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Spouses and Roommates on Board & Subboard

Started by KarenC15 • 13 replies • 1653 views

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KarenC15
Posts: 118
Posted:
In our HOA, we have three, previously four, couples that serve on two boards. One will serve on the master and the other serves on the regular association board. The master represents the homeowners and has the right to assess the other board. This seems like a conflict of interest in any community, but especially in mine which is very small. Has anyone else dealt with that: having one household have members and nonmember residents serve on two boards with assessing and fining authority?
GnomeX
Posts: 253
Posted:
It depends. What does your governing documents say?

I once was the appointed Treasurer while my wife was the elected President. To stop accusations such as yours, I refrained from all voting and just did the book-keeping. Our problem was the Board appointed me as no one else was willing to volunteer for the position. With small associations, you can run into problems like this when no one is willing to volunteer for the Board. In our case we absolutely MUST have at least 3 members on the Board to comply with the Washington State HOA Act and other Board members were not willing to be Treasurer.

This isn't always a black and white issue.
GnomeX
Posts: 253
Posted:
It depends. What does your governing documents say?

I once was the appointed Treasurer while my wife was the elected President. To stop accusations such as yours, I refrained from all voting and just did the book-keeping. Our problem was the Board appointed me as no one else was willing to volunteer for the position. With small associations, you can run into problems like this when no one is willing to volunteer for the Board. In our case we absolutely MUST have at least 3 members on the Board to comply with the Washington State HOA Act and other Board members were not willing to be Treasurer.

This isn't always a black and white issue.
KarenC15
Posts: 118
Posted:
It is not discussed in our documents. We were just deeded the common areas through an oversight and no bylaws were ever created for the association or the master association. The master association just created bylaws without a membership vote that focus on anyone who is a resident being able to serve on the board (because someone wanted to add a roommate who was not on the deed). The regular association does not appear to have bylaws. I don't know where else I could look for such a rule. The covenants just say one vote per household, regardless of owners listed and membership is defined by the deed.
GnomeX
Posts: 253
Posted:
Sorry don't know why the double post.

Also I misspoke. It is the Washington State Non-Profit Corporation Act that requires at least 3 Board members. Not the HoA Act.
GnomeX
Posts: 253
Posted:
I am kinda confused on your post. Do you have 2 distinct Board of Directors for your HOA?
GlenL
Posts: 5,429
Posted:
Karen, I'm not an attorney but as I understand it every State requires a corporation to have by-laws in order to operate. Usually the AIC & Covenants require the HOA to have a Board of Directors (sometimes called Trustees) the by-laws list the qualifications to serve. These are often very lax when the Declarant is in charge since members of the Declarant's Board are often not homeowners but employees.

If the by-laws do not specify that you must be a member or their spouse to serve then anyone is eligible. If they don't limit it to one member per household at a time then it is perfectly OK for both parties to be elected and serve. Theoretically you could have a husband, wife and their adult children comprising the entire Board. That is if the other homeowners elect them and they are eligible under the by-laws to serve.

The one vote per household argument has been tried before but that is one vote per items the household is eligible to vote on i.e. elections or document changes. The Board is a different animal and every member on it is entitled to vote on Board business, no matter how related they are.
KevinK7 (Florida)
Posts: 1,326
Posted:
Quote:
Posted By KarenC15 on 09/04/2013 9:27 PM
In our HOA, we have three, previously four, couples that serve on two boards. One will serve on the master and the other serves on the regular association board. The master represents the homeowners and has the right to assess the other board. This seems like a conflict of interest in any community, but especially in mine which is very small. Has anyone else dealt with that: having one household have members and nonmember residents serve on two boards with assessing and fining authority?

I had dealt with that. The governing documents were quite clear who could serve on the board: members of the community, and member was restricted to homeowners. That didn't stop non-homeowners from serving and while those non-members were serving they decided to change the articles of incorporation to allow them to remain. They had a complete disregard for everything.
JohnC46 (South Carolina)
Posts: 14,230
Posted:
Non-owners can easily open the door for financial and legal abuse. I for one do not believe having non-owners on any board is a wise move.

TimB4 (Virginia)
Posts: 20,986
Posted:
Let me see if I understand this correctly. You have an Association for your section (lets call it Association 1) of the development and a master Association (lets call it Association 2).

You have one household where one spouse is serving in Association 1 and the other spouse is serving in Association 2.

If this understanding is correct then I don't see a conflict of interest.

