Ask the Expert

Marjorie Jean Meyer, CMCA®, PCAM®
Vice President and National Director of Education and Certification
ASSOCIA

Problem Boards

I am a director on a 5-member board for an HOA. The other four directors abruptly stopped communicating with me, outside of board meetings, several months ago, because I dissented on some aspects of a few board issues. I agree with the other 90% of what this board is doing. I have tried to arrange mediation to reestablish a working relationship, but they refused. I have emailed the president requesting that I receive all the same information as the other directors, but he won't answer. At the latest board meeting, most of the items I had never seen before and I couldn't possibly have made an informed vote on. I abstained on most votes. This situation is unlikely to change. How can I compel the board to provide me with all the same information that the other directors are receiving? I have studied the association documents and the state statutes and there seems to be no help there. The membership is aware of my plight and has told the board what they are doing is not right. I am planning a formal written request to the board, and also informing the D&O insurance provider. Any other ideas or advice would be appreciated.

- B.

Notifying your association's D & O carrier and insurance agent of the board's breach of fiduciary duty is probably the most expedient way to convince the other board members to include you in all verbal and written communications regarding your community.

Sincerely,

Margey

Our community is a 350-unit condo complex in California. A small group of homeowners has been spreading a lot of lies and slander about board members in the community, none of which is true. Whenever the board tries to defend itself, these homeowners shout them down and claim the board isn't allowed to respond. It's ruining our community because people are taking sides and becoming hostile, and monthly HOA meetings are a nightmare. What can we do to put a stop to it and have a reasonable interaction among homeowners, even if they disagree?

- Elaine

It's very discouraging to have a small minority of homeowners disrupt the earnest efforts of a community associations' volunteer board of directors. Why not hold an informal gathering of all owners, perhaps around the pool or in the clubhouse if one or the other is available, at which everyone has the opportunity to meet and chat with the board members? Better yet, if the association were to provide simple munchies and non-alcoholic beverages, the atmosphere would be even more relaxed and hospitable. Even if the malcontents try to disturb the get-together, chances of their swaying more neighbors to their side would be slim.

Once you get the obvious support of your neighbors, the discontented homeowners will see that their efforts are fruitless and they will, at least hopefully, fade away.

With regard to controlling your monthly board meetings, consider invoking parliamentary procedure. The purpose of parliamentary procedure is to help move the meeting along and to encourage proper protocol and common courtesy. For more articles and information on conducting meetings use our key word search field "meeting conduct".

Sincerely,

Margey

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We have recently amended our CC&R's and Guidelines. We have 3500 homes in our association. Is it sufficient for our association to submit a copy of the amended documents to the homeowners via CD ROM? Or can we post it on our association website advising the homeowners that if theywish they can request a copy to be printed and pick up at the on-site office?

- Debbie

Your association's governing documents or state statutes may dictate how to disseminate a copy of your newly amended CC&Rs and Guidelines to all 3500 homeowners. If neither addresses the issue, then make it available by all reasonable means possible such as on your website, on a CD or by hard copy if requested.

Even if not required by state statute, consider recording the documents to make them a public record.

Sincerely,

Margey

When should the association books be audit and by what person?

- Edward

Your association's Declaration or state statutes may contain a provision requiring an annual audit of the books and records, although I recommend you have an audit performed whether or not it's legally mandated. Audits are performed by Certified Accountants soon after the fiscal year end of the entity.

Sincerely,

Margey

Fees - Contesting

I purchased an office condominium in 1989 in New Bedford, Mass. I believed that the other units were to be sold. There are currently 8 units. The developer did not sell any other unit but has instead rented them. This has often made life difficult for me.

Most recently, I was informed by a visit from the Trustee/Developer and the Property Manager that there is a need to almost double the condo fees (our share going from $450 to nearly $900 per month) mostly because of increased management fees. It is important to note that the property developer/trustee is the president and ceo of the management company which of course takes care of their rented out condos. There of course was no discussion of competive bids.

My question is what rights and safeguards does a minority owner have against a developer holding onto total control of the trust thereby just dictating to the single minority unit owner? What power do I have to contest this raise in my fees? Thank you.

- Anonymous

You certainly are in an unenviable situation and I wish I could offer a panacea to your problem. The only solutions I can think of are 1) try asking a judge in Small Claims Court, or whatever local jurisdiction there is in Massachusetts in which a citizen may appear before a judge without legal counsel, to ask for an order restraining the developer/owner of the other units/management company CEO from doubling the monthly assessment, or 2) sell your office condo and buy another in a development in which multiple owners have installed a reasonable, fair and compassionate condominium association board of directors.

Sincerely,

Margey

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Insurance | Legal | Maintenance | Management | Rules

We were told, at ******, here in ****, Texas, we will no longer have lifeguards at our swimming pool any more, at least, none this year. I can not understand why. I think we all resident should be informed and even have a vote before making decision. Could the management reconsider this?

