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Avoiding Legal Blunders A Crash Course Before You Crash

Much like corporations and charity organizations, condos, co-ops and HOAs across the nation are helmed by groups of residents who volunteer to serve their communities, and who are elected to their post by their neighbors. This is of course the case in New Jersey, where hundreds of thousands of residents live in either co-ops or condos across the Garden State. Given how driven, results-oriented and particular citizens can be, it's perhaps not surprising to find many individuals volunteering for board positions in their communities.

While many board members are either in or have retired from successful, demanding careers that may impart terrific insight into how to manage their building or association, there are many situations in which an HOA’s board of directors may need an expert’s advice in law, finance, or corporate administration. New Jersey laws, as well as co-op and condo bylaws, can vary a great deal from one community to the next, and certainly aren't always intuitive. These inconsistencies and intricacies can lead a perfectly well-meaning board to make a decision with serious legal ramifications, putting the board at risk for lawsuits both within and outside the community.

Getting On Board

The profile of an individual attracted to a volunteer board position is generally an intelligent, energetic, and outgoing personality—someone wanting to make a difference. Even though board members are elected by the community however, there is no compensation for the time and effort a volunteer job of this magnitude involves.

Whether a board member is still working full- time, or has retired from a successful career, there are times a board may need an expert’s advice. The fields of law, insurance, and accounting are specialized and varied; one size does not fit all. Having a CPA on the board, or an attorney, or an insurance adjuster does not mean a board can always forgo hiring an expert consultant.

The overall lack of specific experience or knowledge may lead a perfectly well-meaning board to make a decision with minor to serious legal ramifications, putting the board at risk for lawsuits both within and outside the community. Honest mistakes are going to happen no matter how careful or conscientious a board approaches the various duties involved in running a community.

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