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TammyI (California)
Posts: 68
Posted:
Our HOA has not had a legit meeting in several years. All the owners I have met with would like to replace the current MC. Any ideas what we should do first? I have contacted 15 of the 16 homeowners (MC will not give out owner info and I can not find the last one)we thought we would send the letter for an emergency meeting to the condo as that is the only address we can find. Next issue: Do we first vote in a new board or use the old one and then replace it? The secretary and treasure were said to have been MC staff not homeowners and they are not invited to this HOA meeting. The last known President was told he was voted off the board by the MC. 15 of 16 owners have already agreed that we need a new MC and would like to move on it now. We have the quotes, referrals and a CPA to make the transfer.

MatthewW4 (Arizona)
Posts: 500
Posted:
Tammy,

Since your association has been dormant for several years, I would suggest a two-stage restart because a normal board election can be a time-consuming affair.

First, hold a meeting and ask all owners to sign in so you can verify that you had a quorum (and hopefully all) of the owners present. Hold a new election taking nominations from the floor and vote in a new, temporary board. Then schedule a more formal election a few months later to elect a permanent board. There is no reason why those who are elected to the temporary board cannot run for the permanent board.

This approach will allow the temporary board to cut the ties with the MC without too much screwing around with all the election requirements. If you can muster the support of 15 out of 16 owners whatever your group decides on will be pretty much bullet-proof if the MC challenges it.

BTW, you should be able to get the address of that 16th owner from the county assessor as they send the tax bill somewhere. Even if you cannot find that owner for the first meeting, by the second meeting you should have the records from the MC.

TammyI (California)
Posts: 68
Posted:
Is there a legal way to hurry this along? We are a few months of having no money. We need to take control NOW. The owner of 4 units is leaving for an extended stay abroad on first of May. We would like to give a 30 day notice to the MC ASAP and replace them before he leaves.

The County assessor will only tell you the owner and address of the property taxed not where the bill is sent, I have tried. That's how we have found most of the owners names.
TimB4 (Tennessee)
Posts: 21,061
Posted:
Quote:
Posted By TammyI on 04/16/2013 12:26 AM

The owner of 4 units is leaving for an extended stay abroad on first of May. We would like to give a 30 day notice to the MC ASAP and replace them before he leaves.

Make sure you get their proxy appointment before they leave.
MatthewW4 (Arizona)
Posts: 500
Posted:
Quote:
Posted By TammyI on 04/16/2013 12:26 AM
Is there a legal way to hurry this along? We are a few months of having no money. We need to take control NOW. The owner of 4 units is leaving for an extended stay abroad on first of May. We would like to give a 30 day notice to the MC ASAP and replace them before he leaves.

This is why I suggested a two-stage election. Hold your election for a temporary board ASAP. What are all of you doing tonight? If you have the support of 15 out of 16 owners, there really is no one in a position to challenge what you are doing even if it does not fully comply with state law.

I agree with Tim that you need to get that owner's proxy before he takes off.

Quote:
Posted By TammyI on 04/16/2013 12:26 AM

The County assessor will only tell you the owner and address of the property taxed not where the bill is sent, I have tried. That's how we have found most of the owners names.

Sorry about that. In Arizona all that stuff is online and publicly available. You have made a reasonable effort to locate this owner and give them notice, so no one can fault you. Do not waste any more time on it.
JonD1
Posts: 2,350
Posted:
Sounds like you are chomping at the bit to move this along. I would suggest you take the time to do it right and prepare rather than learn after the fact it was botched up.

Do you have access to the HOA's records?
Do you have control of the HOA funds?
Do you have a plan to collect dues from this point on?
Have you read and do you understand the contract in place with the MC in regards to termination and notice?
Are you a Board member?
Is anyone who feels the MC should be removed now serving on the Board?

Just how does the Board or the owners allow the MC to hold Board positions?
How does the MC remove an HOA President?
Were the current Board members elected into office?

I would suggest you take the time to get ALL of your ducks in a row before you start taking on more tom avoid complicating further what seems to be a complicated
situation.

