Does the board have to be truthful?

TomP11 (California)
Posts: 113

Posted:

I am sitting in a meeting, and my board is not being truthful. One owner brought up that they are having trouble with the sale of their home because the lenders have discovered that the community is underinsured. The board stated that they were not aware that the community did not have sufficient coverage. I recall this exact conversation last year after the special assessment. The insurance broker and the property manager warned the board about choosing the cheapest option. But they wanted to take the money and use it for landscaping. Yes, they spent $1.5 million on landscaping. My question is, does an HOA board have to be truthful?

TomP11 (California)
Posts: 113

Posted:

Sorry for the second post I think I hit refresh during the posting

TimB4 (Tennessee)
Posts: 21,059

Posted:

Duplicate postings often happen out of the habit of double clicking.

With this site, you only need to depress the submit button once.

TimB4 (Tennessee)
Posts: 21,059

Posted:

They may have lied.
They may have been telling the truth and didn't remember.
They may have been telling the truth and thought they had enough insurance.

Since you were sitting in the meeting, did you mention the conversation you remembered?

DeanJ
Posts: 1,786

Posted:

Quote:

Posted By TomP11 on 07/24/2025 7:55 PM
I am sitting in a meeting, and my board is not being truthful. One owner brought up that they are having trouble with the sale of their home because the lenders have discovered that the community is underinsured. The board stated that they were not aware that the community did not have sufficient coverage. I recall this exact conversation last year after the special assessment. The insurance broker and the property manager warned the board about choosing the cheapest option. But they wanted to take the money and use it for landscaping. Yes, they spent $1.5 million on landscaping. My question is, does an HOA board have to be truthful?

You were at a meeting attended by your insurance broker last year? That’s rather unusual.

SheliaH (Indiana)
Posts: 6,964

Posted:

What Tim said.

All of the homeowners are business partners with each other since all of you co-own the common areas, so it makes sense that the people they elect to serve on the board to manage the association's resources are truthful, even if the news is unpleasant. Conversely, if there was talk of being underinsured, there may have also been talk of increasing assessments to cover the new premium. Did that conversation take place, and if so, what happened? If everyone said hell no, assessments are already "too high", this is another reason why you're at this point.

Anyway, you know the answer to this - if no one speaks up, the problem won't be faced, let alone addressed, and you can't always wait for someone else to do it. Looks like you'll have to get this party started by talking to your neighbors to see who feels the same way (start with the person who's selling - he or she may be on the way out, but they can help persuade people to pay attention less the same thing happen to them). All of you will need to go to the next board meeting to demand answers and if you're blown off, it may be time to call a special meeting to see if these folks should remain on the board. Read your documents to see what's required.

There are lots of conversations on this websites about truth telling in a HOA, the fallout (there's always some), and what it takes to turn things around - read some of them and bring your questions back to this conversation to get updated information.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

ElleN (Idaho)
Posts: 1,334

Posted:

Quote:

Posted By TomP11 on 07/24/2025 7:55 PM
My question is, does an HOA board have to be truthful?

I think the question you want to ask is:

Is the board violating the bylaws, articles of incorporation or the declaration of covenants, conditions and restrictions, or state statutes?

In general the law permits an owner to take a board to court (or possibly an ombudsman, depending on the state) to enforce all of the above governing documents.

One generally cannot force a board to be truthful at board meetings.

In both cases (board is violating governing docs or state law; board is lying), your best chance of causing change is to disseminate the correct information (if your really have the correct information) and/or elect new directors.

Disseminating the correct information will likely make you enemies. But many do it as part of their campaign to get new directors elected.

MarkM19 (Texas)
Posts: 1,459

Posted:

Tom,
I am going to take the other side of your argument from the board's perspective.

1) The owner may be having problems selling for any number of reasons including not getting an inflated price.
2) Never saw a lender ask for the HOAs insurance documentation before.
3) The board choosing the lowest bidder does not necessarily mean they got lesser coverage.
4) The board and maybe the property manager are the only people who actually compared the policies apple to apples.
5) Owners typically blame everyone but themselves for the home not selling. This is not surprising.

To make the claim that the board is not telling the truth means they all got together and are hiding facts from the owners and the insurance company. I have been on boards for 1 years now and every board is made up of different types of people. Some are just seat fillers, and they do no research on important matters. Many have very little experience with the day-to-day operation of managing the PM or the HOA.

We do not have all the details, so we are left to once again speculate on who is at fault. Unfortunately, only the board has the power to give the answers you may be looking for here.

TomP11 (California)
Posts: 113

Posted:

Quote:

Posted By TimB4 on 07/25/2025 5:48 AM
They may have lied.
They may have been telling the truth and didn't remember.
They may have been telling the truth and thought they had enough insurance.

Since you were sitting in the meeting, did you mention the conversation you remembered?

It was a Zoom meeting, and that owner had the last question. I had my had raised and they said address everything else to to property manager.

