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Subject: Limitations of Articles of Incorporation

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BillT2
(Montana)

Posts:5

07/08/2008 9:27 PM
I hope someone has knowledge about what limitations are placed on the board of directors by the articles of incorporation. Our association's articles of incorporation (filed with the secretary of state) state that our association has three purposes: 1) provide an owners association for the owners of land within the development 2) provide what road maintenance shall be required 3) administer the rights of the association under the CC & R's. Sounds simple enough. Here's the catch: a former BOD procured an old fire truck from a local volunteer fire department that replaced it with a newer one. The new board, after reviewing the Articles of Incorporation, believe the fire truck is not authorized and want to sell it. Past directors, as well as a few residents, are saying the fire truck is not only legal but necessary and should not be sold. We live in a rural part of Montana and the chance of a forest or brush fire is indeed a possibility. Since there has been no formal fire fighting training for any of the fire truck drivers(or even if there was)the board is fearful of the liability against the association should a resident be injured or killed while driving the truck or fighting a fire. So three questions arise: 1) Based on the articles cited above can the association legally own and operate a fire truck? 2) "If" we can own and operate the truck would we(the association or BOD) have any liability for injury or death of an operator if they signed a waiver and operated the truck voluntarily? 3) Could a home owner sue the association if they felt the fire truck did not perform properly (ie: no training for operator or truck performed poorly) and their home was lost? PS: the closest "real" fire truck is 16 miles away so in all likelihood the association truck would be first on the scene. Thanks, Bill in Montana

KirkW1
(Texas)

Posts:1145

07/09/2008 6:04 AM
I would have to read the entire thing to begin to give you thoughts on this. At some point it may be worth getting the opinion of a lawyer. As for liability issues, you definitely need to speak with your insurance agent and make sure there is insurance to cover this vehicle. You may want to look into getting a volunteer fire department going to cover the area instead. I wouldn't like the idea of my neighbors going into a fire without the proper gear. And that extends well beyond a fire truck. If they don't know what they are doing they could easily get into serious trouble with fire. I would personally look to make some arrangement where the volunteer fire department was given ownership and kept it parked in the neighborhood. The idea of wanting to increase fire protection is a great one. And I would support it if I lived there. I would simply want to ensure that the HOA was helping not making another problem on top of the original. I think most states have laws limiting the liability of anyone trying to assist in an emergency. But I don't know if that would help your case or not.

BillT2
(Montana)

Posts:5

07/09/2008 8:31 AM
Thanks Kirk. What are your thoughts on wheather the association can legally own and operate a fire truck based on the articles? Some here feel we can do anything we want not prohibited by the CC & R's while others feel we follow the Articles and just maintain the roads and enforce the CC &R's. To push the envelope, so to speak, it has even been suggested that if we are going to have a fire truck we may as well get an ambulance and train some EMT's or advanced 1st aid responders. Where do you draw the line? Bottom line after all the legal debate is that the association doesn't have enough money to maintain the roads and is voting on a special assessment this next week. It is an interesting time for our asociation. Bill

RogerB
(Colorado)

Posts:3704

07/09/2008 8:58 AM
Bill, my responses to your questions are: 1) Probably, but I strongly recommend getting a legal opinion from a good attorney. 2) Yes, and I suggest you contact your insurance agent to see what coverage you would and would not have. 3) Yes, discuss this with the attorney and the insurance agent.

Roger Borcherding Official HOATalk.com Sponsor DARCO Property Management (Colorado) (303) 925-0150 *See legal notice below (end of page) or go to www.hoatalk.com/legal

JohnK3
(Pennsylvania)

Posts:467

07/09/2008 10:04 AM
I'd have to guess that between the CCRs and ByLaws, your Board must have some powers to take actions for the "welfare" of the HOA. Please advise. But for right now, let's assume your Board arguably excercised within its authority. Larger issues, as others have noted, include myriad liability and cost questions that must be addressed. Last time I saw one of our local fire trucks, I was amazed at how complicated it appeared. Scores of dials, meters, tech stuff. I would also have to guess that operating one would require some serious training and possibly licensing, which also must be addressed. Out of curiousity, how much did yours cost? And what are the maintenance costs (including insurance)? And where is it garaged? And does it carry its own water or just pump it from a local source? And...I could go on forever. This is realy fascinating.

SusanW1
(Michigan)

Posts:2184

07/09/2008 4:17 PM
Does your neighborhood have ANY fire protection services (from the county, city, state??) If not, then I would say having a TRAINED, volunteer fire dept. is a good idea. We had one for years; in the 40's the women of the sub comprised the firefighter squad, since all the men were not at home (working). If you DO have fire protection services,then having a fire truck would not come under the "protection of property" that is implied in the Board's duties, since an outside source is already able to do that.

KirkW1
(Texas)

Posts:1145

07/10/2008 9:49 AM
Where do you draw the line is always a good question and only one that can be answered by the people involved. Most volunteer fire departments get started because people realize that they have inadequate fire protection. Then they realize that they also don't have adequate ambulance services. But as you start down the road, more and more questions come around. Like what does this cost? Can we afford it? And you should consider the question: Can we share this expense? I think you should start with gathering information first and foremost. In the meantime the fire truck should probably be maintained to protect the investment. It won't help if it isn't able to roll. And you will have a harder time selling it if that should be the decision. But if you want a volunteer fire department, you should form one for a variety of reasons: 1) There is federal grant money available for them. 2) They qualify for many other financial benefits. 3) They have their own insurance. 4) They qualify for training. 5) They can buy other needed equipment. In thinking of special assessments, you also need to consider the ongoing cost of all of this. But don't forget the roads since you need those to get all services to your house no matter what else happens. Have you looked into turning over the roads to the county? Consider that you already pay the county taxes for road maintenance.

MaryA1
(Arizona)

Posts:2259

07/12/2008 1:46 PM
Bill, The most important question which you have failed to address is this: Is the HOA responsibile for fire services w/i your community? You stated being in a rural area but didn't say whether or not there is a rural volunteer fire dept. If the assn doesn't have enough $$ to maintain the roads how are they going to maintain a fire truck, albeit an older one? However, if they can come up with the money, are their members willing to put in the time to staff the volunteer fire dept and what about training? My husband was the EMT CPT of a volunteer fire dept many, many years ago. Even volunteer depts require training for the personnel. Even fighting a brush fire requires some know-how. With regard to your articles of inc. IMO, the board should be looking more closely at the bylaws and/or CCRs for answers on what the board's resp's are. Generally speaking, the articles of inc. states the name of the corp, it's official address and it's registered agent; the name of the incorporator; the purpose of the corp; and whether it's a stock or non-stock corp. The info contained in the art. of inc. may differ greatly from state to state; however, generally there is not much detail about the corp's operations, which are spelled out in the bylaws and CCRs.

EdieL
(Virginia)

Posts:72

07/12/2008 2:04 PM
Your comment, "can do anything we want not prohibited by the CC & R's" If the CCR's don't state that YOU CAN do something, then silence is not golden. Seems to me the Assoc. BOD would be treading on very thin ice. Edie

MaryA1
(Arizona)

Posts:2259

07/13/2008 1:31 PM
Edie, The CCRs address what the members CANNOT do -- the "R" in CCR's means restrictions.

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