Differences -

-- If the newbie has served as a volunteer on non-profit, non-HOA, non-condo corporate boards, then shareholders were probably not involved; nor did contractual terms with shareholders known as "covenants" exist; and nor was there much infrastructure to be maintained. Board service for charitable non-profits is largely honorary, with the key qualifying criterion being the board member must donate a certain amount of money each year.

-- If the newbie served on for-profit corporate boards, then shareholder involvement was likely limited to strictly specific votes at the annual meeting; no covenants with shareholders exist; infrastructure was professionally managed with the board having minimal direct responsibility; and directors are paid.

Could you give an example of an instance where the newbie didn't seem to get it? That may indicate where some of the trouble is.

One thing that is different (s ElleN says) is that for-profit companies with shareholders and non-profits serving a specific demographic are in some ways beholden to these groups and act with them in mind.

These corporations also have CEOs and Executive Directors that have a level of authority not seen in HOAs, despite the fact that some board presidents like to style themselves as "CEOs". In HOAs the board president has no more authority that the other directors - all have a single vote and none of them can tell the others what to do. HOA directors will have specific jobs depending on their officer roles, but that's not the same thing.

Hi Kerry, Yes, I've searched through Davis-Stirling quite often. This time, my search seemed to be just nuanced enough not to actually get an answer.

We are 51 units. We have a management company =, who handles a few other HOAs so I couldn't tell you how many hours they spend on us. Our property manager has done a good job and has been an excellent resource for my many questions. It's because of the "nuance" that I ask here.

I like what you say about the for profit corporations having a "boss". This makes me wonder if he keeps referring these questions to me because he doesn't realize that I hold no more power than the next director, including him.

I'm getting the sense that our lawyer newbie is extremely concerned about liability. We do carry D&O insurance so we would be covered for decisions made within our duties. I understand that of course these decisions would have to be made with best judgement guidelines.

For example, we are 51 townhouse style units. Some are connected as 2, 3 or maybe even 5 units. One of our 2 units buildings noticed termites. So we consulted with a couple termite companies. They came, gave their evaluations and bids. The unit needed to be tented. The Board agreed and arranged a meeting with the affected homeowners and the chosen termite company. Our newbie was very concerned, "what if something goes wrong in the fumigation process", "the homeowners need to sign a hold harmless agreement so the Board is not liable". I disagreed, explaining that the Board members are not the termite experts, we depend on the advise of experts and then hire the best we can (certified, well rated, etc) and then the termite company holds the responsibility for "something going wrong". My opinion in this case is that the Board would more likely hold responsibility if we ignored the advise of the experts and then "something went wrong".

There were 3 instances in which he asked for "hold harmless" agreements in the last Board meeting. I can only remember this one. I did suggest that he may need to occasionally remove his lawyer hat. ;-)

He needs to keep his lawyer hat on but remember he is not specialized in HOA law. If he were specialized in HOA law, he would know to read the covenants and California statutes. These say the HOA indemnifies the directors in situations like what you described.

Can't figure out your obsession with how many hours per week a manager spends on an account. For example, you spend $200K per year for two onsite, full-time employees of a management company working, what, 40 hours per week. How many hours would a manager spend per week if their monthly fee was $350.00 per month?

Per my agreement, I spend whatever amount of time (hours) to achieve what I have outlined as what we do for the account on a monthly/yearly basis. What you also have to calculate is the amount used for the accounting department to send statements, receive and post payments, and receive and pay invoices.

I ask about hours per week from a PM to get a sense of how much support a board has from their PM. Period.

Sorry, Max, your desire to snipe at me has nothing to do with the OP’s question.

Actually, I think that you need someone like Mr. Lawyer on association boards, because I get the sense that too many overlook liability as a concern. (The regular posters here know that I often mention it in my responses.)

It sounds like your community may have a lot of common area, which means lots of opportunity for the association's actions to affect others and lots of opportunity for people to get injured on HOA-owned property.

