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Suing Board members, Not the HOA Board

Started by WalterM3 • 393 replies • 25131 views

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WalterM3 (Georgia)
Posts: 442
Posted:

Okay, I have filed in Magistrate's Court (Small Claims) an action, not against the Board, but against the corporate officers, for malfeasance.

I engaged one of those online lawyer services, and he confirmed I can sue in a "derivative action" on behalf of the HOA members to get a judgment not for me, but to force the Board members to repay money to the corporation for 1) using funds wrongly and 2) without getting a majority vote in writing as required by Georgia law, as detailed below.

STATEMENT OF CLAIM

A derivative action is being brought by the plaintiff on behalf of the Homeowners Association for harm done to it by the defendants. One thousand, one hundred and forty dollars ($1,140.00) of the Association, funds were disbursed in September 2014 in order to have the Association attorney analyze and attend a deposition for a trial between two members of the Association. The deposition was pursuant to a suit between two HOA residents over a claim of defamation. It had nothing to with HOA affairs.

1. The four defendants were the officers of the corporation on the dates when the services were rendered by the attorney and the invoices from the attorney have those dates, September 3, September 4, September 5 and September 8, 2014.

2. No regular meeting of the Board of Directors was held during that time.

3. No Board meeting being held, per the Association Bylaws and the O.C.G.A. § 14-3-704 - Approval of action without meeting, an Action Without Meeting is required. A majority of the Board Members must approve the disbursement in writing.

4. The Association Bylaws require that Actions Without meetings be decided BEFORE the action. "Action Without A Meeting. Any action by the Board of Directors or by any committee appointed by the Board of Directors required or permitted to be taken at any meeting may be taken without a meeting if, prior to such action one or more written consents describing the action taken are signed by no less than a majority of the members of the Board of Directors or of such committee, as the case may be." (HOA Bylaws Art IV, Sec 7).

5. No Actions Without Meetings were recorded throughout years 2013 and 2014 per communication with the management company representative.

THEREFORE Plaintiff asks for relief in this action on two grounds:

1. The money was spent for the personal gain of two of the defendants.
2. The money was not disbursed with the concurrence of a majority vote of Board members in writing as required by law.

Defendants must make restitution by a payment of one thousand, one hundred and forty dollars ($1,140.00) to the general account of the HOA.

-------------------------------------------------------

What do ya'll think?

Walt
TimB4 (Tennessee)
Posts: 21,059
Posted:
Good luck.
LarryB13 (Arizona)
Posts: 4,099
Posted:
Walter,

Since the association was not a party to the lawsuit between homeowners they had no need for their attorney to be a spectator at the deposition. It was money poorly spent.

I have some reservations about the merits of your claim, however. You identified the defendants as "officers of the corporation" yet you allege that the Board of Directors failed to do certain things. Officers and directors are not necessarily the same people. In addition, officers may act to manage the day-to-day affairs without micro-management of the board if the board authorized them to do so.

The nature of your claim is essentially a class-action lawsuit as you seek reimbursement of misspent association funds to be paid to the association. Does the Magistrate's Court have jurisdiction to grant this kind of relief and do you have the standing to seek the relief requested on behalf of all other members?

I think you should have engaged the services of a real attorney before tilting at this windmill. Your chances of prevailing are very slim.

WalterM3 (Georgia)
Posts: 442
Posted:
Quote:
Posted By LarryB13 on 05/15/2015 3:21 PM
Walter,

Since the association was not a party to the lawsuit between homeowners they had no need for their attorney to be a spectator at the deposition. It was money poorly spent.

I have some reservations about the merits of your claim, however. You identified the defendants as "officers of the corporation" yet you allege that the Board of Directors failed to do certain things. Officers and directors are not necessarily the same people. In addition, officers may act to manage the day-to-day affairs without micro-management of the board if the board authorized them to do so.

The nature of your claim is essentially a class-action lawsuit as you seek reimbursement of misspent association funds to be paid to the association. Does the Magistrate's Court have jurisdiction to grant this kind of relief and do you have the standing to seek the relief requested on behalf of all other members?

I think you should have engaged the services of a real attorney before tilting at this windmill. Your chances of prevailing are very slim.


One of the purposes of Magistrate's Court is to present cases where the dollar amount is so low using a lawyer is not feasible. You'd spend more on the lawyer than you could get a judgment for. In Georgia you can make your claim and your answer orally. You have to actually come to court to do it, but a clerk or judge will take it down for you. And the stated purpose is to find justice.

The officers of the corporation of course are the president, vice president, secretary and treasurer. They also sit on the HOA Board of directors; in our case there is an "at large" Board member with voting power to constitute a 5 person Board.

HOA's in Georgia are governed by at least a couple of statutes, the Georgia Property Owners Code and the laws that govern non-profit corporations. It turns out that the HOA Bylaws and Covenants are taken almost verbatim from these statutes. So if an officer violates a provision in the Bylaws or Covenants, they have also violated a statute.

Our bylaws state in at least two places that all monies must be disbursed by a majority vote of the Board of Directors. If not discussed at a regular meeting, an Action Without Meeting must be captured --in writing- for the records of the corporation.

That is the law in Georgia, as my statement of claim says. I am hoping that the judge will take obeying the law pretty seriously. The 4 officers blithely, arrogantly, ignorantly failed to follow a clear provision in the Bylaws - and the law.

