Indiana HOA Issues & News Coverage

Started by TalinaR • 33 replies • 3340 views

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TalinaR (Indiana)
Posts: 10

Posted:

Our HOA president/ treasurer made the newspaper today: http://www.courierpress.com/news/2013/jan/12/whos-king-of-your-castle-homeowners-associations/
Anyone have resources or ideas about how best to go about obtaining the banking statements for the association and/ or removing the president/ treasurer?

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Read your documentation and become a board member. The answer your looking for. it is all in there. Board members are the ones elected to represent the genral membership on daily basis. That means being a board member/officer you may then be able to know the bank information.

Why do you need to ask these questions if you ever read your rules originally? The answers to running and being a member in a HOa is all there. It's not in the court room or on a blog. The power and information is already in your hands if you just read.

Former HOA President

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

He doesn't sound like the right person for the job.

That said... most of your HOA is not paying dues. That is a huge problem. An HOA is like the city real estate tax, if you dont pay your taxes, they will foreclose. Same as an HOA. Its not an optional payment.

LarryB13 (Arizona)
Posts: 4,099

Posted:

I hope everyone listened to that tape recorded telephone call between the reporter and the HOA president. I am sure that after that tongue lashing the newspaper will fold its tents and flee into the night out of fear the HOA prez will file all those lawsuits. Funny.

LarryB13 (Arizona)
Posts: 4,099

Posted:

Quote:

Posted By TalinaR on 01/13/2013 5:54 PM
Our HOA president/ treasurer made the newspaper today: http://www.courierpress.com/news/2013/jan/12/whos-king-of-your-castle-homeowners-associations/
Anyone have resources or ideas about how best to go about obtaining the banking statements for the association and/ or removing the president/ treasurer?

Assuming that you are not still under control of the developer, the surefire method of removing the president is to vote out the board that appointed him.

Typically, the board is elected by the members and the officers (president, treasurer. etc.) are appointed by the board. In the HOA world (as opposed to the real corporate world), the board usually appoint themselves to fill the officers' positions.

You can wait for the next election of board members or you may be able to hold a recall election. These are usually subjects found in both your community documents and state laws for HOA's and non-profit corporations.

After listening to the tape of your president ranting and raving at the newspaper reporter, you may just want to arrange an "accident" to sideline him.

Many states have laws governing HOA's and they usually require some amount of financial disclosure. I doubt that this guy will give you squat without a court order.

JeanneK3 (Maryland)
Posts: 562

Posted:

Check your state laws as to what must be made available to homeowners by law. In Maryland if there is a written request for financial statements they must be released within 15 days.

If you don't get them, organize your neighbors and split up the cost of an attorney and sue the association for the release of this information.

Also, as has been said before, your governing documents tell you how to remove your board and elect another one.
Jeanne

KellyM3 (North Carolina)
Posts: 2,239

Posted:

This HOA guy fulfills all the stereotypes.....the residents aren't being harassed by a newspaper reporter telling a story. There is no slander and no libel. The audio recording is classic and makes us all look terrible.

SheliaH (Indiana)
Posts: 6,964

Posted:

Quote:

Posted By JeanneK3 on 01/14/2013 4:53 AM
Check your state laws as to what must be made available to homeowners by law. In Maryland if there is a written request for financial statements they must be released within 15 days.

If you don't get them, organize your neighbors and split up the cost of an attorney and sue the association for the release of this information.

Also, as has been said before, your governing documents tell you how to remove your board and elect another one.
Jeanne

Ditto.

In many HOAs (like mine), the membership (homeowners) elect the board, who then elect the officers among themselves. Your documents should specify how this is done and if that's the case, I'd be talking to the other board members about removing this guy (which they might do, now that all of Evansville is aware of his behavior). After you do that, make sure everyone has a copy of the Association budget (which they should already have), so you can begin keeping track of where the money's going.

And why is the president also the treasurer? Those offices should be seperate.

