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dando_11-13-18Most community association Board of Directors understand the importance of maintaining Directors and Officers insurance (“D&O insurance”) to protect the Association, Board members, and those who assist the Board, such as property managers and committee members. D&O insurance provides coverage for claims for “wrongful acts” committed or alleged to be committed by a Board member or someone else insured under the policy. Unfortunately, what many Directors do not understand is that to preserve coverage under a D&O policy, the policy requires that an insured under the policy provide the D&O insurer with timely notice of any threats of lawsuit that it receives that may be covered under the policy. Otherwise, the D&O insurer may deny coverage of the claim.

In the case of Taylor v. State Farm Fire & Casualty Company, decided by the Georgia Court of Appeals in September 2018, a former Association committee member of the Regency Oaks Neighborhood Association, Inc. (the “Association”), Regina Taylor, learned the importance of timely reporting claims the hard way.   In this case, Taylor sued the Association after leaving her committee member position with the Association, and the Association brought counter-claims against her.   In January 2015, after filing her lawsuit against the Association, Taylor sent a copy of her lawsuit to the Association’s D&O insurance carrier, State Farm, to notify it of her claims against the Association.   State Farm appointed defense counsel to defend the Association against Taylor’s claims.

However, Taylor did not notify State Farm of the Association’s counter-suit against her and ask that it cover the Association’s claims against her under the policy until over a year later, in July 2016.   Even though Taylor was potentially insured under the D&O policy since she was a former Association committee member, State Farm denied coverage of her claim.

roleoftreasurer_6-6-18Last, but certainly not least in our blog series exploring the roles of Association officers, we discuss the role of the Treasurer.   Like the Association Secretary, the Treasurer may delegate many of the tasks for which he or she is responsible to the association’s managing agent; however, the Treasurer is ultimately responsible for ensuring that all of these tasks are performed properly. In light of this responsibility, the Treasurer should be familiar with the critical areas of financial responsibility.

If an association employs a professional management company, the Treasurer should receive a package of financial material before each board meeting. That financial package should include a balance sheet, statement of income, bank reconciliations, schedule of accounts payable, cash receipt and disbursements activity, homeowner delinquency report, and general ledger or journal entry activity. If self-managed, the Treasurer may personally prepare these items or may use the assistance of a bookkeeper to do so. The Treasurer should give a presentation of the association’s financial position at each board meeting.

role_of_secretary_4-4-18In this second post of our blog series exploring the roles of Association officers, we discuss the role of the Secretary.   The Secretary is the association’s chief information officer and bears responsibility for ensuring that the association’s records are created and maintained in accordance with state law and the association’s legal documents.

Aside from financial records maintained the association’s treasurer, the association’s Secretary maintains most permanent records of the association. The Georgia Nonprofit Corporation Code, the Georgia Condominium Act, Georgia Property Owners Association Act, as well as an association’s governing documents, identify the records that an association must keep as part of its permanent records. These include, but are not limited to:

  • Minutes of all meetings of the members and board of directors
  • Signed consents evidencing all actions taken by the members or a board without a meeting
  • Records of all actions taken by a committee in place of the board
  • The membership list of all association members, including names, addresses, and the number of votes each member is entitled to cast
  • Copies of the association’s articles of incorporation, bylaws, declaration of covenants and all amendments
  • The association’s most recent annual registration filed with the Secretary of State
  • Copies of resolutions adopted by the members or board of directors
  • Copies of all written communications from the association to the membership as a whole during the past three years

The City of Atlanta City Council is reportedly voting at its Monday, March 5, 2018 meeting on a proposed ordinance that would prohibit all use of vehicle immobilization devices, or “boots”, on private property in the City of Atlanta, including property of condominiums and homeowners associations.   A link to the proposed ordinance, Ordinance 18-O-1129, can be found here.

While the formal agenda for the meeting has not been released, we have information that a City Council vote on this ordinance will be held at the City Council Meeting at 12:30 p.m. on Monday, March 5, 2018 at 55 Trinity Avenue SW, Atlanta, GA 30303. The meeting is in the City Council Chamber on the 2nd Floor.

The Ordinance would prohibit the use of vehicle immobilization devices, or “boots”, on all private property in the City of Atlanta. If enacted, homeowners and condominium associations located within the City of Atlanta would be prohibited from booting vehicles located on association property, whether such booting is performed by a booting company, property manager or by the association.   This means that condominium and homeowners associations located within Atlanta would no longer be able to use boots on vehicles that are parked on association property in violation of the association’s rules or regulations, or which are otherwise unauthorized.  

We are providing this Alert as a benefit to our clients and property managers who live in and manage properties located in the City of Atlanta, many of whom use boots as a cost-effective means to control unauthorized parking in their associations.  

TO TAKE ACTION:   Attend the City Council Meeting on Monday, March 5 at 12:30 OR if you are unable to attend, make your opinion heard by e-mailing and/or calling your City Councilmembers. City Council contact information is listed here: http://citycouncil.atlantaga.gov/ 

In addition, e-mail addresses for the City Council are listed here for your quick reference:

jnide@atlantaga.gov; arfarokhi@atlantaga.gov; mcoverstreet@atlantaga.gov; csmith@atlantaga.gov; hshook@atlantaga.gov; mswestmoreland@atlantaga.gov; narchibong@atlantaga.gov; aboone@atlantaga.gov; drhillis@atlantaga.gov; mbond@atlantaga.gov; ilyoung@atlantaga.gov ; fmoore@atlantaga.gov ; aboone@atlantaga.gov ; dchambers@atlantaga.gov; cwinslow@atlantaga.gov; jmsheperd@atlantaga.gov; malewis@atlantaga.gov; jpmatzigkeit@atlantaga.gov; ektaylor@atlantaga.gov  

 

role-of-president_2-14-18In the first quarter of the new year, many community associations have either just elected new Boards of Directors and appointed new association officers, or are preparing to do so.   As we frequently receive questions during this time regarding the roles, responsibilities, duties and obligations of the association officers, we have prepared a series of blog posts exploring the roles of the President, Secretary and Treasurer.   In our following first blog post in this series, we will discuss the role of the Board President.

