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Letter to the editor

Condos: Proper insurance is board's responsibility

By Richard White, Special to the Times
Published January 12, 2008

Q: I'm on our condo board, and this year it was my job to secure windstorm/hazard insurance for the community, which is in a flood zone. We are appropriately insured for hazard but are grossly underinsured for flood, according to the appraisers I worked with. Our president strongly opposes insurance and personally carries neither homeowners nor flood insurance. I think we're committing fraud if we leave ourselves knowingly underinsured. The president doesn't want to hear it. Insurance is a constant battle at board meetings.

A: You bring up a very important aspect of being a director. Personal agendas, political viewpoints, religious beliefs and secret dealings are out the window. The directors' fiduciary duties and responsibilities override their personal aspirations.

Directors are required to properly insure the association's property in accordance with the statutes and documents. To underinsure the common areas may place an excessive liability responsibility on the owners. Imagine their reaction when they learn they'll have to pick up the costs in case of a flood because the association is underinsured. Your board should consult with a lawyer and an insurance agent about the coverage you need. All of you are responsible, not just one director, even if he is the president.

Let voters decide

Q: A board member had a stroke but retains his seat. The board is making no effort to remove him. He isn't helpless, but as I understand it the stroke has diminished his brain cells. Isn't the board obliged to act? What is our liability in allowing this person to participate in board decisions? He will likely be re-elected because he has done a good job in the past. I don't think he could pass a competency hearing. Can I demand an evaluation of this person?

A: You're on very thin ice here. Unless your documents state otherwise which would be highly unusual, the only way to remove a director is through a recall by the membership. The board has no authority to remove a board member. (They can remove someone from an officer's position, but that person remains on the board.)

Few illnesses render a handicapped person useless. You could open yourself up to a discrimination charge. The best-operated condo I ever managed had a president who, because of a stroke, could not walk or use his left arm and hand and had difficulty talking. Proof of his capability: At the annual meeting, attended by 100 percent of the members, he received 100 percent of the votes for re-election as a director and was subsequently re-elected president by the board.

Hands are tied

Q: I was recently appointed treasurer of our condo board, but in fact the president is acting as the treasurer. At the last board meeting I presented a motion to be authorized to handle the financial records, as assigned and mandated by our bylaws: supervise the financial transactions, sign checks, be authorized as a signatory on bank records. The board's response: They'll discuss the motion some other time. What can I do?

A: Send a written memo to all the directors notifying them that each and all are responsible for the association's operations. Explain that as the treasurer, you have certain responsibilities mandated by the documents. Tell them that if they do not want you to perform your duties as an officer, they should approve a motion relieving you of those duties and should inform the members that others will be performing the treasurer's duties.

Richard White is a licensed community associations manager. Write to him c/o Community Living, St. Petersburg Times, P.O. Box 1121, St. Petersburg, FL 33731. Sorry, he can't take phone calls or provide personal replies by mail, but you can e-mail him at CAMquestions@cfl.rr.com. Please include your name and city. Visit him online at talkwithcam.com.

[Last modified January 10, 2008, 17:26:21]