Okay, how do we establish a funding plan for our HOA’s Reserves? (Part 2 of a 3 part series on Reserves)

October 30, 2014 on 12:59 pm | In Common Interest Community, HOA, Susan B. Tarley | No Comments

 

Once an association has obtained a reserve study, two questions arise: 1) Do we have to fund a reserve account?   and 2) If so, how do we fund a reserve account?

The statutes for condominiums and property owners associations require an association’s budget to include, among other things, an annual amount to fund the reserve account that is consistent with the obligations in the reserve study.  This means that an association should be placing funds into the reserve account that permits it to meet is obligations to repair, replace and restore capital components based on the estimated replacement cost, the estimated remaining life and the estimated useful life of the capital component.

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How important are state statutes and case decisions in governing your HOA?

October 30, 2014 on 12:59 pm | In Common Interest Community, HOA, HOA litigation, Susan B. Tarley, Unit Owners Association | No Comments

We discussed Governing Documents for homeowners associations and Governing Documents for condominium associations. These governing documents for your community association must be read in conjunction with certain state and federal laws. In this article, we will discuss those relevant laws that must be considered by your HOA.

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4 Tips to help your HOA protect its Attorney-Client Privilege

October 30, 2014 on 12:59 pm | In Common Interest Community, General Interest, HOA, HOA litigation, State & Federal Litigation, Susan B. Tarley, Unit Owners Association | No Comments

The Attorney-Client Privilege protects confidential communications between an attorney and his or her client.  This privilege includes communications made to the attorney and communications from the attorney. The Attorney-Client Privilege is designed to encourage clients to communicate with their attorney freely, without fearing disclosure of those communications made in the course of representation. The Attorney-Client Privilege is important because it permits clients to give their attorney complete and uncensored information, enabling their attorney to provide informed and thorough legal advice.

For community associations, the Attorney-Client Privilege belongs to the association and can only be expressly waived by the a decision of the association board or executive organ. However, the privilege can be impliedly waived based on the client’s conduct.  A determination on whether the privilege has been waived will depend on the specific facts of each case. The association will have to establish that the attorney-client relationship existed, that the communication is privileged, and that the privilege was not waived.

Here are four basic tips for the board of your Common Interest Community to follow so that it protects the association’s Attorney-Client Privilege:

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What does it mean to be on the Board of Directors of your HOA? Fiduciary Duties (Part 1 of a series)

October 30, 2014 on 12:59 pm | In Business Planning, Common Interest Community, HOA, Merger & Acquisition, Real Estate Strategies, Susan B. Tarley | No Comments

Board members are told that they have fiduciary duties to the community association, but what does that really mean?  Fiduciary duties arise because the members of the association entrust a board member to act in the best interest of the association when handling the association’s business.

There are three components that are important to understand fiduciary duty.  First, the Virginia Code, at § 13.1-870, imposes on directors a requirement that a director exercise her duties in good faith and in the best interest of the association.  This requirement is the so-called “business judgment” rule. Second, Virginia case law imposes duty of care that requires a board member to act as a reasonable person would under similar circumstances.  Third, Virginia case law imposes a duty of loyalty that requires a board member to put the association before any personal interest.  These last two duties are referred to as “common law” duties. Continue reading “What does it mean to be on the Board of Directors of your HOA? Fiduciary Duties (Part 1 of a series)”

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Virginia Statute – HOAs must adopt “Cost Schedule” to recover copy costs

October 30, 2014 on 12:58 pm | In Common Interest Community, General Interest, HOA, HOA litigation, Real Estate Litigation, Susan B. Tarley, Unit Owners Association | No Comments

The Virginia Code has provisions that provide members of condominium associations and homeowner associations with the ability to request copies of books and records. The statutes have also permitted  associations to recover the costs of copying the requested books and records.

This blog post highlights a new statutory provision affecting common interest communities. On July 1, 2012, HOAs and condo associations will only be able to recover these copying costs if the association has adopted a cost schedule.

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7 reasons to consider amending your HOA’s governing documents

October 30, 2014 on 12:58 pm | In Common Interest Community, HOA, HOA litigation, Susan B. Tarley, Unit Owners Association | No Comments

In other posts we have discussed a homeowner association’s governing documents. Many communities were established 20-40 years ago with governing documents that worked well for the developer, and for the most part the community association. However, many of these governing documents are outdated.  Virginia and federal laws pertaining to community associations have changed substantially.  If your board of directors has not engaged in an audit of your communities governing documents in the past 5-7 years, it should.

What is an “audit” of our governing documents?

An “audit” of your documents is an in-depth review by your HOA’s board of directors in conjunction with your association attorney.  The Board reviews each document noting any sections that lack clarity, are no longer enforced, appear to not apply to your community, protect a long-gone developer, or do not provide the association with adequate remedies.  The Board prepares a list of concerns or issues facing the community, such as homes that are not being maintained, large amounts of delinquent assessments, or enforcement capabilities of the association.  The Board provides this information to the association attorney.

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(Yet Another) Update on ADA Compliance regarding HOAs, Condos and Swimming Pools

October 30, 2014 on 12:58 pm | In Common Interest Community, HOA, HOA litigation, State & Federal Litigation, Susan B. Tarley, Unit Owners Association | No Comments

We blogged about the extension granted by the Department of Justice for existing pools to comply with the new ADA Standards for providing accessible entry and exits. Just days after issuing its “Final Rule,” the Department of Justice published a fact information page with Questions and Answers regarding Accessibility Requirements for Existing Swimming Pools at Hotels and other Public Accommodations. The DOJ’s Q&A attempts to answer questions regarding whether your pool shall require accommodations. This blog post analyzes the Q&A.

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In a Heartbeat – Is an HOA liable if it provides an AED?

October 30, 2014 on 12:58 pm | In Common Interest Community, HOA, HOA litigation, Susan B. Tarley, Unit Owners Association | No Comments

It happens in a heartbeat – literally.  Sudden cardiac arrest is a leading cause of death among adults over the age of 40 in the United States and other countries.  Studies have shown, however, that when bystanders intervene and start cardiopulmonary resuscitation (“CPR”) or utilize an automated external defibrillator (“AED”), four out of ten victims actually survive this otherwise certain killer.

Community associations considering installing an AED at the clubhouse or pool are understandably concerned about liability. What if someone uses it incorrectly? Is the Association required to provide training? Should access to the AED be limited? What if the AED has not been maintained?

AED

 

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Three Factors An HOA Should Consider When Hiring An Attorney

October 30, 2014 on 12:58 pm | In Common Interest Community, HOA, HOA litigation, Susan B. Tarley, Unit Owners Association | No Comments

Selecting an attorney is one of the more significant decisions made by the board of directors for a community association. Often times, the association makes its decision based upon price alone. Although “price” is a valid factor to consider, there are other important factors the board should review during its selection process. This article addresses three of the major considerations.

First, the board should determine the prospective attorney’s experience level in the representation of community associations. Attorneys for common interest communities are similar to the general counsel in major corporations because of the wide range of issues that arise. Extensive experience in many of the possible legal issues facing community associations should be a prerequisite.

Tarley Robinson

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What Does It Mean to be on the Board of Directors of your HOA? Potential Liability (Part 2 of a Series)

October 30, 2014 on 12:57 pm | In Common Interest Community, General Interest, HOA, State & Federal Litigation, Susan B. Tarley | No Comments

We frequently are asked whether volunteer board members can be civilly liable for actions taken while a board member. This issue is of serious concern because lawsuits tend to be over inclusive, naming every possible defendant in the initial complaint. Why sign up as a volunteer board member if it could bankrupt you?

 

 

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