Post by dorothykeeler on Jan 20, 2016 23:33:41 GMT -7
Dear GLA Board Members,
I have discussed the items below with Leo and he recommends I not send this at this time. He believes you are all aware of what I am offering and fears it may be taken as threatening or challenging. That is not my intent. I greatly appreciate your volunteering and trying to serve all GLA Members, and I am offering this information in hopes it increases everyone’s awareness of your legal risks.
After considerable research, I have come across detailed circumstances where Home Owner Association Board members can be held personally and criminally liable for their actions. As a former 10 year Realtor in Anchorage, Alaska, (selling houses and small income properties) and a former Independent Contractor for The Land Company in Wasilla, Alaska, (selling raw acreage in subdivisions very similar to ours donovanestates.org/plat.html ) I believe Land Owner Association Board members are held to the same standards.
Board members, we are in difficult times. Many of the GLA Board members are new and may be unaware of the personal risk their actions may cause. Other Board members are simply uninformed and/or face considerable peer or Church Universal Triumphant pressures engineered to provide special treatment, not supported by the Governing Docs, to church members, affiliates, and friends of the church.
It is my desire to inform the GLA Board members of the personal liability they all face by choosing to ignore the facts below.
According to Zurich, a Swiss insurance carrier with over 140 years serving businesses worldwide, including 100 years in the United States: ( hpd.zurichna.com/Whitepaper/Zurich-Liability-Exposures-Nonprofit.pdf )
“The board of directors of a nonprofit organization can be exposed to a variety of lawsuits, ranging from allegations of wrongful acts to financial mismanagement to errors in judgment and negligence. Claims against directors and officers tend to be costly and disruptive to an organization. Perhaps even worse, if found guilty of misconduct, board members could be personally liable, placing their individual assets at stake…
The primary objective of a nonprofit board of directors is to provide oversight and direction to the organization so that it can successfully fulfill its mission. Although nonprofit boards are typically not subject to the same level of scrutiny as those in the for-profit sector, they nonetheless owe fiduciary duties to the nonprofit organization...Any perceived breach of these fiduciary responsibilities can lead to legal action.”
It is important to note that the GLA Board does not have liability insurance, so individual Board members have nothing but their own financial resources to rely upon if they are personally sued.
I believe that current Board members should be very concerned about past and present violations of their fiduciary responsibilities to the GLA Association.
According to the NOLO Law for All web site ( www.nolo.com/legal-encyclopedia/fiduciary-duties-hoa-board-members.html )
“The day-to-day business of most planned developments, such as managing finances and maintenance, is typically run by its homeowner association (HOA) board of directors (the Board)… serving on the Board can be an important way to impact, and help maintain, the well-being of your community. However, to serve responsibly, and avoid potential legal liability, you’ll need to know what your fiduciary obligations are…
HOA Boards Fiduciary Duties Under Corporate Law
…Subject to some limitations, this fiduciary duty applies to HOAs even though they are typically nonprofit corporations, and even though HOA board members are usually volunteers.
A Board member’s fiduciary duties involve three basic components: the duty of care, the duty of loyalty and the duty to act within the scope of its authority.
The Duty of Care
To meet the duty of care, an HOA Board member must make informed decisions, which might require a bit of research before you act or vote on an HOA matter. For example, before fining a homeowner for a rule violation, you must familiarize yourself with the association's CC&Rs, and the details of the situation, such as by talking with the homeowner. HOA Board members must also act in a prudent and reasonable manner, basically using sound business judgment, and avoiding arbitrary or capricious actions…
The Duty of Loyalty
The duty of loyalty requires that HOA Board members act fairly, in good faith, in the interest of, and for the benefit of, the HOA as a whole, rather than make decisions based on any personal interest or gain. HOA Board members should also avoid acting where there is a conflict of interest. For example, a Board member who is helping select landscapers for the property should not steer contracts for landscaping to family members…
The Duty to Act Within the Scope of Authority
This duty requires the HOA Board to perform the duties it’s obligated to carry out, but prohibits the Board from making decisions or acting on matters without the authority to do so. The authority of an HOA comes from its obligations under state laws, as well as the authority granted to it in the developments governing documents.
