HOA Lawsuit for Nonenforcement

Started by ThomasC11 • 19 replies • 3786 views

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ThomasC11 (California)
Posts: 210

Posted:

I am a former Board Member, have warned against not enforcing convenants and few listened. Now I have seen community fall into state of ill-repair.

There has been talk of several homeowners joining together to file suit. We could be in trouble.

Once BOD is provided documentation/photos of nonenforcement issues, what is the legal timeline for them to act on the information?

SusanW1 (Michigan)
Posts: 5,202

Posted:

WHY hasn't the board acted? No funds? Not feasable?

Homeowners will have to prove that the board willfully ignored needed repairs/replacements.

Can you be more specific/

ThomasC11 (California)
Posts: 210

Posted:

There have been many emails, photos, letters sent to BOD and several Mgmt. Companies. The fact that many Board Members are in violation themselves seems to be the main reason why the rules have not been enforced.

I would think that these members should and could be removed from the Board.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Thomas,

Any "legal" timeline would be found in your Associations Governing documents, specifically your enforcement policy.

Perhaps you and the other homeowners could approach the Board to be an enforcement committee. The committee would be responsible for tracking and issuing notices in accordance with your enforcement policy.

Tim

ThomasC11 (California)
Posts: 210

Posted:

Tim, there is a Committee that goes through the neighborhood to look for violations. They are everywhere. The ultimate fine is only 25.00 so many people laugh at the letters they receive.

Can one take formal action against BOD who do not follow rules. They are technically not a "member in good standing".

SusanW1 (Michigan)
Posts: 5,202

Posted:

Thomas - first you say Covenants, then you say rules (are being violated)

Can you be more clear?

What kind of violations are "all over?'

ThomasC11 (California)
Posts: 210

Posted:

It is a combination of both. Our CCRs list things like #of pets, keeping balconies clear...Rule and Regs list others like parking in garage, # of plants allowed on front patio, garden hoses being put away. I could go down our street and find a multiple violations at 2 of every 3 townhomes. For example, lawn furniture in common area, not kept on back patio, garages full of junk, not cars, etc.

Our heiarchy is CCRs/Bylaws/Rules and Regs. As far as I am aware, all need to be enforced? If there are Board members who do not follow these documents, what action can be taken against them for starters, then against the Assoc. for not executing their fiduciuary duties?

JanetB2 (Colorado)
Posts: 4,219

Posted:

Hi Thomas:

Violations pertaining to CCR’s should be taken care of as most courts will potentially uphold anything in the CCR’s that do not violate state statutes. This is because these are attached to the property and homeowners agreed to them when they purchased or by majority vote if they were amended. If there is something the HOA and homeowners no longer want to enforce, then they should properly amend to avoid potential legal liability.

Rules on the other hand are usually adopted by the board and without vote of homeowners. If you research you will find that some courts will uphold rules and others have not upheld because they are not attached to property by homeowner vote similar to CCR’s.

However, in your case if homeowners file that the rules are not being upheld and which were adopted by the board, then court could potentially rule in favor of homeowner because HOA is not upholding their own rules which they themselves adopted and expected to be followed. On the other hand if a HOA files against the homeowner for not following a rule, potentially the owner could win depending on the state and court/judge as the rule was not agreed to by all homeowners by vote and added as amendment to CCR’s.

Just trying to give you an idea of all sides and potential scenarios.

DorothyO (Washington)
Posts: 293

Posted:

Thomas,
I asked our attorney what would happen if people just started ignoring the covenants, Bylaws and Resolutions, iff they ignored the violation notices sent by the Board (which in our case is not the rogue crew you've got)? There is never a quorum so there would never be a consensus to hire a management company. If things basically went to hell in a handbasket? He said that what we would have is a dysfunctional association, and any homeowner could bring suit in Superior Court (here in Washington), for breach of contract, lowering of property values, etc. A judge could then assign a management company to take over the duties. Because our CC&R's specifically state that "any homeowner can enforce a covenant," it would only take one to bring suit. It seems you have sufficient documentation of all your efforts to handle this professionally. If all this has been for naught, and it seems it has, I would think a consultation with an attorney would be your next move.

RyanD1 (California)
Posts: 38

Posted:

Thomas:

I would recommend consulting a lawyer in regards to creating a specific petition to remove the Board of Directors. This would be the first step to remove the Board of Directors. Have you read over your CC&R's regarding the removal of Board Members that were elected?

DanielH1 (California)
Posts: 482

Posted:

You can sue the HOA but, ultimately, your HOA fees will go up to pay for the cost of lawyers (possibly for both sides) and to cover any judgement that you get. If you are hoping to punish the Directors individually and make them pay individual fines, you'll have a very, very tough time and suing the HOA won't get you there.

As a practical matter, nothing can be done to people who violate their fiduciary duty. Your best bet is to replace them (in an election) with people who will carry out their fiduciary duty. Judges will probably wonder why you haven't replaced these people and you should have a good explanation (apathy is not a good explanation).

DorothyO (Washington)
Posts: 293

Posted:

Daniel raises a good point. Why hasn't this Board been replaced?

ThomasC11 (California)
Posts: 210

Posted:

The BOD was recalled 1 year ago, the new group went to self management and flopped. Some of them remain on, but some from the recalled group are back. There is also a major case of apathy unless a special assessment is on the horizon.

Many good families have given up and left. Many remain but are outnumbered. I speak for them and need to take some action.