The President serves as its chief executive officer and generally has all of the powers and duties of any president of any other corporation organized under the Georgia Nonprofit Corporation Code.   These powers generally include, but are not limited to, appointing committees, calling special meetings of the association members, establishing agendas for all association and board meetings, and presiding over those meetings.

whosincharge_12-21-17Many community associations hold their annual Board of Directors’ elections in the last quarter of the calendar year.   This means that there may be up to 2-3 months in between when a new Board is elected and January of the next year.   This often leads to confusion as to when the newly elected Board should take over- immediately after the annual meeting, or January 1st of the next year?

For the vast majority of community associations, the new Board will take over immediately after the annual election. This is based upon common Bylaws’ language stating that the Board members shall hold office “until their successors are elected by the Association”, or similar such language. In addition, most Bylaws provide that a newly elected Board will meet as a Board either immediately after the election, or within 10 days thereof or a similar short period of time, for the purpose of electing new officers from amongst the new Board members.   All of these provisions call for a new Board to take over, and begin conducting business, immediately after the annual meeting at which they are elected.

insurance_checklistBudget season is a great time to review the association’s insurance coverage.  Although comprehensive, quality insurance coverage can be a significant expense, it is typically far less expensive than paying out-of-pocket for the litigation expenses and/or damages incurred in the event of a loss.  And, your association must carry at least the minimum coverage required by its governing documents, and, for condominium associations, as required by the Georgia Condominium Act. 

 

Below is a “checklist” of the coverage that you should always maintain for the association:

Property.  Provides financial reimbursement in the event of damage to covered property.

annual_membership_meeting_9-18-17As fall approaches, many community association managers and Boards of Directors begin preparations for what can be one of the more stressful times of the year in the community association world: annual membership meeting season.   In an effort to make this annual meeting season a little easier for your community, we’ve compiled a list of some of the more common annual meeting terms and their plain English definitions in this handy “Cheat Sheet”:

Meeting Notice:   The written notice sent to members before the annual meeting advising them of the date, time and place of the meeting.   An association’s Bylaws generally contain specific requirements as to how many days before the meeting the notice must be sent, how the meeting notice must be sent, and what information the notice must contain in addition to the meeting date, time and place.   If the Bylaws do not state any such requirements, the annual meeting notice must be sent at least 21 days prior to the annual meeting for associations subject to the Georgia Condominium Act (the “Condo Act”) or the Georgia Property Owners Association Act (the “POAA”); and for all other associations, at least 10 days, but no more than 60 days prior to the annual meeting (if notice is sent by other than first class or registered mail or statutory delivery, then it must be sent at least 30 days prior to the meeting). 

exculpatory-clauses_8-16-17_ver2Crime happens.   And, when it happens within a community association, the association will oftentimes get drawn into civil lawsuit seeking millions of dollars.   While an association cannot prevent being named in a wrongful death lawsuit, it can do certain things to help protect itself from liability in such suits.   One of those things is obtain the proper liability insurance. Another is to ensure that an association’s Declaration contains an exculpatory clause stating the association does not have a duty to provide security on its premises.

The contrasting results of two Georgia Court of Appeals cases highlight the importance of such an exculpatory clause.   The tragic facts of the cases, Bradford Square Condominium Association, Inc. v. Miller (decided in 2002) and Camelot Club Condominium Association, Inc. v. Afari-Opoku (decided in 2017), are strikingly similar.   Both cases involved criminals following a condominium resident into the condominium, and attacking and killing the resident during a robbery attempt. However, the resulting civil wrongful death lawsuits filed against the condominium Associations ended with very different verdicts for the Associations.   In the Camelot Club case, the jury found the Association to be partially responsible for the victim’s death, and liable for paying 25% of a $1,625,000.00 jury verdict.  In contrast, the Georgia Court of Appeals in Bradford Square found that the Association was not liable for the victim’s death, and the victim’s widow was awarded no money.

leg-update-2_pic_7-19-17On July 1, 2017, Senate Bill 46 became law, granting community associations in Georgia new statutory rights to require that their association’s Developer turn over control of the association to the homeowners. Previously, the Georgia Condominium Act provided condominium unit owners some rights to require that their condominium Developer turn over control. However, Senate Bill 46 expands these rights for condominium unit owners and for the first time extends the same expanded turnover rights to owners of lots in homeowners associations, including both homeowners associations subject to the Georgia Property Owners Association Act (“POAA”) and those that are not.

Under the new statutory language, if a Developer fails to take any one of six specified actions, any homeowner or homeowners can, after giving the Developer 30 days’ written notice and an opportunity to cure its failure to act, file a lawsuit in superior court to obtain a court order transferring control of the association from the Developer to the owners.   The six specified Developer failures to act that can trigger the owners’ right to request turnover are as follows: