GA BOD and Interpretation of Facts

Recently, the BOD of a 60 unit complex decided to enforce some of the rules regarding the Common Elements. According to the Declaration, they are within their rights for doing so. However, as these rules had not been enforced in the 37 years of the Association's existence and the Board did not ask for input from residents even for diplomacy's sake, there was quite a lot of grumbling amongst the owners. A petition was signed by 15% of the owners calling for a special meeting, either in person or by written consents. Specifically, the motion requested that the Board put its new rulings on hold and delay any fines until the entire membership could discuss them at the annual meeting in December.

The Board held a special meeting to discuss the petition. The property manager advised them they had no choice but to allow the petition. According to the minutes of this meeting, the Board also checked the rules regarding the quorum and majority type needed for a special meeting, and specifically noted the paragraph which starts off with "“Except as may be provided elsewhere, the presence, in person or by proxy at the beginning of the meeting, of Owners entitled to cast one third (1/3) of the eligible votes of the Association shall constitute a quorum."

The Board did send notice of the meeting in the allotted time along with the motion. They did not send the cover letter that explained the motion as had been requested by the petitioners, nor did they send the proxy forms. After some back and forth talk between the Board and the petitioners, it was agreed that the meeting would still take place, but just as a town hall type of forum.

During the town hall meeting, the Board stated that enforcing these rules is not a matter of choice. Instead, according to the Board, they are a required to do so by the Georgia Condominium Act (GCA). When challenged by an owner that the GCA does empower them but does not take away their discretion to act, they denied any such discretion. It should be noted that the Declaration repeatedly uses the phrase, "the Board, at their discretion, may..."

The Board also claimed that the Association's insurance policy does not cover liability damages for anyone except the Board members themselves. Yet, in minutes from a meeting held earlier in the year state: "We are insured up to $2,000,000 personial liability with no detectable. $1,000,000 liability for officers and directors."

We can only hope that detectable = deductible and pers personal.

Can anyone here enlighten me on the gap between the Board's claims and appearances to the contrary? Thank you for any help you can offer.

The professional liability (D&O) insurance probably covers Board members, previous Board members (for 3 years), committee members, volunteers, and agents. Ask for a copy of the insurance policy or else the name of the insurance carrier to call to find out exact coverage.

Paul and Roger, thank you both for your thoughts. I'd like to clear up a couple of things. The reason the meeting was held as a town hall type of forum is because the BOD did not send proxies out with the notice of the special meeting. Two reasons were given to the petitioners consisting of 'we forgot' and 'we didn't know we were supposed to'. As there was not enough time to send the proxies before the date of the meeting selected by the Board, the petitioners compromised with the forum. (The reason I included the line from the emergency meeting the board conducted when they received the petition is because it is pretty clear that they neither forgot or were unaware.)

As far as the insurance goes, that information comes from a BOD meeting held last February. Maybe I should just ask, what does the $2,000,000 for bodily injury, property damage, personal injury and advertising injury cover if not accidents that may occur on the property? The $1,000,000 is for the Board's D&O. Is this typical of what most associations of our size choose for coverage?

Roger, can I ask what specifically the Board could be held liable for when they don't enforce the rules? The Board has never been sued nor even threatened with same in the 37 years prior to this. At the town hall forum, which attracted more owners than the usual annual meetings, owners were upset because many had bought in here because of the liberal policies.

Thank you all again.