Bottom line here is this does not go as YOU see fit because you say so. There are rules, laws, contracts and guidelines that must be followed or you are digging an even deeper hole for yourself.

Just where have all the owners been that have allowed for this to occur. AND FINALLY HIRING A NEW MC WILL NOT AND DOES NOT ELIMINATE THE NEED TO HAVE OWNERSHIP INVOLVEMENT. oR YOU RUN THE RISK OF BEING LEFT AT THE MERCY OF ANOTHER MC.

Sounds like there is plenty more going on here and you best understand all of this before you jump into the deep end.

The majority of owners who now help beat the drums of action will be glad to sit back and do nothing when and if the time comes for them to actually involve themselves. Be careful taking the point position those are the folks who get stuck holding the short stick..

JohnC46 (South Carolina)
Posts: 14,265
Posted:
As some have said.

If you have 15 of the 16 owners then you have a Quorum so the 16th is not needed.

Call a special meeting, elect a BOD then and there. Probably 3 would be sufficient. Then the BOD can elect their Officers. I suggest Pres, Treas, Sec.

The first order of business for the new BOD will be to fire the Management Company. I might go lightly here to be sure the new BOD has all records, understands the MC contract, has control of the checking account, has the MC prepare a financial report, etc. Be sure all your ducks in a row before firing the MC.

Even if the owner of 4 units is not available you have in place a BOD and they can function. Most of what they will need to do will be within the power of the BOD meaning it will not require the approval of the owners.

With only 16 units, I doubt a MC is needed. I would think the association could easily be self managed.

Hope this helps.

KevinK7 (Florida)
Posts: 1,343
Posted:
You could check to see if there is any financial paperwork filed with the county to help locate the 16th owner if necessary.
TammyI (California)
Posts: 68
Posted:
This is a VERY dysfunctional HOA. The MC was brought on 15 to 20 years ago when the developer became too old to manage the HOA. He retained 25% of the properties. It is said; the MC purchased several properties so that between them they held the majority. Any owner that wanted to participate in governing was not allowed to do much of anything as the MC ran all the meetings. Over the years, the MC has sold her properties and the developer’s properties have been passed to the next generation, but the MC has continued to bully all the owners. At the last known meeting, the MC told the owners that there could be no meeting until her contract was renewed. It was renewed without being read or copies made because of the plumbing issues that had to be resolved. That was 8 years ago. No one has a copy of the contract with the MC, but I did get copies of the CC&r’s, Articles of Incorporation, By-Laws, and the previous years financial statement although it held up escrow for more than a month. We also have minutes that ended with that last meeting 8 years ago from one of the last known board members.

According to the CC&R’s if a MC is used the contract is for one year at a time only.

Last November the MC sent out a notice stating anyone wanting to be on the board to submit their name to her office. According to the MC, they received no response. I responded the same day I received the notice with a phone call and followed with a letter, as did four other owners. A 5th asked if her son could help as he works in real estate in the area and could help to improve our property.

I have put myself in harm’s way already and the other owners warned me, the MC would levy fines and use threats against anyone who disagrees with their management. There is no way we are going to get access to any records or funds if there are any, short of a court order and the MC knows everyone in the county, (Another threat). An association who had contracted with this MC had to sue the MC to get control of their funds after they did not renew the contract. The over $100,000 they thought they had was gone.

I took this off the MC website.
"MC is so sure our services exceed any other management company you’ve dealt with in the past, we offer you a ā€œSATISFACTION GUARANTEEā€. If at any time you become dissatisfied with MC, you can cancel your contract. NOW THAT’S CONFIDENCE……"

This is what we are dealing with and it’s prime CA beach property we are talking about. I had no idea of any of this until last year when I asked when the next HOA meeting was going to be.

Also, to correct the typo earlier: we have 8 of the 11 owners in agreement, which is 13 of the 16 units. One owner really likes the MC, one owner has the MC managing their property and the other owner we can’t contact.

