Monday, October 17, 2016

If Hillary and Donald were running for your Condo or HOA Board which one would get your vote?

I realize that the title of this blog post will prompt some readers to dash off a response in support of their favored candidate or at least launch an attack against the candidate they despise.

The question in the title of this blog post is designed to make you think about the criteria community association members currently use when deciding who to vote for in an election of directors. While the stakes are undoubtedly higher on the national stage, the more local the government, the more direct impact your elected representatives can have on your daily life.  Accordingly, many of the same factors affecting our presidential election can and do affect association board elections; voter apathy in the form of an uninformed and uninvolved electorate combined with fiery rhetoric and rigid mindsets often result in the best condo, cooperative or HOA candidates not being elected and, in many cases, not even running in the first place.

Let's imagine Hillary and Donald both running for a seat on your condominium board.  For purposes of this blog post, we'll treat Gary Johnson and Julie Stein as the condo candidates who didn't send in their notice of intent to run on time. Perhaps in your community the personality types represented by each of these presidential candidates is not far off the mark? Thank goodness the Florida statutes limit the space permitted for a Candidate Information Sheet while also providing that the association is not responsible for any of the contents.


Now, let's begin the critical analysis that voters should undertake to make an informed choice. How do you see the following aspects of association operations being impacted, positively or negatively, by the current presidential candidates (and the real ones in your community) if they were running for a seat on your board?
  • Which candidate is more likely to encourage and facilitate open board and membership meetings with order maintained while also allowing members to speak and fully participate?
  • Which candidate do you want involved in preparing and passing your association's operating budget?   
  • Which candidate is likely to engage in cronyism both in terms of hiring professional advisors and vendors as well as the uniform and fair enforcement of covenants and restrictions against members and residents?
  • Which candidate has the ability to expose the association to lawsuits based on poor judgment, refusing to honor contracts, impulse control, or a quick trigger finger? For example, fair housing claims based on discrimination often result in high penalties and punitive damages against the housing provider/association.
  • Which candidate is likely to abuse his or her power on the board by rewarding friends and punishing "enemies"?
The foregoing questions are designed to tease out the negatives in a particular choice, but you can just as easily ask the following questions from a more positive perspective:
  • Which candidate has served on a community association board before, for how long and how efficiently did the community operate?   
  • Which candidate has previously volunteered for committees and other roles for the benefit of the community?  
  • Which candidate has attended any sort of educational classes for board members or expressed an interest in learning what the position entails?
  • Which candidate respects and understands parliamentary procedure? 
  •  Which candidate has a sense of fair play and has previously helped diffuse conflict in the community?
Lastly, and because the scenario in this blog post demands it, which candidate might be a little too focused on your community's walls and fences and which might benefit from a strict email policy?
After looking through both sets of questions, you may conclude that in far too many communities there is a lack of qualified candidates and the members have very few good choices. Many people feel that way about the 2016 presidential election as well. Still, refusing or failing to vote  is guaranteed to result in you not getting the board (or president) you want. The moral of this blog post: vote or run for your board and make your community great again. After all, we're all stronger together.
I realize that the title of this blog post will prompt some readers to dash off a response in support of their favored candidate or at least launch an attack against the candidate they despise.

The question in the title of this blog post is designed to make you think about the criteria community association members currently use when deciding who to vote for in an election of directors. While the stakes are undoubtedly higher on the national stage, the more local the government, the more direct impact your elected representatives can have on your daily life.  Accordingly, many of the same factors affecting our presidential election can and do affect association board elections; voter apathy in the form of an uninformed and uninvolved electorate combined with fiery rhetoric and rigid mindsets often result in the best condo, cooperative or HOA candidates not being elected and, in many cases, not even running in the first place.

Let's imagine Hillary and Donald both running for a seat on your condominium board.  For purposes of this blog post, we'll treat Gary Johnson and Julie Stein as the condo candidates who didn't send in their notice of intent to run on time. Perhaps in your community the personality types represented by each of these presidential candidates is not far off the mark? Thank goodness the Florida statutes limit the space permitted for a Candidate Information Sheet while also providing that the association is not responsible for any of the contents.