As others have said, 94 liens for non-payment of dues is a serious problem - the article didn't say how much they are, but if the Association is responsible for a number of services (e.g. street maintenance), you need to get a handle on this problem (quickly!)
If the non-payers are doing so because they don't like the president, tell them that issue is seperate from their responsibility to pay assessments (even if the president is behaving like an asshole, but there are ways to deal with that).

Good luck!

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

TalinaR (Indiana)
Posts: 10

Posted:

I've read and reread our protective covenants. That's the first thing I did as we are now HOA newbies running the block's lake maintenance association now and I know that is 1st thing to do.
We are governed by the main HOA in addition to our own lake maintenance association but it's so convoluted. Our protective covenants mention an "Act" that supposedly outlines various things further but I have no idea where to reference this "Act".

Indiana law states:
"IC 32-25.5-3-6 Grievance resolution procedures
Sec. 6. The governing documents must include grievance resolution procedures that apply to all members of the homeowners association and the board."

So I know the info has to be out there somewhere, it's just not in my copy of the covenants. I am betting there is a general set of covenants that goes along with the set we have but I don't have it. I will be requesting financial records next and a copy of the other by-laws.

I should also add that the board consists of 3 people (all close friends of the president), that is it! My husband was on the board for a few months but as soon as he spoke up about the attitude and disrespectful tone of the board to a resident he was removed. No, we are no longer under developer control and I've never in the 4 years since living her heard one work about elections for positions

I've seen in other situations that a petition of something like 2/3 can force a reelection or a removal and was just curious what the experiences here have been. The other avenue we'll go is the legal route. I'm sure now that the story has been published as well as the audio file, we'll have people willing to listen.

TalinaR (Indiana)
Posts: 10

Posted:

Oh, almost forgot to mention the HOA's responsibilities...
All they do is mow and maintain common lakes! Over $30,000 in mowing and lake maintenance costs!? We have a few lighted subdivision entry areas, and some no trespassing signs too but we pay $130 a year and our lake isn't even one of the common lakes that is maintained. Also, these aren't lakes... they are drainage ponds for the subdivision.
The total collected per the very generic budget says over $40,000 for all lots. Then there is the insurance, legal reserves, admin costs and such.

TimB4 (Tennessee)
Posts: 21,062

Posted:

Quote:

Posted By TalinaR on 01/14/2013 7:52 AM
Our protective covenants mention an "Act" that supposedly outlines various things further but I have no idea where to reference this "Act".

Typically this is how governing documents refer to applicable State statutes. Somewhere in the CC&Rs and/or the Articles of Incorporation and/or Bylaws and/or your master association documents, should be wording similar xyz, of the Indiana Homeowners Act (the Act). Once this is done, when that statute is referred to again it would simply say "the Act".

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

Quote:

Over $30,000 in mowing and lake maintenance costs!? We have a few lighted subdivision entry areas, and some no trespassing signs too but we pay $130 a year and our lake isn't even one of the common lakes that is maintained.

How do you respond to your real estate taxes, state taxes, federal taxes. Do you see those as optional too?

TalinaR (Indiana)
Posts: 10

Posted:

On our lake we pay real estate taxes, state taxes, federal taxes on our "lake" since we own it as opposed to the HOA owning it. The community lakes (5 of them) are owned/ paid by the HOA and are listed as $730 and the insurance is $2925 for the yearly budget.

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

The point is, if you belong to an HOA, you need to pay. You cant opt out. Just like you cannot opt out of your city taxes, opt out of being in the state of Indiana or opt of of being in the USA, unless you leave. The HOA is part of your deed thus you need to pay. Think of it as another tax. Its not optional.

If you disagree with how its being run, you can participate and gather support to run things the way you want. Same goes for any city, state, federal government.

TalinaR (Indiana)
Posts: 10

Posted:

I've no interest in NOT paying my dues, that isn't the point of this discussion (and my dues are paid). Not sure how you interpreted that it was the point.
My concern and intention is to address the shady and unprofessional conduct of the board members and to move towards getting new leadership in there as well as to further research the financial dealings.

