WI HOA Homeowner demands to see list of deliquent homeowners

Is your Association incorporated (most are)?

If it is, in addition to any HOA/COA laws you would need to also comply with your applicable States Corporate laws (typically the nonprofit corporation act). It is normal for those laws to stipulate that members may review and copy the Association records.

Here is a link to WI nonprofit corporation statute.. Section 181.1601 and 181.1602 addresses a members right to inspect. This is what it says:

181.1601  Corporate records.
(1)  Minutes and records of action. A corporation shall keep as permanent records minutes of all meetings of its members and board, a record of all actions taken by the members or directors without a meeting, and a record of all actions taken by committees of the board as authorized under s. 181.0825.
(2) Accounting records. A corporation shall maintain appropriate accounting records.
(3) Membership records. A corporation or its agent shall maintain a record of its members in a form that permits preparation of a list of the name and address of all members, in alphabetical order by class, showing the number of votes each member is entitled to cast.
(4) Form. A corporation shall maintain its records in written form or in another form capable of conversion into written form within a reasonable time.
(5) Copies at principal office. A corporation shall keep a copy of all of the following records at its principal office:
(a) Its articles of incorporation and all amendments to them currently in effect.
(b) Its bylaws or restated bylaws and all amendments to them currently in effect.
(c) Resolutions adopted by its board relating to the characteristics, qualifications, rights, limitations and obligations of members or any class or category of members.
(d) The minutes of all meetings of members and records of all actions approved by the members for the past 3 years.
(e) The financial statements furnished for the past 3 years under s. 181.1620.
(f) A list of the names and business or home addresses of its current directors and officers.
(g) Its most recent annual report delivered to the department under s. 181.1622.
History: 1997 a. 79.

181.1602  Inspection of records by members.
(1)  Records at principal office. Subject to s. 181.1603 (3), a member is entitled to inspect and copy, at a reasonable time and location specified by the corporation, any of the records of the corporation described in s. 181.1601 (5) if the member gives the corporation written notice or a written demand at least 5 business days before the date on which the member wishes to inspect and copy.
(2) Other records that may be inspected. A member is entitled to inspect and copy, at a reasonable time and reasonable location specified by the corporation, any of the following records of the corporation if the member meets the requirements of sub. (3) and gives the corporation written notice at least 5 business days before the date on which the member wishes to inspect and copy:
(a) Excerpts from any records required to be maintained under s. 181.1601 (1), to the extent not subject to inspection under sub. (1).
(b) Accounting records of the corporation.
(c) Subject to s. 181.1605, the membership list.
(3) When other records may be inspected. A member may inspect and copy the records identified in sub. (2) only if all of the following apply:
(a) The member's demand is made in good faith and for a proper purpose.
(b) The member describes with reasonable particularity the purpose and the records the member desires to inspect.
(c) The records are directly connected with this purpose.
(4) Applicability. This section does not affect any of the following:
(a) The right of a member to inspect records under s. 181.0720 or, if the member is in litigation with the corporation, to the same extent as any other litigant.
(b) The power of a court, independently of this chapter, to compel the production of corporate records for examination.
History: 1997 a. 79.

The statutes that Tim found for you look as complicated as ours here in CA. But here, our statutes also list records that may not be examined by our HOA members. They include, executive session minutes, personnel actions (dismissal, demotions, raises, etc.), homeowner disciplinary matters, e.g., fines. I'm thinking hat there must be such a stature in WI.

I think, then, that there's more to your statutes and, like us, you may not be legally required to provide the list. Instruct your attorney to cite the relevant statutes to backup his or a different lawyer's "suggestion" to you.

Power trip? You must be kidding! If I was power tripping, I wouldn't be on this forum asking for an opinion.

We have a lawyer that told us to not provide names of homeowners when providing financials. We prefer not to be activists and follow the rules and laws as written. FWIW, I am all in favor of full disclosure. We have made a point of always making our records available to all HOA members.

At issue is the fact we are a small community and I see no reason to run the risk of incurring legal costs from either party.

