Association Board Members: Do Your Homework

Jun 5, 2014


How can an association board avoid claims of improper association management?
Understand your duties and obligations as a board member. There are a number of ways to accomplish this.
  • If the association has an orientation book, read it. At the same time, the board should make sure that the book is up to date (hire a community association attorney to make sure the book complies with the relevant state status);
  • Have the community manager, if she or he is experienced, hold an orientation meeting discussing the duties and obligations;
  • If the association does not have a community manager, hire a community association attorney to conduct an orientation. This should be repeated every time the composition of the association board changes. This is an expense that is worth its weight in gold and there are attorneys and consultants specializing in the areas that know how to price this for budget driven associations;
  • The Community Association Institute is always a good resource for this type of information, both at its conferences and through materials found in its bookstore online at www.cai-online.org.
Know Your By-Laws By-Laws are the association’s operating manual.
  • Have a community association legal specialist review the by-laws and the association’s actual practices and make sure that they are in sync. If they are not in sync, revise the by-laws;
  • Require elected board members to read the by-laws and understand how the association is managed;
  • Follow the by-laws and do not get lulled into a false sense of informality.
Know your Covenants, Conditions, & Restrictions. CC&R’s are rules that the board is charged with Enforcing;
  • Have a community association legal specialist review the CC&Rs and make sure they comply with existing law;
  • Require elected board members to read the CC&Rs;
  • The board must be aware of how the CC&Rs have been enforced to avoid discriminatory application.
Know Your Professionals You are only as good as the team you build. Whether an association is small, large, simple, or complex, the use of processionals is worth its weight in gold.
  • Community & Property Managers;
  • Community Association Attorneys;
  • Community Association Financial Advisors & Bankers;
  • Community Association Accountants.
How to choose?
  •  Referrals from other associations or professionals;
  • Avoid conflicts of interest;
  • Check references;
  • Check association experience.
  • What to do?
  • Demand that professionals have their own professional liability insurance;
  • Obtain written engagement agreements;
  • Require written engagement agreements;
  • Require mutual indemnification agreements so that both sides are responsible for their own conduct.

 

This information was provided by McGowan Program Administrators Community Association Insurance & Risk Management. Find more at www.mcgowancompanies.com.

 


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