Voting President Off Board

We have 16 condominiums in our HOA and a one person BOD.
We also have a contract with a Property Management Company
to handle most of our business.

The President of our board has not held a meeting or election
in many years and has become very comfortable in her dictatorship.

We need to get her off the board, so we can start working on doing
things right. If she goes, I am willing to run and I think I have
a few other owners interested as well but I am not sure if we could
get enough votes without explaining the reasons. I have no idea
what their opinion of her is but she does not think too highly of
them and that is partly why she won't hold any meetings.

I have a lot of reasons why she needs to go but I don't
want to hurt any feelings or start a big flap. A few examples
are 1) She is hiding reserves in a seperate bank account.
2) She is not approving much needed maintenance. 3) She did
not know that two owners were years behind in their dues and
cannot understand how to verify monthly financial reports (which
are only sent to her 4) Her husband makes all her decisions and
he does not believe in budgets. He says they just pay the bills.
He also goes through the HOA files periodically and "throws a
bunch of them away." (including our POM contract).

How would I go about calling or requesting a special meeting to
take a vote about this and not feel somewhat akward with her
right there in the meeting? Both she and hubby will blow a cork!
They yell and scream about everything. I think it is their way
of avoiding normal discussions about things they don't understand.

Should I just wait until election time and insist that we have one
this time? She will probably say no without realizing it isn't her
choice. She has very little understanding of... anything actually!
I cannot imagine being able to get anything done right if she remains
on the board, President or not.

POM is no help at all. They do very little for us as it is.

What should I do?

Jenn

There is another aspect to this. A Board member or an officer is generally immune to suit when acting lawfully and in accordance with the covenants, By-Laws, and what all. However, when they leave those protections, oh my. Assessments not collected..? Guess who may find herself having to cough up the money? Missing Reserve money? Again guess who may be held accountable for it? Missing records? Can we say State Attorney General and embezzlement investigations? Can we say audit of bank records and personal finances? Needed maintenance not done due to lack of attention to the By-Laws, Covenants and whatever by someone who has identified themselves as being the responsible party, and my unit has declined in value? Can we say lawsuit to recover the loss of value caused by the run down condition of the units? I can go on, but you probably get the idea.

Jennifer,

Good for you for being involved. As you know, non-profit organizations are not banned from earning interest or investments. It just means that the income from Assessments are considered non-taxable to the Association (not to the member as non-profit does not indicate a charity). If you are earning interest, that interest must be reported as income to the IRS (Federal and State).

Keep doing what you are doing and make sure it's documented. You may want proof that you were doing the right thing even if your other board members were not.

Tim

Jennifer,

That is great that you are stepping up and taking an active roll. I am pretty sure that you governing documents state that you need 3 members. Since you have not had an election in years, you are within you right to call for one asap.

In regards to the reserve account. I would ask for all the financial documents over the last 12 months from the management company. That way you could review all the bank account activity for both the operating and reserve accounts.

Yes. the management company is definitely asleep on this.

To answer your questions. Many years ago, we had 3 board members. They were all crooked. Two of them dropped off the board when they moved away. The President has been the only person handling HOA business and finances since then.

When the MC was hired in 1997, our (then 3 person board) gave them $3000 for our operating fund and retained about $15,000 in their existing checking account. The reason I know this is that I did an audit on HOA books before the MC took over and have a copy of their check register with bank account number.

Over the next 7 years, MC sent out yearly financial statements showing misc. payments to HOA "outside savings" and payments from "Owner Contribution". By all outward appearances, it looked like this was our reserve account and the HOA was keeping control of it, which is fine. But they never reported any of this to the homeowners and after 2003, the activity seemed to stop.

Now, all these years later, I decide to dredge the whole thing up and it could possibly be too late to do anything about. When I asked the President if we had an outside account, she said no.

So I deided to audit the MC records as far back as they could possibly go, which was 2003 and we managed to find a check signed by the President and the one remaining board member, putting money back into our maintenance fund. I have a copy of the check and it was written from the original checking account that we had before MC took over.

If I confront the President with the copy of this check, she will play dumb but I would much rather have her come clean than try to get this information from the bank. The possibility exists that all the money in that account went back into our maintenance fund but I doubt it. I don't have real clear financial reports from that far back to know for sure. I am going to ask MC to run some kind of cash balance report that starts from day one up to now and see if it makes any sense.

I wish I would have gotten involved in this a long time ago. I was so busy with work and a mom with Alzheimer's and a few other excuses but basically oblivious to what was going on all these years. I foolishley thought I could trust these people to at least, operate within the law.

Jenn

The fact that the President did not realize this was what alerted me to her cluelessness.

Jenn

I think I can get a few homeowners interested.

Thanks for the advice everyone.

Jenn