Monday, September 19, 2011

Killer Weed in the Common Area?

How do Boards of Directors deal with the use of Medical Marijuana in Community Associations?

By Paul Windust
    Community Associations increasingly face issues with medical marijuana.  It is a confusing area because federal and state laws conflict and social mores are in constant flux—especially when it comes to marijuana.  Long gone are the days when the high school health teacher could show “Reefer Madness” and his students would accept that marijuana use leads straight to jail, depravity, or worse!  Today, attitudes toward many substances, including marijuana, are more relaxed—at least at the state level. But regardless of current social opinions on the use of marijuana, the question that board members and managers ask us is whether the use of marijuana, medical or otherwise, is a violation of their CC&Rs, and if so what can or should be done about it?

Sunday, September 4, 2011

First Thing We Do, Let's Ban All the Bloggers!

   All speech is not necessarily objective or persuasive--merely posting something on the Internet does not make it right, or even important.
      Anyone who surfs the web for useful stuff about community associations has seen three kinds of information posted there--the good, the bad, and the ugly. “Good” information provides accurate facts and useful advice related to those facts. “Bad” information, while often inadvertent, provides neither accurate facts nor useful advice and is usually the result of carelessness or lack of experience. “Ugly” information, on the other hand, is accurate facts used as a cover for bias that either intentionally misleads or is simply invective—or both. The facts used, true as far as they go, are nevertheless intended to disguise or “beard” a political or social agenda. To illustrate “ugly” information, assume that the following is a blog post.  It is reproduced here in the blue font below, in its entirety as it appears in the blog—all of the emphasis is in the original. You tell me into which category this “information” falls: 

“HOA boards can be sued and not covered by insurance
Much of the abuse by boards, the management firms, and attorneys are tortious acts that are illegal and also constitute a fraud upon the members. You will not hear this at pro-HOA seminars sponsored by local governments and/or taught by CAI attorneys.
“D and O” means “directors and officers.”

“Most, if not all, D and O policies contain a provision that excludes intentional criminal and fraudulent acts committed by board members,” says Collins. “However, [our policy] will continue to defend the directors and/or officers until such time that a criminal action can be proven. The policy will then cease to provide any further protection once it is determined that a board member knowingly committed a criminal or fraudulent act.”
D and O coverage also doesn’t indemnify a board or board member against decisions made “in bad faith,” or with illegal intent. If a board is found to have acted in an illegal manner—deliberately discriminating against a prospective buyer, for example—and are hit with punitive damages, members are on their own when it comes to paying them.

The reason for pursuing these actions acts of bad faith is to force the homeowner into court, where the attorney gets his fees and the HOA gets a free ride, most of the time.  Directors and officers are legally bound to act in good faith toward their members.”
Yes it’s ugly, but let’s analyze why.