1 HOA Pres, No Mgmt, and No Board Members?

Started by JessieS • 16 replies • 2460 views

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JessieS (Maryland)
Posts: 4

Posted:

My community is 3 years old, Maryland suburbs, and we only have 25 single homes and a small playground. The President got rid of our Mgmt company 2 years ago because it was not cost effective for a small community.

-We have never been mailed a budget.
-He has refused to get an audit.
-We had 1 meeting in 2010, 1 in summer-2011, no meeting since.
-Grass in common areas hasn't been cut and there are weeds growing.
-Playground has not had any upkeep, nor has the gazebo. Several trees have fallen in playground.

Last year, I asked for a budget, how much was in the bank, was the tax returns filed and what, if any. contracts were we responsible for. The President refuses to release any info.

I know he has spent the money. Everyone is refusing to pay anymore dues because of how the community looks. He has not taken anyone to court (we have no lawyer) and has not sent any letters out. Even if we band together and vote him out, how do we get access to bank records? I do not even believe he had insurance for himself, so he would be responsible for stealing the money.

I am at the end of my rope. What can be done? He is the only one on bank account and refuses to provide bank statements. Help with advice please!!

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Shoot yourself in the foot much? Cause it hurts...So people have stopped paying their dues and things are going downhill you say? Mmmm...Can anyone see a correlation here> A HOA is ONLY funded by it's members FOR it's members. It is also ran and operated by it's members. So I would suggest people start paying up and getting together to get thing organized. Instead of concerning yourself about the bank, concentrate on how to get organized. No one says that you as a member can't call a special meeting and discuss some issues. READ YOUR DOC's!!! They hold the key to everything!!!!

Former HOA President

JessieS (Maryland)
Posts: 4

Posted:

Let me re-phrase...Everyone was paying their dues and we had reserves. Owners attended the 2010 meeting, asked for the budget for 2011 and the President said he would get it out in December.

We never received anything. Last year at our meeting, residents began asking for budgets, what was the money being spent on, etc. We even asked if President has filed the tax returns and he said yes. We asked for a copy; we asked to see contracts; everyone only wanted to know what was the money spent on. He said, he did not have to provide that data.

By the end of 2011, around November, we held back our assessments, asked for another meeting and he has ignored us. He does not care about not getting assessments. We should have money in the bank because we have no vendors whatsoever, and when the grass was cut on common ground, one of the homeowners was cutting it.

The playground is shabby now. No new mulch in 2 years. Trees have fallen in the playground. There is a wasp home in the gazebo. We're just looking for some advice as to calling someone to get access to bank statements and find out what happened to the reserves.

FredS7 (Arizona)
Posts: 927

Posted:

It's past time to read the CC&Rs and initiate the process of recalling the president and electing a new board.

And witholding payments wasn't the brightest idea. I sure hope your documents don't prevent a member with unpaid payments from voting.

GlenL (Ohio)
Posts: 5,491

Posted:

I see posts like this and I cringe, everyone was happy to let one person do all of the heavy lifting until surprise, surprise he is either overwhelmed and lets things slide or they suspect him of stealing. Jessie here's a thought to keep you up at night, if because of homeowners not paying their assessments or any other reason, the president has canceled or let lapse the HOA insurance policy and someone is injured on the HOA's common areas or maybe drowns in the HOA's retention basin; each and every homeowner can be sued for it.

The best thing to happen is for three of you to step up and offer to take over from him or at least help him by filling out the Board. That is if you can find people willing to give up an hour or two of TV every month to protect their investment. I mean you all have been happy to let one person do it in the past. And when you go to him, I wouldn’t accuse him of theft or incompetence but praise him on the job he has done in the past and offer to help. Yes, I know he may be either a thief or incompetent but if you lead off that way, all he will get is defensive. Hopefully he will be so relieved that he will gladly hand it over and be glad to be done with it.

Barring that, you are going to have to call a special meeting and recall him and elect a Board. You will need to read and follow your CC&R's, the Maryland HOA Act and possibly the Maryland Non-profit Corporation Act. Hopefully he will turn over the records or you may have to sue him for them and hope for the best. The judge can order him to turn over what he has but you'll never know for sure if he does.

