illinois--No one wants to be a BOD PART 2

Started by MichaelJ8 • 20 replies • 1559 views

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MichaelJ8 (Illinois)
Posts: 113

Posted:

Still not enough volunteers. (We will become our own association in a couple of weeks.) The owners want me to be on the BOD plus treasure. I have been helping the developer the last two years by
1) collecting the monthly fees, 2) deposting them, 3) writing checks to pay vendors, 4) taking the checking account statements to his accountant to do the tax forms. I suggested to the owners that we hire an accountant and they said NO. There are seventeen of us and most of them do not care. My question is, if i take the treasures job and do the three steps that i stated above, would that be enough? (I am not an accoutant) I do not want to cause problems for myself or anyone else. If this siuation does not get better I will probably sell and move.

PetunkaM (Florida)
Posts: 1,009

Posted:

Michael, you need the board of directors. It is that simple.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

I would try to sell the idea better on the third-party accountant. We used one and it was the BEST option. I think you should stay treasurer but work close with the accounting firm. Get a few bids to show the owners the options available. Explain to them the liability issues hiring someone may eliminate. Your not going to live forever or atleast forever in this HOA... (Always leave room for zombies and vampires for not dying...LOL)

We had a policy of requiring 2 board signatures AND the accounting companies signature on ALL checks of the HOA. In order to do this, your HOA would need atleast treasurer and the president. Which is the BEST combo although other assigned board members/officer could sign. However, since most seem trustworthy of you, I'd try to be consistent about signage.

I think conveying your feelings on the issue and bringing bids in, may help convince others it's a good idea.

Former HOA President

MichaelJ8 (Illinois)
Posts: 113

Posted:

If i became a board member, we then have no president or visa versa. Melissa mentioned pssible liabilities if i remained the treasure. Could someone explain that in more details. Maybe i could use that as a selling pointto hire an accountant. I know that if i mention a fee increase to hire an accountant i would not reach the age of 69. (I am 68). I do not like this situation at all.

PetunkaM (Florida)
Posts: 1,009

Posted:

Michael, you will live, I promise. OK, how many board members do you think you have? You can be on hte board and be a treasurer also. But you cannot be a treasurer if there is no one lese on the board.

PetunkaM (Florida)
Posts: 1,009

Posted:

Opps, sorry for the typo's..

MichaelJ8 (Illinois)
Posts: 113

Posted:

the board at this moment will be 3 people. The developer is 1, and I and other one will make up the other two. I did not want to do two jobs but it looks like i will.

SusanW1 (Michigan)
Posts: 5,202

Posted:

There are only 17 of you, don't worry about an accountant for the upcoming board, but DO get one to look over the books that will be handed over by the developer.

That transition procedure is more important than anything right now.

As far as your new board: I have heard of president/treasurer and a secretary as a board for start-up boards. or VP/treasurer. Surely you can get three people to step up for these positions.

PetunkaM (Florida)
Posts: 1,009

Posted:

If i became a board member, we then have no president or visa versa… the board at this moment will be 3 people. The developer is 1, and I and other one will make up the other two. I did not want to do two jobs but it looks like i will… I do not like this situation at all. [Michael]

Michael,
It seems the Developer is stepping down and you cannot get anyone to replace him? Truly, you should not operate only with two board members, particularly if your By-laws require three members: President, Treasurer and Secretary. I would not like that situation either. Violating the docs from the start could lead to more significant problems in the future. Please try to tell the membership, again, that you must have three people on the board and unless someone is willing to step in, your association will be in violation. Explain, that you personally cannot not undertake the responsibility of the treasurer under these circumstances. I know, easier said than done but do not give up.
And, if you accept the position, am sure you will issue financial statements and perhaps have your taxes done by an accountant should that be necessary. You could also authorize your bank to pay utilities electronically which could save you some time. Review all your insurance policies including the D&O insurance.

MichaelJ8 (Illinois)
Posts: 113

Posted:

According to our documents the developer must be on the Board of Directors. I will number 2 and someone else said they will be number 3. That takes care of the board. WE have volunteries for vice president, secretary and me being the treasure. We HAVE NO PRESEDENT. How big a problem will that be? THANKS FOR EVEYONE ACKNOWLEDING MY POSTS.

BruceF1 (Connecticut)
Posts: 2,535

Posted:

Quote:

Posted By MichaelJ8 on 08/21/2011 7:44 AM
According to our documents the developer must be on the Board of Directors. I will number 2 and someone else said they will be number 3. That takes care of the board. WE have volunteries for vice president, secretary and me being the treasure. We HAVE NO PRESEDENT. How big a problem will that be? THANKS FOR EVEYONE ACKNOWLEDING MY POSTS.

