What does it mean to be on the Board of Directors of your HOA? Fiduciary Duties (Part 1 of a series)
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)”
What can an HOA Board do if members question whether the President acted properly?
Susan Tarley answered a question that was published in the March/April 2013 issue of the Common Ground, the Community Association Institute’s Magazine for Community Association Leaders. Here is the question and answer.
Question
Our bylaws state that no reimbursement shall be given for services rendered by any board member unless voted and agreed on amongst the board members. I am a board member, and our association president has submitted bills totaling more than $600 to our management company without board approval and has been paid. A review of the past years minutes indicate no such vote was taken. We feel the president has his own monetary agenda and does not care about our community. I understand we can file a petition with 67% of the unit owners signing to have him removed, but we just want our money. What can we do?
HOA Litigation: Is it avoidable?
We have written previously on the costs—both in time and money—for homeowners and condominium associations to litigate cases. On one hand, boards of directors have a fiduciary duty to uphold the governing documents of associations, but on the other, the board must investigate alternatives to the divisive nature of litigation.
As it turns out, sometimes there is no alternative because a homeowner can sue an HOA, forcing the association to defend. But what efforts can or should a homeowners or condo association take to avoid the consequences of litigation?
A series of recent Virginia cases highlights the consequences associations can face in litigation cases. This blog posts provides a brief summary of those cases and some cautionary advice.
Virginia HOAs and Olde Belhaven – Guest Post on Construction Law Musings
Once again, my friend and colleague, Richmond Construction Law attorney Chris Hill, permitted me the opportunity to blog at his award-winning blog Construction Law Musings. You can get a lot of great information on construction law, including the intricacies of mechanic’s liens, from Chris and his blog. You can also follow him on Twitter, @ConstructionLaw.
For Chris’ blog, we wrote a post exploring the Olde Belhaven case that made it into the national media. Our take is that we must remember that HOA Governing Documents are drafted by counsel for the developers, and when the developers leave, the enforcement of those restrictions is left to the volunteer Boards of Directors of your neighborhood.
Here’s a brief excerpt of the post:
A recent case highlights what happens when an Association’s Board of Directors, trying to uphold its fiduciary duty by enforcing and upholding its governing documents goes head to head with homeowners, both believing that they are in the right. . . .
Our experience is that the volunteer Boards of Directors, when faced with tough choices, try to make decisions consistent with their fiduciary duties, in an attempt to protect the rights of all the owners in the neighborhood. That doesn’t mean they always make the right decisions, but these ordinary people are not ogres, either.
Read the complete blog at Construction Law Musings, as well as many other informative posts on Chris’ outstanding blog. Thanks, Chris!
Benefits of HOAs Part 2: How is Covenant Enforcement Good for Owners?
The enforcement of covenants, conditions, and restrictions (“CC&R’s”) is among the most criticized of the duties performed by the Board of Directors of community associations, but is also the most important responsibility. CC&R’s govern many activities in a community including house designs, parking regulations, maintenance and repair of the common areas, and collection of assessments. Sensational “Gotcha” type news stories highlight enforcement practices of some associations, which contribute to a false perception that associations in general lack common sense. However, studies repeatedly show that the overwhelming majority of people living in neighborhoods governed by HOAs believe that the rules in their communities benefit them.
Continue reading “Benefits of HOAs Part 2: How is Covenant Enforcement Good for Owners?”
What happens when your business partner wants to leave? Do’s and Don’ts
It’s a simple fact of business life that you and your company’s fellow shareholders or members will not always see eye-to-eye. Furthermore, our personal lives change and that effects the level of willingness in which some participate in a business venture.
As in any relationship, businesses also reach that awkward stage in which a shareholder or member wants to leave his current business venture and start something new. We have discussed starting your business and provided guidelines for setting forth the rules for governing your business. This article addresses some of the difficulties that arise during the “break-up period.” For the purposes of this article, we will use the terms “shareholder” and “member” interchangeably, as well as the terms “director” and “managing member.”
