Association officer

[SecondAttempt]

I have managed to live most of my life without homeowners' associations. I generally have a negative opinion of them. I owned a condo for 10 years and was part of the HOA. They were pretty benign but my most memorable experiences were watching the president do her rounds when she arrived every summer to nit pik and ding people on stupid little violations. I guess it was her personal power trip. We never got any dings though.

So now I live in a rural subdivision that has an HOA that I am not part of by deed. I don't completely know the history but it is correct. I am however part of a road maintenance association for our private road and gate.

I have been asked to be a director for the road maintenance association and have agree to have my name on the ballot.

Have I made a mistake? What are my risks?

I have no issues with my neighbors. Most live on the mainland most of the time (we are in Hawaii). I am happy to help and I live here full time. When there are issues with gate, fallen trees, etc. I don't mind helping out.

I know of only one legal issue where the RMA has an injunction against an adjacent landowner who had an access easement for a lot that he tried to turn into access for a new subdivision.

Overall, I am trying to be helpful but want to avoid any legal issues. I doubt the RMA has good legal cover because we are small. I have good personal liability insurance but I doubt it covers this.

Thoughts?

 

[Lewis Clark]

The association should have directors and officers liability insurance to cover you when doing your association work. If a D&O policy exists you should have little or no personal liability.

 

[CDRE]

Check, and update if necessary, your umbrella policy.

 

[athena53]

Check, and update if necessary, your umbrella policy.

Umbrella policies typically exclude these types of activities. I was on the Board of Directors of my professional society and when I told the insurance agent that they told me those activities would be excluded.

Definitely make sure the Association has D&O coverage that protects you.

 

[COcheesehead]

I’ve served on boards. It’s a thankless job, but you’ll understand HOA’s far better if you serve and may have more empathy for future encounters with HOA’s.

The one lesson I learned from my two board experiences is that trouble begins when:
1. Someone doesn’t read the rules.
2. If they do, they don’t think they apply to them.

Have fun.

 

[REWahoo]

Umbrella policies typically exclude these types of activities. I was on the Board of Directors of my professional society and when I told the insurance agent that they told me those activities would be excluded.

Definitely make sure the Association has D&O coverage that protects you.

^ This.

The one lesson I learned from my two [HOA] board experiences is that trouble begins when:
1. Someone doesn’t read the rules.
2. If they do, they don’t think they apply to them.

Nailed it.

 

[Franklin]

Hello Second Attempt. This is my second as well. Anyway, I am the treasurer in our 22 home community. We have D@O insurance, in fact I just paid it yesterday ($1,800). It cover just about everything including cyber attacks (not sure why). We have 4 officers and this protects us from screw ups. When I took over the biggest thing I saw in need was a reserve fund to cover the unexpected. So, we all agreed to build up 2 years of expenses to keep on hand. Our biggest expense is a large well and pump which serves all homes. We have a well/pump comittee to convene whenever we have worries on that issue. The other expenses are power, landscape, and general maintenance. For me the biggest hassle is collecting the checks and keeping records. But, honestly no real complaints. Before I took the job I visited with the HOA heads of surrounding communities to get a feel for what they do and how they do it. That was super helpful. Ive stayed in touch and get a copy of their annual HOA presentations for reference. Overall you should be fine.

 

[Ronstar]

I’ve served on boards. It’s a thankless job, but you’ll understand HOA’s far better if you serve and may have more empathy for future encounters with HOA’s.

The one lesson I learned from my two board experiences is that trouble begins when:
1. Someone doesn’t read the rules.
2. If they do, they don’t think they apply to them.

Have fun.

This was my experience. I was on our HOA committee that reviewed plans and issued permits for shoreline construction. We had published regulations on the HOA website that specified how construction must be done. Regulations were mainly for safety and erosion concerns.

About 10-20% of the applications came to us with design elements that were not in conformance with our regulations. Our committee almost always denied approval of these applications. These applicants usually tried to get approvals anyway - sometimes threatening legal action. Our sometimes they would just build what they wanted.

Our committee would recommend to the HOA board that homeowners of non-permitted construction be fined. The HOA board would fine them. Sometimes they paid the fines, sometimes they didn't. The bad thing for those with unpaid fines is that the unpaid fines showed up as unpaid HOA dues on title commitments when they went to sell.

It was too much work with negative possibilities, so I resigned from the committee.

 

[OldShooter]

... For me the biggest hassle is collecting the checks and keeping records. ...

