A condo association’s board of directors has a number of important responsibilities, as well as liabilities. Understanding these issues can help you to better serve your clients in this industry.
Responsibilities of the Board of Directors
The board of directors is responsible for overseeing all activities of the condo association, including its business affairs, building management, interactions with residents, pending litigation and more. The board must conduct its activities based on the standards included in the condo association’s governing documents. Unless these governing documents specifically include compensation for members of the board of directors, they must serve without receiving payment.
Some of the specific responsibilities of the condo association board of directors include:
- Conducting board meetings
- Appointing committees
- Establishing fiscal policies
- Investigating possible violations of bylaws and enforcing penalties as necessary
- Dealing with maintenance issues
- Communicating with residents as needed
- Responding to concerns from residents
- Hiring professionals to manage the buildings
- Keeping detailed records
Liabilities of the Board of Directors
The condo association board of directors is subject to the bylaws contained in the association’s governing documents. When the board of directors fails to uphold any of the responsibilities clearly conveyed in these bylaws, or when the board of directors is responsible for clearly violating a bylaw, liability may result. When this occurs, board members can be held responsible for related losses.
Members of the board of directors are expected to understand the condo association’s bylaws, as well as their responsibilities. They are also expected to behave logically and reasonably. If one or more board members engage in improper actions, those responsible will not be excused based on a lack of experience or ignorance. Even in the case of inexperience and ignorance, board members may still be held legally liable for mismanagement, negligence or any other improper behavior.
Insurance Needs
Because the responsibilities of a condo association and its board of directors are so important, and because the consequences of negligence can be severe, having the proper condo association D&O insurance coverage is essential. As an independent insurance agent, it is your job to make sure that your clients have the protection they need.
American Team Managers Insurance Services is proud to work with independent insurance agents who provide services within this industry. Please contact us today to find out how we can help you grow your business and provide a better quality of service to your clients.
About American Team Managers Insurance Services
Founded in 1998 by Chris C. Michaels, American Team Managers Insurance Services (ATM) has provided wholesale and MGA services to more than 5,000 independent insurance agents throughout the United States. Our goal is to establish close, long-term relationships with our agency partners and insurance carriers and provide competitive products for the Exclusive and Non-Exclusive markets that we serve. For more information on our products and services, give us a call at (877) 671-7503 to speak to a representative.