Board Gone Bad....Please help

Good Morning,
I live in a small subdivision, with approx. 350 homes. We have an HOA, with an acting board, and I have volunteered for several projects. But here's our problem I'm looking for help to resolve.
Our current board president is in violation of a few of our HOA by-laws, and has been for quite some time. I am currently in the running for a position on the board, but the president is seemingly trying to stop that from happening by not holding the necessary meeting. To be honest, we have already held 2 meetings, in which we did not reach a quorum. (The second meeting, no board members were present, only our management company) There are currently only 2 acting members of the board - the president, and vice-president. The election was to select a treasurer and secretary. The president has claimed that another meeting will cost upwards of $1200, and has said it will cause a raise in HOA dues. In order to combat this, we (the candidates running) offered to spend the money out of our own pockets, and canvas the neighborhood in order to get the necessary proxies needed for a quorum. Our proposal has been ignored, and the president has publicly displayed his dislike for one of the other candidates. He also stated that the board only requires 2 people. We are currently waiting for a new letter from the board stating whether or not another meeting will be held, and what the board will do going forward.
The president has displayed unacceptable behavior on a public forum (Facebook) by stating that one of the candidate's HOA dues were not paid. (They were in fact paid) Then stated that things like that come up in a public campaign.
This person also owns his own business, which has happened to be contracted to do business for our HOA for the last 3 years, while he has been president of the board. Several homeowners complained, stating it was a conflict of interest, and he assured everyone that he has nothing to do with that particular selection process. Now, with only 2 acting members of the board, the decision will be left to only one person.

I'm not sure what we can do, if anything, and was hoping to get some helpful advice.
Thank you.

Felicia,

If applicable, and it likely is, the IL General Not For Profit Corporation Act of 1986 Section 108.10 specifies:

(a) The board of directors of a corporation shall consist of three or more directors.

Therefore, even if there is a quorum with only two directors, the Board must have a minimum of three directors seated. You might want to bring this issue up to the Board.

Please note that this would not require that the board hold another meeting. It just means that they must appoint someone to fill that vacant seat.

Hi Tim,

Thank you for that. I'm going to read up on that, and make sure I bring it up to the board. I had found the Common Interest Association Act, but I didn't think to look at this one.
Thank you again!

Another question....
Since we only have 2 of the required 3 members on the board, are those 2 able to still make decisions regarding our HOA? Or would they have to wait until a third member is elected to fill the position?

Thanks again!

Thank you. That's what I thought, but wanted to make sure.

We are in a holding pattern until this new newsletter comes out stating what the current board members' decision is regarding another meeting.

I contacted the management company asking for the Article of Incorporation, but I haven't heard anything back yet. Sometimes replies are iffy. From my understanding, our president governs whether or not the management company replies or not. At least, that's how it's worked in the past.
And so we wait.

According to what our president has told us, meetings run $1200, and here's the breakdown he gave:

to have a meeting we have to send out a mailing announcing the meeting and that cost about eight hundred,then we have to send out another mailing with the candidates and proxies another eight hundred of postage,paper and handling and then the management cost he's only contracted for two meetings per year any extra cost extra so actually its more than 1200. We can save money by putting mail in mailboxes but a homeowner called and reported the activity the post office

Also, the place we hold our meetings is free. The amount sounds way too high to me, and others. I don't see the need for 2 separate mailings, and nothing we ever get is double sided, so we end up getting a 6,7, or 8 page letter with the proxies and ballots.

But we're already paying the management company about 13K a year for their services.

And technically, is it their job to try and save us money? Or are they only suppose to do whatever the HOA president tells them, as far as mailings and such go?

Our letters are never double sided. We usually get a 6 to 8 page letter. They come in legal sized envelopes. All of which are cost factors, in my opinion.

But if the management is only doing as directed, then it goes back to our president.

Tim,
Thank you. That does make sense. As a homeowner, I can request to see the management's contract with our HOA, correct? The question has been raised as to if we actually need a management company, being as we're not very big. And seeing as it could save us a heap of money...might be the way to go. But I would need to see what they are actually contracted to do.

