Glossary of Homeowner Association Terms

Directors & Officers Liability Coverage is insurance coverage that protects board members in lawsuits due to actions taken on behalf of their homeowner association. It usually also covers errors and omissions by board members.

Easement means the right that someone has in the land of another, such as the right to cross Parcel A to get to Parcel B.

Employee is a worker that performs services subject to the will and control of the employer, both as to what will be done and how it will be done. The employer establishes hours of work, may provide training and the worker may not assign anyone to do the required work.

Exclusive Use Common Area(s) is a portion of the common area designated in the CC&Rs for the exclusive use of one or more, but fewer than all of the owners of separate interests.

Executive Session refers to a confidential portion of a board meeting. See Open Meeting Act.

Fiduciary means the legal, moral and ethical obligations a person has to fulfill responsibilities to another. In a homeowner association, directors of the association have a fiduciary duty to act in the best interests of the association.

Governing Documents means the CC&Rs, Bylaws, Operating Rules, and the Articles of Incorporation (or Articles of Association).

Housing Cooperative. (See Stock Cooperative.)

Independent Contractor is a worker hired to do a specific job over which the employer has no right to control the manner in which the work is done. The worker is generally licensed and offers services to the public. Independent contractors establish their own hours and receive no training. Independent contractors are free to assign work to others, if they determine to do so.

Insurance Coverage Forms

  1. Guaranteed Replacement Cost Coverage with Full Building Code Upgrade is insurance that pays replacement costs without regard to policy limits and includes costs resulting from code changes. The amount of recovery will be reduced by any deductible.
  2. Guaranteed Replacement Cost Coverage with Limited or No Building Code Upgrade is insurance that pays replacement costs without regard to policy limits, but limits or excludes costs resulting from code changes. The amount of recovery will be reduced by any deductible.
  3. Replacement Cost Coverage is insurance that pays replacement costs up to policy limits based upon like or equivalent construction. The amount of recovery will be reduced by any deductible.

 

 

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Michael T. Chulak

818-991-9019