Quote:
Posted By BillH10 on 11/24/2014 3:39 AM
Nigel
As others have said, I am not an attorney, nor do I practice law.
I've read the Texas Property Code sections 209.0051 (e) and 209.0051 (h) (5). Your interpretation appears to be accurate unless your association is subject to section 209.0051 (a) with respect to being subject to Government Code Section 551.0051.
Now, what do to about it? Here are some thoughts:
1. I recommend you or the Board consult with your management company with respect to how far along they are with implementation of the increase. If they have notification letters printed, especially with postage affixed, or the invoices/statements have been prepared, again especially with postage affixed, they most likely will bill the association a second set of charges if they have to prepare a second set of letters or invoices. (As an aside, as the owner of a management company, this is exactly what I would do. The Board of one of the associations we manage has approved an increase, effective January 1, 2015. The invoices will be mailed on November 30th. With the exception of a few, they are printed, stuffed, stamped, and ready for transport to the post office. If the Board stopped this process now, then subsequently decided to proceed, the administrative and wasted postage costs they would be billed would be $1200-$1500 instead of the normal amount)
2. If stopping the process now is going to result in increased expenses to the association, and especially if an assessment increase is likely to be noticed and approved for the December meeting, I recommend you consider calling a Special Meeting as quickly as possible to notice the members of the increase and hold the meeting. Under section 209.005 (e) (2), you can do this in 72 hours. Other than possible expenses for a meeting room, and possibly some charges from the management company (if they attend your meetings), this special meeting should not cost anything.
3. In any case, as suggested by another poster, I recommend the Board convene a special meeting prior to your scheduled December meeting to consider what to do about this, as quickly as possible. I don't believe you should stop the implementation process without holding a properly noticed meeting of the Board. You can structure this meeting, and the meeting notice, in such a way that, if after discussion the Board determines it wishes to proceed with the increase, notice of that has been given, and the increase can be approved. While you can certainly hold a meeting to decide not to implement the assessment telephonically under 209.0051 (h) I do not recommend you do so as it will limit your options to ratify the previous decision to proceed with the assessment increase.
If your colleagues on the Board do not agree with you, and do not wish to hold a meeting, or stop the increase, you have a dilemma. You may have alternative courses of action available to you; I think I would write a letter to the other two board members outlining your position. Then, I suppose, all three of you should cross your fingers, hope no association member challenges the increase, and do it correctly the next time.
A question I have is, where is your management company in this? They should have been aware of the meeting notice requirement and should have advised the previous board of the points you have raised. Out of curiosity, was the meeting notice posted on the website, and did it contain a draft agenda which included an item regarding an assessment increase? If so, was a general e-mail sent to the association? I know you said you did not receive one but is it possible you did not receive it for some unknown reason. As thorough as you have been in this, I suspect you have already determined that notice was not posted on the website or an e-mail sent.
As for your comments regarding the contracts, Boards routinely commit their successors to contracts. In some cases it may be necessary to do so, to ensure work is performed when required, or to obtain pricing advantages, such as discounts if the contract is for two years and not just one; there may be other similar reasons. If the contracts are troubling you, read them to determine the cancellation/termination process. You may not be as committed as you think you are.
Thanks for the insight
I've already outlined my position in writing to the other two directors, no response as yet.
As for where the management company is on this issue - From my observations, the management company does all of the heavy lifting. They definitely should have been aware of the changes brought about by the 2012 act. The way the management company (board) handled the noticing requirement in the past was to simply put time, date, location on the website - no indication of what the agenda was, and they included a request for RSVP due to limited space (meetings were held at a board members house). I had previously pointed out to the management company that by using this method of notification they made it very difficult for a homeowner to determine when a board meeting took place. Board meetings are generally quarterly and the notice was posted 72 hours prior to a meeting, I have never seen agenda items included with the notice of meeting. This method of notification required a homeowner to log into the management company website every 72 hours to catch the notice. I presume that this was intentional, because at the annual meeting there was a discussion about security items and the Pres said that he would "invite" one of the association members to the next BOD meeting. I do intend to ensure that any future meetings fully comply with the statute.
This is not a large HOA - it was totally built out this year and consists of 230 residences. The major expense is cutting the grass and landscaping, Capital assets would the playground equipment, benches, picnic tables, irrigation system, Roads, sidewalks, lighting are the responsibility of the City and the power company.