To ensure you meet your obligations as a Board member, you must know what duties are required. Review your state law and HOAs governing documents, specifically the articles of incorporation and bylaws, and your developments CC&Rs to determine the HOAs obligations, and the extent of its authority. For example, if the laws or governing documents do not grant your HOA Board the authority to adopt new rules and regulations, any restrictions the HOA adopts about home colors might be invalid.
HOA Board Member Protection from Personal Liability
Many HOA board members are understandably concerned about their personal liability for lawsuits. Unhappy homeowners can sue the HOA and the Board members individually for any number of reasons--for example, if the HOA fails to properly maintain a common area, or discriminate when enforcing a rule. The best protection against liability as an HOA Board member is to take what you do seriously. You can avoid a breach of fiduciary duty by fully informing yourself before making decisions, ensuring you have the authority to act, and always acting in the best interests of the HOA.”
Board members have recently voted on items they were not fully informed on. The “gag order” imposed by President Charlotte Mizzi during the January 11th Board meeting denied the Board members from hearing pertinent and valuable facts from knowledgeable landowners. ( glastonbury.freeforums.net/thread/152/statements-inacurrate-letter-regina-wunsch and glastonbury.freeforums.net/thread/143/board-11-2016-problems-concerns )
It is hard to accept that Board members exercised their fiduciary responsibility of The Duty of Care when they stood by, accepted the “gag order,” and refused to listen to the many knowledgeable and articulate landowners who voiced objections during the meeting. ( glastonbury.freeforums.net/board/18/open-letters)
Some Board members might think that abstaining from a vote will shield them from personal and/or criminal liability. The dialog below explains in detail the fallacy of that belief.
Please consider the following carefully before participating in any further GLA Board discussions, decisions, or votes.
www.blueavocado.org/content/what-do-when-you-really-really-disagree-board-decision
"Most of the time, nonprofit boards work through consensus. But what if you think a serious mistake is being made? Sometimes knowing what to do in advance if such a situation arises can help you understand the situation more clearly as it unfolds:
Have you ever been in a situation where the board has made a decision that you think is very wrong and will have severe negative consequences for the organization? Or where you think an important decision has been railroaded through?
…It's important to remember that reasonable people can disagree in good faith on important issues. The following situations may give you some food for thought if a case that goes beyond reasonable disagreement were to arise for you.
Question: The board I'm on is about to make a bad decision. Although the last two years have been very tight financially, they refuse to make any cuts to the expenses. But they don't want to do anything different in fundraising either! If we have another bad year, I'm afraid we won't be able to pay our bills.
Answer: Call the board chair and express your concerns. But if you truly expect that the decision will go another way, write a letter to the board that explains your reasons for voting against the budget that has been proposed. Bring this letter to the meeting at which the vote will be taken and ask to read your letter aloud and have it entered into the official minutes. You may be outvoted, but you will have shown how seriously you take the matter. Your reasoning is in the permanent record, and those who did not attend the board meeting will be able to understand your point of view.
Many years from now, someone reading the minutes may also find your comments important and informative.
Question: The board has just voted to repair our playground structures rather than replace them, but I believe strongly that repairs won't do and some child may be hurt. What can I do?
Answer: Consider asking the board for an independent, expert evaluation of the situation, perhaps by a play equipment specialist. Such an evaluation will bring professional, objective information to the decision. If board members won't do that, or if they choose to ignore a report that indicates the structures are dangerous, at least make sure that your "no" vote is recorded in the minutes. Later, if a child is unfortunately hurt and a lawsuit is brought against the organization, you will be protected if your vote by name has been recorded. After the vote, simply say, "Please put my name into the minutes as having voted NO on this motion." When the minutes are issued, check to be sure your vote has been recorded properly.
