No one likes to admit lack of knowledge. But condo and apartment association boards are generally made up of volunteers – good Samaritans who want to help out the community. And that’s the problem – a good portion of condo association board members have no head for business. And this could put your association at greater risk of loss.
As a nonprofit entity, your condo, homeowner, community or apartment association must meet relevant state laws. What’s more, association board members who aren’t often familiar with the legalese of association practice may not understand the bylaws, covenants, or other legal documents that the association has adopted. Worse, if your board has no standing experience with writing, amending, or interpreting your bylaws, any move by the board could open your association up to legal entanglements.
Read more…
As a condo association, your board has worked hard to maintain a certain standard. That could include the caliber of homeowner. In fact, in a few cases, condo associations have stepped in just as a condo owner is about to close the sale and exercise what’s known as “first right of refusal.” That is, the board will instead offer to buy the property instead of the buyer who has already lined up to purchase the condo. While the practice is much less used in a condo association setup, those people trying to sell through a cooperative association have one very large roadblock to overcome. Read more…
Flickr photo credit: loop oh
If you know what directors and officers insurance is, you know that major corporations won’t operate without it. The liabilities created by a board of directors or by senior management are of the business-crippling kind. D&O coverage allows boards and management to conduct business with one more safety net should decisions go awry and shareholders or customers become litigious.
So why is it important for your association to have D&O coverage? Because those same liabilities apply to your condo or homeowners association. While your board or your management team may not be determining shareholder value or stock prices, they are making decisions that directly affect residents and the value of their properties. Board members not used to running associations could inadvertently (or on purpose) override existing covenants or bylaws. Not only that, boards could underinsure, or fail to insure the property common grounds, exposing the association to a myriad of liabilities. Read more…
How much do you trust the staff you’ve hired to manage the front desk?
I mean we’ve all heard stories about the waiters and waitresses at our favorite restaurant swiping our credit card numbers on a little theft gizmo before running the charge through for the meal. I’ve actually been a victim of something similar. Although I love the restaurant dearly (it serves the best Mexican food) I only pay with cash. period.
Every month large sums of money moves through your books. Rents come in as income, and then there are expenses – utilities, maintenance, staff, supplies, insurance, taxes, advertising, legal fees, tenant damage, etc. Do you have safeguards in place to deter sticky fingers?
Do you have one person write checks and another person sign them? Who reconciles the bank statement each month? Direct theft is one form of employee dishonesty.
Another form would be when an employee uses tenant information – credit card numbers, social security numbers, birthdates, etc. to make fraudulent purchases for personal gain. This form of theft is more difficult to identify. And yet, you could be named as a party in the lawsuit. Read more…
Recent Comments