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December 19, 2006
Would You Drive A Car Without Any Training? What About Manage an HOA?
People like simple answers. Its hard sometimes to give them. However, this is how I see it. Anyone who takes off in a vehicle and drives into traffic without any training, competence, or insurance, is taking on a huge responsibility with even bigger ramifications for mistakes in judgment. That person should not be doing what they are not qualified to do - and the price can be high. Now, if its a matter of life and death, that might be different ... but if it is a matter of deciding that it probably will be okay because .... well, making decisions for an HOA, that is not a matter of life and death. It may be a matter of earning a living, or a matter of stepping up to the plate when no one else will. But it is not very wise.
Consider these things:
1. Mismanaging finances can lead to losses and the bigger the budget, the bigger the losses, and the bigger the losses, the more it generally costs to recover the losses, and the more that is lost, the bigger the "net" is that goes out to sweep in potentially culpable parties. Do you want to be among them?
2. Misjudging reserves needs based on acceptance of a reserve study without regard to legal or other requirements can lead to losses, see # 1 above.
3. Violating the governing documents or the law can be an accident. And accidents can be small, or large. Violations can lead to Association fines (for missing important statutes like the Open Meetings Law, the Records Inspection Laws, the Election Laws, and things like that). Violations can also lead to losses in terms of dollars, and the bigger the ... you get it, refer to #1 above.
4. Knowingly violating the governing documents or the law can lead to losses, and also to "punitive" remedies (those are the kind of damages juries award against big corporations when they knowingly stomp on the little guys), and no one is fully protected by the Association or insurance if they intentionally cause damage to others - and the more atrocious the conduct, the bigger the damages, and .... go back to #1 above.
5. Discriminating against anyone, or allowing it to happen on your watch, can lead to .... well, you know the drill.
6. The same goes for removing a pet without grounds to do so, starting a fistfight over an architectural violation, name calling, humiliating someone, picking favorites, meeting in secret, etc. Losses caused can be considerable, especially when you consider that recovering attorney fees may be up for grabs to the prevailing party.
So, the moral of the story is, don't go driving without driver's training or a license, and definitely do not venture out without directors and officers liability or errors and omissions liability coverage.
And it certainly makes sense to get educated! Watch the website: http://www.californiacondoguru.com for basic and other educational offerings in the months to come. 2007 is the year.
Posted by Beth Grimm at December 19, 2006 6:15 PM