Now, let's begin the critical analysis that voters should undertake to make an informed choice. How do you see the following aspects of association operations being impacted, positively or negatively, by the current presidential candidates (and the real ones in your community) if they were running for a seat on your board?
  • Which candidate is more likely to encourage and facilitate open board and membership meetings with order maintained while also allowing members to speak and fully participate?
  • Which candidate do you want involved in preparing and passing your association's operating budget?   
  • Which candidate is likely to engage in cronyism both in terms of hiring professional advisors and vendors as well as the uniform and fair enforcement of covenants and restrictions against members and residents?
  • Which candidate has the ability to expose the association to lawsuits based on poor judgment, refusing to honor contracts, impulse control, or a quick trigger finger? For example, fair housing claims based on discrimination often result in high penalties and punitive damages against the housing provider/association.
  • Which candidate is likely to abuse his or her power on the board by rewarding friends and punishing "enemies"?
The foregoing questions are designed to tease out the negatives in a particular choice, but you can just as easily ask the following questions from a more positive perspective:
  • Which candidate has served on a community association board before, for how long and how efficiently did the community operate?   
  • Which candidate has previously volunteered for committees and other roles for the benefit of the community?  
  • Which candidate has attended any sort of educational classes for board members or expressed an interest in learning what the position entails?
  • Which candidate respects and understands parliamentary procedure? 
  •  Which candidate has a sense of fair play and has previously helped diffuse conflict in the community?
Lastly, and because the scenario in this blog post demands it, which candidate might be a little too focused on your community's walls and fences and which might benefit from a strict email policy?
After looking through both sets of questions, you may conclude that in far too many communities there is a lack of qualified candidates and the members have very few good choices. Many people feel that way about the 2016 presidential election as well. Still, refusing or failing to vote  is guaranteed to result in you not getting the board (or president) you want. The moral of this blog post: vote or run for your board and make your community great again. After all, we're all stronger together.

Tuesday, October 4, 2016

Indemnity Provisions can leave Associations holding the bag for someone else's wrongdoing!


A recent Broward County negligent security lawsuit filed on August 31st raises issues about who should  pay the consequences when a security breach results in a resident's death. In this case, a community with an entrance feature protected by a 24-hour guard and security cameras became vulnerable to entry when a perimeter fence was not properly maintained. An intruder with a decade-long rap sheet entered the upscale Davie community and fatally stabbed a resident. The multimillion dollar lawsuit was filed against the community's management company and security company but not the association. The initial reaction from the volunteer board of directors may have been relief to not have been named in the lawsuit until someone reminded them that they likely agreed to broadly indemnify both the management company and the security company in their contracts.


This blog post addresses provisions in existing service contracts which require the association to be financially responsible if its vendor’s negligent actions cause damage to a third party. As it is typical for boards to agree to provide broad indemnification in management, security and elevator contracts, in the negligent security case discussed above, it is likely that the management company and/or security company will file third party claims against the association to enforce the terms of those indemnification provisions.


While agreeing to an indemnification clause is often a cost of doing business these days, these provisions should not be treated as harmless boilerplate. Indemnification clauses must be carefully considered and discussed with legal counsel prior to agreeing to same. Moreover, the association must contact its insurance agent to confirm whether or not its current insurance policy will cover such clauses or if additional coverage is required. Most indemnification clauses will require that the vendor be added as an additional insured to the association's policy and the association's policy will be treated as the primary coverage for any claims even if the vendor has sufficient coverage to address its own negligence.


In the case of an onsite manager, that individual really is an extension of the board so it is reasonable for the association to indemnify him or her for actions taken at the board's request and with their direction. However, consider the case of a woman trapped in an elevator who sues the elevator company for negligent maintenance which resulted in her entrapment and injuries. The elevator company was hired to perform regular maintenance and repairs on the association's elevators. Neither the volunteer board members nor the association manager have the skill or expertise to determine when repairs and maintenance must be performed nor how to perform those functions, hence the need to hire an elevator expert. With a broad indemnification clause in place, however, the elevator company can avoid liability for all but the most egregious actions which typically must rise to the level of gross negligence or willful misconduct.


In a contractual setting, a fair indemnification provision should be reciprocal (meaning the contractor or vendor agrees to protect the association in addition to the association protecting them) and should be based on the party causing the harm being the party responsible for fixing it.