The Communicator - Volume 2, Issue 1 - (Page 17)

Most directors do not like the enforcement aspect of their duties. These duties are unfortunately necessary. The consistent and fair application of the governing documents (including the CC&Rs and the rules) are objective Serving Northern California CIDs and their Families evidence of the operation of a successful since 1995 (not to mention less vulnerable) board. The letters and notices to offending or delinquent unit owners are the objective evidence that will establish the successful defense (or unfortunately, if not well done, the successful prosecution) of any given board. Directors must remember that their fiduciary duty is to the association as a whole. A director must resist the temptation to do a favor for a friend; it may be one of the most expensive favors that a director will ever do. That favor to one unit owner will not be viewed as fair or warranted by another unit owner (or by a judge or jury reviewing such a favor in retrospect). Rules must be enforced uniformly and consistently for all members. Such fairness or consistency is the primary bulwark against future action that may be taken by frustrated and desperate owners looking for an escape from 403326_American.indd 1 their own personal financial crisis. Should a lawsuit be filed, the defense of the association and any individually named members of the board must be tendered to the CGL and the Directors and Officers Liability insurance carriers. This may require the assistance of counsel. One of the policies will hopefully provide for the defense of the association, its board and any individually named members of that board (as well as pay for any judgment should the directors be found liable). At that point, being able to demonstrate to defense counsel that policies were enforced fairly, consistently and based upon objective factors will go a long way toward a successful conclusion of any such action. Not being able to produce such evidence will be the cause of unneeded stress and ultimately an emergency special assessment to pay a judgment! ■ Steve Callaway, CEO, West Callaway Stotka, Inc., can be reached at (925) 686-2860 or wcsinfo@westcallaway.com. Kevin Mallett, Esq., Russell & Mallett, LLP, can be reached at (925) 947-4915 or Kevin@Russell-Mallett.com. 393429_American.indd 1 The American Community is built on trust… that’s why board members choose AMS Full Service Management for Associations. Fully Certified Association Professionals and Responsive Professional Personnel. Free HOA Client Website. 24/7 Emergency Assistance. Staff CPA to provide Superior Quality Assurance to clients for all financial products. Locally Owned and Operated American Management Services, Inc. 90 Great Oaks Boulevard, Suite 105 San Jose, California 95119-3414 In The Bay Area - 800-720-1999 408-225-7380 Fax 408-225-7382 Email: Info@amspcam.com Visit us at www.amspcam.com 10/8/08 12:05:22 PM The Communicator12:16:39 PM 9/4/08 • 17 http://www.amspcam.com http://www.americanasphalt.com

Table of Contents Feed for the Digital Edition of The Communicator - Volume 2, Issue 1

The Communicator - Volume 2, Issue 1 Contents President’s Message Does Your Insurance Agent Know Something You Don’t? Lien Stripping and Chapter 13 Bankruptcies Mortgage Crisis Impacts Directors Legislative Bill Status Report Annual Holiday Awards Banquet & Casino Night 2009 Events & Educational Calendar New Members Index to Advertisers

The Communicator - Volume 2, Issue 1

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