TimB4 (Tennessee)
Posts: 21,062

Posted:

Quote:

Posted By TalinaR on 01/13/2013 5:54 PM

Anyone have resources or ideas about how best to go about obtaining the banking statements for the association and/ or removing the president/ treasurer?

Typically Associations are incorporated as nonprofits. Expecting this to be the case with your Association, the Indiana Nonprofit Corporation Act of 1991 would apply.

Per IC 23-17-27-2, a member is entitled to inspect and copy, at a reasonable time and location specified by the corporation, the records of the corporation described in section 1(e) of this chapter if the member gives the corporation written notice or a written demand at least five (5) business days before the date on which the member desires to inspect and copy. Note: You may need to pay for the copies.

Per IC 23-17-12-8, A director elected by members may be removed by the members only at a meeting called for the purpose of removing the director. The meeting notice must state that the purpose of the meeting is the removal of the director. Note: this statute does defer to the governing documents (in case your documents cite a different procedure).

Typically, the procedure to petition the board for a meeting for the purpose of recalling a Director would be within your governing documents.

NOTE: You need to find willing volunteers to serve after the recall. Sometimes it's easier to wait until the next election and then vote those bums out of office.

Hope this helps,

Tim

TalinaR (Indiana)
Posts: 10

Posted:

Tim, this was exactly what I was after thanks!

The "act" thing kind of threw me... I think they are a non profit. Need to figure out how to verify that but at least now I know to start rally the troops

Thanks again!

JM10 (California)
Posts: 503

Posted:

Quote:

To my mind, the president should never also be the treasurer or secretary.

The president doesn't know the meaning of slander (a newspaper could only commit libel). He also doesn't know the legal definition of solicitation or harass. He would have been better off writing a letter, especially a letter to the editor.

I'm from California and we got bank statements by going to small claims court as allowed by the Davis-Stirling Act. The board, however, has refused to file the mandatory state documents that were due in July 2011.

So sometimes it works. Sometimes it doesn't.

TimB4 (Tennessee)
Posts: 21,062

Posted:

Quote:

Posted By TalinaR on 01/14/2013 11:01 AM
I think they are a non profit. Need to figure out how to verify that but at least now I know to start rally the troops

Search the State Corporation Web site

TimB4 (Tennessee)
Posts: 21,062

Posted:

Did a quick search on that site. There appear to be three possibilities.

LarryB13 (Arizona)
Posts: 4,099

Posted:

Quote:

Posted By TimB4 on 01/14/2013 11:20 AM
Did a quick search on that site. There appear to be three possibilities.

I searched a bit more.

Stonecreek Property Owners Association, Inc. is for an HOA in another county, even though the incorporator is from Evansville. It was formed in November, 2012.

Stonecreek Homeowners Association, Inc. is the one that Mr. Hess is president of.

The third one was Stonecreek Maitenance Assn Lake A Inc. and was incorporated just last week. The incorporator's name is Talina R. Coincidence?

TalinaR (Indiana)
Posts: 10

Posted:

LOL. We did just form our individual lake association last week for our private lake

but we also are part of "Stonecreek Homeowners Association, Inc."

So the "Stonecreek Homeowners Association, Inc." is non profit then? Where does it show that? I know when I formed "Stonecreek Maitenance Assn Lake A Inc." we didn't get non profit status via the IRS because we don't have that kind of money right now.

TalinaR (Indiana)
Posts: 10

Posted:

Ah ha! I was searching for a business name on another page. The link posted above is MUCH more helpful!

LarryB13 (Arizona)
Posts: 4,099

Posted:

Quote:

Posted By TalinaR on 01/14/2013 2:26 PM

So the "Stonecreek Homeowners Association, Inc." is non profit then? Where does it show that? I know when I formed "Stonecreek Maitenance Assn Lake A Inc." we didn't get non profit status via the IRS because we don't have that kind of money right now.