Thanks again. I'm going to check on our laws to see what they say. Things are getting quite gnarly, so I'm checking into all the laws. I'm hoping to see last year's bids for one of the businesses we contract, as well as the management company's contract. I think it's all open, but I'll have to read the laws again, to make sure
Thanks so much for all the help on here. You've given me some great tools I didn't even know were out there. If/when I get a place on the board, I'm sure I'll be back for more advice.

I think that Tim's right--no one is required to show you the bids, but you most likely do have a right to review and even copy the contract with the MC, Felicity. There may be something in it that says the MC will look for financial efficiencies to recommend to the Board, But Im pretty sure it'll place the ultimate decisions making responsibility on the Board--which is exactly as it should be.

Felicity, don't your governing documents or your state corporations codes required that minutes must be recorded?

According to everything I've read for our state, yes, they are suppose to be kept, and on file with the state. Unfortunately, we have people in place that aren't doing their duties. I am currently running for a position on our board, but due to a personal conflict, the president is doing everything in his power to keep that from happening. I want the opportunity to help get things running the way they should, and hopefully, better our community. From my understanding, if our HOA hasn't kept up with sending the required documents to the state, our HOA is in bad standing with the state, and that isn't fair to our community.

I've gone over our by-laws, the Common Interest Community Association Act, and the General Not for profit corp act, in search of infomration. I'm not sure that all meeting minutes must be sent to the state, but seeing as we only have 1 annual meeting, there's not much to send. The board is suppose to meet at least 4 times a year, but due to lack of communication, we are unaware if those meetings take place, and if they do, we've not seen any minutes from them either.
Our by-laws do specify that the board must provide certain documents, as requested. Also, it specifies about meetings and elections, but there is nothing specific as to what should be done if we cannot reach a quorum. Which is where I'm at a loss.

Sounds to me like the OP is lacking in any real understanding of the HOA's operations.

No, the MC is not supposed to work to save the property money. Nor are they hired to cut costs and trim expenses.

The two mailings might be rquired under the OP's documents when calling a meeting. Not left to how one feels things should be done. And if in fact the second mailing might contain 6-8 pages in most areas that might increase the cost of mailing, my guess doubling postage, and printing costs.

No, the state does not require copies of the minutes from every property in the state to be filed. Therefore, the HOA no doing so is not an issue.

No, the 350 home property is not what most would consider small therefore eliminating the need for an MC because of ALL the money the property would save. After all what does the MC in fact do on a daily basis? Nothing. And who might step up and handle their duties once we cut them loose? The volunteer Board members?

Sounds to me like there may be a good reason why the current Board Presdient is working to keep this OP off the Board. Last time I checked that was in fact their right to do so. Not saying the current Presdient is without fault but having an uninformed person who misinterprets the duties of the Board, the actions of the Board, the supposed shortcomings of the Board would IMO be problematic.

Thank you, again. I read up on the directors retaining their position. We have been informed that that is the case, and that's what our board is doing. The previous secretary will maintain his position on the board.

I read the 2 links you posted about quorums, but it raises a few more questions.

In order for a meeting to be held, don't the board members have to be present? At least one? I haven't been able to find where this is stated clearly. I found where it states that the president is to preside over all meetings..but I'm not sure how to interpret that. The last meeting we tried to hold, no board members were present, and no quorum was reached either. If we would have met a quorum, could any business have been conducted since none of the directors were present? I cannot find these specifications anywhere. Unless I've missed them. Since only our management company was present, along with about 6 homeowners, my understanding is that no business could have been conducted, regardless, since the president and/or vice president was not present.

IMHO – you all need to recall the directors and fire the management company. Clearly the directors are either corrupt or complacent and the management company is not advising the board on running the community in a way that is in the best interest of the homeowner. BoD members are typically amateurs in the HOA business. We are interested parties from all walks of life who are willing to give our time and energy to our neighbors and working to make our community a better place to live.. Any BoD member or management company that is a barrier to that endeavor should be replaced immediately.

My 2 cents.