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Fiduciary Duty
Facts

Plaintiff, Ms. Carmichael, is on the board of directors of Commerce Towers Condominium (“Association”).  On the board with her is Mr. Frese and Mr. Vickers.  Mr. Vickers, Mr. Frese and Mr. Tarantino are the officers of the Association. (collectively “Officers”).  All three are also the officers of Tarantino Properties, Inc. (the “Management Company”). Carmichael and other unit owners (collectively “Owners”), individually and on behalf of the Association, sued the Officers and the Management company for breaches of fiduciary duties and for unjust enrichment because the Officers caused the Association to provide for the maintenance and preservation of property that was not part of the Association (the retail space of the buildings).  The Officers and Management Company asserted that the Owners did not have standing to sue on behalf of the Association (a derivative suit).
Continue Reading Self-Dealing by Director is a Breach of Fiduciary Duty (Case 2)

Virtual Meetings

Most condominiums and homeowner associations (HOAs) are nonstock corporations under Wisconsin Chapter 181.  As such their members can make decisions one of three ways:

  1. Holding a meeting;
  2. Action by written consent (181.0704 Wis. Stat.). This may be used unless “limited or otherwise provided in the articles of incorporation or bylaws…”  For an association to act by written consent, the action must be “approved by members holding at least 80 percent of the voting power, or a different percentage, not less than 50 percent, specified in the articles of incorporation or bylaws.”  The written consents must be signed and dated after the date of the last meeting of the members and kept with the minutes
  3. Action by written ballot (181.0708 Wis. Stat.) This may be used “if permitted by the articles of incorporation or bylaws, any action that may be taken at an annual, regular or special meeting of members may be taken without a meeting if the corporation delivers a written ballot to every member entitled to vote on the matter, the ballot sets for the proposed action and provides an opportunity to vote for or against the proposed action.”  “Approval by written ballot … valid only when the number of votes cast by ballot equals or exceeds the quorum required to be present at a meeting authorizing the action, and the number of approvals equals or exceeds the number of votes that would be required to approve the matter at a meeting at which the total number of votes cast was the same as the number of votes cast by ballot.”

Continue Reading Condo and HOA Virtual/ZOOM Meetings in Wisconsin – How Legal Are They?

Fiduciary Duty
Facts

Plaintiff, Coley, owns a home in an HOA, the Eskaton Village (“Association”).  Two other Eskaton named entities (“Eskaton”) develop and support HOAs.  A five-member board runs the Association, subject to the Declaration.  Eskaton has always controlled three of the five directors on the Association Board because it owns 137 of the 267 units.  The three directors are always employees of Eskaton and are “financially incentivized to run the Association for the benefit of Eskaton.”  In short, the better Eskaton performs the higher their compensation, which is directly related to the expenses of the Association.  Coley, one of the other two directors, filed suit because of various acts by the other directors to benefit their employer at the expense of the Association, including disclosing attorney client privileged communications.
Continue Reading Self-Dealing by Director is a Breach of Fiduciary Duty (Case 1)

10 Commandments of Association Management

Please join Husch Blackwell’s Condominium & HOA Law Team as we reveal the 10 commandments of what association management “Shalt Not” do while governing. Together, we’ll cover the basics of what homeowner associations (HOAs), condo boards and managers need to know. We’ll also dive into the nitty gritty of assessment collections.

Presenters
Lydia Chartre, Partner, CCAL
Dan Miske, Partner, CCAL
Ketajh Brown, Attorney
Sandra Chapman, Senior Paralegal
Billie Fatheree, Paralegal
Continue Reading Association Academy: The 10 Commandments of Association Management – September 25, 2020

Does your homeowners association have a written collection policy?  What duties does the property manager and/or Board have under the policy?  Learn what role the property manager and/or the Board of Directors should have in the assessment collection process.

Want to learn more about Wisconsin condominium and HOA law from experienced condo and HOA…

Directors & Officers

I recently read an article on the difference between condominium and homeowner association officers and directors by an attorney out of Ohio, Jennifer B. Cusimano of Kaman & Cusimano, LLC.  It was well written, clarified a subject that is often confused, and inspired me to do my best to explain the difference to our readers.

In simple terms, directors are elected by the owners, officers are NOT.  Officers are elected by the Board of Directors annually. 
Continue Reading What is the Difference Between Community Association Directors and Officers?

Surprise in Box

The Board of Directors always has the power to make and amend Rules and Regulations on its own, without owner approval…right? Wrong.  The Board’s rule-making power and authority completely depends upon what authority is given by the Declaration and Bylaws, and as we know, all associations’ Declarations and Bylaws are different!  This is true in Wisconsin and in many other States.  Knowing what is in your governing documents will keep you out of troubling lawsuits.
Continue Reading Know What is in Your Documents—The Board Might Not Have the Authority You Think it Does…

Follow the Rules
Facts

When you are headed down the wrong path – TURN BACK.  This applies to owners and associations when they act on their belief of what their documents say, but then learn that their understanding may be wrong.  Often parties who make a mistake, or learn that they might have made a mistake, refuse to reevaluate their situation and at least allow turning back to be an option.  Such appears to have been what happened in the recent case of Fritz v. Lake Carroll Property Owners Association, Inc., (2019 unreported case out of Illinois) where the association passed a rule that required inspection and pumping of the owners privately owned septic system every four years and that if an owner failed to follow the rule they would be fined $250 and $25 per day. 
Continue Reading Wisconsin Condominium and Homeowner Association Owners Need to Follow their Rules Even When they Are Not Recorded.

Tied Hands

A Court in Colorado recently dealt with a developer who placed a provision in the declaration of a condominium association prohibiting amendment of the declaration – ever – without the declarant’s written consent, and requiring that all construction defect claims be resolved through arbitration (Vallagio at Inverness Residential Condominium Association, Inc. v. Metropolitan Homes, Inc. (395 P.3d 788)).
Continue Reading Developers Sometimes Draft Documents for Their Own Benefit