2-Minute Drill Weekly Tweets for 2011-07-15
- Blog Post: When is it unlawful for an employer to terminate an employee? #
- Virginia Homestead Act has changed, but still needs work. Contact your state legislator. RT @mpgoldstein: http://ow.ly/1uDoqL #VaLaw #
- Blog Post: Reserve Study…it’s the law! (Part 1 of a 3 part series on Reserves) #
- Va lawyers need to educate ourselves on judicial realignment proposals. Can’t complain if we don’t get involved. http://ow.ly/1uDodi #VaLaw #
- #FF to @constructionlaw IMHO the model of professional use of all forms of social media for VA lawyers and the source of lots of good info. #
- Anniversary of this first Tarley Robinson tweet: Blog Post: Arbitration instead of Court? Be careful what you ask for http://fb.me/CBmUH7Y1 #
- Cool news from @_RobDean – Welcome, Rocket Matter! http://ow.ly/1uDodA#
- RT @peterfrost: “@washingtonpost: Who raised the debt ceiling? http://t.co/71yGh81 #Carter #Reagan #Bush #Clinton #WBush #Obama”#
- From the Amber Property Mgmt Blog: Can Homeowners’ Associations prohibit owners from flying the American Flag? #HOALaw #
- “Survey Ranks Law Schools Based on Grads Who Live Large. Texas Tops” http://t.co/h9YgUis RT @_RobDean: UVa 4 W&L 15 WM 27 via @ABAJournal #
- Chesapeake, Va judge dismisses portion of fly ash case #VaLaw#
- New Town After Hours – Need Tickets?: As one of the sponsors for this summer’s concert series, New Town After Ho… #
- Thanks for the RT @andrewmcroberts: New legislation affecting #Va Condominium Associations and Homeowner Associations http://ow.ly/1uzsmu #
- Blog Post rerun for Va HOAs. New legislation affecting Virginia Condominium Associations and Homeowner Associations http://ow.ly/1uzsmu #
- Condo associations and HOAs can fine residents for breaking the law if governing documents allow it http://t.co/ZZbxNQ8 RT @AmberPrprtyMgmt #
- Yes. RT @HOA_Lawyer: Thinking of starting a HOA lawyers circle on Google+ limited to attorneys who practice HOA law. Interested? #google #
- Google+ to Businesses: Don’t Create A Company Page Just Yet http://ow.ly/1dMj11RT @tomfosterweb #
- Audit finds Albemarle County Cir Ct clerk does not perform the required financial duties associated with her office #
- Thanks for the RT @cvodzak Opening Thoughts on Google+ http://goo.gl/fb/6SYhv RT @jarredt #
- Thanks for the RT @vahoalaw New blog post: When is it unlawful for an employer to terminate an employee? #
- Incorporation May Not Be a Shield if You’re not Careful. If you incorporate, act like a corporation. http://ow.ly/1uxmtI RT @constructionlaw #
- The war of the social networks – Quick read about FB, Twitter and Google+ http://t.co/dT0uBff RT @vahoalaw #
- So much conflicting data on home sales. RT @mrwilliamsburg: Home Purchase Contracts Surge in June 2011 http://tinyurl.com/64fywfx #HeadSpins #
- Thanks for the RT @kramerlawfirm: Blog post: Two words owners and builders dread. #
- When is it unlawful for an employer to terminate an employee?: The short answer is, rarely. Virginia is an at-.. #
- Opening Thoughts on Google+ http://goo.gl/fb/6SYhv RT @jarredt I agree that Circles is a cool concept. Separates your followers easily. #
- Verizon’s white pages directory gone. Yellow pages next? #
- Help a hard-working local musician from Virginia follow his dream. @shane_cooley http://t.co/ORV6nTZ#
- Blog post: Two words owners and builders dread. RT @constructionlaw http://ow.ly/2bs11C #
- Blog Post: What does it mean to be on the Board of Directors of your HOA? Part 2 of 2. https://blog.tarleyrobinson.com/?p=360 #
- It’s 7-11 today. That means Free Slurpee Day at 7-11. Admit it. You want one. http://mobile.7-eleven.com/promotions/ #
- LandAmerica officers and directors sued for breach of fiduciary duty in Richmond bankruptcy court #
- Court realignment committee unveils plans. Big changes for 9th judicial circuit (Wiiliamsburg/York). http://ow.ly/1uuUxc #
- Colonial Williamsburg v. Halsey Minor case regarding Carters Grove transferred from CA bankruptcy court to Newport News#
- Williamsburg attorneys Rizk and Green with cogent analysis of Casey Anthony verdict. #
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2-Minute Drill Weekly Tweets for 2011-05-06