Question: I've just been voted off the board of a nonprofit because I've been asking too many questions about the finances. I think the board president and the executive director are embezzling money. What can I do?
Answer: The first step might be to write a letter explaining your concerns --perhaps proposing an investigative committee -- and send it separately to each board member and to the executive director. Ask them to respond to you by a certain date…
Your final recourse is to bring the charges to the attorney general in your state. That office is responsible for overseeing nonprofit organizations incorporated within the state; your local state legislator may also be helpful in making sure there is an investigation.
Question: I'm still angry and disappointed over a decision the board has made. What can I do?
Answer: Once a decision has been made, don't keep bringing it up again or try to take your case to others. For example, if the board has just adopted a budget that you think is unrealistically optimistic, don't continue the argument by trying to convince staff or others that the decision should be overturned. If you feel that other board members understand your point of view but still disagree, and you feel that you could not openheartedly work within that decision, consider resigning from the board and state your reasons clearly in a letter to the board. If, however, you can reluctantly live with the decision, make your disagreements clear, but also make clear that you will work with the decision.
And finally . . .
Too often board members feel uncomfortable with a decision as it's being made but decide to remain silent. In some cases it's fine to let the meeting roll on, but in other cases it's an indication of a board that may later be described as "asleep at the wheel." An underlying but too-common reason is that there's an implicit feeling that questioning the staff (or the majority) is being distrustful or not acting as a team member.
If you find yourself experiencing such thoughts, take a few seconds to think it through. There are more choices than simply keeping quiet or being disruptive. Be sure that you take the board's decisions as seriously as the organization needs them to be taken, and doing so will sometimes mean being clearer than is ordinarily necessary."
Dear GLA Board member, your silence or indecision is putting you at great risk of personal or perhaps criminal liability. As mentioned above, it is imperative that you vote “no” on things that you disagree with and be certain that your vote is recorded accurately in the official minutes.
I sincerely hope these comments are useful to protect every Board member with personal integrity and the commitment to represent the best interests of the entire GLA community.
Most Sincerely,
Dorothy Keeler
SG 26-A1
I have discussed the items below with Leo and he recommends I not send this at this time. He believes you are all aware of what I am offering and fears it may be taken as threatening or challenging. That is not my intent. I greatly appreciate your volunteering and trying to serve all GLA Members, and I am offering this information in hopes it increases everyone’s awareness of your legal risks.
After considerable research, I have come across detailed circumstances where Home Owner Association Board members can be held personally and criminally liable for their actions. As a former 10 year Realtor in Anchorage, Alaska, (selling houses and small income properties) and a former Independent Contractor for The Land Company in Wasilla, Alaska, (selling raw acreage in subdivisions very similar to ours donovanestates.org/plat.html ) I believe Land Owner Association Board members are held to the same standards.
Board members, we are in difficult times. Many of the GLA Board members are new and may be unaware of the personal risk their actions may cause. Other Board members are simply uninformed and/or face considerable peer or Church Universal Triumphant pressures engineered to provide special treatment, not supported by the Governing Docs, to church members, affiliates, and friends of the church.
It is my desire to inform the GLA Board members of the personal liability they all face by choosing to ignore the facts below.
According to Zurich, a Swiss insurance carrier with over 140 years serving businesses worldwide, including 100 years in the United States: ( hpd.zurichna.com/Whitepaper/Zurich-Liability-Exposures-Nonprofit.pdf )
“The board of directors of a nonprofit organization can be exposed to a variety of lawsuits, ranging from allegations of wrongful acts to financial mismanagement to errors in judgment and negligence. Claims against directors and officers tend to be costly and disruptive to an organization. Perhaps even worse, if found guilty of misconduct, board members could be personally liable, placing their individual assets at stake…
The primary objective of a nonprofit board of directors is to provide oversight and direction to the organization so that it can successfully fulfill its mission. Although nonprofit boards are typically not subject to the same level of scrutiny as those in the for-profit sector, they nonetheless owe fiduciary duties to the nonprofit organization...Any perceived breach of these fiduciary responsibilities can lead to legal action.”
