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EmilyB2 (Arizona)
Posts: 40
Posted:
Do we need to follow all the doctrines in the DCCR, Articles of Incorporation, and By-Laws? I am assuming yes. But please, make me feel better and answer.

When the documents say "shall be" does that mean we must follow it?

If we don't follow these doctrines, what could be the consequences?

If we have not been following something, should we start now? Again I am assuming yes, on this.

Just because the doctrines don't say "you must", "you need to", or anything else along those lines and just says something like matter-of-fact, do we still have to follow it?

I am asking because there is a lot we have not been following, I just finally got to reading all the documents myself to find out.
LawrenceC1 (Georgia)
Posts: 480
Posted:

Quote:
Posted By EmilyB2 on 07/27/2012 9:23 AM

Emily,

These are not "stupid" questions at all. You should be commended for reading your governing documents and asking about what you read.

Quote:
Do we need to follow all the doctrines in the DCCR, Articles of Incorporation, and By-Laws? I am assuming yes. But please, make me feel better and answer.

The answer here is not as cut and dried as it might seem. The Board of Directors can make decisions in the best interest of the community that go against something in the governing documents. For instance, if it would cost thousands of dollars to enforce some provision, and there is little chance of ever getting back that money, the board may choose not to pursue enforcement. Remember, this may mean that this particular provision may never be enforced in the future.

Quote:
If we don't follow these doctrines, what could be the consequences?

Any homeowner can sue to force the board to take or not take some action. However, this is unlikely to happen since it would cost the homeowner a lot both in time and money. The other reason this is unlikely is that any attorney who picks up the case will understand the "business judgment rule" that protects the board for having their decisions challenged, so long as they are reasonable, informed, and in the best interest of the community.

Quote:
If we have not been following something, should we start now? Again I am assuming yes, on this.

Maybe not. If it is something that furthers the quality of life or increases property values, it is a good idea to start enforcing it. If not, maybe you amend your documents to remove this provision entirely.
EmilyB2 (Arizona)
Posts: 40
Posted:
Thank you for answering.

The Board are very strict in lot enforcements. However, I don't think they ever read any other part of the documents because as I am telling them all the things we were supposed to do according to the documents in organizing the association, they have never heard of these procedures and were not advised by our previous PM.

I don't want any member coming to me and calling me a hypocrite for enforcing lot regulations but ignoring them when it comes to running the board.

Following these rules now will not cost us anything, but I feel will benefit the community because decisions will be made in a more organized fashion to keep any board from making bad choices or taking advantage of their position.

One rule will actually benefit our finances, which at the moment I think may be not only breaking our document rules but also state law. It will not cost us anything to fix this and will only benefit the community financially.
LawrenceC1 (Georgia)
Posts: 480
Posted:
Emily,

Eventually, it all comes down to what the homeowners want. If there is a general consensus that certain aspects of the documents ought not be enforced, then you will face a difficult and lonely battle to do otherwise.

Check with your neighbors. Build a consensus. Then approach the board in the spirit of representing the will of the community to make changes in policy.

Whatever you do, you need to be open and transparent in your decisions. If you are deciding not to enforce some provision, or to start enforcing something that has been let slide in the past, you need to let every homeowner know what is happening.
EmilyB2 (Arizona)
Posts: 40
Posted:
Thank you Lawrence, that is very good advice and I will do that.
JimD15 (Florida)
Posts: 21
Posted:
Emily,

Lawrence is correct and especially in Florida you will see that some of the C&R's that were never enforced for years may be unenforceable now. When home sales in FL rise again the first people in your community who will push for C&R enforcement will be sellers.
CarolR11 (Colorado)
Posts: 2,563
Posted:
Emily, can you give examples of "other parts" of your governing documents that aren't being followed?
EmilyB2 (Arizona)
Posts: 40
Posted:
That is funny you say "sellers". We wanted to put some money into our home to make great improvements so that we can enjoy our property more, but with the board not following some of the rules and mismanagement (as I see it, they don't) of funds, I feel the community will not have the funds to make proper repairs to the common area assets and the home values will go down.

We already have foreclosed homes in disarray, but the community walls and playground are starting to look just as bad. And, no one seems to care to volunteer. All this just made me not want to put money into a home in a community that I see going downhill. I think because of this, we will decide to move. And we would stay if we saw the HOA doing a better job with the finances and following the rules to keep in line.

In has been frustrating being on the board because I am the only woman, and the only family oriented person and the other's just don't know what it is like to bring their child to the type of park we have. No one goes there because it is terrible, but when I brought up possible improvements they had rejections that were based on assumptions on what people may do, my example was adding a fence around the park. I feel they are not connected emotionally with the families in the community and they keep shutting down my ideas, I hardly get any speaking time.

The community members have also approached the board asking for a better website and more festivals like we used to do before this current board took over. The board just shut them down and told them if they want it go do it themselves. And shut me down when I offered to create a website for free, saying they wouldn't know how to use it - it is so easy!

We used to have more people coming to monthly meetings but the board blows off everything the members say and people stopped coming and caring.

