Confidential Settlement Agreement

Our annual association meeting was held Saturday. As I have stated in previous posts, I was running for a seat on the BOD. I got 4 votes out of 27. Oh well will try again next year.

During the meeting a discussion of the sanitary sewer ensued. There is a concern that new home builders will run into a major obstacle connecting to the sewer. The sewer line may not be where it shows on the association's sewer line map. This has happened to 2 home builders so far. One of the home builders (a board member at the time) was reimbursed a portion of the costs he incurred to bring the sewer line to his house. The 2nd home builder was offered a temporary solution of a number of above ground tanks that periodically need pumped at his expense of course. The discussion began by the president. He stated that in the bylaws it states that if the sewer line is not there, it is up to the homeowner to pay for all of the expenses related to bringing the line to the house and it then becomes the property of the Association except for a number of feet from the house. It doesn't matter if the closest line is a mile away. The Association is not paying to extend the line even if shows one on the sewer line map. Keep in mind the home builder has to also pay a $5,000 or $15,000 access fee depending on if the member is in good standing, not in good standing or a nonmember.

I spoke up and said that a home owner had been reimbursed a portion of his expenses to bring the line to his house and I asked if that courtesy would not be extended to others similarly situated. The President interrupted me and said that was a confidential matter that was related to the lawsuit that had been filed and settled against us. We did sign a confidentiality agreement when we settled the lawsuit but it had nothing to do with the reimbursement of this homeowners expenses and I stated so. I proceeded to speak and stated that the confidentiality agreement was to not disclose the terms of the settlement agreement to 3rd parties and that members at this meeting were not 3rd parties. He got very angry and kept telling others it can't be discussed. Others attending the meeting kept asking me questions about the reimbursement of the sewer line not about our lawsuit so I just kept talking while the President is basically having a temper tantrum and no one is listening to him. A previous board member spoke up and said the records have been sealed. I just laughed at that. The lawsuit is a public record. Anyone can go to the county court house and ask to see the file on _________ Corp. vs. __________. One has nothing to do with the other. And the confidentiality portion is for the terms of the settlement only (price.)

I am seeking some advice. Should I just let it go and chalk it up to the President misinterpreting our settlement agreement and being put on the spot about the improper reimbursement or should I send a letter along with a copy of the settlement agreement to all of the board? I'm a little concerned that the President will try something stupid like taking me to court for in his eyes breaking the confidentiality agreement.

How exactly can a by-law take ownership of the owner-installed sewer line away? To me that would be a detail required in the covenants, not the by-laws. Otherwise the BoD can make changes at a whim.

"You must install sprinklers, but then they become property of the HOA."

"You must plant an apple tree, but then that tree and all the fruit is property of the HOA."

"You must build a fence, but then that fence becomes property of the HOA."

Those examples may sound silly but I would consider such a by-law the equivalent of a fee or assessment. You are paying money for the HOA to have something. That authority should not be in the by-laws.

Glen I need to clarify. The Association sued me and my husband for an unrelated matter and we signed a confidential settlement agreement. The agreement is for the terms of the settlement only. The details of the lawsuit are not confidential and one can get the lawsuit records that were filed regarding the case at the courthouse. The records are not sealed. These are all public records.

The President is confusing the 2 issues. They are not related in any way. The point I was trying to make at the time was that the BOD needs to be fair with everyone. Since they reimbursed a board member for a portion of his expenses, they should reimburse others similarly situated. The President wants to keep it hush, hush because the person he reimbursed was a buddy. There are other instances where there is selective enforcement of the dues and fees.

If it were me I would work to get a simple set of covenants and restrictions regarding the maintenance of the sewer approved and filed to prevent such mismanagement. I know you have mentioned your HOA situations before and to me this by-law still sounds bad. It would be like Microsoft saying that once I install Windows they own my computer.

I say spread the information about the lawsuit except for the confidentiality part and let them sue you. You can easily respond with public records.

Sounds like something more complicated is going on here. More complicated than can be answered in a few internet posts. Typically if private property wants to be developed, the expense is paid for by the owner/builder. Doesn't matter what it costs. It's their land. If it were my HOA and the other lots never got developed, I wouldn't care. I know that someday they will be developed when it became profitable to do so.

I wouldn't want my HOA paying to build someone a house no matter what.

I don't see an issue with the HOA taking control of the sewer line, being that they are in control of the sewer, but I was under the impression that they would take possession of the entire connection. As in my area, I own up until the county line. I'd imagine that the owner would retain the line up until the property line.

I was also thinking that since there are no covenants there is no binding agreement between parties, correct? Each party would then be free to negotiate with the HOA, so being reimbursed while unethical may not have been technically wrong, unless disputed in court?

Yes, it was paid out of HOA funds and yes it was documented in board meeting minutes but the meeting was held with no quorum. Only 3 members were present. A quorum is 5. It was discussed at an annual meeting very briefly and we were all apparently asleep at the wheel because no one asked any questions. On principle, I don't have a problem with it because the guy paid a $5,000 access fee and the access was not there. He was going by what the sewer line map showed. So when the plumber began digging where he was supposed to, no line was there. This cost him extra time and money. My issue is that the board will not reimburse anyone else similarly situated and will do nothing else to try to fix the problem. It's basically too bad so sad! We aren't going to do anything about it.

Thanks for your comments but I still think that asking someone to pay $5,000 for sewer access ($15,000 for nonmembers)is excessive.

You are absolutely right but the President has those records under lock and key. LOL The President doesn't want it known that he and another board member were quite vicious and made decisions without proper protocol. Not to mention the fact that the litigation cost the Association thousands of dollars in legal fees. He doesn't want that known either so IMO they used some interesting accounting to cover it up. They only listed legal bills on the financial report once a year and the litigation lasted over 3 years. So unless members are really on top of things they don't pay that much attention. They don't add up the complete costs over the 3 year time period.

I'm growing quite weary of being the watchdog over the board. I've done about all I can or am willing to spend anymore time on. What will be will be. Life is just too short and I have more urgent issues to occupy my time with.

Thanks folks for all your input. - Sharon

Yes, to third parties and the price only not the details of the litigation.