HOA conflict of interest?

Hi there. I'm new to this board. I purchased a condo a year ago and so I'm relatively new to dealing with HOAs. It's not been pleasant but from what I've read of others' experience, it could be worse. I'm looking for advice on my situation. I'm not sure if I'm in the right or if what's happening is simply unfair and I have to deal with it. I live in a small, 5-unit building. My unit was a foreclosure and I had to pay a $10,000 buy-in. They also tried to charge me $10,000 in the previous owner's late HOA fees. My realtor was able to get that last part discharged because it's absurd and I was willing to walk away from the sale. There are 5 people on the board and 6 owners (two are married). Everyone is by default a board member. The married couple only get one vote, however the wife's mother is also an owner and she happens to be the president of the HOA. Her daughter and son-in-law act as treasurers and handle all of the money. At our last board meeting the wife let it slip that they had sued the previous owner and recouped the late HOA fees. I'm annoyed because the woman and her mother always vote together. There is one other girl who owns in our building and lives there (all of the rest rent their places out). There's one other woman, a horrible older woman, and she always vote with the other woman and her mother. We voted to replace the carpets. Downstairs (where I live) they were moldy and musty. The older woman said she would pick up carpet samples from her friend's showroom and bring them for everyone to look at. I offered to go with and she refused to let me. When she dropped off the samples they all looked the same, with varying colors of the same hideous, tacky floral pattern. I sent out an email and asked if there were other options that were more neutral and did not feature such a strong, distinct style. It seriously looks like it belongs in an old-timey whorehouse. The woman said these were very high quality and the very best. I said I didn't like any of the options and I didn't vote for any of them. I had to live on-site and see the carpet every day and it affects my home value too. The other girl in the building also voted against it, but the other 3 voted us down. They installed some horrendous carpet AND the one older woman had her buddy who's a "painter" paint the walls YELLOW without a vote. I came back from a trip and it was all done. Everyone who comes to my place comments on how ghastly the carpet and walls are. Another thing they voted on was banning dogs for renters and requiring HOA approval for any homeowner dogs. I voted against this because I planned to get a dog. I will never be able to get a dog now because those 3 will vote it down. Another thing they voted on was making payments late after 8 days and charging $50. The girl upstairs was late by several months once and they gave her a pass. I was out of town and paid on the 10th day and got an email from the treasurer saying I owe $50. What's even more ridiculous is that this treasurer never deposits my HOA check right away. One time she took 2 months to do it! I have all my bank records showing that they are deposits weeks or months after the due dates. I have no way of knowing when the treasurer or her mother pay their portions. It feels like a serious conflict of interest here. I have never seen bank records or know how they are handling the funds. Any time we hire a contractor it's that one woman's "friends". And the bill is really, really high. Any advice on my rights? I haven't paid the late fee. Thanks!

You will just have to learn to get along with your new dysfunctional family. You should look at your docs to see if it allows a non-owner officer such as the mother. I would not want a non-owner as an officer. With only 6 people, if you want to change things you will need to get involved. Become secretary, treasurer, president, etc. To do this you need to show you can get things done and are easy to get along with.

You could have gone carpet shopping by yourself and presented options and pricing too. You didn't. You were out voted.

You were late. Pay the late fee!

I do get the point. The payment is due in the associations hands before the due date. Period. Although they are late depositing it, which is unfortunate, this doesn't change anything about the technicalities of when it is due.

Have a discussion with them about the check depositing. Use use cash with receipt, bank check, money order, etc.

You should look at the records, but you should not worry yourself how others are paying. For example I pay my dues by automatic bill pay. I could leave the country for a year, and my bank would keep writing checks and paying my bills while im gone without me lifting a finger.

As far as an email being a legal document, if you were notified by email and you acknowledged the email and the late fee, you have been notified.

So they refused you to pick out carpet...... what stopped you from going to the carpet store, by yourself? Nothing. You could have done it.

Bylaws change. That is life. Your living in a place that requires people to vote and get along. That is what a condo is. Learn to live with it, or sell.

Things aren't always so black and white. Your comments aren't helpful. I'm not going to grin and bear something that isn't right. Yes, I could have picked out carpet ... carpet no one would have looked at. I would have been voted down by 3 tasteless women. I have been and will continue to be voted down on everything and they will continue to change the bylaws to suit their own interests, which IS a conflict of interest. If there's anyone who has legitimate advice on whether it constitutes a conflict of interest for a mother and daughter to be running an HOA--or anyone who has dealt with small HOAs where a majority consistently makes rulings that benefit themselves and hire their friends as contractors, I'm all ears. Thank you.

The only thing I question is the non-owner, non-member, board member?, president who is the mother. I'd look for technicalities in your bylaws to get rid of her. As for conflicts of interest, they are not illegal and there is no government entity that will help you with this issue. If a group of people want to vote a certain way its legal, no matter how you personally feel.

To put things in perspective, the condo you own is located within the walls of your house. Everything else is owned by the association and decisions are made on a voting basis.

