Board member compensation for time at Small Claims

I have recently been asking about a Rental Restriction amendment that we are going to be proposing to the membership.

One issue that continues to scare me is something that someone brought up in another topic: The liability of not enforcing the restriction. I worry that if we set up a rental restriction and members break the restriction and we fine them but we do not go to court to collect the fines we may open ourselves up to a law suit from another owner that is trying to sell their unit. That owner could claim that the HOA is not enforcing rental restriction rules and that is lowering their property value.

So maybe going to small claims court against owners that are renting without board approval per the CCR might make it easier to defend against a case where the other owner is suing us. I would think we could say to the judge that we tried to enforce the CC&R and we could show that we have taken the offending owner to court.

Does that make sense?

If so then there is the issue of who is going to present the rental restriction penalty collection case in small claims court? All three current board members are busy people and have jobs, including myself. I would prefer not to take a half day or day off to do this, without some compensation. Is this possible? Our CC&Rs state that we can not pay ourselves for the position of being on the board and we have never done so in any way. But this is something that goes beyond that in my opinion. Would it be legally possible to pay a board member to represent the board in small claims court? (This is in California).

I am really inexperienced with this stuff. I assume this is a two stage process.

First stage: go to small claims court with a claim (less than $5000) against the owner who is delinquent paying the rental restriction penalty, and presumably win a judgement to have them pay the claim. The CCR rental restriction (if passed) would say that non payment of rental restriction penalty will be enforced with a lien.

Second stage: get a lawyer to place a lien when they don't pay. The lien would include the penalty and legal and court fees.

I am concerned about owners that would not pay us after stage one. If we use a half day of legal time for stage one the HOA will be out significant money with no hope of getting paid until the Lien is paid, and as we are finding out even the lien doesn't ensure getting paid if other institutions, like the mortgages or prop taxes are higher priority.

As stated originally, my goal in enforcing the penalty is not entirely to collect the funds. It is also to show evidence that the BOD is trying to enforce the CCR's just in case a home owner feels lack of enforcement is lowering their prop value.

DonnaS,

I agree with you. It could easily open a can of worms. So while I started asking questions while I was trying to figure out what we wanted, at this point I am against it and want to convince the other board members of that. I suspect that it won't be hard to kill it as all I have to do is say I am done doing any more work on this and the other two guys will realize they will actually need to do something and it will come to a screeching halt.

Unfortunately we have already spent a lot of money to have an attorney write a document that I wouldn't vote for even if I wasn't concerned about the liability of not enforcing it. The proposal he wrote seems really flawed and I was hoping to get some opinions about that in one of my other postings.

You may notice that I ask very pointed questions, not so much to support a position for or against the rental restriction, but instead to try to understand different issues of how the law works. (and I know it is different state by state).

My question this time --- Can a board member get paid by the HOA for their time when they go to small claims court to represent the HOA?

Donna, BTW, I don't remember where we established that non-enforcement does not lower property value. I truly don't remember that part of this saga.

From our Bylaws

"Compensation

Section 4. No director shall receive compensation for any service he may render to the Association. However, any director may be reimbursed for his actual expenses incurred in the performance of his duties."

So I could be paid for gas to get to the court house but not for my time or the expense of missing a half day of work.

I have a salaried job with finite vacation time . The other two board members work for themselves. None of us are retired or have any free time during the day so it would be near impossible to get us to attend small claims court for the sake of the other homeowners, some of which are out of state, out of country, and most of the rest retired. An attorney would be the alternative and as mentioned his expenses would be paid by the HOA with only a hope and a prayer of seeing it paid by the owner that was breaking the rules.

Another point against adding more rules that have to be enforced.

Tino,

If your Association is incorporated, you probably have a registered agent. The registered agent can represent you in court (even small claims). Typically, but not always, the registered agent is an attorney.

Tim

Did I miss that you had a management company?

Send that person. Your board can stipend that cost.

In Michigan, the Annual Report is due in October. The officers and the registered agent are listed. You SHOULD have a Registered Agent, in fact, I think it's required.

I thought attorneys are not allowed to present cases in California SCC