Ethics

Started by JohnD31 • 3 replies • 1235 views

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JohnD31 (Arizona)
Posts: 2

Posted:

I live in community that the state's supreme court ruled twice that the community didn't have to become a mandatory association, forcing everyone to join the association. in the last supreme court ruling the judge awarded a large settlement to homeowners who won the case.

These homeowners didn't take the settlement. but asked the court to put in place a judgement that if the BOD ever rewrote the CC&Rs making it mandatory membership the homeowners would have the right to activate the judgement plus interest since the ruling.

The BOD has hired an attorney who lives in the community and has drug out the lawsuit for ever quite a few years now and keeps appealing every time a judge says the judgement still stands and the board and members will have to pay up. The attorney is the who is is making money and benefiting by this case continuing.

what can we do to protect us against this wast of money by the BOD? who is fiduciary responsible? many members don't want to be in this lawsuit and are forced to pay assessments to pay attorney fees, even though the attorney has been told 5 time no.

TimB4 (Tennessee)
Posts: 21,062

Posted:

John,

I can see this from all sides.

As a Board member, if the membership is voluntary, then it's possible members can come and go as they desire and this can impact the amount of funds available for maintaining common area or providing services.

If you are a member of the Association paying fees, you are annoyed at seeing money spent unnecessarily.

If you are a resident and not a member of the Association, you certainly want the ruling to stand and might be paying money for attorney fees every time the issue is appealed.

I would offer the following advice, which differs depending on what side you are on.

If your on the Board -

Read all material on the case prior to appealing it another time. I would also suggest that a summary of this issue be made and given to every new director so they know the history. They should then ask themselves what are the chances the ruling will be reversed this time? In my opinion, if it's less than 80%, I wouldn't waste the money filing an appeal.

If your a member of the Association -

If you believe that the Board is spending your money unwisely, you either need to get yourself elected to the board to prevent this from happening or, if your membership is voluntary, resign your membership.

If your not a member of the Association -

Based on the posting, it appears that the decision has been appealed several times. During every appeal ask the court for attorney fees and court costs. The court might say no, but they could say yes. If the Association has to pay your attorney fees as well, there might be a revolt in the membership and stop the issue once and for all.

Tim

SusanW1 (Michigan)
Posts: 5,202

Posted:

Did you show the NEED for a mandatory HOA?

If there are no common areas or "assets" (i.e. really liabilities,) then what would be the reason for a mandatory group?

Tell us more about what is being funded by your "dues.'

PetunkaM (Florida)
Posts: 1,009

Posted:

‘what can we do to protect us against this wast of money by the BOD? who is fiduciary responsible? many members don't want to be in this lawsuit and are forced to pay assessments to pay attorney fees, even though the attorney has been told 5 time no.’

John,

Gosh, I have not met an attorney who loves to keep on losing his case? I can see how hiring an association attorney, who is also an owner, could be viewed as a conflict of interest. In fact, we have at least three attorneys living in our community and none would formally advise the board on any legal issues nor would they agree to represent the association. If the owners do not agree with the BODs decision, you could have a few choices.
Petition the Board to fire that attorney hoping your justification to do so will be accepted
Hire an independent attorney and ask his opinion
Recall the BOD

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