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Problem with board members and wrong (maybe) HOA rules and covens.

Started by BryanW2 • 15 replies • 1949 views

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BryanW2 (Virginia)
Posts: 3
Posted:
I find myself in the middle of a rather interesting squabble over HOA rules.

The community we live in was initially started by a local N. VA developer. In 2006 they came up with the HOA and sold one house. The HOA Covens they elected to adopt were pretty strict and intrusive. About a year later the next house was build and purchased. The first two home owners are on the board, and have decided they like “their” HOA rules so that’s what got filed and they intend on enforcing.

Now it gets interesting. The original developer folded the project and sold and or turned it over to another N VA developer. That company adopted more lenient rules, and turned the HOA management over to a local company. Most of the homeowners were given the “new rules”, and they were in effect when the HOA management was turned over to the homeowners.

So we have two of the original home owners pushing “their rules”, and attempting to enforce them, and me the HOA President believing the “last rules” are the ones in effect legally.

Who’s right?

And what do I do to limit the liability to the board?

Thanks in advance

Bryan
TimB4 (Tennessee)
Posts: 21,062
Posted:
Quote:
Posted By BryanW2 on 09/18/2013 5:41 AM

Who’s right?

CC&Rs (i.e. deed restrictions) are filed with the county. Go and get a copy direct from the source. This will tell you who is right. If they aren't filed, they aren't enforceable.

Quote:
Posted By BryanW2 on 09/18/2013 5:41 AM

And what do I do to limit the liability to the board?

Once you get a copy of what is filed with the County, give them a copy and explain that these are the only covenants that are enforceable. The urge them to verify this with their attorney (if needed).

RayC4 (Virginia)
Posts: 173
Posted:
Bryan, I agree with Tim on the Covenants issue, But as I am also in Virginia and have big-time subdivision issues myself, your situation interests me. It sounds as if there are very few homeowners at this point. Was there a formal 'turnover' from declarant Control to the homeowners per the Property Owners Association Act? And what is the current ratio of occupied homes vs total lots?
DaveD3 (Michigan)
Posts: 796
Posted:
Tim is 100% correct. See what docs are on record with the county. I would also check to see if those two homes actually have different docs filed than the rest of the neighborhood. That would be downright odd, but interesting.
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Could it be possible that those two houses are their own HOA and the OP is under/in a different HOA?
DaveD3 (Michigan)
Posts: 796
Posted:
Quote:
Posted By JohnC46 on 09/18/2013 11:19 AM
Could it be possible that those two houses are their own HOA and the OP is under/in a different HOA?

It seems like that might be a possibility.
Wouldn't that be interesting? A 2-unit HOA with a 5-member board
BryanW2 (Virginia)
Posts: 3
Posted:
I’ll check with the county, but I think the Secretary refilled all the docs when the homeowners were given the responsibility of the HOA wen the management company dropped out upon the sale of the last house. He did not bother to show me what he filed, and I made the assumption that he would file the bylaws of the last HOA, and the ones he had complained aobut.

My problem is I have a board member that essentially filed (with the state and insurance agent) the bylaws that he liked, but none of the majority of the owners had a chance to vote on.

This is not the first time he has tried to act unilaterally.

There were two 8 home communities in our immediate area. Ours, and another. The original intent was for them to be one community. When the developer dropped the project the other 8 homes were split off into their own group. Leaving the two existing houses by themselves.

The two houses are now owned by the VP and Secretary/Treasure of our HOA, and want to join the other community. The other community has exceptionally restrictive covens, to include a Claus that will allow them to increase fees significantly without first talking to the home owners, that the majority of home owns in our HOA have rejected. We only have a retention pond as common property. The other community has common property to include the area around the entry into the community.

However, the Secretary has essentially used rules similar to the restrictive bylaws as the “official bylaws” of our HOA.

When joining the other HOA was defeated, the secretary tried to saddle our home owners with maintenance fees supporting the other community, without even bothering to talk to the home owners.

This appears to be evolving into one of those HOA horror stories I’ve heard about, with the secretary and VP (we only have a three member board) doing what they want and not necessarily what the home owners desire.

About the only bright spot is we will have board elections quite soon.

Bryan
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Bryan

To help get this straight. In your HOA how many lots/units will there be and how many are now owner occupied.

Thanks

DaveD3 (Michigan)
Posts: 796
Posted:
I'm lost on which community is which and which is the other one.

As for the documents on file at the county, do they have a historical record?
Curious that it seems like your county requires little in the way of verification, as if anyone could file new documents.
BryanW2 (Virginia)
Posts: 3
Posted:
We have 8 lots, all occupied.

The development started in 2006. Quaker Homes was the original developer. The came up with the original bylaws, that are very strict. The first two or three home owners purchased houses from Quaker. Two board members are the original home owners.

Quaker stopped development around 2008/2009, and it was later taken over by an organization called MVP.

Armstrong management was utilized to administer the HOA. MVP apparently did not like the original bylaws and simply replaced them, as they owned 5 or 6 of the remaining lots. They outvoted the first two or three homeowners. The original home owners do not like the bylaws imposed by MVP, they are less strict than the ones by Quaker Homes.

In October of last year the control of the HOA was turned over to the homeowners with the sale of the 7th house. The last house was sold about 3 months ago.
The Secretary of the HOA apparently filed the old, 2006 bylaws, with all the documents associated with the HOA. I was unaware of this as I made the assumption that he would in fact file the correct docs. I will never make that mistake again.
Enter the other HOA, that we historically were supped to be part of. Sort of like N and S Korea. They are far stricter, and feel we should be joined with them. Along with the two original home owners who feel our community should be rolled into theirs.

