Board Member Responsibilities

Many Association governing documents require an annual audit.  In order for an audit to be meaningful in the Community Association context it must be performed by an independent certified public accountant. The only way to fulfill the requirements is to hire a CPA who is not a member of the Board or even an owner in the community.  While your documents may specifically require an audit, you need to be aware that a CPA can do one of three levels of financial examinations to determine if the accounting work is being done properly: a compilation, a review or an audit depending on the requirements set forth in the governing documents. In a compilation, the accountant simply puts the association’s numbers in a proper financial format. The accounts are not examined for accuracy. A review determines if the financial statements require any material modifications. It consists of inquiries into the association’s bookkeeping practices.  The audit is the most detailed level of review and, if done properly, it will offer reasonable assurance that the records are free of misstatements. The auditor also looks for irregularities or illegal acts. It is significantly more expensive than the other two reviews.

 

The American Institute of Certified Public Accounts has standards for doing audits on community associations. By adhering to these standards, an auditor can express an opinion on the association’s financial health. Continue Reading Do we have to have an annual audit?

We have published on this topic in the past, but due to frequent misunderstanding of the process we want to provide more information on this topic. Most community association boards of directors realize the importance of, and requirement for, holding open meetings. There are times however when closed sessions of the board are needed. Fortunately in Virginia the statutes for both homeowners associations and condominium associations are very specific as to when closed meetings can be held. They are generally referred to as executive sessions. The purpose of executive sessions is to allow the board to discuss certain sensitive topics among themselves with no members present.  The following are the topics which qualify for a meeting to be closed pursuant to statute:

Continue Reading WHEN CAN A BOARD GO INTO EXECUTIVE SESSION?

Question: I live in a townhouse style condominium that is comprised primarily of young families and, consequently, we have quite a few dogs in the community. Our recorded Condominium Declaration states: “No more than two (2) pets shall be maintained per UnitThe Board of Directors may promulgate additional rules and regulations regarding pets.” Our Board of Directors has passed a board resolution changing the number of pets allowed per unit from two (2) pets to one (1) pet.  My son is heartbroken that we will have to choose which one of our dogs we have to give away.  Can board members just make up their own rules? Continue Reading Can Board Members Make New Rules and Change Old Ones?

If you own a single family home and your roof needs to be replaced, you either have to take money from savings or borrow the funds to pay for it.  Either way, it’s your sole responsibility to replace your roof.  But what if you own a condominium unit and the roof of your building needs to be replaced or the streets need to be repaved? What if you live in a homeowners association and the pool deck needs to be replaced?  Don’t you expect all of the owners in the community to contribute to the costs and don’t you expect there to be enough money in “savings” to pay for it.  Continue Reading Making the case for replacement reserves

The American Heritage Dictionary defines “fidelity” as “faithfulness to obligations, duties, or observances,” but what does fidelity mean to your association and why do you need fidelity insurance?  Every association collecting assessments has one or more persons handling the financial obligations of the Association (collecting and depositing assessments and paying invoices).  Every board member, management company employee or other individual handling an association’s funds has a fiduciary responsibility to handle those funds in a way that best benefits the association, but what if they don’t?  Continue Reading What is Fidelity Insurance and why does my Association need it?

Questions often arise about the duties of the secretary in taking and producing minutes of meetings and providing association records to members. The primary functions of the Secretary are to produce minutes of meetings and maintain the records of the association. The secretary must produce a draft of the minutes for approval, and then finalize them with any changes upon once they are approved at the next meeting. Records to be maintained include all of the minutes, any resolutions adopted by the Board of Directors, correspondence, contracts and notices of meetings.

We suggest that the following files be maintained: Continue Reading BEING SECRETARY OF THE ASSOCIATION CARRIES SIGNIFICANT RESPONSIBILITIES

As association attorneys we are in need of the governing documents in order to answer questions posed by the board or the manager.  Frequently we have those documents in that association’s file if we regularly represent that association.  We do need to keep up to date on any changes in the rules and regulations or architectural guidelines which may be made without our input or review.  Of course, we do believe it is a good investment for associations to allow us to review proposed rule or guideline changes before implementing to insure enforceability.  

Continue Reading DOCUMENT MAINTENANCE – DO YOU HAVE ALL OF YOUR ASSOCIATION’S GOVERNING DOCUMENTS?

 

[This article is an excerpt from an article written by Mike Hunter for the

Charlotte Observer. We believe it contains some very helpful information and suggestions]

“Most swimming pools have a list of rules posted somewhere on the premises. We’ve all seen them. The rules contain common sense prohibitions against dangerous pool activities, such as having glass in the pool area and diving into the shallow end.

And almost every set of pool rules contains a statement similar to this: ‘No one under the age of 18 may use the pool unless accompanied by a parent or guardian.’ It makes sense, right?

According to a 2012 federal court opinion from California (Iniestra v. Cliff Warren Investments), a pool rule requiring adult supervision of children violated the Fair Housing Act (FHA) because it discriminated against families with children.

In explaining its opinion, the federal court found the rule requiring adult supervision to not make perfect sense if its goal was to ensure the safety of all swimmers. The court noted that the Iniestra children, who were competent swimmers, were not allowed in the pool facility without a parent, but yet adults who never swam a day in their life could use the pool facility without supervision. Also illogical was that a certified lifeguard who was under 18 could not use the pool without the presence of a parent or guardian.

Continue Reading The Fair Housing Act and Your Community Pool

 

March 2015 – The U.S. Department of Justice announced settlement of a Fair Housing violation case against a Community Association and its Management.  In addition to requiring a revamped set of Rules, the offenders must pay a $10,000 penalty to the United States and pay $100,000 to six families that suffered as a result of the discrimination.

The Complaint filed in 2013 alleged that the enactment and enforcement of a facially neutral Common Areas Rule was discriminatory. The rule provided that:

Continue Reading GO SLOW: CHILDREN AT PLAY