week - September 8, 2017
Published: Fri, 09/08/17
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Do Your Job as an HOA Board Member—and No More—for Your Own Protection
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In this week’s tip, we give a warning to a reader that taking on too much authority may leave board members at risk of liability they truly don’t want to assume.
The warning comes in response to an HOAleader.com reader’s question asking for a “high-level description of the treasurer’s role” and whether the treasurer is responsible to educate other board members on financial issues.
First, on the legal front, it’s unlikely that any state requires the level of involvement for an association treasurer that our reader is contemplating.
“Here in Colorado, it’s not required now, but it might be in the future, that board members in general need to go to some education session on HOA governance,” reports Melissa Garcia, a partner at Hindman Sanchez, a law firm in Arvada, Colo., with about 1,600 association clients. “Usually, treasurers are also board members. That’s not a requirement now but could be one soon.”
Our experts also universally say this reader sounds at risk of taking on too much responsibility, which can increase the liability of any board member who strays into that zone.
“This question was something I had to do some additional thinking about,” states Barbara Holland, CPM, regional manager for FirstService Residential in Las Vegas. “Very few board members are CPAs or CFOs, where they really understand finance and business. And so many people who become treasurers do it because of personal reasons. Maybe they don’t like how the HOA is spending money.”
But Holland sees the treasurer’s role as limited. “For somebody in the treasurer’s role,” she says, “their expertise is to approve bills and sign checks—as opposed to developing their own financial statement for the association or doing the budget themselves.”
That’s also what Garcia sees in her state. “Here in Colorado, many of the treasurer’s responsibilities are delegated to an accountant or bookkeeper,” she explains. “A management company also usually has a financial team who prepares those documents. It’s the treasurer’s high-level role to be sure that nothing seems out of order. But usually it’s not the treasurer doing this and educating all the other board members.
“Maybe that could happen with a self-managed association,” muses Garcia. “But even then, they usually have a bookkeeper or someone who has that kind of background handling those responsibilities.”
But our experts infer from our reader’s question an interest or willingness to really dive into the association’s financial functions. They find that worrisome. Find out why in our new article: https://www.hoaleader.com/members/3601.cfm
Best regards,
Matt Humphrey
President
P.S. With Hurricane Irma about to hit Florida, we send our best wishes for readers and their communities in the affected area. It's a good reminder at this time, for those of us not immediately facing the storm, to think about preparing our communities for potential future storms and natural disasters. Here's an article that can help your community get started: https://www.hoaleader.com/public/733.cfm
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Brand-new Special Report!
What HOA and Condo Boards Need to Know to Create
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HOA insiders often say that the biggest challenges boards face are "the 3 Ps." Based on your own experience as an HOA board member, you can probably guess that those Ps stand for Parking, Pets, and People.
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Upcoming Event
HOA Reserves and Other Funding Options:
Tips to Be a Smart HOA Money Manager
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Recent articles posted at HOAleader.com:
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What's an HOA Treasurer to Do (We're Serious: What's the Job Description)?
An HOAleader.com reader writes to ask for a high-level description of the treasurer's role in operating the processes that provide the data necessary to prepare financial statements and a more complete description of the other board members' responsibility to understand enough about financial statements so that they can make informed decisions about financial matters.
Click here to read full article:
https://www.hoaleader.com/members/Whats-HOA-Treasurer-Do-Were-Serious-Whats-Job-Description.cfm
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What to Do If an Owner Violates Your Condo's Pre-Sale Owner-Approval Rules
An HOAleader.com reader writes, In our condominium association, new people who purchase or rent from an owner have to go through an approval process that includes a background check. This has been the process for 17 years.
Click here to read full article:
https://www.hoaleader.com/members/What-Do-Owner-Violates-Your-Condos-PreSale-OwnerApproval-Rules.cfm
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Beware If Your Condo Building has "Tuck-Under" Parking
The city of Los Angeles has joined San Francisco in passing ordinances that may require some condo associations to make costly retrofits to protect residents from the risk of future earthquakes. Here's what to know about the buildings at risk and what's required.
Click here to read full article:
https://www.hoaleader.com/members/Beware-Your-Condo-Building-has-TuckUnder-Parking.cfm
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What You Need to Know About HOA-Specific Software: Part 2
This is the second in a two-part series on software that can help you manager your HOA more efficiently. In this article, we provide details on 11 software systems on the market today.
Click here to read full article:
https://www.hoaleader.com/members/What-You-Need-Know-About-HOASpecific-Software-Part-2.cfm
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How to Avoid Unenforceable Terms in Your HOA Rules
An HOAleader.com reader has a really interesting question: "We're updating our HOA rules and regulations and trying to avoid non-specific wording like 'offensive behavior,' lawn ornaments [that are] 'unsightly' or 'distasteful,' and paint color [that's not] 'earth tone.' How are other HOAs addressing 'unenforceable' wording in their rules and guidelines?"
Click here to read full article:
https://www.hoaleader.com/members/Avoid-Unenforceable-Terms-HOA-Rules.cfm
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