Evan McKenzie on the rise of private urban governance and the law of homeowner and condominium associations. Visit evanmckenzie.wikispaces.com for my published articles and services.
SCA Board Members Should Be Held Personally Accountable For Huge Tax, Restaurant & Other Financial Losses! January 24, 2012 by THE VOICE.With annual meetings and election of members to associations' boards of directors in March and CHD&B's recognition that members' volunteering to serve on boards of directors is at a historic low, Carpenter, Hazlewood, Delgado & Bolen, PLCAttorneys At Law No Board - Now What?By Nikita Patel on the 27th of January 2012 http://www.carpenterhazlewood.com/resources/enews/2012/no-board-now-what In these challenging times and with volunteerism at historically low rates, the possibility that no owner will volunteer to serve on the community's Board of Directors is becoming a more common problem. Without owners willing to volunteer to serve on the Board, the prospects are grim as a functioning Board is necessary (legally and practically) to guide the association in decisions. how might the following pending legislation affect any candidate's decision to serve on a board of directors? Arizona Fiftieth Legislature-Second Regular Session (2 of 15 HOA bills thru 1/27/2012) HB 2455http://www.azleg.gov//FormatDocument.asp?inDoc=/legtext/50leg/2r/bills/hb2455p.htm&Session_ID=107 An act amending sections 33-1243, 33-1810 and 33-1811, Arizona Revised Statutes; relating to condominiums and planned communities Sec. 2. Section 33-1810, Arizona Revised Statutes, is amended to read:33-1810. Board of directors; annual audit; indemnification B. Notwithstanding any provision in the community documents, if a member incurs attorney fees and is successful in compelling the board to comply with any provision of the community documents or Arizona law, the individual board members are jointly and severally liable for the member's attorney fees and the association shall not indemnify the board members for that liability unless that indemnification is approved by a vote of two-thirds or more of the membership. SB 1240http://www.azleg.gov//FormatDocument.asp?inDoc=/legtext/50leg/2r/bills/sb1240p.htm&Session_ID=107 An act amending sections 33-1243, 33-1810 and 33-1811, Arizona Revised Statutes; relating to condominiums and planned communities Sec. 2. Section 33-1803, Arizona Revised Statutes, is amended to read:33-1803. Penalties; notice to member of violation; selective enforcement; damages F. Notwithstanding any provision in the community documents, if a member incurs attorney fees in a court action between the community or the board and the member regarding enforcement of the community documents and the court determines that the community or the board has engaged in selective enforcement of the community documents' provisions with respect to that member, the member is entitled to an award of damages in the greater of the two following amounts: 1. Triple the total penalty the community attempted to enforce against the member, plus legal fees, costs and any monies incurred in expunging the penalty. 2. Triple the member's actual damages plus legal fees and costs. These bills, and others, if passed and enacted into law, will redefine OPM (Other People's Money) in associations.
Arizona’s Fiftieth Legislature, Second Regular Session, 2012As the worm turns... January 31, 2012, more legislation this session (SB1468) that recognizes and addresses (financial responsibility) the historic imbalance between associations, their boards of directors, managers and attorneys and the individual homeowner. "... directors are 'personally liable'... if enacted, who in their right mind would volunteer for service on the board of directors if this risk exists? This is the 'Make Sure No One Every Volunteers to Serve on Their Board' act(sic)!" SBC, Carpenter, Hazlewood, Delgado & Bolen, PLC, 02/02/2012 A bit dog always barks. SB1458 personal liability of directors – joins HB2355 and SB1240HB2455 indemnification - individual board members are jointly and severally liable for the member's attorney feesSB1240 selective enforcement - member is entitled to an award of damages Triple the member's actual damages plus legal fees and costs.
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