- Frank

I would think that it was your association's board of directors, not the management company, that made the decision to eliminate lifeguards for the current season. Perhaps you could investigate what prompted that decision; it may be financial constraints, or it may be that the board wishes to reduce the association's liability by posting signs and advising pool users that they are swimming at their own risk and must oversee their children.

Homeowners residing in community associations delegate their vote to their board of directors to make the day-to-day operational decisions for their community. If you disagree with a decision, ask why it was made so you can have a more comprehensive understanding of the issues involved. If you still believe the decision was improper, work with the board to help them consider alternatives. Still not happy? Offer your own services as a board member so that you have a say in how your community is managed.

Sincerely,

Margey

Top | Board of Directors | Communications | Finances | General
Insurance | Legal | Maintenance | Management | Rules

The only common areas we have in the subdivision are gravel roads and grassy side of the roads. What are the liabilities of the association if someone were to get injured? Is it necessary to have liability insurance with only roads as common areas?

- Diane

Every association should carry liability association because anyone can sue it, whether or not it's a legitimate claim. The real benefit of liability insurance is that it will either provide defense for the association or allow the association to retain its own legal counsel for reimbursement.

Sincerely,

Margey

I live in California. Our board is revising the CC&Rs. They have suggested that Realtors not be allowed to serve on the board. Is this legal? Can it be enforced?

- Betsy

Banning a group of potential volunteers from serving on the board is harsh and shortsighted and may violate the association's bylaws. It would be better to craft an administrative resolution detailing the expected conduct and behavior of board members including the requirement to avoid conflict of interest situations.

Sincerely,

Margey

Interpreting the Declaration

Our planned community Declaration states that it can be amended by an affirmative vote of 80% of the voting power in the association. That equates to 800 of 1,000 possible votes. The members have liked this supermajority for the last 20 years because it prevents minority groups that change with every new board from making whimsical changes to our CC&Rs.

The current board is one of those boards who has an agenda and wants to make a bunch of changes to the CC&Rs. So, they have announced to the Members that the Declaration has a clause that allows the board to interpret the provisions of the Declaration. Therefore, they have also announced that they find our Declaration's amendment clause as being ambiguous and it needs clarification.

Subsequently they have passed a "resolution that states that it clarifies the amendment clause to mean the Declaration can be amended by the affirmative vote of 80% of “votes cast.” They passed this resolution in a closed executive session that was not noticed to the members. The board has recorded the "resolution" in the local county recorders office.

This resolution will allow our Declaration to now be amended by as few as 80% of only those votes that are cast. Since we have quorum requirement of only 10% the boards new resolution will allow our Declaration to be amended with as few as 80 affirmative votes.!! ( 1,000 members x 10% quorum = 100 votes …… 100 x 80%= 80 votes. )

To make matters worse we have many owners who are part year owners and many times they do not receive mailings from the association timely if at all. Our association has a very hard time keeping an up to date mailing list. So, many owners may not even receive an absentee ballot on a proposed CC&R amendment. There are other owners who rely upon not voting as equaling a "no vote". The new interpretation of the amendment clause will work against these owners if they don't vote in the negative.

Also, apparently there is nothing that prevents preventing the next board from just voiding this board's resolution because it is just a resolution and resolutions do not need member approval. And then the next board could change it back etc.etc. In the mean time amendments will have been passed under the lower voting requirement.

Can the board actually do what they have done to change the voting requirement to amend the Declaration? Can a board unilaterally interpret the Declaration any which way they want just because there is a clause that states they can interpret the provisions? If so what is the point of entering into the HOA contract when purchasing a property if the terms of the contract can be unilaterally changed at anytime by a board. And how could an owner ever rely upon a Declaration that can be changed in such a way by the board ? Can boards use resolutions to do this?

I hope the answer isn't, "Run for the board".

- Concerned Owner

If the amendment provision in your association's Declaration is unambiguous and unequivocal regarding the requirement of 80% of the membership to approve an amendment, then the board cannot reinterpret it to satisfy their agenda. Before making such a monumental decision with far-reaching implications, the board should obtain a written opinion from a competent attorney either confirming the validity of their intentions or advising them not to continue their efforts.

Sincerely,

Margey

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We live in a CA townhome/condo. Can the HOA make us tent for termites before we have a discussion re: viable alterntatives to tenting? We feel like we are being bullied by a few homeowners without getting all the facts first. Thank you.

- R.

Before deciding to tent the buildings, the board should pursue all possible solutions, consulting with entomologists and other termite experts as well as with a competent attorney. Based on the expert opinions of those professionals, the board should decide what is in the best interests of the entire association and inform the association membership why and how it reached its agreed course of action.