It is important to note that the GLA Board does not have liability insurance, so individual Board members have nothing but their own financial resources to rely upon if they are personally sued.
I believe that current Board members should be very concerned about past and present violations of their fiduciary responsibilities to the GLA Association.
According to the NOLO Law for All web site ( www.nolo.com/legal-encyclopedia/fiduciary-duties-hoa-board-members.html )
“The day-to-day business of most planned developments, such as managing finances and maintenance, is typically run by its homeowner association (HOA) board of directors (the Board)… serving on the Board can be an important way to impact, and help maintain, the well-being of your community. However, to serve responsibly, and avoid potential legal liability, you’ll need to know what your fiduciary obligations are…
HOA Boards Fiduciary Duties Under Corporate Law
…Subject to some limitations, this fiduciary duty applies to HOAs even though they are typically nonprofit corporations, and even though HOA board members are usually volunteers.
A Board member’s fiduciary duties involve three basic components: the duty of care, the duty of loyalty and the duty to act within the scope of its authority.
The Duty of Care
To meet the duty of care, an HOA Board member must make informed decisions, which might require a bit of research before you act or vote on an HOA matter. For example, before fining a homeowner for a rule violation, you must familiarize yourself with the association's CC&Rs, and the details of the situation, such as by talking with the homeowner. HOA Board members must also act in a prudent and reasonable manner, basically using sound business judgment, and avoiding arbitrary or capricious actions…
The Duty of Loyalty
The duty of loyalty requires that HOA Board members act fairly, in good faith, in the interest of, and for the benefit of, the HOA as a whole, rather than make decisions based on any personal interest or gain. HOA Board members should also avoid acting where there is a conflict of interest. For example, a Board member who is helping select landscapers for the property should not steer contracts for landscaping to family members…
The Duty to Act Within the Scope of Authority
This duty requires the HOA Board to perform the duties it’s obligated to carry out, but prohibits the Board from making decisions or acting on matters without the authority to do so. The authority of an HOA comes from its obligations under state laws, as well as the authority granted to it in the developments governing documents.
To ensure you meet your obligations as a Board member, you must know what duties are required. Review your state law and HOAs governing documents, specifically the articles of incorporation and bylaws, and your developments CC&Rs to determine the HOAs obligations, and the extent of its authority. For example, if the laws or governing documents do not grant your HOA Board the authority to adopt new rules and regulations, any restrictions the HOA adopts about home colors might be invalid.
HOA Board Member Protection from Personal Liability
Many HOA board members are understandably concerned about their personal liability for lawsuits. Unhappy homeowners can sue the HOA and the Board members individually for any number of reasons--for example, if the HOA fails to properly maintain a common area, or discriminate when enforcing a rule. The best protection against liability as an HOA Board member is to take what you do seriously. You can avoid a breach of fiduciary duty by fully informing yourself before making decisions, ensuring you have the authority to act, and always acting in the best interests of the HOA.”
Board members have recently voted on items they were not fully informed on. The “gag order” imposed by President Charlotte Mizzi during the January 11th Board meeting denied the Board members from hearing pertinent and valuable facts from knowledgeable landowners. ( glastonbury.freeforums.net/thread/152/statements-inacurrate-letter-regina-wunsch and glastonbury.freeforums.net/thread/143/board-11-2016-problems-concerns )
It is hard to accept that Board members exercised their fiduciary responsibility of The Duty of Care when they stood by, accepted the “gag order,” and refused to listen to the many knowledgeable and articulate landowners who voiced objections during the meeting. ( glastonbury.freeforums.net/board/18/open-letters)
Some Board members might think that abstaining from a vote will shield them from personal and/or criminal liability. The dialog below explains in detail the fallacy of that belief.