DaveC6,

I think you are doing the right thing, you may be in violation of the Fair Collections Act and cost 1k per incident. Your not on a power trip, you just have to be diligent.

The act is at http://www.ftc.gov/os/statutes/fdcpa/fdcpact.htm

Section 805(b) says:
(b) COMMUNICATION WITH THIRD PARTIES. Except as provided in section 804, without the prior consent of the consumer given directly to the debt collector, or the express permission of a court of competent jurisdiction, or as reasonably necessary to effectuate a postjudgment judicial remedy, a debt collector may not communicate, in connection with the collection of any debt, with any person other than a consumer, his attorney, a consumer reporting agency if otherwise permitted by law, the creditor, the attorney of the creditor, or the attorney of the debt collector.

That means that the homeowner must authorize their name to be published as part of being late; I doubt that happens much.

Section 813 says:
(a) Except as otherwise provided by this section, any debt collector who fails to comply with any provision of this title with respect to any person is liable to such person in an amount equal to the sum of --

(1) any actual damage sustained by such person as a result of such failure;

(2) (A) in the case of any action by an individual, such additional damages as the court may allow, but not exceeding $1,000; or

(B) in the case of a class action, (i) such amount for each named plaintiff as could be recovered under subparagraph (A), and (ii) such amount as the court may allow for all other class members, without regard to a minimum individual recovery, not to exceed the lesser of $500,000 or 1 per centum of the net worth of the debt collector; and

(3) in the case of any successful action to enforce the foregoing liability, the costs of the action, together with a reasonable attorney's fee as determined by the court. On a finding by the court that an action under this section was brought in bad faith and for the purpose of harassment, the court may award to the defendant attorney's fees reasonable in relation to the work expended and costs.

(b) In determining the amount of liability in any action under subsection (a), the court shall consider, among other relevant factors --

(1) in any individual action under subsection (a)(2)(A), the frequency and persistence of noncompliance by the debt collector, the nature of such noncompliance, and the extent to which such noncompliance was intentional; or

(2) in any class action under subsection (a)(2)(B), the frequency and persistence of noncompliance by the debt collector, the nature of such noncompliance, the resources of the debt collector, the number of persons adversely affected, and the extent to which the debt collector's noncompliance was intentional.

(c) A debt collector may not be held liable in any action brought under this title if the debt collector shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error.

(d) An action to enforce any liability created by this title may be brought in any appropriate United States district court without regard to the amount in controversy, or in any other court of competent jurisdiction, within one year from the date on which the violation occurs.

(e) No provision of this section imposing any liability shall apply to any act done or omitted in good faith in conformity with any advisory opinion of the Commission, notwithstanding that after such act or omission has occurred, such opinion is amended, rescinded, or determined by judicial or other authority to be invalid for any reason.

That means the person can sue the HOA for posting the name if they wish.

Be aware that one state Supreme Court ruled that meeting minutes could identify a homeowner, if those meeting minutes were not made public. They are association records and so any member could see those records. If you were to post the meeting minutes and they contained talk about specific deliquent accounts then it must be posted in a members only area. Otherwise you are not complying with the above.

Hope this helps

Milton, the Fair Collections Act does not apply to HOAs, therefore does not apply.

Uh, I'm not so sure. It's true that the Fair Debt Collection act was aimed at abusive third party collection agencies, but our attorney once told us there is state and federal case law that consider assessments to be "debts' as defined under the Act.

You'd have to ask an attorney for the specific bafflegab, but in various places, I seem to remember a debt is usually defined as any obligation of a consumer to pay money arising from a transaction conducted for personal, family or household use. That sounds like an assessment to me.

Of course, this subject keeps coming up over and over and over again like a super zombie or vampire, and once again I have to ask what will this homeowner do with this information, assuming he finds a legal way to get it? Is he/she/they going to go to each of these homeowners and demand to know why they haven't paid? Will the homeowner pay the debt on their behalf or refuse to pay his own assessments because X number of people aren't paying either?

