Tuesday, July 26, 2016

Hillary's Emails

QUESTION: With all the news regarding Hillary’s emails, should our board set up a dedicated email account for official business?
ANSWERUnlike federal employees, there is no requirement that boards use “official” email accounts. However, there are practical reasons for doing so.

1. Litigation. Even though homeowners do not have a right to inspect emails between directors, that changes when litigation is filed. As part of discovery, a director’s emails can be subpoenaed. When board members use personal accounts for HOA business, their personal emails can end up in plaintiff’s hands for the world to see if not carefully sifted from the record. That means sleepless nights deleting 30,000 “private and personal” emails, making it look like the board is hiding something. When people start deleting emails, plaintiffs and judges are understandably skeptical.
2. Confidential Information. Another benefit to an “official” HOA account is it becomes less likely that confidential HOA business will be viewed by family members. Many couples share email accounts and see each others’ communications. A family member is less inclined to log into a board member’s HOA account and read confidential communications.
3. More Cautious. Finally, using an HOA account should make directors more careful about what they write since emails are no longer personal but rather business emails that belong to the association. Knowing the emails are retained by the association should make directors more cautious and businesslike in their communications. That raises an issue that needs clarification–conducting business by email.
No HOA Business. By statute, boards cannot conduct association business by email. (Civ. Code §4155.) That does not mean directors are prohibited from emails altogether. Directors are allowed to (i) conduct emergency meetings, (ii) send emails to management and vendors, (iii) send emails to legal counsel, and (iv) send administrative emails to each other about meeting dates and times. For a more complete discussion, see “Email Meetings.”
RECOMMENDATIONBoards should reserve a domain name for their associations and establish an email account for directors. Setting up an account is easy and the cost modest. Email accounts should not be a generic “president@myfriendlyhoa.com” since they need to be terminated once a director is no longer on the board. Rather, use the director’s name, “j.smith@myfriendlyhoa.com.” Finally, boards should adopt an official “Email Policy” for directors that complies with the Davis-Stirling Act so board members know what they can and cannot do with emails.

Thursday, July 21, 2016

Mudslide Assessment

QUESTION: About 10 homes in our community were red-tagged by the city due to severe damage from mud and rock sliding off a mountain slope. I asked our board to waive monthly assessments for those homes until they could be occupied again. I was told “We do not have the authority to do that.” Are they correct?
ANSWERWaiving assessments is analogous to California waiving property taxes. If you can get the state to waive taxes you might have an argument for the board waiving assessments.
Deficit. Forgoing assessments is a friendly gesture but it would create a deficit in the budget that would have to be covered by other members via a special assessment.
Negligence. Fortunately, there is no need to drop assessments since the ten homeowners should have insurance to cover their loss. If they failed to carry insurance, you would be asking your neighbors to involuntarily pay for someone else’s negligence, i.e., their failure to insure.

RECOMMENDATION: If you want to waive assessments, I recommend putting it to a vote of the membership. If the membership approves the waiver, the board would not be acting outside their authority.

Wednesday, July 13, 2016

Adrian J. Adams, Esq. - Specializing in Common Interest Developments


Adrian J. Adams Esq.: Adrian Adams Esq. is one of the leading attorneys in California that specialize in common interest developments. Adrian Adams Esq. serves as an expert witness on standards of care issues involving association boards and managers, For more information about Adrian Adams Esq., contact us at (800) 464-2817 or (310) 945-0280.

Tuesday, July 12, 2016

Personal Opinions

QUESTION: Is a board member allowed to vote on an issue according to his own personal opinions? Example: board member personally does not like a certain type of tree so he votes against planting them in the common areas.
ANSWERPersonal opinions…everyone has one. The law does not require directors abandon their opinions when elected to the board. If they did, whose would they adopt?
Rather, directors are required to make decisions (i) in good faith, (ii) in a manner they believe to be in the best interests of the association, and (iii) with such care as an ordinarily prudent person would use in similar circumstances. (Business Judgment Rule.)

If a director’s opinions are out of step with the community, homeowners can express their own views during Open Form and fellow directors can out-vote him. That’s why you have boards of five directors with majority votes–it exerts a moderating influence on outliers.

Wednesday, July 6, 2016

Director Loyalty

QUESTION: Does the “duty of loyalty” mean I have to support, in public, a position reached by a majority of the board? Am I precluded from publicly dissenting and making adverse comments?
ANSWERYou can dissent and make adverse comments in a board meeting when the matter is under discussion by the board. But once a decision is made, it’s time to move on. You don’t have to become a cheerleader for the board’s decision but a director goes too far when he undermines the board or the agreed-upon course of action. Such behavior can result in a breach of the director’s fiduciary duties.


Business Judgment Rule. When a homeowner is elected to the board, he/she automatically becomes a fiduciary and must follow the business judgment rule. That means the actions of a director must be in good faith, in the best interests of the association, and with prudent care. (Corp. Code §7231(a).) Stating you voted against the motion but support the board’s decision is okay. Disrupting operations, attacking fellow directors and undermining an agreed-upon course of action is not okay. It is harmful to the association and falls outside the Business Judgment Rule. When that happens, disruptive directors face personal liability.
Dealing with Rogues. If a director goes rogue, the board may have no choice but to censure him/her and, where appropriate, form an executive committee to exclude the director from sensitive issues. Any director who believes he must win all votes is really not suited to be on the board. If needed, the board can call a membership meeting to remove the director.
RECOMMENDATION: Once the board makes a decision, dissenting directors should either publicly support the decision or keep silent. They should in no way undermine the board. If the director cannot follow this policy, he/she should immediately resign from the board. Once off the board, the former director can publicly oppose the board’s decision, provided he/she does not disclose any privileged information.

Tuesday, July 5, 2016

Adrian J. Adams, Esq. - Think Tank Contributor for the Foundation For Community Research

Adrian Adams, Esq. - Think Tank Contributor for the Foundation For Community Research from Adrian J. Adams, ESQ on Vimeo.

Think Tank members are really investing in the future of our research, once we have those initial reports back we'll be able to approach those external funders for the remaining projects.  They provide a critical review of the organization's scope of work, and facilitate introductions to like-minded organizations to ensure that the research produced is very robust and that they provide new data.

Adrian J. Adams, Esq.: "The monies that we raise jumpstart additional research because the Foundation for Community Association Research is really the only foundation that is doing serious work in studying community associations and the changing roles within those communities."

Please also visit:
http://www.adamsstirling.com/
http://www.adrianjadams.com/
https://adrianjadamsesq.wordpress.com/