Please consider the following carefully before participating in any further GLA Board discussions, decisions, or votes.
www.blueavocado.org/content/what-do-when-you-really-really-disagree-board-decision
"Most of the time, nonprofit boards work through consensus. But what if you think a serious mistake is being made? Sometimes knowing what to do in advance if such a situation arises can help you understand the situation more clearly as it unfolds:
Have you ever been in a situation where the board has made a decision that you think is very wrong and will have severe negative consequences for the organization? Or where you think an important decision has been railroaded through?
…It's important to remember that reasonable people can disagree in good faith on important issues. The following situations may give you some food for thought if a case that goes beyond reasonable disagreement were to arise for you.
Question: The board I'm on is about to make a bad decision. Although the last two years have been very tight financially, they refuse to make any cuts to the expenses. But they don't want to do anything different in fundraising either! If we have another bad year, I'm afraid we won't be able to pay our bills.
Answer: Call the board chair and express your concerns. But if you truly expect that the decision will go another way, write a letter to the board that explains your reasons for voting against the budget that has been proposed. Bring this letter to the meeting at which the vote will be taken and ask to read your letter aloud and have it entered into the official minutes. You may be outvoted, but you will have shown how seriously you take the matter. Your reasoning is in the permanent record, and those who did not attend the board meeting will be able to understand your point of view.
Many years from now, someone reading the minutes may also find your comments important and informative.
Question: The board has just voted to repair our playground structures rather than replace them, but I believe strongly that repairs won't do and some child may be hurt. What can I do?
Answer: Consider asking the board for an independent, expert evaluation of the situation, perhaps by a play equipment specialist. Such an evaluation will bring professional, objective information to the decision. If board members won't do that, or if they choose to ignore a report that indicates the structures are dangerous, at least make sure that your "no" vote is recorded in the minutes. Later, if a child is unfortunately hurt and a lawsuit is brought against the organization, you will be protected if your vote by name has been recorded. After the vote, simply say, "Please put my name into the minutes as having voted NO on this motion." When the minutes are issued, check to be sure your vote has been recorded properly.
Question: I've just been voted off the board of a nonprofit because I've been asking too many questions about the finances. I think the board president and the executive director are embezzling money. What can I do?
Answer: The first step might be to write a letter explaining your concerns --perhaps proposing an investigative committee -- and send it separately to each board member and to the executive director. Ask them to respond to you by a certain date…
Your final recourse is to bring the charges to the attorney general in your state. That office is responsible for overseeing nonprofit organizations incorporated within the state; your local state legislator may also be helpful in making sure there is an investigation.
Question: I'm still angry and disappointed over a decision the board has made. What can I do?
Answer: Once a decision has been made, don't keep bringing it up again or try to take your case to others. For example, if the board has just adopted a budget that you think is unrealistically optimistic, don't continue the argument by trying to convince staff or others that the decision should be overturned. If you feel that other board members understand your point of view but still disagree, and you feel that you could not openheartedly work within that decision, consider resigning from the board and state your reasons clearly in a letter to the board. If, however, you can reluctantly live with the decision, make your disagreements clear, but also make clear that you will work with the decision.
And finally . . .
Too often board members feel uncomfortable with a decision as it's being made but decide to remain silent. In some cases it's fine to let the meeting roll on, but in other cases it's an indication of a board that may later be described as "asleep at the wheel." An underlying but too-common reason is that there's an implicit feeling that questioning the staff (or the majority) is being distrustful or not acting as a team member.
If you find yourself experiencing such thoughts, take a few seconds to think it through. There are more choices than simply keeping quiet or being disruptive. Be sure that you take the board's decisions as seriously as the organization needs them to be taken, and doing so will sometimes mean being clearer than is ordinarily necessary."
Dear GLA Board member, your silence or indecision is putting you at great risk of personal or perhaps criminal liability. As mentioned above, it is imperative that you vote “no” on things that you disagree with and be certain that your vote is recorded accurately in the official minutes.
I sincerely hope these comments are useful to protect every Board member with personal integrity and the commitment to represent the best interests of the entire GLA community.
Most Sincerely,
Dorothy Keeler
SG 26-A1