I maintain homeowners should know the number of people who are delinquent, how delinquent they are (30 days, 60 days, etc.), and if the Board has taken legal action to collect - and if not, why not. If someone really wants to get the dirty details, I suppose he/she could do some searching at the local courthouse or recorder's office (to see if 123 main street has a lien filed against it by the association).

I know a lot of people think the shame factor might compel people to pay, but in my own experience as treasurer of our board (and wrestling with a LOT of delinquencies), I find the shame factor does absolutely nothing these days. First, some are delinquent because they really have fallen on financial hardship and are trying to make things right. Then you have the others who just don't give a damn, figuring they'll stay in the house as long as possible and pay no one until the Association or mortgage company send over the sheriff with an eviction notice after the foreclosure goes through. Does anyone think these people care if the whole neighborhood knows they're a first rate deadbeat?

that said..... we never use the names of homeowners on the lists, just address. Its too much trouble to keep the list updated with owners names when the addresses never change.

This is a tricky tacky situation. The owner is one of those who doesn't know exactly what they are asking for. It isn't like they can do anything about it. Yeah, you know the names of the people who owe money... Now what? Nothing. Only the board can do anything about it.

Yes, this owner does have the right to see who does owe. It's not exactly something I would broadcast or want to happen. We too only refer to "Lot Number" in reference to who owes in our meetings. Since our meetings are open, members can hear what our decisions are in regards to who owes and that situation. We just don't embarass anybody by revealing names.

A solution I found for my HOA is to have a policy in place. We put in place a 6 months behind on dues, we would place a lien unless you made payment arrangements. Once the membership recognizes the HOA board did have a policy and enacted it at 6 months, they backed off knowing "personal" information.

This would be my suggestion. Instead of providing the information, I would instead state your going to make a policy and enforce the ability to lien to collect. That is all your HOA is really supposed to do. Lawsuits for the money is an expensive useless option but most lay people just think this is the way to go all the time. Reality is that a lien is a form of court judgement that has more teeth to it than a lawsuit judgement. A lien the person can't just simply sell and move without paying. A lawsuit judgement allows the owner to pick up and leave without paying a dime. You tell me which is the better option even though the lien is time consuming?

Overall this is just a case of uneducation of the person requesting the information. I would ask what they planned on doing with this information as they can not do anything about it. Suing your HOA is suing yourself and your neighbors. So this person is creating yet more expense for the HOA. Money that instead could be used to collect money. Plus they don't even know if that home that owes money is in foreclosure or bankruptsy. Factors the HOA can not control and most likely never get money from if they were to take action. It's all in the education. Spread some...

What's the difference? In a small community, if you know the address, you usually also know who lives there.

The question about whether or not to reveal the names of homeowners who are delinquent in paying assessments has been argued many times overs the years since I have been on this forum. I think there are just about as many people who will argue one one side or the other of the issue.

My question has always been, other than idle curiosity, what purpose does one have in mind when requesting (or demanding) such a list of names? Does that person intend to personally sue those who are delinquent? Is that person going to harass the delinquent homeowners? What does the person intend to do with that information?

I can go online and find out if any individual in my town is delinquent in paying their real estate taxes, their motor vehicle or other personal property taxes, or even their municipal sewer use assessments. So what? Of what use is that information to me other than idle curiosity? (Actually, as a tax preparer it is useful information when preparing a client's income tax return as they can deduct only the taxes they actually paid during the year and not what they were billed, which is the information some provide. Otherwise, that information is of no value.)

Personally I have always believed that other owners have the right to see all. The good, the bad, and the ugly including who owes our association what.

Left up to me I would publish names and addresses of deliquent homeowners on a big board at the entrance. I for one believe in public shaming.

Now Steve did bring up an interesting point as to confusion on names as to who lives there so I would soften my stance to addresses. The lot # and other methods are at best a poor obfuscation.

I say the report should list addresses.

Steve:

I think you and I are of a similar mind. I do support full disclosure. The last I knew, we had approx $10,000 in AR from delinquent homeowners when you include fees and interest. For a community with an annual budget of $23,000, the AR becomes an issue when we discuss finances at our meetings. Making it more difficult for homeowners, we need to raise dues to cover repairs of three ponds and a mile of paved walking paths.

