THE EMPTY SEAT

QUESTION: Our bylaws state that if a board member misses 3 meetings in a row the director can be removed. Does that happen in open session or should it be in executive session for privacy reasons because it is a disciplinary action?

ANSWER: It should be done in open session. It’s not a disciplinary action—the board is not fining him for violating a rule; it’s declaring his seat vacant because he is no longer qualified to be a director.

PRESIDENT CONTROLS
NEWSLETTER?

QUESTION: Can the president of the board tell the treasurer that he cannot publish financial information to the homeowners by way of the newsletter?

ANSWER: If the board delegates control of the newsletter to the president, yes. Otherwise, it would be a board decision. In my opinion, boards need to keep the membership informed and should routinely publish financial information in the newsletter. If the treasurer is intentionally publishing inaccurate information because he/she has a political agenda, the board should remove the treasurer and appoint someone who will publish accurate data. If the information is accurate, the board should disclose, disclose, disclose.

RENTER ON THE BOARD

QUESTION: Can a renter run for the board? There is no prohibition in the governing documents against it.

ANSWER: Absent any membership requirement for directors in the governing documents, renters can serve on the board. To add qualifications, you need to amend your bylaws.

FANNIE MAE AND
MASTER INSURANCE POLICIES

QUESTION: Fannie Mae states that the following is no longer permitted in master insurance policies: (i) blanket policies that cover multiple unaffiliated condominium associations, and (ii) self-insurance arrangements whereby associations are self- insured or have banded together with other unaffiliated associations to insure all of the general and limited common elements of the various associations. What does Fannie Mae mean by affiliated vs unaffiliated?

ANSWER:  Instead of affiliated v. unaffiliated, a more artful use of terminology might have been to use the term "insurable interest." Associations insured in master (or group) insurance programs have no insurable interest with one another much less with the group. This lack of insurable interest is contrary to state statutes. There are other issues, however, that arise from such group programs such as the association not being the First Named Insured, not ever receiving an actual complete insurance policy and receiving insurance certificates which fail to mention that the First Named Insured is the group and not the association.

Thanks to Clifford Treese, CPCU, ARM, CIRMS for this answer. Cliff is a nationally recognized professional in insurance and risk management for common interest communities and President of Association Information Services.

CHRONIC COMPLAINER

QUESTION: We have an owner who is constantly emailing and calling our onsite manager and management company with complaints. She is constantly threatening to sue the HOA and our managers. She claims the board gave her cancer due to stress, which she later admitted was misdiagnosed. She left live cockroaches under glass on a board member's front step. She tried to recall the board twice. She is taking up so much of our time and money the board can hardly focus on anything else. Is there anything that can be done?

ANSWER: I wish there were an easy answer but there isn’t. Chronic complainers and the mentally unstable make everyone around them miserable and burden the association with unnecessary management and legal expenses. Their misguided behavior adds to the stress already felt by directors who volunteer their time and energy to serve on the board. And they make it difficult to recruit others for the board. If their actions rise to the level of harassment and threats, the board can seek a restraining order.

PEER PRESSURE

FEEDBACK: [Re: Fining Everyone] If the fire department fines the association and the board levies a special assessment to pay it, the assessment would be against all homeowners and the peer pressure would be the same as the Marine Corps uses. -D.A.

RESPONSE: Instead of waiting for fines from the fire department and then assessing everyone, the board should consider installing a security camera to deter (or catch) the scofflaw. One reader suggested water boarding. I prefer security cameras since California is currently in a drought.

  Very truly yours,
 
   Adrian Adams, Esq.
   Adams Kessler PLC