CA law- HOA president getting paid against HOA bylaws- what recourse?

Our HOA president suggested at a homeowners meeting that she should get paid for her time and effort and wanted to be exempt from paying monthly HOA dues. At the time the homeowners agreed to this and no one checked with the HOA bylaws.

Several years have gone by and recent review of the HOA bylaws clearly states that no board member can receive compensation for any services rendered for the Association.

Can we demand that the President reimburse the HOA for the HOA dues that she never paid? or are we out of luck since the homeowners did vote in agreement for the president to receive this stipend?

It will depend on how the meeting was done and what the ballot actually said. If it amended the bylaws to allow compensation - then your Association would be legal. However, the individual should have paid their assessments and the Association cut a check for the fees (along with the proper filing of an IRS 1099-misc. at the end of each year).

However, if the wording did actually violate the bylaws then it probably violated the covenants as well.

You can explain that it was a violation of your bylaws to compensate the President and inform them that the assessments will no longer be done. I also suspect that your Association covenants specify that assessments would be equal to all lots - thereby waiving the assessment was also a violation of this covenant.

You should also ask if 1099's were created as, the person should have counted the waivers as income. However, this could also have the IRS ask, why you didn't create the 1099's in the past and is the individual an employee (which would require the Association to withhold taxes and pay a share of the ss/medicare taxes), or an independent contractor. Here is a link to the IRS website - Independent Contractor (Self-Employed) or Employee?

You should then propose a motion that the individual establish a payment plan to repay what was not collected.

Therefore, the first thing that should be determined is if the bylaws were amended and if so, was it done properly?

Tim

There was no written ballot... just verbal vote. The bylaws have never been amended.

I am 99% sure no 1099 was created. this person just was exempt from paying monthly HOA dues.

The President was paid or not required to pay how much?

For what period of time?

So the estimated total cost to the 10 unit property would be ____________.

(Why she was entitled to pay for serving as President for 10 units would require a good answer for me.)

As to a small claims case it is not YOU alone that was affected.
Where are the other owners and Board members on this issue?

How this can proceed if you were willing to take action I would guess you might need some legal advice and then the cost clock begins. That clock can run very quickly. Is this matter worth it in your time, effort and money?

Taking on any legal action might in the end cost you personally and with your neighbors and fellow owners on the property.

Seems the homeowners violated their own documents and the Board sat by and did not do their job. Hence my question as to why this was done by a vote of the homeowners. As most have more than likely never read or understood the by-laws of your property they would be the last group qualified to vote on such an item.

Sounds like the President arranged this to happen and everyone sat on their hands and did nothing.

The president was not required to pay $245 monthly for about the past 4 years. So the total estimated cost to the hOA is around $12000.

At the time we were getting bids of having the buildings repainted and it seemed like a big headache because all the bids were well above our reserves. basically no one else volunteered to be president and this person said she was putting in way too much time and effort to not be compensated.

The board is just made up of volunteer homeowners so none of us are really "qualified."

As a homeowner I read the bylaws because people were complaining that in recent years the president has not been holding regular meetings, not scheduling required fire alarm inspections, and basically does nothing and they expected her to fulfill duties since she is getting paid the stipend, or whatever you call it, for the waiver of her HOA dues.

The "president" can resign and be hired as a manager, if there is SO much work that has to be done. Then she, or anyone else, can be paid.

If she is also doing the billing, newsletter, contracting vendors, secretarial role, filing, paperwork, etc., you may want to consider this kind of setup.

There is not "so much" work. We pay to have an outside company collect dues and all the accounting. we have shared the responsibility to get bids on work, etc. Some of us help with the landscaping for free to minimize costs to the HOA, etc. There is hardly any work at all and we have a VP and treasury to assist. Three board members are mandated by our CCR's.

It also says in our laws that regardless of any homeowner majority vote, the bylaws can not be changed unless a formal amendment is submitted with our city and approved. Of course, this was never done so I am 100% confident that the vote is null and void.

The president has made many references in other issues that implied she has read the CCr's and is knowledgeable about the contents. She authorized work and also threatened to not pay for work/maintenance that she personally believed feel outside the HOA responsibilities.

i sent an email to all homeowners saying that the compensation should be stopped and maybe it was a mistake in good faith, but a good faith effort needs to be made to correct the problem. No one knows what to say or do. Several of us think she should make some sort of effort to repay the association, but no one has mentioned late fees that are typically charged other homeowners.

Some of us feel cheated because we assumed the president had read the bylaws and the most clear wording in the entire document is related to the board and the fact that they can not be compensated.

We do not know how to properly suggest the idea that the President at least make an attempt to pay the association the missing money. I figure all she will do is resign and say it is not her fault because when she brought up the idea of waiver of dues- others agreed so it is now our problem.

I just think if we paid a vender to do work, and then the vender actually overcharged or never completed the work, we would try to get our money back somehow.

I mean, if you think you have paid enough taxes to the IRS in good faith, but you are audited and they find that your own money... you still have to pay the back taxes. I know our HOA is not the IRS... but it feels equally frustrating right now.

Julie:

Unless you have gobs of time on your hands, I wouldn't start a war over this. However, the payments would stop immediately and legally must do so. If the HOA president is inconvenienced, then the president should leave office and consider being a non-officer member.

Verbal votes don't matter. If nothing else, suggest the board launch a petition to officially change the by-laws if the community wants a paid HOA president. It won't happen.

If the negligent behavior continues, then you proceed to further steps.

Richard,

I do agree that based on the OP the bylaws are clear.

The muddying of the waters come from the vote of the membership (not the board) that allowed it to happen.

It sounds like the property owners were pleased with the HOA president aka on-site, pseudo-property manager arrangement until it came time for capital improvements and a possible assessment. Only then did a problem become a problem and the arrangement could hit folks in the wallet for property maintenance because $12,000 is allegedly owed.

I blame the community for going along with this deal for so long and the president ABSOLUTELY should know better or quit if the HOA obligations were financially burdensome.