As a matter of public record, when I was treasurer, we had liens files on all delinquent homes which, in essence, means all the delinquent owners are a matter of public record. What I do not know is what are current delinquency list look like as I was off the board for a year. Annual dues were due by 3/31/2013. Still waiting to hear from our treasurer on updated delinquency list.

As far as board officers, no officer cans serve if they are delinquent in their dues nor can they vote as homeowners.

It does look like we will have to provide the information based on information provided. There may be underlying reasons the homeowner made the request, and I can think of two. Regardless, we will follow the law. This issue is just a new situation that we have not had to deal with in the past.

Bruce,

I am tempted to agree with you that 99% of these requests will yield no useful information.

The problem with secrecy is that along with protecting privacy it allows corruption. Until you see the delinquency list you have no way of knowing that the board members have exempted themselves from paying assessments, or waived assessments for their friends.

Matt

I am sorry to say but I believe many disgruntled homeowners think like this nad the more one tries to make it difficult to see information, the more disgruntled homeowers there will be.

Let the light and truth shine.

That response does not answer my question.

Other than satisfying some individual's idle curiosity, what purpose does knowing who owes what serve for the individual requesting the information? I am hard-pressed to come up with a purpose other than one of curiosity.

Do not construe my question as taking a position on whether or not such information should be provided. I'm just trying to understand why some people feel they need to know that information.

I have see responses like "shame" the delinquents into paying. Really? How? By publishing their names in letters to the editor? Posting the names on facebook? Posting names on signs throughout the community? Placing sings on their front lawns?

True deadbeats really don't care what others think. They likely already owe other bills they have no intention of paying. Shame them all you want. Those who are having difficult financial times might be ashamed, but they, for some reason, don't presently have the means (the old trite saying, "you can't get blood out of a stone"). So, my question, what purpose is being served? If divulging names of delinquents to individual homeowners will actually accomplish getting those unpaid assessments into the association's bank account, then I'm all in favor of it. But, I have not seen any proof that divulging that information actually accomplishes any productive, useful purpose. It just satisfies someone's morbid curiosity.

Matthew,

That's one of the best arguments I've seen on this issue. However, there are ways to address this without providing a complete list of delinquencies.

As for board members, the governing documents could contain a provision that in order to seek election or re-election to the board, a member must provide proof that their assessments are current.

As for others, it could be required that a board member seeking re-election submit a sworn affidavit that he/she has not recommended nor has voted for any relief from, or reduction in, assessments to any individual owner, or group of owners, in the community except as permitted by the CCRs (or Declaration or other governing documents).

Let me ask the opposite question: What purpose is served by hiding the association's true and full financial picture from its members even when the members request to know it?

I was always open about our budget. I covered both the collections and expenditures in front of everyone in our open meeting. I just did not reveal the names of the owner's who owed except by referening their lot #. It wasn't rocket science to figure it out who that was. However, with my clear 6 month lien policy in place, members knew we were taking action and just waiting on owner's to sell or pay up. Depending on the situation, they also knew I wasn't afraid to pursue foreclosure options. Having that system and transparency in place kept the nosy at bay.

However, here is what happened after I resigned. The new board who most did not ever attend meetings except when they had something on THEIR agenda. They had no idea about how our budget worked even though I was completely transparent. Even to the point of printing out copies of expenditures and posting meeting notes at the front entrance above the mailboxes/pay area. It's a long story on how these people got into place and had spent a long time protecting the members from them. I knew they weren't capable of doing the right thing.

We had bills of 5K to meet every month. There was no wiggle room. We collected just enough to pay our bills each month. 107 homes $50 a month with a 95% on time payment rate. Any extra money collect immediately had to go into maintenance or collection efforts. People had to pay by the 15th of the month. The bills had to be paid by the 5th to the 10th. So when we had our monthly meeting at the BEGINNING it appeared we had $5K in our bank account. After the 15th, we no longer had that amount. We barely had a few hundred dollars if we were lucky. Savings had been mostly depleted and wasn't enough to make a month's worth of bills. I was on the verge of raising dues the 3% when I left.

