Across the West Palm Beach area, and indeed all around the country, some homeowner’s associations are trying to enter the 21st century by creating Facebook pages. It is the hope of most associations that by developing a Facebook identity, the residents will feel more of a connection to the community, and actually become involved.
With monthly meetings at most HOAs becoming no more than a formality, and a social gathering for board members, it is the intention of most boards to try and find some way to fill the empty chairs that stare back at them in the large, and small conference areas each month.
The Internet has always posed a challenge for those who do not understand it. It is, like it or not, a mainstay of life as we know it, and everyone is forced to adapt, or move out of the way.
One of the foremost experts in the field of Social Media and HOAs is Joel W. Meskin, Esq., CIRMS and Vice President of Community Association Insurance. Recently, he shared his opinion of how the social media revolution isn’t always the best thing, in terms of legalities as well as HOA rules and regulations.
“One of the biggest challenges is that the technology is moving and morphing at such a great speed that most in the legal and insurance world are not sure how to respond, what the exposures are and what are the unintended consequences.
The Internet, e-mail, twitter, Facebook and all other social media fall into the category that I call a blessing and a curse. Lets first start with what I think is absolutely critical. I think that every community association should have a website so it can MAKE AVAILABLE AND DISTRIBUTE INFORMATION. For example, there can be access to governing documents, house rules, access to contact information, repair and service requests, meeting dates and agendas and the like. However, I do not think that an association should have an association sponsored Facebook, twitter account or similar social media tool where the board and association members can have an open dialogue.
I probably do not have to tell you that people will write things in e-mails and in the social media context without thinking or contemplating the unintended consequences of what they have to say. Moreover, people will say things in these formats that they would never say to someone face to face. I am not even a fan of the board having an intra-board email system that can only be used by and between board members. We are embroiled in litigation right now where board members forwarded these e-mails to non-board members. In our company, we send e-mail to the entire company at least annually to remind them that they must treat these vehicles the same way they treat any other "written" document. I advise employees not to put anything in writing that they are not willing to have as a blown up exhibit in court while they are on the witness stand."
For those of you who have attended any of the Board Member Boot Camps held by KGB, the previous line should definately stick in your head. This was a topic that was discussed at length at the camp, and one that many associations do not seem to fully grasp.
"Theoretically, all board business should be held in board meetings with the proper notice with the exception of the day to day issues that a manager needs to work with board members on to effectuate board decisions and policies" Meskin continued. "If an association member has an issue, they should bring it to the board, or they can communicate in writing to the board to be discussed and acted upon at a board meeting. Discussion and posts in unsupervised social media tools are very rarely productive debates. This also should help minimize the drama involved in social media forums.
Community Associations are legal entities where individuals with individual property interests share a common property interests with other members of the association. These legal fictions cannot manage the common interests on their own. Accordingly, they need to have boards of directors and officers to manage the association pursuant to the governing documents, which normally include By-laws (the operating manual of how to manage the association) and the Conditions, Covenants and Restrictions (the common interest rules placed on the individual property rights). The governing documents virtually always have provisions requiring the association to indemnify the board members for claims against them for the work they do in their capacity as board members and officers. The Directors and Officers Liability policy is the way in which the association funds this indemnification.
Accordingly, in very general terms the D&O policy will defend and indemnify the board when claims are brought against the association and/or board members for alleged "wrongful acts" including alleged breaches of fiduciary duties (the board members have a duty to put the interest of the association above their own individual interest as an association member).
The issues that arise in the social media formats include, but are not limited to allegations of the following:
- Defamation
- Invasion of right of privacy
- Interference with contractual relations
- Discrimination
- Emotional distress damages
As my wife constantly advises me, communication is king. Unfortunately, in the litigious world we live in, without controls in place which would be virtually impossible to enforce in the association context, at the end of the day, blame will always be pointed toward the board and the association which inevitably will result in a D&O claim. The cost benefit analysis results in an absolute "no" with respect to the association using social media forums. It must also be kept in mind that complainers will dominate any such forums. People just do not write to praise.
The D&O policy provides both a "defense" and an "indemnity." The reality is that even if the association has a good policy, once the policy is violated, the association will be sued or a board member will be sued. As a result, the D&O carriers will end up either excluding this coverage, increase premiums or reject risks that have these exposures, because they are just not controllable risks.
We live in a world of instant communication and expectations of instant response. Sometimes, speed is not the best way,” concluded Mr. Joel W. Meskin, Esq., CIRMS | Vice President Community Association Insurance.
There are of course many pros and cons to becoming more of a digital netizen, both in your personal life, as well as in business. With associations, the best thing to do is to consult your property manager, attorney, and anyone else you can think of before establishing a Facebook presence. Of course, whether you have an official presence or not, odds are pretty good that if you check out Google, Bing, or any of the other myriad of search engines, you will find your association at least mentioned, if not Unofficially represented.
Be sure to subscribe to this column, and stay abreast of issues involving you, the homeowners of Palm Beach County! If you've had any issues with your HOA that you'd like me to try and delve into, and possibly write about later, please let me know.
Comments