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KASS: When you’re the only board member left…

Q:   I am the only board member left standing in our condo. The others resigned (I did not ask why because I don’t think it is relevant to the immediate issue). The by-laws provide that a board consist of five members. Practically speaking, what is the effect (if any) on my ability to function? Anne.

A:     Dear Anne. First, I think you should inquire why the other board members resigned; it may be very relevant.

Technically, you are “the board” and can make decisions but I strongly urge you to immediately consult with your association attorney about the procedure for filling vacancies. This will also be spelled out in your bylaws.

Whenever I have procedural questions, I reach out to Jim Slaughter, attorney and author of Robert’s Rules of Order Newly Revised (11th Edition). He wrote: “While I am not encouraging a long-term board of one, various condominium acts, and most state nonprofit acts, quorum for a board is based on a percentage (typically a majority) of board members entitled to vote or of total “board members,” which means that the quorum goes down in the event of vacancies. So, yes, you could have a properly constituted board with only one board member.” Jim pointed out, however, that some states set a fixed quorum such as two members, in which case you may have to go to court for assistance.

Bottom line: you should proceed as if you are the entire board, but try very hard to get owners to join you as board members. Alternatively, you may have to go to court.

Jim is a fellow member of the College of Community Association Lawyers. (CCAL).

 

 

LETTER FROM THE VA:

 

“In a recent column that discussed the Department of Veterans Affairs (VA) home loan program, it was reported that it will likely take a lender a lot longer to process a VA loan than an FHA loan and that VA has to approve each loan. Those statements are incorrect.

In fact, approximately 99 percent of VA lenders have “automatic authority” to underwrite and close loans without prior approval. Moreover, the time-to-close for VA loans (from loan application to funding) is on par with conventional or FHA products.

According to the most recent data from Ellie Mae, VA loans close in an average of 51 days, versus 49 days for FHA loans, and 48 days for conventional loans. The difference of 2, and 3 days does not justify the published statement of “a lot longer.”

Another point in the article that requires clarification is the statement that VA requires many borrowers to pay a funding fee, which can range between 0.5 and 3.3 percent.

This is not a full-picture of VA home loan funding fees. Yes, fees range between .5 percent and 3.3 percent. But the fee variations depend NOT ONLY on the permutations of the borrower’s military service, they also vary depending on the first or subsequent use of the benefit, and the amount of money the borrower might select to contribute as a down payment.

Especially since this piece clearly focuses on “20 percent down payment,” the different variations should be mentioned. More specifically, for borrowers who make “more than a 10 percent down payment,” the funding fee for first-use or subsequent use of the benefit is 1.25 percent for veterans and 1.5 percent for reservists/National Guard.

We appreciate that the article correctly reports that disabled veterans and surviving spouses are exempt from the funding fee. VA notes that in sum, roughly 40% of VA borrowers do not pay a VA funding fee.

We appreciate your efforts to inform consumers about the availability of this important benefit for servicemembers, veterans, and surviving spouses. Jeff London, Acting Director, Loan Guarantee Service, Washington, D.C.

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Q:   I often hear the term “net, net lease”. What does that mean? Candy.

A:   Dear Candy. It means the tenant – in addition to basic rent – is paying all other real estate expenses as taxes, insurance, and maintenance. If you enter into a commercial lease, and the landlord wants a net lease (also called “triple net”), make sure the lease spells out specifically what you have to pay? For example, how do you define “maintenance”? Does the tenant have to repair the roof if it leaks or is this the responsibility of the landlord. It is always better to resolve issues before the lease is signed – while the parties are talking to each other – than afterwards, when a problem arises.

 

 

 

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