HOA Legal Updates: Board Meetings, Volunteer Insurance, and Wildfire Coverage Concerns

In the ever-evolving landscape of homeowners association management, staying informed about legal developments is crucial for board members and property managers alike. The September 2023 issue of “Community Association Update” from Tinnelly Law Group highlights several pressing concerns facing HOAs today, from the legality of email communications to insurance challenges in wildfire-prone areas. Let’s dive into these important topics that affect how associations operate and protect their communities.

Email Discussions Among Board Members: Meeting or Not?

One of the most common questions facing modern HOA boards concerns electronic communication. With the convenience of email, board members frequently discuss association business outside formal meetings, raising important legal questions about transparency and compliance.

According to legal experts, email exchanges between board members generally do not constitute official “meetings” under most state laws governing homeowners associations. However, this distinction comes with important caveats that boards must understand to avoid potential violations.

While email provides efficiency, boards must ensure these discussions don’t replace the open meeting requirements mandated by state laws. Most states require HOA boards to conduct official business in meetings that are properly noticed and open to membership attendance. Email discussions should be limited to informational exchanges or matters that don’t require formal board action.

Best practices for HOA boards include:

– Using email primarily for scheduling, distributing information, or emergency communications
– Avoiding email votes except where explicitly permitted by state law
– Documenting any decisions made via email in the minutes of the next formal meeting
– Establishing clear communication policies that maintain transparency while allowing for efficient operations

Protecting HOA Volunteers: Insurance Considerations

Volunteers are the lifeblood of many community associations, serving on committees, organizing events, and handling various tasks that benefit the community. However, many HOAs overlook a critical question: are these volunteers protected if they suffer injuries while performing these services?

The newsletter emphasizes that association boards have a responsibility to ensure proper insurance coverage extends to volunteers. Without adequate coverage, both the volunteer and the association could face significant financial exposure if an accident occurs during volunteer activities.

Key insurance considerations for HOA volunteer protection include:

– Verifying that the association’s general liability policy explicitly covers volunteers
– Exploring workers’ compensation options that can extend to volunteer activities
– Implementing volunteer waivers that outline risks and responsibilities
– Creating clear safety protocols for volunteer activities

Proactive insurance planning not only protects volunteers but also helps associations maintain the community involvement that makes neighborhoods thrive.

Wildfire Insurance Cancellations: A Growing HOA Crisis

Perhaps one of the most pressing issues facing many associations, particularly in western states, is the increasing frequency of insurance policy cancellations due to wildfire risk. As climate change intensifies wildfire seasons, insurance companies are reassessing their exposure, often leaving HOAs scrambling for coverage.

When an association’s master insurance policy is canceled due to wildfire concerns, the consequences can be severe. Without adequate insurance, associations face:

– Potential violations of governing documents that require specific insurance coverage
– Difficulty meeting lender requirements for unit owners
– Increased financial risk to the association and its members
– Challenges in obtaining replacement coverage at reasonable rates

The newsletter outlines several strategies associations can implement when facing insurance cancellations:

1. Work with specialized insurance brokers who understand the community association market
2. Implement and document fire mitigation measures throughout the community
3. Consider higher deductibles or adjusted coverage limits to make the association more insurable
4. Explore state-sponsored insurance programs where available
5. Communicate transparently with homeowners about insurance challenges and potential assessment impacts

Legal Enforcement of Board Recalls

In a noteworthy legal development, the newsletter discusses a case where court intervention was required to enforce a properly executed board recall. This situation highlights the sometimes contentious nature of association governance and the legal remedies available when democratic processes are challenged.

When association members follow proper procedures to recall board members but face resistance, courts may step in to enforce the will of the membership. This case serves as an important reminder that:

– Association bylaws and state laws regarding recalls must be strictly followed
– Recalled board members have a fiduciary duty to respect legitimate recall votes
– Courts remain the ultimate arbiter when internal governance processes break down
– Proper documentation of recall procedures is essential for enforcement

Staying Informed on HOA Legal Matters

For association board members, managers, and homeowners, staying current on legal developments affecting HOAs is not merely beneficial—it’s essential for proper community governance. Resources like industry newsletters, educational seminars, and relationships with knowledgeable legal counsel can help associations navigate the complex regulatory landscape.

By understanding the legal nuances of board communications, ensuring proper insurance coverage for all association activities, preparing for insurance market challenges, and respecting democratic governance processes, HOAs can better serve their communities while minimizing legal and financial exposure.

As the community association industry continues to evolve, so too will the legal frameworks governing these important organizations. Proactive education and thoughtful governance remain the best strategies for thriving amidst these changes.

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