Private Communications by One Director

Is it legal to do so? Yes.
The potential legality is more concerning with WHAT the individual person has as the contents of those discussions, letters, etc..

I frequently called my landscapers and gave them directions, orders, asked questions, requested clarifications, reminded them, etc.. I called lawyers and asked questions, provided information, etc.. Never had an open line, party phone, conference call, etc. to do so.

Brian,

Certainly it is acceptable and legal to contact outside parties, but I might expect that other members of the board would be copied on the messages, or at least be provided with copies if asked. Verbal agreements ought to be followed up with a written confirmation in cases where there is some commitment by either party that is more than trivial. I can't believe that one board member should be allowed to conduct official business in secret.

Lawrence,

I would agree, a good president would keep the board apprised of his/her activities, copy board members on emails and written communications, etc. A good president would also verbally report on his/her activities at each board meeting. We have an agenda item for each regular meeting called "President's Report" for just this purpose.

Unfortunately, there are some individuals who confuse the role of president of a democratic society (such as an HOA) with the role of the president of a company. The president of a company is the boss, and the members of the president's staff report to him or her. The president of an HOA is not the boss. The president of an HOA reports to its board of directors and (normally) serves at the board's pleasure. The president of a company, by signing documents and communications, approves those documents. The president of an HOA, by signing documents and communications, AUTHENTICATES (not approves) that the documents and communications are the official actions of the board.

The president normally represents the HOA and is normally the contact person (other than possibly a property manager)for contractors, the association attorney, and, possibly homeowners. While the president should report to the board on his/her activities, it would be unreasonable to expect that the president report on every exact detail and every exact word that is said.

Unfortunately, I'd have to see your president in action myself to determine if I think he/she is performing what I would consider normal activities, or overstepping his/her authority.

Lawrence - do you have a management company? If not, then the pres if doing the day to day activities of the HOA and, yes, if probably having lots of side conversations with vendors, etc.

I'd say that anything that would resulted in him spending $$ above or beyond the budget, should be brought before the board. Otherwise, the budget really runs the place, doesn't it?

As far as policies, etc. - those are in writing, too. So I am not sure what you are concerned about.

Maybe you could be more specific.

Do you have procedures for delinquent dues accounts? Then the treasurer simply follows them.

Do you have procedures for handling blind bids from vendors? Then the board simply goes thru the procedure.

If your president is making things up as he/she goes along, then she/he is acting outside of procedures.

If you don't have procedures, then your board needs to make sure that procedural steps are followed by everyone. No preferential treatment.

The president is the representative of the HOA. This would mean they would have "private" conversations with contractors conveying the needs of the HOA. A lawyer is a contractor of the HOA. The responsibility of the BOD is to agree to hire the attorney and what they want the lawyer to do for them.

I will tell you from my prospective, that I was the only one communicating to our lawyers. There were several reasons. First, each communication be it email, phone call, or conversation can be a CHARGE. So limiting contact to the lawyer reduced the bill greatly. Plus having multiple sources who think the lawyer is their private attorney can really mess things up for everyone. It's best to keep 1 source in communication and convey to that source what the majority wants. It also helped that I had some legal knowledge and could talk lawyer...

Of course, I would keep ALL the HOA members and accounting office informed of my conversations with the lawyer. It wasn't a detailed report because it wasn't necessary. My position of President was a position I was elected for so that the general membership wouldn't have to deal with the details of daily operations. I don't know why anybody not in that position would want to know all the ins/outs if it's not their responsibility. It's rather boring...

Melissa,

You make an excellent point about maintaining a single point of contact -- and that is indeed one of the duties of the President. Also, you are correct that charges from a lawyer can add up quickly, and that it is essential that communications with attorney's be carefully controlled. That, too, is appropriate to be managed by the President.

All I'm asking is that any communication with the President be shared with the other board members, either a "cc", a forward of the entire message, or a copy of written documents. This way, when the board discusses an issue, whether a legal matter or a complaint from a homeowner, we are all privy to the background necessary to make a considered decision.

I would say that the paperwork and emails are considered "Private" and better kept that way. Lawyer/client privilege and all. Tell you the truth, I never got a copy of the paperwork myself. Just signed it and they kept it in a folder. Matter of fact, I did a foreclosure on a property and the lawyer forgot to give me the check. It was 6 months later when I was signing a lien, that he opened the folder to find the check. It was so old they almost had to write me a new one! Plus, they may have owed us some interest on it...