To me, it's no different than if the master Association Board was composed of one member from each sub-association board (which does occur in many ares that have more than one Association). Now, I can understand how, depending on how the Associations are ran, this can give a perception of unfairness and should be avoided when possible. However, I don't see it as a conflict of interest.

BTW: So we are all on the same page, a Conflict Of Interest is defined as:
1) A real or apparent conflict between one's professional or official duties and one's private interests.
2) A situation where one duty conflicts with another -- for example, if an attorney were to represent both parties in a divorce proceeding.
JohnC46 (South Carolina)
Posts: 14,230
Posted:
Quote:
Posted By KarenC15 on 09/04/2013 9:27 PM
In our HOA, we have three, previously four, couples that serve on two boards. One will serve on the master and the other serves on the regular association board. The master represents the homeowners and has the right to assess the other board. This seems like a conflict of interest in any community, but especially in mine which is very small. Has anyone else dealt with that: having one household have members and nonmember residents serve on two boards with assessing and fining authority?

While you did not say so directly. Many Covenants, Bylaws say one vote per unit no matter how many owners. This means if owned by more then one person (corporation or hubby-wifey) then one person has to be designated the voting member.

I say if the Covenants, Bylaws say only owners/members can serve on the BOD, then a co-owning husband and wife cannot both serve as one is the designated voting owner/member. You cannot have one vote per unit but a hubby and wife both have votes on the BOD Do you see the conflict as I do?

Now I could see having "fellow owners" serving on committees, but not on the BOD.

My view on it.

TimB4 (Virginia)
Posts: 20,986
Posted:
Quote:
Posted By JohnC46 on 09/05/2013 2:14 PM

While you did not say so directly. Many Covenants, Bylaws say one vote per unit no matter how many owners. This means if owned by more then one person (corporation or hubby-wifey) then one person has to be designated the voting member.

I say if the Covenants, Bylaws say only owners/members can serve on the BOD, then a co-owning husband and wife cannot both serve as one is the designated voting owner/member. You cannot have one vote per unit but a hubby and wife both have votes on the BOD Do you see the conflict as I do?

John,

When a vote is before the membership, then it is typically one vote per Lot/unit.

When a vote is before the Board of Directors, it is one vote per Director.

They are two different things.

Yes, I see a perception of unfairness and I believe that creating this perception should be avoided whenever possible. However, if the governing documents and State laws do not prohibit two members from the same household from being elected to the Board, then from a layman's opinion it appears to be legal to have this occur.

I would have more concern if one spouse was elected and one spouse was appointed. However, if both spouses were candidates and both were elected by the members, then they knew what was happening.
TimB4 (Virginia)
Posts: 20,986
Posted:
As I said, creating the perception of unfairness should be avoided whenever possible. Sometimes, it simply isn't possible.

Real life example:

In my Association, we simply did not have enough volunteers to fill the Board (we only filled 3 out of 5 seats). Per our governing documents, a Director had to serve as President and VP. Per our governing documents, only the Treasurer could hold two offices at the same time and that other office was limited to Secretary (i.e. Secretary/Treasurer). However, the Treasurer refused to accept the office and duties of Secretary.

We begged and knocked on doors for volunteers for 30 days. However, nobody else stepped forward. Therefore, the Board appointed my wife as Secretary. However, to try and avoid creating a perception of unfairness, we did not appoint my wife as a Director. Thus, even though both of us (my wife and I) attended and participated in Board meetings, my wife had no vote. Hopefully we made this clear enough to the membership.
GnomeX
Posts: 253
Posted:
Quote:
Posted By TimB4 on 09/05/2013 2:37 PM

We begged and knocked on doors for volunteers for 30 days. However, nobody else stepped forward. Therefore, the Board appointed my wife as Secretary. However, to try and avoid creating a perception of unfairness, we did not appoint my wife as a Director. Thus, even though both of us (my wife and I) attended and participated in Board meetings, my wife had no vote. Hopefully we made this clear enough to the membership.

Yep Tim we had the exact same problem. No one would step up (and STILL won't step up). I was appointed Treasurer after another Board member resigned. My wife was elected and was Board President. I recused myself from ALL voting. I never voted on any Board decision. Our Bylaws also stated the President could only vote in a tie. For the entire year neither I nor my wife voted on ANY Board action.

Didn't matter. BOTH my wife and I were accused of stacking 2 votes on the Board. Never happened but the allegations and slander just kept flying.

Too many people don't look at facts. Instead they drum up drama and believe whatever the hell they want to believe.

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