www.AssociationHelpNow.com the funds are ultimately used. As far as accounting is con- cerned, an assessment is not deemed income to the associ- ation if it is identified, segre- gated and used for a specified capital project. Otherwise you need to consult with your accountant as to how it is al- located. Kenneth Jacobs, Esq. Spolzino Smith Buss & Jacobs LLP Yonkers, NY ••• Q: May we ban or put restric- tions on guests? In particular, the time of night guests come and go? We have security and a front desk, so we have the mechanism to do so. A: Certainly restraining someone from leaving the building is problematic. You cannot keep people in the building against their will. As to entry, if you have security and a front desk manned 24/7, it is difficult to justify a “curfew”. I suspect that there is some- thing going on, such as drunk visitors wandering the build- ing late at night. If this is the case, you might think about imposing a rule that the unit owner or tenant has to come to the front desk after a certain time to get his/ her guest or to let the guest out. The problem with such a rule is that since you have security and a front desk, it is hard to justify such a rule simply because of one or two drunk visitors, as it imposes a substantial inconvenience to the rest of the unit owners and tenants. “...it is hard to justify such a rule simply because of one or two drunk visitors...”
4 AssociationHelpNow ™ • Hudson Valley New York: Issue 5, 2018
HOA Q&A... continued from page 2.
••• Q: We’ve been told that funds collected for special assess- ments can be used only for the specific purpose for which they were passed and approved, and that we need to give writ- ten notice of the specific pur- pose to all members and then can use the money only for that purpose. Can the board change the purpose of the spe- cial assessment and add it as a part of an increased fee? Are there any special accounting requirements? A: What do your govern- ing documents say? Does a particular type of spe- cial assessment need to be approved by the owners? Usually special assessments to meet operating deficits are not subject to owner ap- proval. Sometimes special assessments for “alterations, additions or improvements” over a certain amount re- quire owner approval. Occasionally “repairs” are included in that category as well. If it needed to be ap- proved and in fact was ap- proved, then the board is bound by the stated purpose of the assessment that it pre- sented to the owners for a vote. If the assessment did not need owner approval, then presumably the board’s notice was informational. In that case the board was not bound and it could send a notice that it had changed the proposed use of the as- sessment. Some boards argue that they do not have to state the purpose of the assessment to raise funds, but require a unit owner vote to disburse those funds. That is a speculative distinction. Your documents should clarify whether that is a board right. Likewise, if a board simply adds the amount of the assessment to its “repair and maintenance” budget for common charges, it runs the risk of a challenge from owners based on how
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——— A: An association’s gov- erning documents will state the requirements a mem- ber must meet to run for a position on the board or a committee. Most associa- tions’ governing documents do not prohibit a member, who is suing the association, from running for or serving on the board or a committee. However, board members le- gally have a fiduciary duty to act in the best interests of the association and its members. A potential conflict of interest and potential breach of fiducia- ry duty automatically arises if a member is suing the associa- tion and is also serving on the board or a committee because the association’s best interests will generally be adverse to the suing member’s self-inter- est. Therefore, even if an asso- ciation’s governing documents do not prohibit a suing mem- ber from running for a board or committee position, some precautions should be taken to address this inherent potential conflict of interest. Prior to the election, the potential conflict of interest should be disclosed as it is important for the mem- bers to take this into account when voting. Then, if the su- ing member is actually elected to the board or a committee, he or she should recuse him- self or herself, or be excluded, from any discussion, vote or communication concerning the lawsuit.
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Spolzino, Smith, Buss & Jacobs LLP Kenneth Jacobs, Esq. 60 East 42nd Street, Suite 4600 New York, NY 10165 Phone: 212-688-2400, ext. 4102 733 Yonkers Avenue Yonkers, NY 10704 Phone: 914-476-0600, ext. 4102 email@example.com www.sbjlaw.com BUILDERS Add-Ventures Restorations, Inc. Todd Vignola P.O. Box 977 Hillburn, NY 10931 Phone(s): 800-905-7551 • 845-357-7134 firstname.lastname@example.org www.addventuresinc.com ENGINEERS The Falcon Group – Engineering, Architecture and Reserve Specialists Dave Chesky, RS 682 Highway 202/206 North Bridgewater, NJ 08807 Phone:908-595-0050 DChesky@falconengineering.com
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SHAPIRO GETTINGER & WALDINGER, LLP Attorneys at Law 118 North Bedford Road Mount Kisco, New York 10598 (914) 666-8033 www.kiscolawfirm.com
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