@Franklin, FWIW I was treasurer of our flying club for about 10 years. 6+/- airplanes, 85+/- members., $350K +/- annual billings. Here is what I did:

Everything was in Quickbooks. A memorized transaction list (one click) invoiced the membership for monthly dues. All but one or two got monthly statements emailed, again basically one click.

Two weeks later, giving members time to review the statements, I created an ACH batch file and uploaded it to our bank. Our default for new members was to permit ACH and when we started the ACH payments we leaned pretty hard on existing members to sign up. The result was that only one or two members ended up sending in checks.

Email statements and ACH payments were the two keys to keep a lazy treasurer happy.

 

[PaunchyPirate]

Former condo board president here. To the OP, I suggest you revisit your general negative thinking about HOAs or don't take the job. If you take the job, you will very likely find out why established rules need to be enforced upon everyone. If you don't enforce the rules (even the nitpick ones) on everyone, then eventually someone will point that out when you need to enforce the big ones. If the HOA doesn't follow the written rules, then that is ground for an eventual lawsuit. If the HOA members don't like the written rules, there are processes to change them. But to not enforce rules that have been adopted is not the way to go.

 

[Lewis Clark]

Former condo board president here. To the OP, I suggest you revisit your general negative thinking about HOAs or don't take the job. If you take the job, you will very likely find out why established rules need to be enforced upon everyone. If you don't enforce the rules (even the nitpick ones) on everyone, then eventually someone will point that out when you need to enforce the big ones. If the HOA doesn't follow the written rules, then that is ground for an eventual lawsuit. If the HOA members don't like the written rules, there are processes to change them. But to not enforce rules that have been adopted is not the way to go.

Very well said.

 

[Lewis Clark]

I’ve served on boards. It’s a thankless job, but you’ll understand HOA’s far better if you serve and may have more empathy for future encounters with HOA’s.

The one lesson I learned from my two board experiences is that trouble begins when:
1. Someone doesn’t read the rules.
2. If they do, they don’t think they apply to them.

Have fun.

Exactly. Then the homeowner blames the board for being picky.

Most people who want to live in an HOA do so because they want the rules enforced. Anyone in a position where they are enforcing rules will eventually be perceived as nitpicking, whether they are an HOA board member or a manager in the workplace.

I've lived in HOA communities for more than 25 years, and have served on boards three different times. Every problem I have ever seen was initiated by a homeowner who didn't care about the rules. I have never seen a problem initiated by any of the Boards.

 

[Rocky mtn high]

D & O insurance is like any other insurance and will try and not cover you based on errors the board may have made. I have personally seen board members having to hire outside attorneys to force D & O insurance to cover. NO WAY I WOULD RELY ON D & O!

 

[Franklin]

@Franklin, FWIW I was treasurer of our flying club for about 10 years. 6+/- airplanes, 85+/- members., $350K +/- annual billings. Here is what I did:

Everything was in Quickbooks. A memorized transaction list (one click) invoiced the membership for monthly dues. All but one or two got monthly statements emailed, again basically one click.

Two weeks later, giving members time to review the statements, I created an ACH batch file and uploaded it to our bank. Our default for new members was to permit ACH and when we started the ACH payments we leaned pretty hard on existing members to sign up. The result was that only one or two members ended up sending in checks.

Email statements and ACH payments were the two keys to keep a lazy treasurer happy.

Well with 22 homeowners it seemed doable....but after this year I am following your advice.

 

[ncbill]

Umbrella policies typically exclude these types of activities. I was on the Board of Directors of my professional society and when I told the insurance agent that they told me those activities would be excluded.

Definitely make sure the Association has D&O coverage that protects you.

Please read the umbrella policy itself.

My umbrella policy covers any volunteer, non-compensated work.

And our HOA also has D&O insurance...it's surprising how many don't.

 

[ExFlyBoy5]

Check, and update if necessary, your umbrella policy.

This. Our previous neighborhood had a voluntary HOA and all directors/board members were named in a law suit when a visitor's car was side swiped while parked. Was it a valid claim? No, but it still caused a headache for almost a year.

If you take the job, you will very likely find out why established rules need to be enforced upon everyone. If you don't enforce the rules (even the nitpick ones) on everyone, then eventually someone will point that out when you need to enforce the big ones. If the HOA doesn't follow the written rules, then that is ground for an eventual lawsuit. If the HOA members don't like the written rules, there are processes to change them. But to not enforce rules that have been adopted is not the way to go.