Chances are, your bylaws say you can have a president, but no vice president. Besides, it doesn't matter. More than likely your bylaws also say that the vice president performs the duties of the president if the president is absent or unable (for whatever reason) to perform the duties of that office. So, in reality, you DO have a president.

PetunkaM (Florida)
Posts: 1,009

Posted:

We will become our own association in a couple of weeks [Michael]

Now I am totally confused. I guess both Susan and I assumed the Developer is turning over the association to homeowners. Is he not?

MichaelJ8 (Illinois)
Posts: 113

Posted:

The developer is turning the association over to us. The by laws state "The affairs of the association shall be managed by its Board of Directors. Regardless of any conflict set forth herein, the Developer shall be a member of the board of directors as long as the developer owns one or more units.

The bylaws state we have 3 people on the board. The developer is one of them. Am i wrong in my thinking?

PetunkaM (Florida)
Posts: 1,009

Posted:

Michael, Allow me a couple more questions:

1.How many un-sold units are in your development, if any?
2. Or, has the Developer actually purchased some units under his own name for investment purposes?

Three board members almost always means: President, Treasurer, Secretary. What is the Developer’s position on the board going to be? Did he say?

SusanW1 (Michigan)
Posts: 5,202

Posted:

Your new HOA does NOT have to be governed by the developer's bylaws.

Why should any ONE owner get preferential, automatic membership to be a board member?

You need to get a transition team of owners together and - with a lawyer - get those bylaws to fit the NEW HOA.

MichaelJ8 (Illinois)
Posts: 113

Posted:

The developer builds a 4 plex, sells one unit and owns the other three. Believe he wants to sell them as quick as he can.
We understand the by laws to state that we elect the bod (execpt for the developer) and the bod then elects the the officers.

PetunkaM (Florida)
Posts: 1,009

Posted:

Michael,
Again, is the Developer a corporation? I would assume he is. Does that corporation own the unsold units? Does that corporation have a mortgage or the property? Or, has the Developer actually purchased these units under his own name? Do you know?
If the Development corporation owns 3 units in each quad how can he turn the association over? If the Developer purchased these units from the corporation under his own name he is a majority owner, NOT the Developer.
Also, how many people actually purchased the units? And, how can you have 17 units if he builds quads? Please tell more. We are trying to be of some help you but still no clear picture what is really going on.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

I don't want to add more confusion to this situation, however I may need to point out something....The developer is turning over the HOA to the owners correct? If that is done, the ALL references to the developer is usually REMOVED from the documentation. This means the rule "as long as developer owns a unit" may be disregarded. This then frees up who can be on the board. Nothing wrong with the Developer being on the board. He/She just has to be ELECTED there instead...

As for Officer responsibilities...Our President couldn't act as "Secretary". The Vice-President's only duty was to take over the meeting duties if the President didn't make it to the meeting. Not alot of technical responsibility. (We had the President/Vice-President the co-signers of the checks though). Your new documents may need to layout a better responsibilities for each position once drafted. You may be able to be President and Treasurer. It's just wiser your not...

It's a good time to have a lawyer consulted for the homeowners. You all need to get on board on what the transition means. There are some of the documentation you may need like Articles of Incoporation available at your local office supply store. They are located in the same area as "lease agreements". Most likely not on their shelf but atleast go online to see what documents you can get for the "Do it yourselfer". They aren't that expensive.

It cost about 2K-3K for our filing fees to remove the developer reference and voting system. That's also a 90% vote of the membership too. So review what you all have and decide what you want changed. You have the right to do it as long as it is legal...

Former HOA President

MichaelJ8 (Illinois)
Posts: 113

Posted:

Sorry my math was not accurate. At the moment, 4 quades, 1 duplex. That is 18 units, 15 is sold, 3 belongs to developer. Illinois law states association to be turned over if 3 years from beginning is up. It is up. The developer is ok, He justs wants all 34 units (original plans) built and sold. The economy is not helping. His financing for the 3 present units i do not know.

PetunkaM (Florida)
Posts: 1,009

Posted:

Please do note that Michael can’t even get anyone to serve on the board. Now, proposing amendments to documents, hiring lawyers or accountants ain’t going to happen or, at best it is too premature. There is no knowledge or interest in that community how to manage HOA; and, perhaps the money is tight also.

But, Michael you really should have a clear understanding of all documents and agreements signed by the developer before you agree to take on the treasurer's job.
PS: You do not need to amend documents just to delete ‘developer’ either. In a sense the association becomes a developer.

PetunkaM (Florida)
Posts: 1,009

Posted:

Or, Michael, if you are not comfortable reading all this stuff, perhaps asking an attorney to review all the agreements and contracts for a fixed fee let's say not more than $1,000. That would come out to about $55 per owner and at least you will have a written statement. Personally, I think it should be more like $800.

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