Sorry for venting, it is just frustrating when you care so much and see others care as well only to give up because it is like there is nothing they can do.

You may say then they should volunteer for the board, well some did, but I don't blame them for quitting because I feel the same way because we have the longest standing board members wanting to control everything and shut everyone else down. Not that they are bad people or have bad ideas of their own, but they don't represent the family and community oriented owners that live here.

FYI, we had some families get together and collect money for festivals and did it on their own. Some people still care, but the board is not supporting them or encouraging them.
EmilyB2 (Arizona)
Posts: 40
Posted:
Carol,

There really are a lot of parts.

A lot have to do with nominations: no nominating committees, no election committees, no proper proxies with nomination names on them (if we had a nominating committee this would be taken care of), people on the board longer than term limit even though we have had enough volunteers for this to not have to happen, throwing people off the board with no proper voting procedure.

Financial: no capital budget outlined just a line item, money was taken out of our reserves and placed in the operating budget, we didn't know the reserves were there to repair the common area assets which was stated in the documents, the deferred maintenance line item (aka reserve budget or capital budget) was taken out of the budget last year.

Lot enforcements: We were not using the allowed fines procedures, we were not using the procedure allowed for us to go on properties and maintain then send an individual assessment to recoup the expense

Doing things that are not our responsibility and then using the assessments to pay for it: hired an county officer to give parking tickets for parking in the wrong direction which is not our responsibility. However, they justify the cost because he is doing the job of drive throughs as well and notifying us of hoa violations. FYI, we don't have any crime in our neighborhood that I have seen or that my neighbors have seen and actually have 6 police officers living in our community. I have a family and would love to have a sheriff if I actually saw a reason to. I would prefer to use this money for an audit since in previous years we have had money unaccounted for.

There are many more, but I see our HOA going downhill because these rules have not been followed.

Probably the biggest one is a board member who has been on the board longer than his term throwing people out because they miss one or two monthly meetings and telling homeowners that if they want a community festival to do it themselves. This attitude is just bringing down the amount of people in the community that care.

After I announced wanting to run for president this year and saying that I wanted to build community in our neighborhood, now he is running for president and saying that he wants to also build more community. I am going to let him have it.
CarolR11 (Colorado)
Posts: 2,563
Posted:
Based on your recent replies here, follow Lawrence's advice. The board is ignoring you, but you need to rally friends and neighbors to support you at meetings. They need to know that terms of directors do actually end at some point. They & your board needs to know that, unless your docs state otherwise, that that director has no authority to throw directors off the board.

You cannot fight this ol' boys club by yourself!

How many are on the board? What size is your community? Do I understand you right? Homeowners elect the board president? In most HOA's, the Board elects the Board's officers.

You mention your previous P.M. Do you have a new one? Can s/he be of any help to you? Is s/he certified?
EmilyB2 (Arizona)
Posts: 40
Posted:
Carol,

How many are on the board? What size is your community? Do I understand you right? Homeowners elect the board president? In most HOA's, the Board elects the Board's officers.

We just had an annual meeting and didn't make quorum, but did get three new volunteers for the board. We currently have 4 board members that are staying, so that makes a total of 7 volunteers. 2 have passed their term limits. The size is 442 homes. We need 3, 5, or 7 board members.

Since, we didn't get a quorum of 1/10 for elections, and never really do, we are going to roll over the board and appoint volunteers to the vacancies which is allowed by the documents.

To elect officers, the board "shall" put together an election committee and the board members will vote on the Officers (president, treasurer, etc.).

You mention your previous P.M. Do you have a new one? Can s/he be of any help to you? Is s/he certified?

We do have a new PM, the last one was fired because another community was complaining about him. The new one is female and has actually helped me be heard more. Yes, she is certified. She was the one who also brought up the term limits at this last meeting/election which really didn't happen because we didn't have a quorum so we had to leave with out taking any actions. The board members blew off the term limit as saying we never get any volunteers anyway, but the fact is we do have enough volunteers and would continue to if that board member wouldn't keep throwing them out.

The way that board member removes them, is by telling them we don't want them on the board anymore because they are absent too much or even just late often, so the members don't show up to meetings any more and then there is a vote to take them off of the list of directors. There is no discussion between the board and the members that he wants to get rid of, he talks to them privately. And he does this with 2 members at a time so that it makes it hard for them to defend themselves in a vote or gather support to stay on.
LarryB13 (Arizona)
Posts: 4,099
Posted:
Quote:
Posted By EmilyB2 on 07/27/2012 9:23 AM
Do we need to follow all the doctrines in the DCCR, Articles of Incorporation, and By-Laws? I am assuming yes. But please, make me feel better and answer.

When the documents say "shall be" does that mean we must follow it?

If we don't follow these doctrines, what could be the consequences?

If we have not been following something, should we start now? Again I am assuming yes, on this.

Just because the doctrines don't say "you must", "you need to", or anything else along those lines and just says something like matter-of-fact, do we still have to follow it?