You also have to consider the more people are cc'd or privy to the information, the more likelyhood you get to be called in as a "Witness". Something that I guarantee you that you don't want to be. It ruins your day and you get a subpeona to show up in court on THEIR time.

Realize the information you want to know is information puts you at risk of appearing in court. Do you really want that or would it be better just to discuss the case in broad strokes?

Please don't take this as an insult...but you have to consider the intellegence level of your board members. How much legal knowledge do they possess? I would not suspect an overwhelming amount IF they are hiring an attorney in the first place. Especially, if your HOA practices the art of confiring with the attorney...Which is a majority of HOA's...This isn't a bad thing but you just have to know your and the laywer's limits. The more hands the dirtier the water. My overall concern is just that.

As for the person who sued...Your options are pretty clear. Place a lien on them. Do NOT sue. A lawsuit by a HOA is useless, waste of time, and expensive. A lawsuit will get you a court judgement but the owner can still sell and move without paying a dime for years (if ever). A lien is also a court judgment. However, the owner can't sell their property until what they owe is paid off. They can rent their property but can never sell it. A better option and cheaper one that in some states require no lawyer to file.

It would take another post to just post information on what to look for and why a HOA does/does not need an attorney. Your HOA found out the hard way, with the frivolous lawsuit reaction. A 5K mistake that I hope can be the catalyst of never letting anyone else do this again...

YOu didn't include that information in your post that it was a lawsuit served on you. That's different. I assumed it was a lawsuit served on the entire HOA. That's a different scenerio that what I perceived to have happened.

A foreclosure isn't always a good option for a HOA. I've done one with an unruly member who also threatened us and other violations. So I understand dealing with people with this attitude. The president hesitating on a foreclosure does make some sense. It's NOT a money making process for the HOA at all. It's basically, doing the work of the bank with NO guarantee of getting money in the end. The bank gets paid first then the HOA. So if the owner owes the bank, the bank will only give the HOA the leftovers. That's not enough to cover the legal costs or expenses already incurred.

You can't get blood out of turip but you can make one bleed. The president may be waiting for the better option of the bank taking the house. That way no additional legal costs will be incurred and a chance of getting more money back. It's just a sit and wait situation...The HOA can always do that...

Melissa,

Thank you for sharing your experience. This is exactly the kind of deliberation that our board needs to conduct.

It would be good to have legal advice about what we can do if we foreclose with the first mortgage in place. Can we renegotiate the mortgage and then rent out the property ourselves? Does the "mortgage terminator" that is getting play in Florida apply in Georgia? If we just sit and wait, how long until the liens expire? Can we renew them? There is something in Georgia called a Fieri Facias that could give us the option of collecting personal goods (E.G. jewelry and televisions) to satisfy the debt. Is this something hat would work for us?

All that I am asking is that the entire board be included on discussions with the lawyers, rather than one board member alone with a personal agenda.

A lien typically doesn't run out. It is progressive and keeps adding on the money owed. I would verify a lien is put on the property first. You may want to check to verify there are no time limits or needs to renew. A lawsuit judgement can expire in 7 years and need renewed up to 15 years. Hence, why I don't recommend a lawsuit because how many board members are going to remember 7 years from now to go renew the judgement?

No, your HOA does NOT want to own this home in a foreclosure sale. What you don't understand is the costs involved. Not only does the HOA have to pay for the foreclosure, they have to pick up the house payments. See the first bid is offered to the HOA for about 1 dollar more than owed. That owed amount is the costs the HOA is already out. Basically, again paying your own legal costs. This ONLY gets the HOA the property. If there is money owed, then the HOA has to get a mortgage. Can your HOA afford to make mortgage payments out of their budget? Does it want to be a landlord? That means maintenance costs and paying the dues of the home. (Renter's don't pay dues).

So you can start to see why foreclosing is a bad idea for a HOA. Example: 5K to foreclose. 5K + 1 dollar to purchase the property. That's 10K right there. Plus if 100K is still left to pay on the house, that's atleast $800 a month mortgage payment. Maintenance costs to fix up the property and utilities. Paying dues payments. Some states allow a foreclosed owner a year to come back and pay up to get the property back. Who's going to manage the property and renter? I thought most HOA's hated renters as they devalue properties...Don't let me begin how this would play with your taxes...

Luckily, I found a bidder to buy the house we foreclosed on. However, they changed their mind and the house went to HUD. They auctioned it off about a year later. By that time the property had been abandoned and a pipe had broken. The property was an eyesore and the repairs were in the thousands of dollars...Took almost 2 years to get someone to pick up the property and get dues flowing again...