The new board came in and immediately called me a "Liar". That I had been hiding the "truth" from them the whole time by denying them projects they wanted to do. (A repaint of a clubhouse which would show paint chips every time someone removed tape/decorations). Other's complained that the pool needed resurfacing. So they promptly spent the 5K in the budget!!! Which as you can tell the next month they had no money to pay bills. Plus they signed a 8K contract to fix the pool for a repair that should have only been 2K at the most. They had to force a special $150 assessment on everyone to include making up for the money they spent. Which they lied to everyone about because the special assessment should have been just for the pool project. However, they raised the extra money to cover the budget shortages they caused. That was NOT disclosed to the owner/members. So me and a few other owners hired a lawyer and forced them to do the special assessment correctly. Even though they lied to everyone to get the vote, they did get the vote. I later found out by the members who apologized to me, they had been lied to.

My overall point to this story, is that no matter the "transparency" one can offer in their HOA, you still have people who can't run a budget. No matter the questions you ask or the information you provide, your going to realize that it's all in the policy and education of your membership. No lawyer or court is going to subsitute for that.

TimB was correct. we did review with our lawyer and we do have to provide the unpaid list of homeowners.

Thanks for the replies.

Well, as you can see this issue has been discussed over and over (and over and over) again, and you can see both sides.

Please let us know what happens when this homeowner gets the list - I'd like to see how the other shoe drops. Is he or she going to march over to the delinquent homeowners and demand payment? Offer to pay the delinquent fees? And will the delinquent homeowners then sue that homeowner AND the association for providing this information to someone who doesn't own the properties that are delinquent? Sound be fun to see.

Could you clarify these statements please. What is it that you think I believe?

I'm having trouble following you, Nila. Are your saying that office of secretary on your board of directors works for your PM? Is the secretary a director, or not? what confuses me is you saying "the secretary at the HOA"; is this "HOA" an office?? or what?

How many directors are there in your HOA, Nila? What size is your HOA? With all of the work that you're doing to reform KS HOA law, why haven't you & others straightened out your own HOA?? Wotta mess!!

Carol,

Our HOA has 9 board members. Under contract with the HOA is a property manager who places between 5-13 employees in the community. One of which works in the office as a secretary. She is not a board member or homeowner. The board also has a secretary. Her payroll check comes from the property management company but the money comes from the HOA. Basically, the easiest way to explain this is: she is his employee and he leases her back to the HOA at a higher hourly wage than she earns. All of the employees are given paid holidays, vacations, uniforms, cell phones, and vehicles to drive while on company time. If they use their own vehicles they are paid another $100 per month. The cost: $400,000.00 per year.

The community has 513 units including free standing homes, duplexes, tri-plexes, and four-plexes. It is a PUD. With 67 acres of land, two pools, two tennis courts, one clubhouse with business office and one maintenance building. It is supposed to be maintenance-provided on the exterior walls, roof, driveway, fence, decks, landscaping, snow removal on the years we have snow if it is 3 inches or more, and lawn care. There are some private and some city streets. Water, sewer and trash pick-up. Dues are monthly at $230.00 per multi unit and $220 on the free-standing homes.

The community was self-managed until 2008 starting in 1976. The same guy was the HOA President all those years. He handled the hiring of employees and sub contractors, made all purchases, signed all contracts, handled the elections and counted the votes, and handled all the money, and nobody ever paid any attention. Over the years those that tried to inquire about various things were silenced by threats of lawsuits. In 1998, due to the lack of maintenance on the wood siding he came up with a plan to stucco all the houses, put out a vote, and it passed. The contractor was told to put the stucco over the rotten wood. I bought in 2005 in a section that has not had the stucco applied but it was on the "schedule" for 2007. The dues were raised by $40. per month and each house received an assessment...except for the smaller houses, they didn't get any assessment.