- HOA owns century-old dam in Waynesboro – Its plan to demolish dam advances (via @newsvirginian) #
- For HOAs, the laws regarding satellite dishes remains the same. http://ow.ly/1sQ1tb #
- Quitting your job? Here’s a list of don’ts to avoid getting sued. http://ow.ly/1sPXWU #
- Virginia Company Bank breaks ground in Williamsburg’s High Street. Good addition to that mixed use development. http://ow.ly/1sPTSf #
- Housing glut? What housing glut? Charlotte Park in New Town in Williamsburg offers detached homes-http://bit.ly/fvUOdt RT @mrwilliamsburg # Continue reading “2-Minute Drill Weekly Tweets for 2011-05-06”
2-Minute Drill Weekly Tweets for 2012-04-06
- Thanks for the #FF @VABarAssn Such a very nice group of folks to be associated with! @alarichmond @anncaudle @katjahill — Happy #Friday #
- Blog Post: What documents comprise your Condominium Instruments? http://t.co/jfhdTQhr #CondoLaw #
- Can I cut down my neighbor’s tree when its branches overhang my property? http://t.co/IyhFV4GK Thanks for the RT @LawyersLog @PCAM_Las_Vegas #
- #FF Looking for HOA info? @ColoradoHOAGal @PCAM_Las_Vegas @myhoacommunity @SwedGottHOALaw @MeebPC @CondoandHOALaw @chrisjaglowitz #
- Thanks for the mention @mandellagram: NEWSofTheLAW | Law behind the news is out! http://t.co/rc2oG7tZ ? Top stories via @wouazo @rapsi_en #
- More HOA info #FF @CaNetwork @Associa @ManagementTrust @NVhoamanager @AccellPM @CardinalOnline @TheMossReport @Jwahwah @IntegratedPros #
- The founder of Marshall Amps passes away. A giant of rock and roll music. http://t.co/hCQIE5Dw RT @time59 #Hendrix #Marshall #
- Blog Post: Can I cut down my neighbor’s tree when its branches overhang my property? http://t.co/BEn0F7ej #
- Blog Post: Thinking about Growing Your Small Practice? Some thoughts. http://t.co/qCHrOBej RT @NexFirm via @atlblog #Law #LawFirm #
- Blog Post: Why law firms have a surprisingly tough time with a liquidity squeeze http://t.co/apkORGnN RT @rocketmatter via @PaulLippe #
- Blog Post: What's your firm's/business' 5-Year Plan? I'm getting started today. http://t.co/mnKYcNfF RT @NexFirm via @jayfleischman #
- Is Delaying the Compliance Date for ADA Swimming Pool to let hotels get through summer? http://t.co/aorUf7sL RT @natlawreview via @GT_Law #
- Blog Post: Unauthorized Practice of Law – When unlicensed attorneys serve as HOA board members http://t.co/6sY2W6K7 #
- Blog Post: Are you a #HOA or #Condo Board member? Know your potential liability. http://t.co/n413NXav #FiduciaryDuty #
- Toronto #condo boom stirs bubble fears http://t.co/MZagQdav RT @hoasoftware #
- Management Tip: the Elevator Pitch. Make your case in 118 Seconds http://t.co/Cy7ubhS1 RT @HarvardBiz #
- Wow! Howard University Suspends All Athletics http://t.co/OLLIMFNx RT @SryImNotSorry via @sbnationdc #NCAA #
- Blog post: Unauthorized Practice of Law: Unlicensed attorneys on your HOA board http://t.co/QKeOn26O Thanks for the RT @SwedGottHOALaw #
- HOA/Condo #Bankruptcy and Assessment Collection – Special Edition Blog Digest http://t.co/Rq20efEl MT @SwedGottHOALaw #condohoa #condohoalaw #
- An Offer You Can't Refuse: Leadership Lessons From "The #Godfather quot; http://t.co/eqWOQ9hl RT @sykorasantini via @FastCompany #
- HOAs: bankrupt owner surrenders property but bank won't foreclose? Try this. http://t.co/WABPFDHp Thanx for RT @IntegratedPros @ericboucher #
- Blog Post: Keep your HOA's documents up to date and in line with your community's needs http://t.co/nmR0mV3H #condoHOAlaw MT @CondoandHOALaw #
- Getting rid of an LLC member can be difficult without an effective operating agreement http://t.co/VnANmtIx Thanks for RT @sykorasantini #
- Blog Post: What documents comprise your Condominium Instruments? http://t.co/NF2w1kDN #CondoLaw #
- Court upholds ex-Norfolk detective's convictions for lying and extortion. He was lead detective in #NorfolkFour case http://t.co/ckHYC0aS #
- The Williamsburg Pottery reinvents itself. Grand Opening on April 5. Mixed feelings – curious/dubious/intrigued http://t.co/qbiquV0C #
- Blog Post: HOA options when bankrupt owner surrenders property but bank doesn't foreclose http://t.co/4OPWpSV2 Thanx for RT @CondoandHOALaw #