The webpage linked to above shows Stonecreek Homeowners Association, Inc. as a "Non-Profit Domestic Corporation."

When you form a corporation, it is either a non-profit or business corporation. Terminology varies from place to place. The IRS has no say in what kind of corporation you choose to form. The Lake Maintenance corporation you formed was also listed as a Non-Profit Domestic Corporation.

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

Quote:

So the "Stonecreek Homeowners Association, Inc." is non profit then?

Non profit, not for profit, doesn't really matter.

TimB4 (Tennessee)
Posts: 21,062

Posted:

WOW. One person listed as President, Treasurer and registered agent and they aren't under declarant control.

TalinaR (Indiana)
Posts: 10

Posted:

Quote:

Posted By TimB4 on 01/14/2013 5:16 PM
WOW. One person listed as President, Treasurer and registered agent and they aren't under declarant control.

Is there some law against that? I wish there was.

TimB4 (Tennessee)
Posts: 21,062

Posted:

Unless your governing documents specify that certain offices can't be held by the same person, it's legal. I don't think it's smart but it is legal.

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

Quote:

Is there some law against that? I wish there was.

Well, its likely not "legal" but not in the criminal sense. Most of the stuff that is "illegal" in an HOA is only illegal when using the CCR/Bylaws as a legal reference. Illegal = not allowed but people do it anyway.

SheliaH (Indiana)
Posts: 6,964

Posted:

I just remembered something - I believe the state legislature passed a HOA bill in 2009 that had a number of requirements for HOAs, but the kicker is the law only applies to HOAs established after July 1, 2009 (that's when Indiana's fiscal year begins).

If your HOA is older than that, the homeowners have to vote on whether they wish their association to be governed under those requirements. otherwise whatever your governing documents say about the fees, how many people can be president and so on will be effective.

I don't remember the specific citation, but if you got to the Access Indiana website and then the Indiana Code area, you should be able to find it. Or perhaps Google Indiana HOA law and see what comes up.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

JohnC46 (South Carolina)
Posts: 14,265

Posted:

My husband was on the board for a few months but as soon as he spoke up about the attitude and disrespectful tone of the board to a resident he was removed.

How was he removed?

Thanks

TalinaR (Indiana)
Posts: 10

Posted:

He and the other board member he was defending were simply removed by Hess and his two board member buddies.

Also, our covenants dont mention anything to the tune of the governing rules of the HOA which we wanted to reference for info about board member removals and president elections as well as any rules regarding positions helped by a single member. I think they are in a general covenants document that we have requested from Hess. Our covenants only apply to the 9 lots on our street surrounding our "lake". Too bad he isn't responding to my request.

LarryB13 (Arizona)
Posts: 4,099

Posted:

Quote:

Posted By TalinaR on 01/16/2013 3:54 PM
He and the other board member he was defending were simply removed by Hess and his two board member buddies.

Unless corporate laws are really unusual in Indiana, board members have no authority to remove other directors. If your husband was elected to the board then the President has no authority to disenfranchise those owners who voted for your husband. Your President gets away with this nonsense because no one has bothered to learn the rules governing HOA's and because no one stands up to him.

Quote:

Posted By TalinaR on 01/16/2013 3:54 PM

Also, our covenants dont mention anything to the tune of the governing rules of the HOA which we wanted to reference for info about board member removals and president elections as well as any rules regarding positions helped by a single member. I think they are in a general covenants document that we have requested from Hess. Our covenants only apply to the 9 lots on our street surrounding our "lake". Too bad he isn't responding to my request.

Your covenants (both the master association and the lake maintenance association) should have been recorded in the same office where deeds are recorded in your county. Go to that office and get a copy there. Some corporate records are available online on the state corporation website. Bylaws may take some work to obtain because many states do not require that they be recorded or filed with a public official.

MikeR15 (Massachusetts)
Posts: 389

Posted:

HOAs are nothing but a scam. You are being ripped off like 60 million other Americans.

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