I'm in condos, and for example our attorney has been adamant about not allowing unit owners to hold yard sales. He's seen what happens: damage to the common elements, people tripping and suing the association (and the insurer saying "nope, that was commercial activity, you aren't covered for that"), an increase in crime after strangers had the opportunity to case the joint, etc.

Many associations also have tight budgets and like to use volunteers in place of professional contractors. They often overlook both workers comp insurance and hold-harmless agreements signed by the volunteers, both of which are needed.

You're right about professional contractors carrying their own liability insurance. But anybody can sue anybody else for any reason. If a homeowner were to be harmed or their personal property damaged, they're probably going after the deep pockets, which means they can and will sue the HOA. You need to be able to defend yourselves. This is especially true if you're treating the units in addition to the common areas. If we were faced with a termite issue, we'd have a chat with both our insurer and the association attorney about risks to the HOA as a result of this. We do not treat the insides of units because of liability concerns - that's strictly up to the owners of those units.

You're also right that the HOA is more at risk if the board ignored advice of the experts. ** But following their advice does not completely eliminate risk and liability.** It just lessens the impact if things go sideways.

I'm actually on Team Lawyer here. I think he was probably right about the hold-harmless agreements in the case of termite treatments. He may be overly cautious, but the consequences of optimism tend to be worse than the ones of too much pessimism. He's got your backs. We are a litigious society. and people go after what they perceive to be the big bucks.

I would say primarily an HOA board has a fiduciary duty to the association and its members whereas a private company has no such duty to others.

Until your lawyer director shows he's read your governing docs and has learned a few things about the Davis-Stirling Open Meeting act in CA, which comprises a lot of materials, I would not count on her/him for valid HOA advice.

During my 14 years on ur HOA Board in CA, tow attendees serve as well. One specialized in CA employment law and toed to preset she know CA HOA law, which she did not, although she did learn some. Another's speciality was unknown to me but he, too tried to intimidate the rest of our Board into thinking he understood CA HOA a law. He did not bother learning our CC&Rs.

An attorney on the board now is a personal injury lawyer from another state. While he has learned very little after 1-1/2 years and contributes almost nothing, our MC's orientation seminar for directors did teach him to often ask, "What do our CC&Rs say about that?" And to ask if statutes permits xy or z. That's a good step.

A brand new board member, appointed after a resignation is an attorney with our city with background in juvenile laws. Looking at her background, she does have experience in reviewing and reorganizing some major reserve accounts for a municipality. We could use that!

It might help, Patti, to check the national organization, the Community Association Inst. (CAI) website for some free literature. The best is the Board Members Toolkit. It'd be excellent for all board members to review. It might answer your own questions too.

Thank you Kerry,

I have learned over time that our contracted HOA attorneys are the best resource for legal questions. We (The Board) have referred back to them on several occasions when we were "just not sure" of the response. In the past I don't mind our lawyers looking over a contract, but again, if I have a real concern, I want it to go back to our HOA lawyers. Everybody has an area of expertise, maybe helpful, maybe not.

I'm reviewing the CI website now. Good resource. Thanks again

I agree that some of the board members seem to be overly cautious since it doesn't sound like you've been taking unreasonable risks.

Some of the overly cautious behavior you're seeing may result from just not understanding the topic. I suggest inviting your insurance agent to a board meeting and have them talk about this stuff. We did that, and it was very helpful (condo insurance is especially confusing). Homeowners also got to ask questions. One topic I found useful was the difference in liability depending on whether a hazard was man made or was naturally occurring and how to tell the difference.

FWIW, our CC&Rs have a restriction against playing on the common elements, and I've seen similar language in other CC&Rs for this area. Our attorney scoffed at this but I'm just waiting for someone to step in a mole or chipmunk hole and break an ankle. Yes, these things are naturally occurring. But... Our current board has been reluctant to hire professional "critter-gitters" - because money - and their volunteer/amateur attempts have been ineffective. So my off-the-cuff assessment is that we have increased liability as a result of using uninsured volunteers (1) who aren't following proper procedures in handling baits and poisons that may be regulated (2) and the critters are having a field day tunneling all over (3).