Board President used rules to his advantage

Recently our board president resigned after being questioned about the appearance of impropriety at a board meeting. The ex-President then proceeded to tell the entire town about accusations made against him by a member of the board is the reason he resigned. Now the board is uncovering contracts that were signed without board approval, arch violations on ex-President not presented to board - instead the management company kept giving him extensions to fix his home, and architectural change requests from homeowner that he even though they are clearly against the guidelines.
As a board member, it makes me very angry that the ex-President got preferential treatment and was never required to attend a hearing for his violations, nor pay fines for noncompliance and yet the board fined other homeowners $10 a day for 90 days for their on-going violations. Now that he has resigned, this year's inspection revealed his violations from last year were still not fixed. We have sent him a hearing notice, however he seems to think that if he fixes the violation he will not be fined. In my opinion, whether he fixes the problem or not - he should be fined from the day the violation was supposed to be in compliance until it is fixed. If we do not treat him like all other homeowners, then we are guilty of preferential treatment. Personally, I think he should be punished much more because of the breach of fiduciary duty.
My question is - is the board allowed to tell other homeowners what was discovered or would this be considered libel or slander? If we cannot tell them, he could get re-elected to the board. As it is now, several homeowners have modifications that were done with his approval (and against our guidelines) that the board will be requesting to be reversed. The homeowners will be need to sue him for damages - not the board, correct? He did not have the authority to approve modifications that were not within the guidelines.
Is there anything the board can do legally to the ex-president to hold him accountable?

I don't understand how the President of the HOA can be allowed to not follow the process ( that they know very well) that all other homeowners are required to follow. Other homeowners that did not comply within the timeframe were fined even though they had fixed the violation - they had not notifed the board that it was completed. The President would have been required to comply by the original hearing date like everyone else if they had not used their position to get a non-board approved extension.
The fact that the board did not become aware of the ex-President's activities until now - and have sent a hearing request should not take away the fact that he was in violation since the original hearing date. I think he should be fined retroactively. Board members should be held to a higher standard and if found to have abused their power or exceeded their authority - the HOA should have some recourse, right?
About the approval of modifications against our guidelines - he was not authorized to do this. In fact, he tried to amend our guidelines so the approvals would fit into them. The board voted down the amendment. The homeowner had a copy of the guidelines and was aware of the rules. If the President signed the approval then he acted beyond his authority. All the suggestions you made - we had/have in place (the committee, the approval process requiring 2 signatures, ...). However, when someone has the been the President for a number of years I can only assume that have friends who are willing to assist them in doing anything they want and covering it up.
Our insurance will not cover a board member for acts of willful misconduct.
If there is nothing the board can do - then why would the other board members want to stay on the board?
If other homeowners found out - then it would give the appearance that we were giving him preferential treatment and we could be held liable - I know I will resign.

He wasn't allowed. When the Board found out about it, they took the necessary actions. The result of those actions had the individual resign.


If you go back and read my comment, I said that he should be treated like any other member. If your Association assesses fines from the date of violation to the hearing date and/or compliance date, then the same procedure should be followed with him.

Not knowing what your procedures were, I used an example of what could have happened.


Then you should certainly argue this point at the hearing. I would suggest that you go through the Associations records of past hearings and gather evidence to support that position.


Board members are volunteers. They should be held to the same standards not higher standards. I believe that the character of the individual should have them set the standards when they are in a leadership position. Unfortunately, that doesn't always happen.


Just as in any other organization, anyone who abused their power or exceeded their authority should be removed from that position of authority. I understand from your posting that this already occurred.


He was not the approving authority or he just shouldn't have approved something that was not in accordance with the guidelines? They are two different things.


Good. That process was followed properly.


Being aware of the rules doesn't preclude an individual from asking for a variance of those rules. The person asking shouldn't be the one blamed. The worst thing that should have happened when asking would have been that the Association said no.


That should probably be the one of the first lines in the letters you want to write to those members who got the approval. Again, I strongly suggest that you confer with the Associations attorney for options and the best language to use in the letters.


If those things are in place, the Board needs to find out who and why the procedures were not followed. If the investigation shows that the management company was partially responsible then I truly believe that the company needs to replace employees or have the companies contract ended for cause. However, prior to ending the contract, read it completely and have the Associations attorney review it as well to make sure there isn't some penalty in their you might be unaware of.


That is true. It typically also won't cover a board members legal action against another board member. Therefore, the cost of any legal action will (at least initially) have to be paid by the membership. Something to keep in mind.


