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HeatherB3 (Florida)
Posts: 32
Posted:
Last month before I became a board member, there was discussion about spending $40,000 on repainting the wall; it is the main barrier between our community and the “outside world.” It was just a discussion, no motion was held, no vote among our BOD at the time, and I just checked our meeting minutes, nothing. Does the wall NEED to be painted? No. Would the wall look better if it was? Yes, everything looks better with a fresh coat of paint. The problem is our HOA is almost $113,000 in the red because of unpaid dues. I think, as did the other new board members and the community, this project could wait for another year. That was one of my platform ideas I ran on.

Now, fast forward 1 month, we have a 60% new board. Two directors held on to their position, one by the skin of his teeth. AND, while I was on my way home, low and behold, they are starting patch work to start painting. Every single one of the old board member’s that got disposed of has their house backed up to the wall.

I just got off the phone with our PM and he said that right before the meeting, the BOD approved the painting in an email, which was legal in an emergency. They felt it was needed RIGHT NOW. So, I asked him for the correspondence. He is unable to produce it, but said he is working on getting the meeting notes together.

This BOD, the ones that were disposed of, REALLY thought they were going to get reelected. One even started crying at the meeting, throwing a fit asking “I don’t understand…blab la bla . I really don’t think they did this right before the meeting, I think they did it right after the meeting and now we have a wall being painted.

What to do… help!!!

MelissaP1 (Alabama)
Posts: 13,836
Posted:
Find out who the contractor is and who signed the contract. The PM shouldn't or couldn't have signed the checks on their own. Our System requires 2 Approved BOD signatures and the Accounting office signature. If you don't already do this, then you all may want to vote for this in the future. All it takes is going to the bank and putting approved signatures on a bank card. Will need to do that anyways to eliminate those NOT supposed to be on the account off IMMEDIATELY. Warning that person may have to appear with you to do so.

Try to review the contract and see about what options you have for stopping it. Maybe you can stop it at the patch work stage. Tell the contractor it could be a invalid contract they are dealing with as the approval is questionable. They should say okay let's check into that as this is a CONTRACTS case.

I had a situation with a contractor who decided to go on and start working on the project I hadn't approved yet. I had them come out and bid on the job and discussed it with the owner/membership. They had done great work in the past for us. However, unbeknowst to me the guy I was dealing with had issues with the company. He would grab contracts and start working on them from under the bosses nose. They didn't get paid unless they had work to do... I had scheduled this project to POSSIBLY start in the next 2 months after we got ALL the money in. Woke up one morning and the contractor had already dug a 2 foot trench and piled sand in the owner's driveway. It was for a retaining wall project. Nearly stroked out that day...It was especially bad because they didn't speak English and the Migrant Guatalmalan Lawncare people were working too. I couldn't tell who worked for who and what version of Spanish to speak!!! Thank GOD for 2 years of Spanish!!!

So FIRST and Foremost make sure everything is even right with the contract and the contractors. Then inform the Ex-BOD who want the wall project done to consider paying for it themselves. LOL...

Former HOA President
CarolR11 (Colorado)
Posts: 2,563
Posted:
Also check your contract with your Mgmt. Co. There may be a clause that says that they cannot break the laws of your state. You should hold their feet to the fire. They're supposed to work for your HOA, not board members--old or new.

The painting project is not an emergency and your bylaws or state codes should have a specific definition for an Emergency Meeting.

If the old board did actually take this action, they should have announced it at the meeting that followed.

Melissa's advice about signatures is on target! In addition, if the old board signed the contract once they no longer were on the board, the contract may be invalid or voidable even if they still were on the signature cards. The mgmt. co. should have gotten them off and you new three on right away! You may need to consult with your HOA attorney if s/he isn't in the pockets of the old board.
DonnaS (Tennessee)
Posts: 5,671
Posted:

Heather,

Classifying the wall painting as an emergency was quite underhanded and unethical. It is probably too late to stop the work if a contract was signed. You really cannot do anything to the former members either because they are no longer on the Board. But I would certainly put the P.M. on notice about an emergency meeting being called. Painting the wall does not fall under an emergency catagory.

720;303 (2).."3. Directors may not vote by proxy or by secret ballot at board meetings, except that secret ballots may be used in the election of officers. This subsection also applies to the meetings of any committee or other similar body, when a final decision will be made regarding the expenditure of association funds, and to any body vested with the power to approve or disapprove architectural decisions with respect to a specific parcel of residential property owned by a member of the community.

617.0303 Emergency powers.—(1) In anticipation of or during any emergency defined in subsection (5), the board of directors of a corporation may:
(a) Modify lines of succession to accommodate the incapacity of any director, officer, employee, or agent; and
(b) Relocate the principal office or designate alternative principal offices or regional offices or authorize the officers to do so.
(2) During an emergency defined in subsection (5), unless emergency bylaws provide otherwise:
(a) Notice of a meeting of the board of directors need be given only to those directors whom it is practicable to reach and may be given in any practicable manner, including by publication and radio;
(b) One or more officers of the corporation present at a meeting of the board of directors may be deemed to be directors for the meeting, in order of rank and within the same rank in order of seniority, as necessary to achieve a quorum; and
(c) The director or directors in attendance at a meeting, or any greater number affixed by the emergency bylaws, constitute a quorum.
(3) Corporate action taken in good faith during an emergency under this section to further the ordinary affairs of the corporation:
(a) Binds the corporation; and
(b) May not be used to impose liability on a corporate director, officer, employee, or agent.
(4) An officer, director, or employee acting in accordance with any emergency bylaws is only liable for willful misconduct.
(5) An emergency exists for purposes of this section if a quorum of the corporation’s directors cannot readily be assembled because of some catastrophic event.
(6) To the extent not inconsistent with any emergency bylaws so adopted, the bylaws of the corporation shall remain in effect during any emergency, and upon termination of the emergency, the emergency bylaws will cease to be operative.
BrianB (California)
Posts: 2,820
Posted:
I would follow the advice given, and then remind the 'old board' that if THEY signed a contract to paint the wall when they legally weren't board members, then the contract is not between the HOA and the painting company, but between the private person who signed the contract and the painting company.

If they want to make it the HOA (who they did not represent at the time), then remind them that would be admission of fraud, and that the HOA will turn it over to the Attorney General for prosecution.

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