TomP11 (California)
Posts: 113

Posted:

Quote:

Posted By DeanJ on 07/25/2025 6:11 AM

Posted By TomP11 on 07/24/2025 7:55 PM
I am sitting in a meeting, and my board is not being truthful. One owner brought up that they are having trouble with the sale of their home because the lenders have discovered that the community is underinsured. The board stated that they were not aware that the community did not have sufficient coverage. I recall this exact conversation last year after the special assessment. The insurance broker and the property manager warned the board about choosing the cheapest option. But they wanted to take the money and use it for landscaping. Yes, they spent $1.5 million on landscaping. My question is, does an HOA board have to be truthful?

You were at a meeting attended by your insurance broker last year? That’s rather unusual.

Yes, the insurance broker attended the meetings to let everyone know about the insurance situation. We are in CA.

MarkM19 (Texas)
Posts: 1,459

Posted:

Tom,
Just a few of the many reasons why Zoom meetings are a thing of the past.

Please tell us a little about your HOA?

Is your association and HOA or COA?

How many units?

How old is your development?

TomP11 (California)
Posts: 113

Posted:

Quote:

Posted By SheliaH on 07/25/2025 6:21 AM
What Tim said.

All of the homeowners are business partners with each other since all of you co-own the common areas, so it makes sense that the people they elect to serve on the board to manage the association's resources are truthful, even if the news is unpleasant. Conversely, if there was talk of being underinsured, there may have also been talk of increasing assessments to cover the new premium. Did that conversation take place, and if so, what happened? If everyone said hell no, assessments are already "too high", this is another reason why you're at this point.

Anyway, you know the answer to this - if no one speaks up, the problem won't be faced, let alone addressed, and you can't always wait for someone else to do it. Looks like you'll have to get this party started by talking to your neighbors to see who feels the same way (start with the person who's selling - he or she may be on the way out, but they can help persuade people to pay attention less the same thing happen to them). All of you will need to go to the next board meeting to demand answers and if you're blown off, it may be time to call a special meeting to see if these folks should remain on the board. Read your documents to see what's required.

There are lots of conversations on this websites about truth telling in a HOA, the fallout (there's always some), and what it takes to turn things around - read some of them and bring your questions back to this conversation to get updated information.

They had a special assessment for insurance, which was $9,765, just for insurance. Our broker provided us with an estimate of what insurance could cost, based on other properties he works with. They got legal involved because no owner was to vote on it, and the lawyer stated that it was acceptable if the money was only to be used for insurance, and if we had extra, it was to be placed in an account for insurance the following year. Well, the insurance broker came back with three companies. Two were of full coverage, and the third, the cheapest, lacked fire coverage. Again, we are in CA. They selected the cheapest one. The broker warned that it could cause problems with the two loans the Board took out and with the owners' own lenders. Other owners spoke up at the time, saying it was a bad idea, but they still went ahead with it.

Well, they took the extra money that should have been for insurance and used it for landscaping. They also increased the dues by $150 a month.

TomP11 (California)
Posts: 113

Posted:

Quote:

Posted By MarkM19 on 07/25/2025 8:00 AM
Tom,
I am going to take the other side of your argument from the board's perspective.

1) The owner may be having problems selling for any number of reasons including not getting an inflated price.
2) Never saw a lender ask for the HOAs insurance documentation before.
3) The board choosing the lowest bidder does not necessarily mean they got lesser coverage.
4) The board and maybe the property manager are the only people who actually compared the policies apple to apples.
5) Owners typically blame everyone but themselves for the home not selling. This is not surprising.

To make the claim that the board is not telling the truth means they all got together and are hiding facts from the owners and the insurance company. I have been on boards for 1 years now and every board is made up of different types of people. Some are just seat fillers, and they do no research on important matters. Many have very little experience with the day-to-day operation of managing the PM or the HOA.

We do not have all the details, so we are left to once again speculate on who is at fault. Unfortunately, only the board has the power to give the answers you may be looking for here.

2) It is a condo/townhouse, so there is a master policy to cover up to the drywall. It was brought up that the cheapest one was not going to full coverage. It was cheaper by $600,000 and was only an increase of $50,000 to the insurance company that dropped us.

3) The cheapest one lacked full fire coverage, and we are in a fire zone

4) At the meeting, the insurance broker explained all the policies to everyone who was in attendance

TomP11 (California)
Posts: 113

Posted:

Quote:

Posted By MarkM19 on 07/25/2025 10:23 AM
Tom,
Just a few of the many reasons why Zoom meetings are a thing of the past.

Please tell us a little about your HOA?

Is your association and HOA or COA?

How many units?

How old is your development?

Since the lockdowns, it has been all Zoom meetings. It is referred to as an HOA condo/townhouse. 150 units, I don't know how many buildings there are. 1973, so 50 years.

MarkM19 (Texas)
Posts: 1,459

Posted:

Tom,
So my expertise in not in the Condo side of the HOA business. I now get what you were originally speaking about with the cheaper polices. Eliminating coverage is always risky business for boards. What I have done with our HOAs in the past is raise deductibles while keeping coverage the same. Many insurance carriers like large deductibles because it helps limit risk for them. I have always suggested that the deductibles be 10 to 20K and take the reduction in rates and setup a separate account for claims if or when they come at the board.

