Question: We have a grounds committee that has broad decision making authority and management tasks regarding the landscape contractors. Are committee members covered under an HOA's director and officers insurance policy?

Answer: All HOA volunteers are covered under Directors & Officers insurance unless specifically excluded.

Question: Since our HOA has no reserves, the board asked the members to approve a sizeable loan for new roofs and painting. The required majority of 75% voted in favor. To repay the loan required an increase in monthly fees of 25%. Those that voted against the loan were livid about the fee increase and presented a letter to the board which they wanted included with the board meeting minutes and distributed to all the members. Are we required to do this?

Answer: No, the letter should not be made part of board minutes. Board minutes should only reflect business decisions made by the board. The record about the loan speaks for itself; 75% voted for it and 25% either voted against it or failed to vote. The fact that the minority wants its opinions memorialized in the minutes is immaterial. Board minutes are the record of board actions, not discussions or opinions.

That said, it is usually a very bad idea for an HOA to borrow money since the loans are difficult to get and very expensive. Most owners have the option of paying their share in cash from savings or a home equity loan which usually offers the best rates and terms available. The HOA should stay out of the finance business whenever possible.

Also, your board should take immediate action about the lack of reserves so this situation does not have to be repeated. Having a long range repair and replacement plan called a reserve study is essential for the board to do proper planning and budgeting. The reserve study typically has a Funding Plan which instructs the board how much money should be set aside each year so money will be available for expensive repairs like roofing and painting. The best funding plan collects a fair share from each member along a (typically) 30 year time line so that no one has to pay more than they should. For a list of credentialed reserve study providers, see the Association of Professional Reserve Analysts website at www.apra-usa.com

Question: I have often wondered where the pound limitation came from in HOA pet policies. I have always considered small, yappy dogs to be more of a nuisance than larger dogs that don't have the usual frenetic personality of smaller dogs. The only vicious dog I have ever owned was a miniature dachshund. Wouldn’t it make more sense to control the behavior and not size of the dog?

Answer: Most pet restrictions have more to do with noise and wear and tear of the common area and less about aggression. But when it comes to aggression, dachshunds may bite but pit bulls can kill. So there is a deadly difference when it comes to size. Certain breeds have a reputation for aggression. While it’s not true in the case of every dog within a breed, pet policies often err on the side of caution. In any case, pets are a politically charged issue so the board should consider opposing views before enacting any new policy.

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