In any event they, the other HOA feels we should contribute to the upkeep of their common areas. The board secretary tried to impose fees on our community to support the other community simply by board executive order and without even talking to the other homeowners. I blocked that attempt. Now I’ve found that the bylaws filed with our HOA are in fact not the correct ones, and I’m trying to fix it.

I have an uncomfortable feeling that this is turning into one of those HOA nightmares you hear about, with at least one and maybe the other HOA board member’s ramming things through and forcing their will on the community.

- Bryan
DaveD3 (Michigan)
Posts: 796
Posted:
It's still not clear what this "other HOA" is. I assume it's an adjoining neighborhood that existed before your 8 lots were developed.

Regardless, it probably doesn't matter.
You say the secretary filed some deed restrictions & whatnot with the county. This would have taken place after the units were sold. Frankly, and while I'm no attorney, I think that's somewhat irrelevant.

What documents were on file with the county for your 8 lots at the time of sale? i.e. what did each of those owners buy into?

Those documents would state explicitly what is required to amend them. i.e. what authority/approval must have been granted to file new or amended documents? There was probably a requirement for a supermajority of owners voting in favor (2/3 or 3/4 seems to be typical).

Once you have that info, you can answer the remaining questions:
What were the restrictions on each lot at the time of sale?
Is there a discontinuity between the first 2 and the remaining 6 lots, and do they share time of sale documents?
What was required to amend the documents to make ANY changes? Did the board receive that authority before filing whatever the secretary filed? Were the proposed documents properly distributed and was there a vote that met the requirements of the original documents?

In the event that there were NOT any documents on file at the time of sale, check with your local municipality. Odds are that going from NO legal HOA (no docs on file at the county) to having an HOA requires far more in terms of approval. I would expect that to include a 100% owner approval and approval from the township/city/municipality.
GlenL (Ohio)
Posts: 5,491
Posted:
Bryan since you keep referring to the Board members living in the first section, I am assuming that you are one HOA built in phases by two different builders, which is not that unusual. As Dave pointed out it would probably be simpler to just amend the Covenants so there is one set for everyone. And yes homeowners can call a special meeting for the purposes of amending the documents, the CC&R's should state how.

Studies show that 5 out of 4 people have problems with fractions
KellyM3 (North Carolina)
Posts: 2,239
Posted:
I propose a demilitarized zone that's buffered by rows of leland cypress trees...and no unification of the North and South portions of the peninsula
KellyM3 (North Carolina)
Posts: 2,239
Posted:
I propose a demilitarized zone that's buffered by rows of leland cypress trees...and no unification of the North and South portions of the peninsula
TimB4 (Tennessee)
Posts: 21,062
Posted:
Quote:
Posted By BryanW2 on 09/19/2013 4:09 AM

My problem is I have a board member that essentially filed (with the state and insurance agent) the bylaws that he liked, but none of the majority of the owners had a chance to vote on.

Unless your a condominium, the Bylaws do not need to be filed with the county. they can be but do not have to be filed.

Additionally, if you are not in a condominium, per § 13.1-823 of the Virginia Nonstock Corporation Act, the Board of Directors adopt the initial set of Bylaws.

Was the set of Bylaws that was filed the initial set of Bylaws?

Also, per VA § 13.1-892,
the Board may amend the Bylaws unless the CC&Rs, the Articles of Incorporation or the Bylaws themselves specify that the power to amend the Bylaws can only be done by the membership.

Quote:
Posted By BryanW2 on 09/19/2013 4:09 AM

This is not the first time he has tried to act unilaterally.

It could be intentional or it could be that the individual is simply trying to cross all the t's and dot all the i's.

Regardless of the reason, based on your postings, it appears that it may be better to have this individual removed from that position. With such a small development, a recall will certainly split the neighbors and could change the dynamics of the neighborhood. Therefore, it may be better if the person simply wasn't reelected to the position. With such a small development, this will require some finesse to gather support without causing lines of division.

TimB4 (Tennessee)
Posts: 21,062
Posted:
Quote:
Posted By BryanW2 on 09/20/2013 5:36 AM

The development started in 2006. The came up with the original bylaws, that are very strict.

Bylaws or CC&Rs (there is a difference)?

PLAT - The recorded map or 'plat' defines each owner's title to property including the association's title to common areas.

The CCR's (Covenants, Conditions, and Restrictions) - are publicly recorded deed restrictions.

The Articles of Incorporation - filed with the Secretary of State provide the legal basis of the association in the form of an Incorporated Non-Profit Corporation.

The Bylaws - are the rules for management and administration.

Quote:
Posted By BryanW2 on 09/20/2013 5:36 AM

MVP apparently did not like the original bylaws and simply replaced them, as they owned 5 or 6 of the remaining lots. They outvoted the first two or three homeowners.

Yep, the Declarant typically has control of the votes.

However, you keep posting the term Bylaws but seem to describe the CC&Rs.

Please clarify.

Quote:
Posted By BryanW2 on 09/20/2013 5:36 AM

In October of last year the control of the HOA was turned over to the homeowners . . .
The Secretary of the HOA apparently filed the old, 2006 bylaws, with all the documents associated with the HOA.

Again, Bylaws or the CC&Rs?

If it's the CC&Rs, and the Board doesn't want to admit their mistake, then it looks like you may need legal action to have a judge determine which set is the proper set.

Quote:
Posted By BryanW2 on 09/20/2013 5:36 AM

I have an uncomfortable feeling that this is turning into one of those HOA nightmares you hear about, with at least one and maybe the other HOA board member’s ramming things through and forcing their will on the community.

Yep, it may be. However, it appears that the work will be worth it.

NOTE: You need to use the proper terminology when discussing these issues. Here are some links to sites that may help understanding that terminology:

HOA-USA Virginia page

Community Association Network Virginia Page a sponsor of HOATalk.

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