- Representing college athletes for free = #NCAA violation? http://t.co/FuyAC2H0 #
- Law firms save on credit card processing fee Check out LawPay-VBA member benefit http://t.co/SUZwzh7z thanks for the RT @BuggLaw @AnnCaudle #
- Blog post: Unauthorized Practice of Law: Unlicensed attorneys on your HOA board http://t.co/6jgaEdWw Thanks for the mention @J_Juffs #
- #Pitt Bomb Threats – 9 in past 2 weeks, 3rd in last 24 hours. Students alternate between fear and anger http://t.co/O0JIV4w8 HT @ErikaTarley #
- Blog Post: Getting rid of an #LLC member can be difficult without an effective operating agreement http://t.co/N0tKdNIz #
- Is your friendly #poker game illegal? Captain George's owner indicted for #gambling in Virginia Beach. http://t.co/namzTKV1 #
- Jack White, ex-#WhiteStripes, with advance release of his new solo album: by helium-filled balloons. http://t.co/FRkYGqDk RT @RollingStone #
- Photos of Joe DiMaggio in Norfolk to open the 1959 Little League season. Took a few swings in a shirt & tie. http://t.co/rEK1kNdI #JoltinJoe #
- Blog Post: Residential construction and mechanic’s liens; how you can protect your mechanic’s lien rights http://t.co/yFFDxPgb #
- App of the Week: Convert Text to Audio with Vocalyze http://t.co/zOyuK4fG Thanks for the RT @DougPons #
- It will take 3 yrs for DC area's delinquent/foreclosed properties to clear http://t.co/fOoqvcCY Thanks for the RT @TheMossReport @MustaFoInc #
- Blog Post: What can an HOA do to collect dues when bankrupt homeowner surrenders property but lender does not foreclose http://t.co/6tMtkZ68 #
- Blog Post Getting rid of an LLC member can be difficult without an effective operating agreement: Originally… http://t.co/jtQ8Phsq #in #
- Blog Post: When unlicensed attorneys serve as HOA board members http://t.co/po0DI7kz Thanks for the RT @MyHOACommunity @ChrisJaglowitz #
- 12 Best Weekend Getaways: Williamsburg is number 7. http://t.co/lpSmVe7D http://t.co/WpTS8Y6n #WBGVA RT @DougPons #
- Thanks for the mention @fooddude4life The Jeff Cattell Daily is out! http://t.co/993ILEjt ? Top stories today via @tarleyrobinson @bolococeo #
- App of the Week: Convert Text to Audio with Vocalyze http://t.co/kanlwvrA RT @rocketmatter #
- 6 Times The #Onion Had People Completely Fooled – Mental Floss http://t.co/dqNM40Vh RT @WieseLawFirm #
- The Tarley Robinson HOA Weekly is out! http://t.co/aBfVTsut ? Top stories today via @condoassoc @vahoalaw @accellpm @condobusiness #
- Home sales delayed by #BankProblems low appraisals, restrictive underwriting and poor service. http://t.co/RRz4RZlI RT @vahoalaw #
- Tarley Robinson Virginia Law is out! http://t.co/qplF7MWv ? Top stories today via @legalninjakris @benglass @andrewmcroberts @valaborlaw #
- One of 82 shots (some never pub'd) of the Queen Mother when she visited #WBGVA in Nov. of 1950 http://t.co/TK1JzB5N RT @musty_clips #
- Illinois Traffic Stop Of Star Trek Fans Raises Concerns About Drug Searches, Police Dogs, Bad Cops http://t.co/Ra1Kr7Ku #
- Pro Tip: Turn off notifications on iPad before presentation to court or jury. #ABATECHSHOW #iPad RT @jasnwilsn #
- Tarley Robinson Williamsburg News is out! http://t.co/hYArAkOT ? Top stories today via @prutownerealty @vainsurancepro @comforttechinc #
- Weekend listening: the Red Rooster channel on #MOG http://t.co/UFyFcEdg MT @redroostah #
- Live From Daryl Hall's House – Daryl & #CeeLo Green. #PDC http://t.co/6u6DW7Ko RT @LFDHcom #
- It will take nearly 3 years for the DC area's pent-up delinquent and foreclosed properties to clear http://t.co/6okzbU1h MT @CarlosFMartin #
- HOA requires solar panels installed on roof rather than slope of property = reasonable http://t.co/mltgR66k RT @vahoalaw via @ColoradoHOAGal #
- Thanks for the mention and back at you @canetwork: Happy #FF @chrisjaglowiz @AttyLSri @pmckuen #
- Blog Post 2-Minute Drill Weekly Tweets for 2012-03-30: Back at you @myhoacommunity Happy #FF @ColoradoHOAGal… http://t.co/IiW0epts #in #
- Blog post: #ADA Compliance – Update on #HOAs #Condos and Swimming Pools http://t.co/YjYM4oH5 #
- Law firms save on credit card processing fees. Check out LawPay, a VBA member benefit: http://t.co/nKh80NGT RT @VABarAssn #
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