Sincerely,

Margey

Our building is having the rotten 2x4's, frame work, rotten boards, sealing windows & replacing some windows while doing this work they have put their saw through the walls, have destroyed sills...wall board. Our condominium contractor has told us that they are not responsible for any damages only repairs up to the frame. Damages are due to poor construction & rain, the damage inside is now due to their repairing the outside. Who is responsible for inside repairs that they have caused.

Please reply as I am confused & frustrated with the response from the contractor. He wants me to pay him for inside repairs that he caused.

Also doing the repairs to get at the rot part of the deck, a portion had to be removed he cut part off & then replaced .The workman ship is not acceptable. nails are protruding, railing is not straight. Top of board is not level & has splinters. Please who is responsible.

Thank you for your reply & any solution or suggestions you may have to get our management off their --- . Work is never inspected nor can we ever get a reply from management company. Thank you.

- Phyllis

Your board should have signed a contract with the contractor that contained a provision entitled "Restoration" which requires the contractor to restore any item or property he damages to its condition prior to the commencement of the work. Additionally, the contractor should make all reasonable efforts to protect property, avoid inflicting damage and perform his work according to industry standards (which espouses quality workmanship). If the contractor is careless and indifferent to the condition of the buildings and interior finishings despite cautions and requests by the board, the board should consider canceling the contract and finding a more concerned and capable service provider.

In the future, the board should ensure that all contracts have been reviewed by legal counsel to ensure they contain the appropriate provisions that protect the association against unsatisfactory performance by the contractor, his employees and subcontractors, and against poor quality material and supplies.

Sincerely,

Margey

I am the first owner of a condo in a newly built building. I've owned the unit for over three years. During this time, we have discovered many construction defects throughout the building. There is one defect that is just affecting my unit and I'd like to ask you who bears the responsibility for this. When my HVAC system was installed, I'm told that it was installed with a primary drainage line and a secondary. I don't know where the primary line drains to, but the secondary line drains into the shower of my master bathroom. Unfortunately, the primary line has never functioned and the only way the unit drains is in my master bath shower. I understand that the HVAC unit is each owner's responsibility, however, I also understand that an owner is responsible for everything contained within his or her walls. Since the piping for the HVAC is beyond the paint on my walls, am I responsible for fixing the poor work of the construction company or is the HOA? I'd really appreciate any insight you could give me. Thanks!!

- Jennifer

Your association's governing documents should specify maintenance responsibility for fixtures within the walls of a unit. If the documents do no address the issue, the board of directors should consider passing a policy resolution, with direction from competent legal counsel, that assigns responsibility.

Typically, if a plumbing or electrical line serves only one unit, the unit owner is responsible for its maintenance and repair. In your situation, since the unit is newly constructed you may have recourse through any extended warranty provided by the builder.

Sincerely,

Margey

I recently became deliquent on my HOA dues due to a job loss. I was at the time serving as the VP of the HOA. Per the covenants and declarations, all board members needed to be in good standing. I resigned due to me not being happy with the Pres. and also being behind on my dues. The Pres. decided to post on the HOA site all residents that were behind on dues. Is this legal? It is my idea that this probably violates privacy laws.

I put my home up for sale 31 days ago. It is now under contract. I paid these past due dues to the attorney for the HOA today. This releases the lien so that I can sell the house. My Realtor got a call this morning for the owner of the HOA management company this morning. She proceeded to tell her that I have a lien on the house and that I was behind on dues, etc. They were paid and caught up a few hours ago. Does the HOA management company have the right to disclose this personal information randomly to others? Thanks in advance for your help!

- Jason

The association should not publish delinquent accounts as doing so may indeed violate federal privacy protection laws.

As to the management company CEO calling the Realtor to advise of the delinquent account, yes, it is appropriate. The association must ensure that the proper parties are aware of any delinquency or deed restriction violation pending so that the correct amount of funds are collected at closing and any violations are rectified. Obviously, in your situation, there was a lag time in communications between the management and accounting departments.

Sincerely,

Margey

Unresponsive Management

We currently have an HOA Management company, I am supposed to be the president of the company. However, I have called numerous times, sent mail and requested a meeting with the company. I know the bills are being paid but they do not respond to me nor am do I know or have access to any of the bank accounts. How can I get their attention. Our association is very pathetic in that no one ever shows up to the meetings but I would like to get our records and at least look into getting a different company. We are very small, only 48 units.

- Tammy

I suggest that you send a certified letter to the CEO of the management company, detailing your complaints and requesting a meeting at a specified time at which to discuss the issues and reach resolution. If you are not satisfied with the CEO's response, consider finding another company. The Community Associations Institute offers a publication that steps through the process of preparing a request for proposal and interviewing potential management companies; you can purchase it by going to the CAI website and clicking on "Bookstore", then entering "select management company" in the keyword search field.

Sincerely,

Margey

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