The Communicator - Volume 1, Issue 2 - (Page 13)

intentionally harmful (i.e., making a decision not to follow the advice, perhaps because of cost, so a director could sell before the cost of doing the work or consequences of not doing the work hits); wanton (this is a slightly lesser version of willful that really would not apply in most cases but might be something like trying to fell a tree in the common area and having it land on somebody or his home); or grossly negligent (perhaps the most dangerous). These sorts of things are always judged in retrospect – Monday morning quarterbacking, if you will, and ignoring an expert’s advice is likely to result in a finding of gross (as opposed to ordinary) negligence. 10. FAILURE TO ATTEND BOARD EDUCATIONAL SEMINARS AND CLASSES We say this tongue-in-cheek, of course, but we do recommend that boards of directors, whether the association is professionally managed or not, regularly attend board educational seminars. If board members know what their managers know, then it makes the managers’ jobs that much easier. And if you are self-managed, board education is your only link to the many new laws that affect homeowners associations. Lastly, the state is strongly considering mandatory board training like many other states, so why not join in the fun and attend the next board educational seminar near you? Many management companies already provide board education to all of their clients, so consider this when hiring a management company for your community. Lisa Esposito, CCAM, is Chief Operating Officer with Massingham & Associates. Michael Dellinger, CCAM, is the Founder of Bay Area Property Services. SPECIALIZED BANKING SERVICES FOR COMMUNITY ASSOCIATIONS AND MANAGEMENT PROFESSIONALS Association Bank Services offers: • Operating and Reserve Checking • Premium Interest Rates • No Monthly Service Charges • CD Placement Services (CDARS) (FDIC Insured Investment to more than 50 million) • Automated Lockbox Services • Automatic Assessment Payments • Association Loans • Business On-Line Banking • Cash Management Services • Remote Deposit • Simpliﬁed Association Signature Cards • Exceptional Service • Experienced Association Bankers Greater Bay Area Michael Kennedy or Katherine Young: 800-200-0013 San Francisco/Marin Monterey/Santa Cruz Karl Lofthouse: 415-273-2011 South Bay/Peninsula Geri Kennedy: 866-493-8022 Contra Costa/Central Valley/Napa/Solano Brian Mavity: 866-846-5476 Sacramento/Northern California Betina Schessow: 800-200-0013 CUSTOMER SERVICE All Locations: 800-200-0013 AssociationBankServices@fbol.com FirstBankHOA.com 9. FAILURE TO DISCLOSE POTENTIAL SPECIAL ASSESSMENTS AND BANK LOANS Some experts believe that almost 40 percent of homeowners associations have or will have a special assessment or bank loan to fund reserves in order to replace a major component, such as roof replacement. Some of this is caused by improper budgeting and reserve funding, and some by early component failure or defect. No matter what the reason, it should be disclosed as soon as the board members start talking about it – “it” being those words that no board member or property manager likes to say: “special assessment.” We recommend that the association start disclosing a special assessment as soon as it is discussed by the board. This can be done with a notice to the membership and/or a meeting of the members. Sometimes it is the reserve study preparer who fi rst reports that a special assessment is necessary to properly fund reserves. This report can be used as well and should be disclosed to the membership, potential buyers and escrow requests immediately. If the association has a Web site, it is probably a good idea to list it there as well. We know that this advice is scary, but failure to properly disclose potential special assessments or bank loans has far greater potential for disaster when involving new buyers and the like. The Communicator • 13 http://www.firstbankHOA.com

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

The Communicator - Volume 1, Issue 2 Contents President's Message The Hammer is Broken Top 10 Mistakes That Get Board Members Sued Dealing with Bankruptcy Ask the Experts – Are Your Contractors Licensed and Insured? 2008 Events & Education Calendar Welcome to CAI BayCen Directory Updates Index to Advertisers

The Communicator - Volume 1, Issue 2

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