However, what I'm hearing from you kind folks is that the rules (being at the bottom of the list) are not as enforceable as the CCR's. Also, it is highly unlikely that the rogue group can be held accountable ?

TimB4 (Tennessee)
Posts: 21,059

Posted:

Thomas,

As I understand it, it works like this:

a) Covenants - outlined in the Declaration of Covenants, Conditions and Restrictions and are attached to the deed are typically enforced by the Association but may be enforced (in court) by any owner upon anyone in violation of the Covenants.

b) Rules - Typically outlined by policy resolutions adopted by the board and apply to the common areas. These are usually enforced by the Board only.

c) Guidelines - Outlined by a policy resolution adopted by the Board, guidelines usually specify what would or would not be acceptable in design changes, which usually require approval from the Association before being implemented. Typically, a violation of a "guideline" is in reality a violation of the Covenants or Bylaws for doing something without getting permission first.

Tim

DorothyO (Washington)
Posts: 293

Posted:

Thomas,
Who recalled the Board? How are you being managed now? How did the former recalled Board members regain terms? How is this musical chairs happening in the face of apathy? Don't you have to have a quorum for any action? Why are you are a former Board member?

On our Board the CC&R's, Bylaws and Resolutions are treated equally in terms of enforcement. If this rogue Board is violating your Bylaws, the very document that requires them to enforce the CC&R's and any other rules they make, (as long as a rule does not change or is in conflict with any of your governing documents, the Board does not need the vote of the HOA), then they very well can be held accountable. There really is no hierarchy when it come to enforcing your governing documents. If the current Board is not willing to honor the requirements of the governing documents, and if you cannot replace this Board with one that will, what Ryan said about consulting an attorney to figure out the best way to have these governing documents upheld, seems the wisest course.

ThomasC11 (California)
Posts: 210

Posted:

There was a group of homeowners, myself included who initiated the recall. For years we had heard that there was never any money. So when the idea of self management was presented many of us liked the idea. Sadly, the concept failed due to infighting from the new Board Members and many bad hires including Prop. Mgr. Several from the new group did not run for re-election, even went so far as to move after their failed effort.

Recalled Board members were able to run again, Ca law does not prevent this, which was a surprise to me (current President has now been recalled 3 times). We eventually reach quorum, but it takes several elections as we never meet the required number of votes on the first or second try. The old boy network gets the same old people voted back on each time.

We now have new Prop. Mgmt. company that is doing a good job, however I already caught the Board President sending over only 1/2 of the definitions of what constitutes a commercial vehicle and should be prohibited in our parking lots. I know because I called the Owner of our Patrol Co. and he read me the info he was given from our end. It is this kind of behavior that is driving the place into the ground.

So I want to call out 2 of the returning Board members who I know are in violation of our documents (garage full of junk, garden hose wrapped around side of unit). These may sound trivial but I see at a rule is a rule and should not be diminished. Especially if they are in a position to call people to hearings and assess a fine.

If these 2 are sent a violation notices and do not address them, they are technically not "members in good standing", which is a requirement to serve on BOD.

Will this hold up, without having to get legal?

DanielH1 (California)
Posts: 482

Posted:

It doesn't seem promising but you could:

1. Convince the current Property Manager to issue violations against the Board Members
2. Wait a sufficient amount of time until the violations are not corrected
3. Have the Property Manager issue a statement that the Board Members are not in good standing
4. Attend a meeting and blow smoke about how the Board Members should fix the violations, step down or be removed

#1-#3 assume that the Property Manager (who you say is good) is friendly to your plight. #4 is problematic because you've got to fake everybody out. You don't have the authority to remove a Board Member. The management company doesn't have the authority; they are just an employee/contractor. The Board might have the authority but it'd have to be a majority vote which the affected Board Members would conspire to make it fail (each one would vote to keep the other on the Board). But, somehow, you got to convince somebody that they have some authority (which they don't) and fake everybody else into agreeing that the fake authority is legitimate.

ThomasC11 (California)
Posts: 210

Posted:

nicely put! I do know 4 of the 7 Board members so it may work.

DorothyO (Washington)
Posts: 293

Posted:

Thomas,
Contrary to what DanielH1 says you very may be able to remove any Board member, above-board, upfront and personal.

There are three sections in our Bylaws that state:
1) Article IV, Officers, Section I. Removal of Officers: "Any officer may be removed with or without cause by a vote of those holding 51% or more of the total votes of the Association at a special meeting of the Association called for such purpose."

2) Article VIII, Indemnification of Officers, Section A: "Each officer and Association committee member shall be indemnified by the Association. . . . "except in such cases wherein such person is adjudged guilty of willful malfeasance in the performance of his or her duties,"

3) Article III, Meetings of Members of the Association, Section C. Special Meetings: "Special meetings of the members for any purpose may be called at any time by the President, a majority of the Board, or, Homeowners having twenty-percent (20%) of the votes in the Association."

I wonder if your Bylaws have any of these relatively boiler-plate clauses? I also wonder what your contract with the PM company says. Could there be language in there that addresses a Board's mismanagement?

As for the violators on the Board, if the Board is who enforces Covenant Violations, and issues the notices, clearly they are not enforcing the CC&R's. BUT! Don't your CC&R's say that any homeowner can enforce a covenant?

The real meat may be in your Bylaws, AND with those 4 out of 7 Board members who may be allies.

ThomasC11 (California)
Posts: 210

Posted:

thank you Dorothy, and everyone for their assistance. I feel armed with the correct info to move forward.

I will keep you posted on the results.

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