CC&R's not providing full answers

As a homeowner in a HOA community where I pay fees for the Board to make decisions on my behalf, do I have the right to ask the Board or Management company to see legal documentation proving ownership of a board member? (Such as a Title, or Contract of sale…)

Where would I find this answer in written form? I cannot find it in our CC&R's

I am worried that something is going on with our HOA President and our Management company.
When I brought it up, the issue was diverted.

Also if a HOA board has 5 members, can 2 of those members hold a HOA meeting?

Your help and answers would be very much appreciated :-)

I am not familiar with property ownership records and processes in other states. In Texas, I can access the county centralized appraisal district website, input the street address, and, unless redacted (peace officers, sexual crime victims, etc.) the name of the owner(s) and other information is displayed. You should contact your local county clerk and ask how you can determine property ownership. If you happen to know a local real estate agent, he or she should be able to provide assistance.

Can 2 of 5 board members hold a meeting? A conditional yes. Generally, a quorum of 3 is required if you have 5 board members, but one or more members may choose to designate another board member as a proxy. However, this must be reflected in the meeting minutes.

We are having the same problem. We found three of the board members having a meeting at our Chinese restaurant. I have been told by our city to contact the DA to resolve the issue. We believe our HOA is working with the Management company to create absurd findings for additional fees, but those are not reflected in the annual budget?

We also have had those questions diverted. There should be more options for homeowners.

As others have noted, Chimeme, it's not difficult checking with county clerk' or tax assessor's office

But read your own documents first, which will say whether one must be an owner to serve on the board. Probably is in your bylaws.

Others know more about AZ HOA meeting requirements than I. In my state's corp. codes and stated again in our bylaws, a quorum of the board must be present by telephonic means or in person to count towards a quorum. Our bylaws say a majority of directors is a quorum. If fewer than a quorum, in our case, the directors who ARE present cannot take any action, i.e., vote/make decisions.

One director giving another a proxy is not permitted in CA for board meetings. But apparently in TX, per Bill, proxies are allowed for directors to use at Board meetings. I don't know about AZ.

Looks like you should start out reading your bylaws to learn more about meetings, etc. As Roger wisely puts it, become knowledgeable.

Can you be more specific about what you think is "going on" between your president & MC? What did you ask them that they ignored??

LH: how many are on your Board?? Were the 3 conducting business or just dining together? In other words, how do you know that it was a meeting? If you know FOR A FACT, that they were conducting HOA business without providing written notice to homeowners, call them out at the next "real" board meeting. Take others with you!

She was appointed as secretary but was she appointed as a director? The two are not the same and many CC&R's allow a non-director to serve as a officer such as a secretary or treasurer.

Board minutes are not transcripts of every word said.

Send your request to be on the ballot certified return receipt.

It might be better, LH, if you'd post your issues within your own HOA on the thread that you started. I'll reply to you on that one. Chimeme has enough troubles and adding yours is confusing..

Kerry, I'm very new to the whole HOA and this site :-) what is a MC? is that the Property Manager?
They have scheduled 6 open forum meetings the third monday October - April with the Owners HOA meeting in March. I have never received an agenda by email prior to a meeting. We are a community of Snowbirds, and the most the Property Management company along with the President will do is post notices on the clubhouse (that does not do a owner any good if we are out of the state)
I will look into the bylaws and state legislation and follow the rules :-)

Thank you again

Management Company - MC, got it!
lol

Chimene,

Do your governing documents specify that Directors may only be members of the Association?

If they do not, then anyone who is properly elected or appointed may serve as a Director.

Do your governing documents specify that Officers must be Directors or members?

If they do not, then anyone who is properly appointed may serve as an Officer.

As for submitting names, you can deliver them in person and get a receipt of delivery or send the notice by certified mail. Then if the Association claims they did not receive the names, you can provide proof of delivery and, if desired, challenge the election through the courts.

Interesting GeorgeR8,
I thought that too.
I just received a email from our MC that said and I quote...

"I received an email from (I put this here, the newest board member) regarding the issue of (Name) being a Board member. I am a real estate agent as well as an HOA manager so I understand contract sales. When a person buys a property on contract the title is kept in the original owners name until the debt is paid which makes it easier for them to foreclose if the current owner defaults on the debt. The person buying a property on contract is the legal owner even if their name is not recorded at the assessor’s office so they have all rights to the property as an owner.

I had a community that had this same scenario and they actually got an opinion from an HOA attorney that said that a contract sale allows the Buyer the same privileges that any other owner would have so they are allowed to run for the Board and serve on the Board.

In the future please consult us as to whether a person is an owner or not as the assessor’s office is not a reliable source."

I have since read the AZ State Legislature

Arizona State Legislature section 44-6804 Disclosure
#2.- A statement that the consumer does not "own" the rental property until the consumer has paid the total amount necessary to acquire "ownership"

And also

Section 44-6810. Advertising
#3 - that the consumer acquires no ownership "rights" unless the total amount necessary to acquire ownership is paid."

Does this not enforce what you are saying? What would be my best response?

Thanks a bunch!

Normally, when a person purchases real estate under a contract, the contract is recorded. By doing so, the buyer acquires the rights of an owner. The assessor will look to the buyer for payment of taxes and list the buyer as a secondary owner.