The idea with insurance these days is it is the emergency plan and only for that purpose.

DeanJ
Posts: 1,786

Posted:

Quote:

Posted By TomP11 on 07/25/2025 10:25 AM

Posted By SheliaH on 07/25/2025 6:21 AM
What Tim said.

All of the homeowners are business partners with each other since all of you co-own the common areas, so it makes sense that the people they elect to serve on the board to manage the association's resources are truthful, even if the news is unpleasant. Conversely, if there was talk of being underinsured, there may have also been talk of increasing assessments to cover the new premium. Did that conversation take place, and if so, what happened? If everyone said hell no, assessments are already "too high", this is another reason why you're at this point.

Anyway, you know the answer to this - if no one speaks up, the problem won't be faced, let alone addressed, and you can't always wait for someone else to do it. Looks like you'll have to get this party started by talking to your neighbors to see who feels the same way (start with the person who's selling - he or she may be on the way out, but they can help persuade people to pay attention less the same thing happen to them). All of you will need to go to the next board meeting to demand answers and if you're blown off, it may be time to call a special meeting to see if these folks should remain on the board. Read your documents to see what's required.

There are lots of conversations on this websites about truth telling in a HOA, the fallout (there's always some), and what it takes to turn things around - read some of them and bring your questions back to this conversation to get updated information.

They had a special assessment for insurance, which was $9,765, just for insurance. Our broker provided us with an estimate of what insurance could cost, based on other properties he works with. They got legal involved because no owner was to vote on it, and the lawyer stated that it was acceptable if the money was only to be used for insurance, and if we had extra, it was to be placed in an account for insurance the following year. Well, the insurance broker came back with three companies. Two were of full coverage, and the third, the cheapest, lacked fire coverage. Again, we are in CA. They selected the cheapest one. The broker warned that it could cause problems with the two loans the Board took out and with the owners' own lenders. Other owners spoke up at the time, saying it was a bad idea, but they still went ahead with it.

Well, they took the extra money that should have been for insurance and used it for landscaping. They also increased the dues by $150 a month.

I have to say this is the craziest thing I have heard on this board. Historically fire insurance is the basis for all structure insurance nationally.. Given the lack of tornadoes and the high odds of fires in CA, this is nuts.

TomP11 (California)
Posts: 113

Posted:

Quote:

Posted By DeanJ on 07/25/2025 2:23 PM

Posted By TomP11 on 07/25/2025 10:25 AM

Posted By SheliaH on 07/25/2025 6:21 AM
What Tim said.

All of the homeowners are business partners with each other since all of you co-own the common areas, so it makes sense that the people they elect to serve on the board to manage the association's resources are truthful, even if the news is unpleasant. Conversely, if there was talk of being underinsured, there may have also been talk of increasing assessments to cover the new premium. Did that conversation take place, and if so, what happened? If everyone said hell no, assessments are already "too high", this is another reason why you're at this point.

Anyway, you know the answer to this - if no one speaks up, the problem won't be faced, let alone addressed, and you can't always wait for someone else to do it. Looks like you'll have to get this party started by talking to your neighbors to see who feels the same way (start with the person who's selling - he or she may be on the way out, but they can help persuade people to pay attention less the same thing happen to them). All of you will need to go to the next board meeting to demand answers and if you're blown off, it may be time to call a special meeting to see if these folks should remain on the board. Read your documents to see what's required.

There are lots of conversations on this websites about truth telling in a HOA, the fallout (there's always some), and what it takes to turn things around - read some of them and bring your questions back to this conversation to get updated information.

They had a special assessment for insurance, which was $9,765, just for insurance. Our broker provided us with an estimate of what insurance could cost, based on other properties he works with. They got legal involved because no owner was to vote on it, and the lawyer stated that it was acceptable if the money was only to be used for insurance, and if we had extra, it was to be placed in an account for insurance the following year. Well, the insurance broker came back with three companies. Two were of full coverage, and the third, the cheapest, lacked fire coverage. Again, we are in CA. They selected the cheapest one. The broker warned that it could cause problems with the two loans the Board took out and with the owners' own lenders. Other owners spoke up at the time, saying it was a bad idea, but they still went ahead with it.

Well, they took the extra money that should have been for insurance and used it for landscaping. They also increased the dues by $150 a month.

I have to say this is the craziest thing I have heard on this board. Historically fire insurance is the basis for all structure insurance nationally.. Given the lack of tornadoes and the high odds of fires in CA, this is nuts.

It is separate just like earthquake coverage

KathyB25 (Alaska)
Posts: 1

Posted:

Board members are not politicians and has a fiduciary duty to the owners. So, absolutely the board has to be truthful.

TerriS6 (California)
Posts: 3,284

Posted:

The board is putting the association at risk. To be deliberately underinsured is a breach of fiduciary duty.