I want you all to know how much the feed back helps us learn and see other options. One owner has an attorney on retainer which also helps.
MoM1 (Massachusetts)
Posts: 56
Posted:
Don't you folks in Calif have the Davis Sterling act that covers HOAs?
CarolR11 (Colorado)
Posts: 2,563
Posted:
MoM makes a good point, Tammy. Go to davis-stirling.com, which is put together by some HOA attorneys. It has a lot about the Calif. Davis-Stirling legislation, but all kinds of generic info too. Scroll through their Main Index and click on topics that fit your situation.
CarolR11 (Colorado)
Posts: 2,563
Posted:
I'm thinking, Tammy, that a small group of you need to meet with a qualified attorney and pay for sound advice.

Per your CC&Rs, you don't really a contract with the MC. But you're all very worried, and rightfully so, that you won't give your records to you. Ask this attorney if you should try to form a board right away, or if s/he advises that this attorney's firm send a strongly-worded letter giving the MC 30 days notice and demanding the return of all Association records at the end of that 30 days period.

I'm not in the legal profession at all and know nothing about this type of situation, but you all do need to do something soon!

Do not fear her retaliation. I doubt that she legally can levy fines. Your bylaws or CC&Rs probably specify that the Board has that authority. And the Davis-Stirling legislation has very strict steps that must be followed before HOAs can levy fines. Go to davis-stirling.com, Fines. IMO, you all should ignore her threats as she does not have the backing of a board of directors.
TammyI (California)
Posts: 68
Posted:
I have been reading the Davis-Sterling Act since I read MoM's post and as far as I can tell this HOA has been out of compliance for 20 years. It also said four days is the minimum numbers of days notice for a meeting, which is good for us. Good idea, I am going to call the owner with the attorney on retainer to see if he covers this kind of thing. Thanks!
CarolR11 (Colorado)
Posts: 2,563
Posted:
Yes, four days minimum for posted notice of a meeting. But since you have no board, I don't know if it matters. So, if your other owner's
attorney doesn't practice HOA law, perhaps they can refer you to someone who does.

Glad you're visiting davis-stirling.com; it's an invaluable site for CA HOA members.
TammyI (California)
Posts: 68
Posted:
We still have May 1, as the date for the meeting, although we have an 8 day window to accommodate as many owners as we can. We are having it at a private residence so that the MC can not invite themselves. Now the issue is the wording of letter we send out to those 3? property owners that side with the MC. The Davis-Sterling act and the the corporation laws it links us to has us questioning every word. We are sending out notices because there is only 1 owner that lives on the property, the rest are investors or vacation homes, and we do not want that held against us. I am also using phone and e-mail. If the attorney doesn't work out I am ready to hire one just to cover my husband and I. Any help with the letter would be greatly appreciated.

You know all this started because I wanted the boards approval not the MC's to replace the 1958 22" sunken sidewalk, the crumbling retaining wall, the bug infested broken down fence and replace the weeds with sod in the front of our beach house.
TimB4 (Tennessee)
Posts: 21,061
Posted:
Let me try to understand this.

You were (are?) under declarant control.
The Declarant kept 25% control of the lots.
Rumor has it that the MC purchased x number of properties.
The Declarant (at some point) contracted with the MC to run the development
Overtime the MC sold their properties to individual homeowners.
The Declarant transferred properties to "the next generation" (new developer?)

Honestly, based on this understanding, is it possible that your development is still under declarant control?
TammyI (California)
Posts: 68
Posted:
According to the CC&R's the developer lost control when he sold 51%.
The son who inherited the properties let the MC control his shares for a time.

The son was always president of the board because of the accumulative voting and the MC always ran the meetings,
until the MC told the son that he was voted out of office while he was out of the country.
We have not found anyone on that board or any owner that could confirm this. This would have been the last meeting.

So more of less your could be right, although he he knows nothing about it.
The MC does not contact him or anyone else and the CC&R's prohibit spending more than $200 without board approval.

Please don't tell me this makes the issue worse.

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