If this contract has not been recorded then the person is not an owner, regardless of what the MC says. The board member may be purchasing on some sort of high-risk unrecorded rent-to-own contract or they may be involved is a fraudulent transaction whereby the seller is concealing the sale from his mortgage lender. In any event, if the board member has not recorded his/her purchase contract I would not want this person on any board of directors as they lack the judgment and knowledge necessary to serve.

Under no circumstances would I accept the word of the MC. Since they seem to have inside knowledge of the board member's apparently unrecorded contract sale they may very well be a party to the sale. The fact that the MC claims that some unnamed attorney provided an undocumented opinion for some other unnamed HOA at an unknown time carries zero weight. After reading the MC's email, my advice would be to find a less dishonest MC.

The MC is correct that the assessor's office is not the best source for determining ownership, but this is mostly a matter of timing. The assessor's records are not updated as often as they should be.

The assessor's website will show you the name of an owner who is presumably the seller. Search the county recorder's website using the name of that seller and the name of the board member. If there is no record of a sale or a contract for a sale, then the board member is not an owner.

You can search the Maricopa County Recorder's records at http://recorder.maricopa.gov/recdocdata/


The above statutes are irrelevant to your issue. They deal with renting real estate.

It requires one but the Articles of Incorporation or the By-Laws will most likely have a specific number of directors.

Hi MelissaP1
I'm trying to educate myself with as much information as I can, as our community has a lot of snowbirds that do not know the AZ laws. Finding a site like this is a great way to get information that leads to the laws. Not the hearsay we are being told by our MC/ PM and President of the board. This is why I'm asking lots of questions.. and yes I will be submitting my name for election.

I am very grateful for all the leads and information I have received on this site.

Hi Tim,
Our HOA board of directors only consist of 5. When we have a meeting they (if all of them are there) are joined by 2 reps from our management company.

I find they are doing things not to the book but whenever we question them on it they divert the question.

In my quote above you will see where the management company has said that a "rent to owner" has the same rights and privigeles as a owner and can stand on the board.... (Rights and Privileges) the rights are not in question, it's the "Unit owner" which is. Our by laws state a "unit owner " can stand on the board.

Is she right or am I wrong?

My counter to such an argument would be (expecting that the governing documents specify that you must be a member to serve):

Our contract, as outlined in the [document, article, section], defines members as xyz and per [document, section] only members may serve as Directors. Per the terms of our contract, Mr/Mrs ABC is not a member of the Association. Since they are not a member, per our contract that they agreed to, they may not serve.

I would expect that the Board complies with the terms of the contract and inform Mr/Mrs ABC that they are not qualified to serve and can no longer serve on the Board.

The Board is free to propose an amendment to the [document] to remove this requirement or change the definition of membership. However, until that is done, I expect those elected to comply with the terms of the existing contact just as they expect every other member of the Association to be in compliance.

The contract itself, in my opinion, would be the CC&Rs. However, the contract is often seen as a collection of all the governing documents together (CC&Rs, Articles of Incorporation, Bylaws and Resolutions).

I suspect that the CC&Rs, as well as the Articles of Incorporation, and perhaps the Bylaws all have a definition of "member"

If they differ between each other, the definition in the CC&Rs would be the one that must be complied with as that document has higher precedence then the others.

I think I pointed out above that any contract to purchase real estate must be recorded. Failing to record the contract means, in the eyes of the law, there is no contract and no sale. I think that a person buying property under a bona fide recorded rent-to-own contract would be considered the owner, even though title remains with the seller until the contract is satisfied. (In my association the CCR's specify that a person buying under a contract is considered the owner.)

I am not a fan of rent-to-own contracts as there is no regulation of them in Arizona. Any property owner may draw up a rent-to-own contract and insert whatever terms and conditions he chooses. While these contracts allow buyers who would not otherwise be able to buy to enter the market, I think most of it is a carrot on a stick. I know no one personally who has ever acquired title to a home through one of these rent-to-own contracts. The seller benefits by pretending to have no obligations as a landlord, so all maintenance falls on the buyer/tenant. Those who cannot qualify for even an FHA mortgage are not likely to be able to fulfill their obligations under a rent-to-own contract, which is alluded to in the property manager's response about being able to foreclose easily.

I recall seeing at least one rent-to-own contract where there was not even an agreement to purchase; the contract said that if someday the tenant wished to purchase the property that a certain percentage of his paid rent would be applied toward the down payment but neither a sale price nor a down payment were set in the contract. Those terms are so vague that even though the agreement was denominated a rent-to-own contract that a court would not likely find that an actual sale has taken place.

In your case, if the board members rent-to-own contract has not been recorded then she is definitely not a unit owner.

My only comment to anyone publishing a website or a newsletter is to keep emotion and opinions out of it.
Simply state the facts as you know them, provide references so others may independently verify those facts, and let the facts speak for themselves.

You are accountable for what you publish. Therefore, by sticking with publishing only verifiable facts, you should be protecting yourself from any potential legal action.

Now, if all you are going to do is provide copies of the governing documents and links to applicable State laws, I think that is a great idea. This is what our Association has on our website. Even though members rarely use the site, we receive lots of compliments from potential buyers and Realtors saying that the site shows a transparency that many Associations do not show.