This is an excellent point. Our new neighborhood tried to pull the "ah, it's not a big deal" on a small detail. I mentioned that they don't have ability to ignore some portions of the agreement. We lived in a neighborhood that would let small details go and then eventually....the whole damn neighborhood looked like crap. Perhaps some folks don't like this and I tell them then they shouldn't live in a neighborhood that has an HOA.

 

[OldShooter]

Well with 22 homeowners it seemed doable....but after this year I am following your advice.

I suggest that you have your board authorize a monthly surcharge for homeowners who do not sign up for ACH payments. $5 or $10, paid to the treasurer as compensation for the hassle, ought to do the trick.

 

[Rocky mtn high]

I was involved in HOA law suit. Cost thousands of dollars and hundreds of hours. In the end the HOA won but is that really how you want to spend retirement years.

 

[athena53]

I suggest that you have your board authorize a monthly surcharge for homeowners who do not sign up for ACH payments. $5 or $10, paid to the treasurer as compensation for the hassle, ought to do the trick.

Mine files a Continuing Lien if you've been delinquent for over a year. The way it's constructed, additional penalties accumulate over time without our having to file additional liens. It's been very easy to collect those once a house is sold. I suppose if someone were underwater on the mortgage or had a reverse mortgage we'd be out of luck.

 

[rk911]

The association should have directors and officers liability insurance to cover you when doing your association work. If a D&O policy exists you should have little or no personal liability.

and if they don't i would politely decline the offer and remove my name from the ballot.

 

[RobbieB]

I wouldn't take the job without pay. How much is the wage?

No wait, I have to run for election? Because nobody else wants the job?

I'm outta here!

 

[MC Rider]

Agree.


Who said,

If nominated I will not run, if elected I will not serve?

 

[SecondAttempt]

I appreciate the answers so far.

I did not intend to start a debate about the value of HOAs. I generally don't like them. People that do like them should live in an area covered by one and join. I get it about enforcing rules fairly on everyone. I get that most rules are there for a reason. I won't go into specifics at the risk of offending anyone. But I will give a few examples where the HOA directors and officers either caused problems or didn't follow the rules (the law) themselves. I read stories about these kinds of things roughly monthly.

The condo complex I owned in has 3 levels with stairs. A few years before I bought, someone getting on in years and having mobility problems with the stairs wanted to put in an elevator near an outside stairwell at their own expense. (They eventually did, and it looks great.) The Board repeatedly denied claiming they didn't believe the disability was bad enough to require it. Lawsuit. HOA residents ended up paying for the Board's bad decisions to the tune of over $100000 plus atorney's fees for both parties.

Many HOAs ban flying flags, antennas, and so forth all of which the US Supreme Court said long ago are unconstitutional. Yet I know of many examples where they still try and then use harassment or intimidation when they have no other way to enforce.

The neighborhood I used to live in in Arizona still has in its bylaws that you cannot sell or rent your house to someone who is black or hispanic. Obviously unenforceable but they refuse to change the offensive bylaws.

It is illegal to ban clothelines in Hawaii yet many HOAs do.

My neighborhood has about 20-25 lots. All but 5 are covered by the HOA and required to pay dues. I happen to have one of the lots that is not required to be in the HOA. I don't know the history behind this but it is clearly stated in the CCRs. The rules here are minimal so it is not a big deal to me either way.

But my question was about a road maintenance association. As far as I am aware there are no rules to enforce except possible encroachment of trees onto the road but we pay for that as the association because, a few years ago, they realized they could not force people to do work on the road easement. This was pointed out by a new owner and the lawyers decided he was correct.

This "job" is about making sure the road is maintained, the gate keeps working, and that sort of thing. I've decided to do it mainly to be helpful since I am around year round and will probably learn a lot!

 

[RobbieB]

As long as you don't have to pay for tree trimming or gate fixing...

So, you have to run for the "office" of tree trimmer and gate keeper?

Gate keeper and key master? Bring on the Ghost Busters -

 

[SecondAttempt]

As long as you don't have to pay for tree trimming or gate fixing...

So, you have to run for the "office" of tree trimmer and gate keeper?

Gate keeper and key master? Bring on the Ghost Busters -

I made it clear that I am inexperienced and will serve only with some mentoring at first. It is a committee. But I am already plotting my takeover of the neighborhood. Keymaster and Gatemaster. Already in discussions with Gozar and Zuul to trim trees and keep the subjects in line.