Sorry, I re-read, I didnt realize the mother owned a unit too. Scratch that comment about the mother.

welcome to a true democracy = direct popular vote on each issue, MAJORITY RULES

thank the creator we live in The Republic of The United States of America with a REPRESENTATIONAL system and an actual CONSTITUTION

as Jefferson said: "Gentlemen, I give you the REPUBLIC, pray that you may keep her."

a democracy was the founding father's worst nightmare

Amy,

Its hard to see how it can be a conflict of interest in a condo that only has 6 members. A conflict of interest is when a board member does something that is in his own interest when that is in conflict with what is in the best interest of the community. With only 6 members what is in the interest of a majority of the members (4) by definition is in the best interest of the community. Good luck.

Hi, Amy.

First, I am from California, but I'll try to give you advice that is more general.

Look at your CC&R.The CC&R are usually relatively difficult to change. The Bylaws/rules are easier to change. However, the Bylaws/rules cannot contradict the CC&R. Further, none of the above can contradict the state legal codes. In California, common interest developments are under civil codes and corporation codes. You need to learn these as well.

For the painting and carpeting.
1. What does your CC&R actually say about contracts?
2. What does the state say?
Many CC&R require at least three bids and may provide that the lowest one must be taken if under a certain amount (like $600) but not if it is over $600. So your opportunity would have been when there was only one bid asking for the board to follow the CC&R and get the required number of bids, especially in the case that the lowest one must be taken.

State law may require certain license/insurance if the work is over a certain amount and this is usually written into the CC&R although the CC&R may not be current. If the CC&R are not current, the state legal codes still should be followed.

Late fees
1. What does your CC&R say about late fees for assessments?
2. What does your state civil code say?
3. What does your state say about the delivery of official notifications? Some CC&R require notification by either personal delivery or first class mail. The state may have different requirements. For instance, in the case of a hearing in California, email is not allowed. It doesn't matter whether there is a response or not.
In California, there is a specific civil code pertaining to late fees. Special and regular assessments are only late after 15 days. The CC&R may have a longer period, but not a shorter one because again state law has more authority.

Further, a late fee in California may not exceed 10 percent of the delinquent assessment OR $10. The CC&R can specify a smaller amount, but not a larger one.

Now, I don't know about what the civil codes are in your state. That's up to you to investigate. You probably should first pay the late fee and then investigate and with your findings write a letter pointing out any problems. Look at both state and CC&R for this.

I do see a conflict of interest if you are, for your first offense, being charged a late fee, but no one else is. As you pointed out, your assessments are not deposited in a timely manner. You do have the right to see the financial records and should be able to check this.

If it is the case that the late fee is being arbitrarily enforced, you have a case of discrimination. Whether or not you as a protected class can bring a discrimination suit is a different matter.

CC&R and bylaws should be enforced in a uniform and fair manner. If any board director is also late but not penalized, that person should not have a say in the fining of another person. That person should ask to be recused and should be considered at the same time as any other person. If the officers are excusing late assessment for themselves, this is a conflict of interest. They are gaining/benefiting privileges that no one else has. If an officer is asked to pass judgment, good or bad, on a relative, that is also a conflict of interest. The gain is special privileges.

I would be concerned about a treasurer who does not immediately deposit the checks because of possible loss and depending upon the type of account, lost income from interest. I would, as someone else suggested, get direct deposit.

Late deposit of assessment checks is reason enough to check the financial records every month. Every member should, but in the case of lax attendance to duties, this is even more important. For instance, you want to make sure the bills are paid on time and the association is not given late fees.

Next item, I want to address is the pet issue.
In California, HOAs are required to allow one pet.
1. See what your state civil codes say.
2. See what your CC&R say.
3. See what your CC&R say about rule changes.
In California, rule changes as well as changes to the physical appearance of the HOA require certain procedures. Your state may have similar legal codes. In California, there must be a 30-day notification before a vote and the rule change must be written. Members must be given the opportunity to address the subject in an open meeting. So you may be able to trip them up if they did not follow procedure because the rule can be void.

You need to look at your state civil and corporation codes as they pertain to common interest developments.

Realistically, it is very easy for people to use dog ownership against you. You have five units. It is unlikely that despite requiring legal procedures that you will get things to change. You can win small victories, and it may require time in small claims court depending upon what issues your state allows small claims court to have jurisdiction over.

I think the first warning you had about the HOA is that they attempted to make an unreasonable financial demand. It seems that your small HOA is a private domain and you might be financing the whims of one family and helping to cement their place in the city by allowing them to give their friends business. Friendship and business do not usually mix well.

There was an old family tradition of generations living together, usually in a house or households. You've stumbled into a HOA that is attempting to do the same thing. I personally do not often agree with my mother and couldn't wait to get out of the house and on my own, but unlike my older sister and brother who had to go back home after graduating from college to live rent free, I supported myself. I'll always be on a different thought wave than my sister and brother. I suspect the same will hold true for you in this situation. This might be one of those situations that you can't change enough to be truly happy.

I hope this helps.

Amy no matter how unfair you think the $50.00 late fee to be - pay it, even if you write paid under protest on the check and take them to small claims court later over it. Because if these people are as against you as you think, depending on your CC&R's or state law it can get worse.

Say your monthly payment is $200.00 + $50.00 late fee. You pay the $200.00 but ignore the late fee. Next month if they are allowed they could credit the first $50.00 of your $200.00 to the late fee making your monthly payment short $50.00 so you get another $50.00 late fee now you owe an additional $100.00 month after that $150.00 so you can see that $50.00 fee can cost you plenty.