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Community Living: Homeowners association insurance strongly encouraged

Q: I am the treasurer of a small homeowners association. We have five board members, and the association is responsible for maintaining the common areas and a large wall around the community. No one has ever questioned the annual budget, but our "Director and Officers" insurance policy is coming up for renewal Oct. 31 and coverage is $1 million. The premium is about $825. Do we really need this insurance, and if so, do we really need $1 million in coverage?

A: I would not serve on a board as a director or officer without this coverage. You never know if an accident or an event could trigger a lawsuit, and if the board does not have this coverage, the directors and officers can be personally responsible. Talk to your insurance agent and your attorney before you make a decision.

Opting out of statutes a questionable move

Q: Our management company recently recommended that our condominium association opt out of the state statutes. It was put to a vote, and our members did choose to opt out. What is your take on this issue? Personally, I favored staying with the Florida statutes, and I think most people were confused by the statutes and just voted with the management company recommendation.

A: Keep in mind that there are only a few things the association can vote not to comply with in the statutes: reserve budgets, annual meetings, audits and a couple of other operational matters. The membership cannot vote not to follow or comply with the statutes, but can vote on specific items as listed. I am surprised a manager would advise an association to opt out of statute requirements. Take reserves for example. Say the association voted not to fund reserves for several years, eventually depleting the reserve fund that had been established. Should a disaster hit and the board call for a special assessment, an owner could sue the board and the manager, claiming that they did not properly prepare a budget that included reserves. Suffice it to say I recommend that members comply with the statutes.

Must board meeting minutes be mailed?

Q: Is our management company obligated to mail the condominium board meeting minutes to all unit owners? It was been a long time since anyone other than the board members attended a meeting. If they need to send the minutes, are they required to do so within a specific number of days after the meeting?

A: The easy answer is no, the board is not required to mail copies of the minutes. The board is responsible to prepare the minutes and keep them in a record book as part of the official records. Any member who wishes to read the minutes must send a written request to read the minutes; if the member wants a copy, the association can charge a copy fee. What I recommend is that two to four days after the meeting, a draft, unapproved copy be posted on a bulletin board for members to read, or, if the association has a Web page, the minutes could be posted there. Some associations have a newsletter and put the copy in the newsletter. The posting and publishing is not a statutory requirement, it just makes for better communication.

Richard White is a licensed community associations manager. Write to him at 6039 Cypress Gardens Blvd., No. 201, Winter Haven, FL 33884-4115 or you may e-mail him at [email protected]

Community Living: Homeowners association insurance strongly encouraged 10/16/09 [Last modified: Friday, October 16, 2009 4:30am]
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