Say nothing about anything confidentiality rules??

Our builder hold the majority of the board. Resident board members have been warned for years that they cannot say anything to residents about board business no matter what it referred to. Nothing having to do with confidentiality has ever been written down.

Resident board members have been silent for years. Finally the residents elected an attorney to the board, and he asked to see the confidentiality rules and was told they were informal but they included the following:

Information regarding bids on contracts, budget discussions and contract pricing.
Information pertaining to Homeowner incidents and personal property damage.
Specific homeowner information.
Any information that that can cause issues between neighbors.
Any information that if disseminated could impact on the value of the homes and the reputation of the community.

It would seem that the first four are totally legit, but they threw in the last item, and there was an uproar since ANYTHING could conceivably affect the value of homes and the reputation.

This last item was added by the builder for obvious reasons, but is it proper to limit board members from discussing with homeowners about issues concerning leaks, cracks, and a myriad of other issues which are of great concern to the community?

Opinions welcome. Some residents are furious that the silence we have heard for years will now continue.

Thanks,
Steve

Is your community a form of condominium or legislated legal template ?

I just have to ask. Where did you get your information NY IS A "closed meeting state"?

You pass that off as accurate when in fact you are incorrect.

Hmm, seems to me that the attorney elected to the Board would know whether or not it was improper and whether or not it was enforceable.

The poster states "We are a condominium. The builder will hold a majority vote on the board until the very last home is sold."

With legislated templates like condominiums, many jurisdictions create a Board of Directors (or " of Managers in NY" ?) with Act compliance required from date of registration of the Declaration. Such would typically be required no matter whether the Declarant ( ? "Sponsor" in NY ?) or whoever controls the majority or largest single voting bloc.

If New York's Code Article 9B Condominium Act somehow exempts the application of that Act's disclosuring until turn-over or ? Declarant's last unit sold or whatever, then the state legislators must have contemplated potentially North Korean scenarios for potentially decades.

If the Act really gives a Declarant ? "Sponsor"? such a dispensation from compliance , then I would be surprised but happy I do not own a NY condo.

Declarant-controlled or First Boards or Sweetheart Boards or " #$! # Boards" may get lots of hate -deserved or not. But the usual analysis I think is that they must comply with the state's condo law. Legal secrecy is hard to believe.

It would be VERY helpful if I could get response to this...

Actually, at the board meeting, neither the resident attorney nor another 12 people in the room heard what the president of the HOA (sponsor appointed) claims he said with reference to what is to be considered confidential... "Any information that if disseminated could impact on the value of the homes and the reputation of the community."

My point here was to ask all of you who are on HOA boards or know a great deal about them if you ever heard of such a provision in confidentiality rules of an HOA?

If the sponsor holds the majority of a board, can he simply add whatever he wishes to the list of things board members cannot discuss and then simply get the 4 to 3 majority vote on it because the sponsor board members have always, from day one, voted in a block.

Steve

As you may recall, I run the community blog. After the board meeting in question, the resident board member who is an attorney came on to the blog to tell the community what transpired at the meeting. One of the subjects was the confidentiality policy. He said:

"The Board does have an informal confidentiality policy:
1. Items regarding individual residents and their issues are confidential, we are not looking to embarrass anyone or cause them problems with their neighbors
2. Items such as contracts, bids, prices etc are confidential, we do not want to put our Management Company or the Board in a position where negotiations can be compromised. Otherwise, not much else cannot be spoken about by Board members and can be discussed with residents."

Then a few days later, the HOA website (a sham because it is 100% controlled by the builder (also called Declarant or sponsor) in its board "excerpts" section announced the following:

"The Board discussed the importance of confidentiality noting, among others, the following topics of what should be kept confidential by Board Members:

Information regarding bids on contracts, budget discussions and contract pricing.
Information pertaining to Homeowner incidents and personal property damage.
Specific homeowner information.
Any information that that can cause issues between neighbors.
Any information that if disseminated could impact on the value of the homes and the reputation of the community."

I noticed the addition of the last line and posted to the community about it. I also emailed 4 people who were in the room for the board meeting, and none recalled any mention of the last item.

The attorney resident board member followed up with everyone in the room, and posted that the president of the HOA (who, of course was appointed by the builder, Declarant, sponsor) claims that he mentioned the part about "value" and "reputation" at the board meeting, and one other board member (not sure if he was sponsor appointed or resident) thinks he recalled it. That is out of 14 people. The attorney, and two CPA on our resident side of the board were certain there was no mention at all.