You would need to check with the bank on what they will require but at a minimum it will take a letter on the HOA's letterhead, stating a duly called election was held on such and such a date and the following members were elected as directors of the corporation, signed by the secretary and notarized. I would suspect it would be better if you would hire a retired judge or a referee to hold the meeting and certify the election results or offer to allow a member of the bank to attend the meeting.

This will probably not be easy or cheap to accomplish and if he tries to hold onto his “power”, very time consuming, remember he can use the HOA’s funds to hire an attorney to fight this every step of the way.

I wish you good luck with this and hope that ALL of your fellow homeowners learn a very valuable lesson from it.

Studies show that 5 out of 4 people have problems with fractions

JeanneK3 (Maryland)
Posts: 562

Posted:

Jessie S:

1. You must pay your assessments. You are giving your President the ammunition to foreclose on anyone he wishes to.

2. Failure to provide documents is in violation of the Maryland Homeowners Association Act. Send your President the appropriate section of the act and tell him to please comply. He just might not know what the law is.

If he doesn't comply, you and as many of your neighbors as possible should file individual complaints with the Office of Consumer Protection, Maryland Office of the Attorney General. Information and a complaint form are on line.

You might look at www.marylandhomeownersassociation.info as to how to proceed.

Jeanne

ChristinaR (Maryland)
Posts: 99

Posted:

What County in MD is your HOA? There are some Counties that provided mediation for HOAs and BOD...it saves the Owners from having to fork over attorney fees.

The website above is a GREAT resource, however, to get the real meat and potatoes, you have to be a paying member.

The Attorney General is where you will need to go IF, you are not in a County with an HOA Mediation Division.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Jessie,

Is your Association under builder control or membership control?

It's possible that the individual serving as President has had to devote more time to personal issues than volunteer issues. Perhaps they just need some extra help. Have you offered to assist by serving on the board?

JessieS (Maryland)
Posts: 4

Posted:

I'm in PG County, Maryland. People have volunteered to help, including myself. The President says, since the community is so small, he really doesn't need help.

He is an accountant. We requested a budget; He said we don't need one, since we do not have many expenses. So we simply said, well just show us the books and print out the bank statements to see where our money is going. He says he is not required to do so.

So we asked if the taxes were filed. He said yes and he is not required to show us the tax forms.

We asked with whom is the insurance with? What company. He becomes irate and says we can make an appt to see the books. We ask for an appt and he says, because he works, he is limited with his time.

Every homeowner has manicured lawns, no noise, lovely neighbors. And then, you look at our small kids park and gazebo. Not to mention the entrance to the community has overgrown weeds. With all the rain lately, grass and weeds have grown very tall.

We believe all the funds are gone. The president is the only one with his name on the account.

I, along with some of my neighbors asked for a balance of assessments. Nothing has been received. If you owe and you are asking for notification, I do not see why we are not getting a response.

This guy has clearly spent the funds, but I do not know who to call in order to get an audit.

JM10 (California)
Posts: 503

Posted:

Hi, Jessie...

Yesterday morning my husband and I went to small claims court. This is the only way we were able to force the board to produce documents.

So this is for California, but here's how we did it.

1. Each person who wants the budget should make a written request. Check your CC&R or state laws. You may be allowed to email or you may be required to send it first class mail/personal delivery.
2. Keep a copy.
3. Include in the letter, what you are requesting by name. If you can find the state code for the requirements for production of documents (10 days, 30 days), quote the code and the time given for production. Also write down (I would boldface) the date on the calendar and set a time (like EOD, say 5p.m.) for production of the documents.
4. In your CC&R there may be a requirement for mediation or if you have enough people, you might be able to hold a special meeting and recall your president.
5. In the case mediation isn't required for small claims and small claims has jurisdiction over production of documents, that's what I would do. If you can get a group to support you, that's even better.

In California, HOAs are under the Davis Stirling Act as well as corporation codes. You need to find what laws cover your HOA in MD. In California, a HOA is considered a non-profit business.

