Lost New Board Members in NC

Started by FlorC • 10 replies • 1640 views

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FlorC (North Carolina)
Posts: 7

Posted:

Hi,

In our last meeting our President resign. We did not get any info that could help us take over the Association. We called(Homeowners)an emergency meeting were we elected a new Board of Directors. We are lost. We also elected a management company but we can not hire them yet because we do not know in what status are finances are. We went to the bank and were told if we take over our monies any discrepancy or other issue we will be liable for. The bank could not give us any information because we are not in the account. The management company, that we have not hire yet, has been giving us some help(without charging). We had the opportunity to have a 10 minute consulation with a lawyer and he advice us to check the insurance to see if we have Errors and Ommission insurance. Our concern is if we take over our monies and any discrepancy or issue went on we are afraid to be liable. Any help or advice would be appreciated. Thanks.

GlenL (Ohio)
Posts: 5,491

Posted:

Quote:

Posted By FlorC on 12/28/2010 3:41 PM

Hi,

In our last meeting our President resign. We did not get any info that could help us take over the Association. We called(Homeowners)an emergency meeting were we elected a new Board of Directors. We are lost. We also elected a management company but we can not hire them yet because we do not know in what status are finances are. We went to the bank and were told if we take over our monies any discrepancy or other issue we will be liable for. The bank could not give us any information because we are not in the account. The management company, that we have not hire yet, has been giving us some help(without charging). We had the opportunity to have a 10 minute consulation with a lawyer and he advice us to check the insurance to see if we have Errors and Ommission insurance. Our concern is if we take over our monies and any discrepancy or issue went on we are afraid to be liable. Any help or advice would be appreciated. Thanks.

OK Flor, Let's start at the beginning. When you said the president resigned, was he a homeowner elected Board member or was he the Developer calling it quits and were there any other Board members? Does the Board have any of the files, financials, etc.?

The first place I would start is checking with the Secretary of States office to find out the status of the corporation that is the HOA, this can often be done online. Then you need to see if you have a full set of the Declarations and By-Laws, the Declarations at least should be on file with the County Recorders office, again often available online. Do as the attorney said and make sure you have insurance coverage for the HOA including D&O insurance for the Board. Then the new Board needs to take control of the financial accounts, see http://www.hoatalk.com/Forum/tabid/55/forumid/1/postid/104940/view/topic/Default.aspx Then the new Board needs to hire the MC and work with it to get things together.

Studies show that 5 out of 4 people have problems with fractions

FlorC (North Carolina)
Posts: 7

Posted:

Thank you

Glen for replying to my post. Yes the President was an elected homeowner. They just left Nov bank statement. We do have the By-Laws and Covenants. When you referred to D&O insurance it is Directors and Board insurance right? I know our fear is we do not want to be responsible/liable for any discrenpancy or wrondoing,if any, from the previous board of directors. This association only had a president and vice-president. We did not have a secretary and treausurer. When he asked before for the financial records there was always an excuse for them(records) not to be accesible. I know by law they have to give us a copy. That is why we feel the way we feel about taking control of the money.Thanks again for the info.

TimB4 (Tennessee)
Posts: 21,061

Posted:

Sounds like the new board needs to visit the old boards homes and politely ask for any and all documentation and records concerning the Association. Specifically, the corporate documents, the tax records, etc.

Once you get what you get, you will need to move forward from there.

SusanW1 (Michigan)
Posts: 5,202

Posted:

Did you ever have an annual meeting?

What is the status of the VP?

FlorC (North Carolina)
Posts: 7

Posted:

Hi Tim,

We alraedy try that. We used to have a manager, but this mananager was the same person who did our lawn maitenance, he died on Dec 2009 and the president and vice-president told us that they ask the widow for them and she said she could not find them. That is why we have this situation.

FlorC (North Carolina)
Posts: 7

Posted:

Hi Susan,

We were not inform of annual meetings. The VP resign too.

KellyM3 (North Carolina)
Posts: 2,239

Posted:

Quote:

Flor,

1. My thought is that the property management company knows your situation. If your new board approves of them, then consider signing a contract for representation. The risk is on the company. They know they aren't getting paid currently and will understand if their fact-finding reveals you don't have money. Tell them upfront. Communicate and don't be afraid to say, "Get us on our feet and protected professionally" and let's see where our finances are." The property manager hasn't said, "no" and they've already offered some free services.

2. Follow the property manager's advice for lack of anything better (but find out what other properties are under their management) and don't cut a corner here and keep any management deal "clean," with no extra services at this point.

3. Get out of the everyday management of your condos if you can. See the problem you're currently in? There's no confidence and should not be any confidence outside of your efforts that are currently under way. Private property owners who control HOA bank accounts with no oversight is potentially dangerous.

One more thing, the property manager has more at stake in earning your business than an attorney. You'll develop a relationship with managers whereas lawyers work for you as needed....and only as needed.

Since you're lost, it's an investment and working alone is unhelpful.

FlorC (North Carolina)
Posts: 7

Posted:

Thank you Kelly for your advice. We already went ahead and sign with the management company. They have been very helpful. We are going to have a good start. Thanks again.

KellyM3 (North Carolina)
Posts: 2,239

Posted:

Flor,

I believe your property manager can now do the "dirty work" of sorting out your HOA mess in a less "dirty" fashion and in a timely way that, I think, could have your neighbors pleasantly surprised.

FlorC (North Carolina)
Posts: 7

Posted:

Kelly,

I agree with you

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