SB1222 - Ombudsman

SB1222  has been introduced in an attempt to create a new system for resolution of disputes in condominiums and planned communities.  Click here to view SB1222: SB1222 Introduced Version.  If passed, SB1222 would (1) require every condominium and planned community to have an “ombudsman”, (2) require the ombudsman to be elected in the same manner as directors, (3) require the board to give the ombudsman access to everything the board has access to (it is not clear if this would include attorney/client privileged information), (4) the ombudsman to serve as an “impartial decision maker” in resolving “disputes between the board of directors and one or more unit owners (is a failure to pay assessments a dispute with the board or the “association”?), (5) that any dispute that would require “action of the board” go to the ombudsman for resolution, and (6) impose certain requirements on who can serve, recall, and voting issues.  There are at least three MAJOR flaws in SB1222.  First, the ombudsman is not clearly indemnified by the association.  Second, it is not clear that existing “D&O” insurance policies would cover the ombudsman.  Third, what if no one runs for the position of ombudsman?  At a minimum, these issues need to be worked out.