I'm not saying their isn't things that can be done. I'm saying that you need to consult an attorney to see what options are available above what you have already done. The Board then needs to weigh the pros, cons, costs and benefits of any such action before deciding what course of action to follow.

As for wanting to stay, I can only answer that for me. I've been serving on my Board for two years now (Architectural committee prior to that). During my tenure I've discovered that a few individuals either due to lack of knowledge or willful intent did things outside of the governing documents and, in some cases the law. As I find these things out, I report it to the board and some of it to the membership as necessary. Since those individuals are no longer serving on the board or on any committee, the Board has decided not to do anything else. However, we have resolved to keep serving so those individuals do not get reelected and if they are reelected, to be in a position of keeping them from from holding any office. Thereby, minimizing the what future damage they can do.

Hopefully, you and your fellow board members will want to continue to serve for similar reasons.


You should inform the membership of certain issues. However, you need to be careful in what you say when you inform the membership.

Suggestions:

Issue - President approved design changes that he didn't have authority to do.

Tell the membership - It has come to the Boards attention that a previous member of the Board appears to have overstepped their authority and approved requests that were not in compliance with our covenants. The Board has taken steps to keep this from happening in the future and will be contacting those individuals who wrongfully received this approval about addressing the violations they changes caused.

Issue - President resigned

Tell the membership - Mr/s. xyz, tendered his resignation to the Board at the mm/dd/yyyy board meeting. The Board accepted the resignation and in accordance with our governing documents, appointed Mr/s abc to serve as the President.

Issue - Presidents violations

Tell the membership - With the recent completion of our annual walk through, the Board wanted to remind the membership of the Associations enforcement procedure. Per [Article x, section y of name of document] the Board may assess fines from the date the violation was first documented until the violation was corrected. The determination of any fines will be decided by a hearing before the Board. or what ever your enforcement procedures are.

What does this do? Well if they are all ran in the same newsletter they could do the following:

1) Informs the membership of the resignation

2) Informs the people who received approvals about the issue so it doesn't come as a surprise

3) Allows the membership to draw their own conclusion about who the individual was who overstepped their authority without the need of the Board to spell it out.

4) Places the ex-president on notice that the board has the authority to fine.


With the knowledge you have gained over this issue, you are probably one of the better ones to keep serving the membership. I told you why I stay. Of course, you need to make your own decision. I encourage you to weigh all the pros and cons of any possible decision before making a choice.

Juan,

I absolutely understand your frustration. I absolutely understand your anger. I also understand the need to vent this anger and frustration so you can start to see the issue and options that are available from a different perspective. Hopefully this forum helps you do that. Please keep us informed on what options were available and decisions were made so others can learn from your experience.

Tim

From the sounds of it, there was a frustrating abuse of station, but relatively low final damage to the community (unless I underestimate the arch changes you speak of). If this is true, I think this largely comes down to who the board and the HOA want to be/become. You can range from disinterested through inflexible tyrants. My guess is somewhere in the middle is best. Demonstrate that the rules exist for a reason, but to inflict every punitive measure in sight may not be the best long-term approach. That said, when determining your actions, what's done is done. Punishment is on the table, but as TimB pointed out, some justice has been served by the ex-president being pressured out. If he purposely avoided hearings to buy time, I'd say pursuing fines in that timeline might be reasonable. But to relentlessly hound someone for going overboard on what I've generally seen and heard to be a thankless, pro bono job can start to appear more vindictive than righteous.

Unless there is something deliberately underhanded in the actions of the members who got unauthorized approvals (like they paid the ex-president knowing they were breaking the rules), I'd tread very lightly on going after them. Assuming they were acting in good faith you might consider giving them warnings that their changes were not within guidelines, but if not egregious changes, let bygones be bygones.

You're going to be criticized by someone no matter which way you go. Personally, I see an HOA as existing for guidelines and representing the common good in a small community--not to be an iron fist. There will always be some issue and even knowing abuse of power. Be ready to share the facts and demonstrate this activity was not condoned by the rest of the board. But turning this into a witch hunt could be detrimental.

The point was not lost to me, and I do recognize that exclusions and grandfathering come with their own slippery slope. But so does punishing community members for acting in good faith. IF my caveats hold (homeowners were believed they were following protocol and the arch changes weren't outlandishly contrary to existing), then I see more damage in potentially developing a draconian perception of the board than leaving what's in place.