In California, certain documents must be produced in 10-days (such as bank statements) others are 30-days (meeting minutes). If you are covered and paying for the insurance, you have an absolute right to view it. This should be in the state codes as well as your CC&R.

You absolutely have the right to view your insurance and if he doesn't have time to show you the books, he can give you a copy or you can ask that the documents be put on a private online blog. As the president, you can say, you understand this is a lot of work, but that should only indicate he needs a secretary. It should be the case that checks need two signatures. Do not take no for an answer. Just say, "we have a right to see these." Whatever his excuse.

When someone hides things that should be common knowledge, it would be very suspicious. In our case, we know that the board was not following several state codes as well as trying to defraud us.

Our story is that we went to small claims court in October 2011 in order to get the insurance. We got the full policy in March. That's six months. Yesterday, we were able to get the judge to require that the newsletters and contractor contact info. We also have a small community (10 units).

While our board was targeting us only, it seems you have one person abusing power. You need to move ASAP IMHO.

ChristinaR (Maryland)
Posts: 99

Posted:

Here is the PG County Info

If you live in Prince George's County, you can contact the Office on Common Ownership Communities. This office offers training sessions, assists during transition periods, offers mediation services and provides needed information.

Call 301-952-4729 or go to the Office of Community Relations web site and choose Common Ownership Communities. For a direct link, http://www.co.pg.md.us/Government/AgencyIndex/OCR/c_o_communities_mission.asp. The e-mail address is [email protected].

You also need to request a copy of your CCRs if you do not already have them. Your documents will most likely have sections on how many Board Members your association MUST have. You can also look into the MD HOA Law. This law REQUIRES that you are given the speicific documentation you have requested within a certain number of days.

Condo/HOA homeowners may have other rights provided for in their association documents and bylaws. For the complete text of these rights, consult the Maryland Condominium Act or the Maryland Homeowners Association Act. To access these Acts, go to www.mlis.state.md.us, click on Maryland Statutes, then Maryland Code Online; choose “Maryland Code” then “Real Property” then either:
Title 11, “Maryland Condominium Act” or
Title 11B “Maryland Homeowners Association Act”

A lawsuit at this point is probably NOT an option unless all the owners are willing to front the bill. And if all your funds really are gone, there will be none to pay the attorney fees.

The best you can hope for is to get a REAL board of directors in place, start over and vow to never allow something like this to happen again.

ChristinaR (Maryland)
Posts: 99

Posted:

I should add that when you file a complaint, PG County will investigate, and if they find that he misapporpriated funds...to say...his pocket, he will be charged. And then you could sue to try and recover the missing money and pay the attorney with the proceeds.

JessieS (Maryland)
Posts: 4

Posted:

Thank you, all for your responses and advice. I know that everyone who volunteers their time as Board members, committee members, etc, do not receive many pat-on-the-back, and for many of you, you deserve more.

When you spend your time searching for that perfect community, with like-minded people, and you get shafted, it just turns you sour and you wonder whom to trust. My husband and I just knew we would be so happy with wooded lots, neighbors walking around with kids in tow, and seeing everyone gardening.

Then, you get one person, with other avenues in mind. We have weeds at the entrance of our community, that is up to my armpit. I am 5,5. I am planning on asking my landscaper to trim, cut and groom the entrance this weekend, out of my own pocket because I will be having a gathering and it looks embarrassing.

Again, thanks to all of you.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Jessie

Tough love here.

Do not treat the symptoms. Treat the disease.

Read your docs and find out how to replace the President and take control.

If many are not happy, replacing the existing BOD is not that difficult.

If you are the one lone voice in the wilderness, it might be near impossible.

Decide which you are and take the appropiate action.

JM10 (California)
Posts: 503

Posted:

See what is under the jurisdiction of small claims court. It cost us about $100 to get documents produced. That's in California.

AnnetteM (Maryland)
Posts: 9

Posted:

Hi ChristinaR,

Do you by chance have the info for Charles County?

Thank you in advance if you can help
Annette

MelissaP1 (Alabama)
Posts: 13,836

Posted:

This is an old post. It's best to start a new one.

Former HOA President

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