Page 13 - New England Condominium September 2019

NEWENGLANDCONDO.COM NEW ENGLAND CONDOMINIUM -SEPTEMBER 2019 13 clientsvc@jbutlerpropertymgmt.com | P: 978-694-9004 F: 978-694-9008 | www.jbutlerpropertymgmt.com COMPANY OVERVIEW • Family owned and managed Massachusetts based property management company • Offers superior construction-related expertise and resources • Blends management expertise with open communication between the board, unit owners and managing agent, making for a healthier property • Superior vendor and cost management • Deployment of in-house maintenance and grounds-keeping crews At J. Butler Property Management, LLC, we measure our success in terms of client satisfaction and take a long-term view of every relationship. A Company you can trust... A Company you can depend on... A Company of Professionals!!! An Unparalleled Level of Condominium Service member is found to have acted in bad more important for small associations corporation or association. One involved attorney was triggered by an owner in a faith, in a self-serving, discriminatory, than large ones. She recounts the experi- or otherwise fraudulent manner, then as ence of one association where the trea- stated above, D&O coverage is voided – surer was stealing money from the con- and they’re on their own when it comes dominium’s accounts and not paying the and support. New York City’s anti-dis- time to foot the bill for legal costs or judg- ments. Cost Versus Number of Units One valid question is whether the add- ed premium costs for D&O are worth the documents, coverage. Clearly, in a large corporation or association where there might be hun- dreds of owners, the personal relation- ships and communications that charac- terize a small association with just a few ered. Despite the units don’t exist. The intimacy of a small ‘intimacy factor’ association might go a long way toward in small associa- avoiding the kind of angry or litigious tions there may situation that might result in a lawsuit be an even higher between the board and one of the own- ers, particularly as the owner might be ing on the part a board member. Good intentions may of board mem- count for more in that kind of situation... or not. Boonshoft recommends that small where there are associations carry D&O insurance in any non-resident in- case. “They still need it, as much as they vestor owners. need all types of liability and casualty in- surance. I always counsel in favor of it, but a board can make their own decision.” where the lack of D&O insurance might the court were paid by the corporation. Shapiro says D&O insurance is even have resulted in a financial disaster for the bills. The premium for the D&O policy crimination law provides protection for took them to court and won. The cost of went unpaid, and the policy lapsed. Be- cause the treasur- er was falsifying the other board mem- bers and owners were unaware that they were uncov- risk of wrongdo- bers, particularly Real-Life Risks One attorney describes two instances under the policy, the damages awarded by a large co-op in New York City with a no- pet policy that was sued over a resident’s and had outdoor space in the form of a right to keep a pet for emotional comfort backyard. He wanted to install a Jacuzzi residents in no-pet buildings who have defending the suit were substantial, espe- medical proof that they require policy paid the legal costs in the end, a comfort animal which could have had severe repercus- to alleviate emo- tional distress. In community—including the shareholder this case, a com- plaint was filed in federal court cers insurance may seem excessive and/ against both the or frivolous to board members when ana- corporation and lyzing budgets and trying to hold the line the individual board members. left in the closet just because the threat of Eventually the case settled, with tion,” says Schneider, “where they didn’t the resident able carry the protection. When I explained to to keep their pet. them why they needed it, they bought it The insurer paid immediately.” It may look like a beautiful, the legal fees, sunny day, but one never knows when the which were formidable – but since the in- surer was not required to pay for any fines your umbrella handy. Another example offered by the same small co-op who lived on the ground floor in his garden, and the board vetoed it. He cially for a small corporation. The D&O sions for the financial health of the small who brought the suit to begin with! While the cost of directors and offi- on expenses, it is an ‘umbrella’ better not rain is low. “I came across one corpora- storm clouds may suddenly appear. Keep n A J Sidransky is a writer/reporter with New England Condominium, and a pub- lished novelist. “As long as a board or board member can demonstrate – and a court believes – that a decision was made in good faith on behalf of the community’s greater good...then the court generally defers to the business judgment rule.”