I asked to see the financial records before I made the purchase but was told that was not allowed because it was a membership only access....I was not a member as a potential buyer. I had owned several homes and some commercial property prior but never in a HOA. I did not read the CC&Rs when they were handed to me at the closing because they were like a small book. My mistake. My error.

I attended every board meeting after taking possession and asked to see the records. Each time I got another excuse. Things seemed very "fishy" and no work orders were being done. Employees were sitting around in the trucks all day talking and smoking (which continues until today)and after 2.5 years of excuses, I hired an attorney. While I was working out of state for a few months some homeowners banned together...meetings etc. When I got back I learned of all they had uncovered, etc. The attorney helped me understand my limited legal rights to see the records. Long story short....it was uncovered that we had no accounting on 10 million dollars. The board president suddenly died after we found out he had just purchased two houses in Calif and was running for the board there, plus he had recently purchased two more units in our HOA he was renting out. We shortly learned after his death that there was massive debt, bills had not been paid for 18 months. Houses were rotting so badly the frames were damaged. It's a very long ugly story. I had completely redone the interior of my house when I bought it and the exterior wall rotted and gave way causing the electric meter to fall off and water poured through my house like a river. Destroying my newly finished basement...massive damage.

I had politely requested help from the HOA on the work orders but they had hundreds of work orders and like I said, nobody was working. I finally hired a contractor to do the exterior work and paid for it myself. Consulting with my attorney he advised I had a Breach of Contract. By this time the board had hired a property manager. I sat down and showed him all my documentation, photos and explained the situation in the community. He said I had clearly been wronged. Since I had a breach of contract I stopped paying my dues. I had paid over $50,000.00 to repair my house due to the "river" running through it. With no maintenance for over 3 years at that point, I felt justified in not paying the dues, but I was more than willing to work out a reasonable program going forward. The board decided to put a lien on my house and sue me for the small amount of dues money I had not paid. I countersued for breach of contract.

Since that time, I have studied HOAs around the country, read every book and report about HOAs that I can find, heard enough stories to fill volumes of notebooks, attended all sorts of meetings, and worked with state legislators to create a law that would give homeowners in Kansas rights to see records, etc. With no laws governing HOAs in Kansas we basically had no legal rights. It was a necessary thing to do.

Today, the money is spent on a high-priced management company, the houses have depreciated in value, there are numerous lawsuits because the board sues for every little thing and they are now getting counter-sued, we have a million dollar loan, over 100 rentals and I've lost count of the foreclosures. The countersuits have all been caused by the property manager doing some cover ups on rotten frames on houses which is a safety concern. IF I could sell my house I would take at least a $200,000.00 loss.

In 2008, I found professionals that were willing to donate three years of their lives to be board members to try and help this community get off it's knees. These were successful business owners with extensive construction and property management experience. Good people that I've know for decades and they understood the HOA needed a "hero" to save the sinking ship. The board members did not want anyone that did not own in the HOA on the board even though the by-laws did not require ownership. Minons were sent out to scare the socks off the homeowners and the professionals were not elected. Immediately the by-laws were changed to exclude non-owners from ever being board members, but a non-owner property management company was hired for the $400,000.00 per year.

Possibly more than you asked for....but thank you for withholding your judgment and showing respect for me until you heard the details. Of course, there a far more details, but I'm giving you a very condensed version.

Have a good evening, Carol.

NDR

Do we have another MikeR on our hands? Someone who did their own damage to themselves? Admittedly did not pay their dues and then demanded work to be paid for out of the dues? Seriously if you studied HOA's you would know that a HOA is ONLY funded by it's members for it's members. The HOA did NOT breach any contract. They most likely put you in order of all the other repairs they had to do on their list as well. You stop paying your dues gave them the right to collect on you. I am surprised they have not foreclosed on you yet. Which I am sure is going to be another HOA fight your going to post about as your HOA is responsible for that too. Not considering that you did not pay dues and are suing them... Gee I can't imagine why your HOA experience is a bad one. You should keep spreading that idealism to everyone due to your own ignorance on how HOA's actually work.