Somehow, it would seem to me that Freedom of Speech might trump any confidentiality BS that is intended only for the benefit of one side, and since ALL board members have a Fiduciary responsibility to homeowners, they are not entitled to do things which are meant simply to benefit the builder - Decralant - sponsor. Is that a correct assumption?

You use of the word "Draconian" was very informative. It would be great if others would give their opinions as well.

I really appreciate the feedback!!
Steve

Thanks, Kerry.
Here is the problem as I see it.

Since it is a condominium, every homeowner owns a piece of every home. If our board members do not tell us of issues concerning defects - as they have not in the past - homeowners are lulled into a false sense that everything is just fine.

Our builder does not hesitate to tell us everything is fine, and the "official" HOA website controlled completely by him avoids discussions of anything that is not positive. You will only see some mention of a problem if the blog brings it up and residents demand answers.

We will shortly be going into Transition, and for those who do not read the blog or do not believe it, the assumption is that we have nothing to worry about and these is no need to bother with engineers and lawyers and accountants. Our builder has pretty much suggested this himself or that he can recommend good engineers.

Residents who have had issues with their homes are told that the issues will be handled after they sign a confidentiality agreement that they will not talk about the problem to anyone.

In my opinion, just like the added clause to the confidentiality rules, all of this is designed to benefit and protect the builder, but it could potentially be extremely damaging to the homeowners if we let Transition go by without protecting out interests.

Nobody wants the values or reputation of the community to be diminished. But board members speaking frankly to homeowners in emails or at meetings, will not hurt the community and only make the homeowners stronger in their resolve to fight to make things right now and through Transition.

Steve

Since my community was already turned over to the homeowners when I purchased my townhome, I don’t have any experience with new communities and transitions, but here’s my two cents anyway (for what it’s worth).

It seems to me not providing information on whatever could “impact the value of the homes and reputation of the community” is overly broad and subjective as hell (some issues are more important that others and even that depends on who you talk to).

It would also appear that if the confidentiality rules are informal, there really isn’t anything that can stop a board member from talking to his/her neighbor – although I agree with your first post that the first three items on your list probably should remain confidential (Information regarding bids on contracts, budget discussions; contract pricing; homeowner incidents; personal property damage; and specific homeowner information). “Information that can cause issues between neighbors” also seems a little too broad for my taste (generally, the Board should stay out of that anyway unless it’s an issue that affects the common area or several neighbors)

As to your question on what might happen if there was a vote not to give any information whatsoever to you, the blog administrator, I don’t know what would happen. I suppose that board member could get booted off the board or resign in protest, but what about the other shoe that might drop? Would the developer then sue the board member and you? You can consider the hypothetical, but I think that’s a waste of time. Worry instead about what’s more concrete – in one person’s opinion, that would be on the construction issues because that could affect homeowners long after they take over the community.

Now, if you can’t get information from the developer, you’ll have to take your case directly to your fellow homeowners. It’s great you have a blog, but as you said some may not be aware of it or read it, so pounding the pavement and talking to them directly may be your best move. I’d start with the homeowners who have had problems with their homes – they could provide details on how easy (or difficult) it’s been to get those problems addressed. More important, they can help you get the word out.

You may also need to start now in developing a strategy on what you’d like to see during the transaction period. To get more insight on what you can or can’t do, take your documents and have your own attorney review them to see what should happen, what you’re entitled to right now and what steps you can take. Educate the homeowners on what needs to happen – some will join you and others, well they’ll do what they’re doing now (stick their heads in the sand and assume everything’s ok).

And keep pressing for answers and document your efforts – if all hell breaks loose after the transition, you’ll need that for the ensuing court battle.

As soon as the community can do so, get more of your own people on the board so they can start going through the records to see what may be necessary – and they may be able to change the rules on communication.
So, that’s my two cents – spend it or toss it in the fountain, as it were and good luck!

Steve

Is your blog considered to be an anti-developer blog? I am under the impression that you have had or are expecting to have issues with the developer. Am I correct?

"Could resident board member refuse to abide, and, if so, what could possibly be the penalty?" Penalty for whom ? : for the blog-master "spiller of beans" or for the Deep Throat inside the BoD ?

From next door, courts shockingly create - magically ? discover ? - condo law by-law power allowing Board majority to internally unseat other individual Directors, all without owner input. Previously legislation widely believed ( this power ) to belong only to the owners entitled to vote including by recall-type Requisition meeting or at next AGM election. Then along comes so-called Ethics by-laws where "ethics" may have little to do with it. . . One Director fought back . . . http://ontario.cafcor.org/index.php?option=com_fireboard&Itemid=46&func=view&id=17809&catid=9