I am asking because there is a lot we have not been following, I just finally got to reading all the documents myself to find out.

The Business Judgment Rule gives a corporate board a great deal of latitude in making decisions.

In those situations where the either the law or your community documents state you "shall" or "must" then you have no choice. I believe the law refers to these as "ministerial" duties or acts.

Virtually all other decisions are within the discretion of the board. The board may pick and choose which battles to fight and unless there is a clear abuse of discretion, the members cannot force the board to take a particular discretionary action.

Example:

The restrictions forbid plastic pink flamingos in the front yard. An owner puts a flock of flamingos in his yard.

If the CC&R's state that the association must enforce the restrictions or that the association has a duty to enforce them, then the board must do everything legal to remove the offensive birds.

On the other hand, if there is no duty imposed on the board then the board can lawfully shrug its collective shoulders and find other things to worry about.
EmilyB2 (Arizona)
Posts: 40
Posted:
Larry,

Thank you for clearing up and helping me understand the language better. That was awesome.
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Emily

Does the chat name SimoneT ring a bell?

GlenL (Ohio)
Posts: 5,491
Posted:
Emily in addition to your CC&R's the Board must also comply with Florida HOA statutes. Depending on the age of your community they may supersede sections of your CC&R's. From your posting I'm assuming you are in an HOA with stand alone
homes so you would follow FL720 if you are a condo then FL718 would apply.

http://www.flsenate.gov/Laws/Statutes/2012/Chapter720

http://www.flsenate.gov/Laws/Statutes/2012/Chapter718


Studies show that 5 out of 4 people have problems with fractions
TimB4 (Tennessee)
Posts: 21,062
Posted:
In addition to your governing documents and State HOA/Condo laws, if your Association is incorporated, they must also follow FL corporate laws.
EmilyB2 (Arizona)
Posts: 40
Posted:
John, No SimoneT, doesn't. Why do you ask?

Glen, thank you for pointing out there are two different statutes. I was quoting the 720 to the company manager and she said that these requirements are mostly for condos, however, like you state these are from the 720 for stand alone homes. Then she tells me she has 30 years of experience and knows the laws?!? She is trying to get us to get rid of the reserves account and I am not sure her reason behind that, because it doesn't benefit the community.

Tim, our non-profit corporate laws are Florida Statutes 617. Those for those that come here later and want to know where to find it.
EmilyB2 (Arizona)
Posts: 40
Posted:
Glen, can you explain this to me, I don't fully understand: "Depending on the age of your community they may supersede sections of your CC&R's."

Thanks.
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Emily

The reason I ask about SimoneT is that it seems to me that there are similarities. Festivals was the main buzz word that caught my attention.

She lived in a mobile home park with many "Canadian, Frenchy owners" (her own words) that were not there all year but when they came, they took over including their "festivals". When she broached the subject with her BOD, she was told to feel free to start her own "fesitvals", as you were told.

Of course, I could be wrong and it would not be the first time.

CarolR11 (Colorado)
Posts: 2,563
Posted:
I think that what Glen is saying is that there may be state laws--applying to your type of HOA--that take precedence over your documents. One reason might be that the state laws are newer than yours.

Don't your documents, usually it would be Bylaws, specify under what circumstances directors can be "fired" from the Board? Typical reasons are the director isn't in "good standing," which means a certain period of time behind in dues, but also often in violation of rules for more that a certain period of time. Other reasons may include missing, say, 3 meetings a year. But these reasons must be in your governing documents! I'm sure your PM will agree.

I hope that your PM's contract says that she must abide by your governing docs AND state laws. In other words, it should say that she will NOT follow board directives that oppose those.

EmilyB2 (Arizona)
Posts: 40
Posted:
John, that is not me. No seasonal owners here.

Carol, thank you for explaining that sentence.

There are no explanations as to why we can vote out a director. It says, with or without cause. I guess if I keep digging into our rule breaking I can be kicked off next!

The last PM we had was an idiot according to our new PM. He made up rules that didn't exist and the board trusted everything he said and if any one of us tried to question him, he would jump down our throats and tell us that he is there to tell us what the documents and law mean because we can't understand them and there are too many rules for us to know. Knowledge is power and for some reason he didn't want us to have any.

The new PM wants us to follow the rules, after I started mentioning what we were not following, but to her defense she just got here. But she is trying to say that we don't have a reserve account per the statutes and want us to get rid of it because of that.

That other board member wants to be able to use the money for whatever the board decides to use it for and he has a whole list of community improvement projects he wants to do. He is the only one who has discussed ideas to spend money outside our budgeted line-items. I am afraid he may get out of hand because we have all this money in reserves, however it is needed for the repairs, which we really need. I feel that if we want to do community improvements it should wait till the next fiscal year when we have budgeted it in and have assessments to pay for it outside our reserve funds.

This reserve account thing, I believe is a serious issue because the money is not being properly managed. I posted some questions about this in another post but no one has answered them. http://www.hoatalk.com/Forum/tabid/55/forumid/1/postid/138172/view/topic/Default.aspx

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