As I said earlier, a lawyer I talked to online (for $50.00) sent me a case in Georgia law that I can use as precedent. It gives me standing to sue the malfeasing Board members on behalf of the HOA/Corporation. A Class Action? Maybe technically.

I do appreciate your comments. But I think in this case I have covered all the bases. They used this money improperly; they failed to document that a majority approved it before the event, as required by law. They should pay it back to the HOA -- to the home owners.

Walt
LarryB13 (Arizona)
Posts: 4,099
Posted:
Walter,

After reviewing your state statutes I have come to the conclusion that your lawsuit is fatally flawed.

First, the statute you cited, O.C.G.A. § 14-3-704, applies to meetings of the members. It does not apply to meetings of the board of directors.

Second, O.C.G.A. § 14-3-821 is concerned with actions of the board taken outside of a meeting. I see nothing in the statute that would prevent a majority of the board from signing written consents to the action and recording that in the minutes. There is no time limitation within the statute to prevent the board from ratifying an action long after the fact.

Third, O.C.G.A. § 14-3-741 requires the participation in a derivative lawsuit of at least 5% of the member votes or 50 members, whichever is lower. Unless you have 5% of the voting power, you cannot bring this action by yourself. I did not research this for Georgia, but in my state a non-lawyer would not be permitted to pursue this kind of lawsuit as it involves bargaining for the rights of others.

Fourth, O.C.G.A. § 14-3-742 requires that before filing a derivative lawsuit you must make a written demand to the board to comply with the statutes. The board then has 90 days in which to correct the issue before you may file suit. You did not mention doing that.

Finally, I found nothing in the statutes that would lead to the conclusion that even if you were to show that the board expended money without properly documenting where it was approved that the money would automatically become a personal debt of the individual directors.

After finding so many problems with your lawsuit, I did not bother to see whether a Magistrate's Court has jurisdiction to hear derivative suits. Jurisdiction is usually set forth in statutes and in the state constitution. The dollar amount is not the only controlling factor. For example, statutes in my state require that if I seek a declaratory judgment that I must proceed in the Superior Court, regardless of the dollar amount in controversy.

You should have consulted with a real lawyer before diving in head-first.
WalterM3 (Georgia)
Posts: 442
Posted:


Wow, that is a lot of research!

1)

§ 14-3-704 - Approval of action without meeting

O.C.G.A. 14-3-704 (2010)
14-3-704. Approval of action without meeting

(a) Unless limited or prohibited by the articles or bylaws, or unless this chapter requires a greater number of affirmative votes, action required or permitted by this chapter to be approved by the members may be approved without a meeting of members if the action is approved by members holding at least a majority of the voting power."

Our Bylaws read:

"Section 7. Action Without A Meeting. Any action by the Board of Directors or by any committee appointed by the Board of Directors required or permitted to be taken at any meeting may be taken without a meeting if, prior to such action, one or more written consents describing the action taken are signed by no less than a majority of the members of the Board of Directors or of such committee, as the case may be. Such written consent or consents shall be filed with the minutes of the proceedings of the Board of Directors or of the appropriate committee and such consent or consents shall be treated for all purposes as a vote at a meeting . Action taken under this provision is effective when the last Director or committee member signs the consent, unless the consent specifies a different effective date."

The language is similar. The context of § 14-3-704 makes plain that it refers to the members of the Board, not the members of the association at large.

"...members holding at least a majority of the voting power..." It is worded oddly, but the context is definitely the Board, not the members of the Association.

Secondly the Bylaws -clearly- state that the Action Without Meeting must -precede- the action.

2)

"Second, O.C.G.A. § 14-3-821 is concerned with actions of the board taken outside of a meeting. I see nothing in the statute that would prevent a majority of the board from signing written consents to the action and recording that in the minutes. There is no time limitation within the statute to prevent the board from ratifying an action long after the fact."

The Bylaws are clear enough.

3)

Third, O.C.G.A. § 14-3-741 requires the participation in a derivative lawsuit of at least 5% of the member votes or 50 members, whichever is lower. Unless you have 5% of the voting power, you cannot bring this action by yourself. I did not research this for Georgia, but in my state a non-lawyer would not be permitted to pursue this kind of lawsuit as it involves bargaining for the rights of others.

This is the suit that the online lawyer found. It was taken out by a few former board members:

Court of Appeals of Georgia.
CRITTENTON, et al. v. SOUTHLAND OWNERS ASSOCIATION, INC., et al.

No. A11A0990.
Decided: October 27, 2011

"A “derivative suit is brought on behalf of [a] corporation for harm done to it[,] and any damages recovered are paid to the corporation.9"

But I will look at that some more. Thanks.

4)

"Fourth, O.C.G.A. § 14-3-742 requires that before filing a derivative lawsuit you must make a written demand to the board to comply with the statutes. The board then has 90 days in which to correct the issue before you may file suit. You did not mention doing that."

I am not suing the Board.

I did send e-mails and certified letters to all the now defendants asking them to voluntarily pay this money back. Those letters, I think appropriately, were all dated April 1st. None of them responded.

I can't find it right now, but there is a citation on the county courts site that says the Uniform rules may or may not be used in Magistrate's Court. The idea is to find justice.

You keep saying I should get a lawyer. The purpose of Magistrate's Court is to bring actions and -not- use lawyers.

The facts are plain enough. We'll see.

Thanks for all that research. Keeps me on my toes.

Walt

WalterM3 (Georgia)
Posts: 442
Posted:
Quote:
Posted By LarryB13 on 05/16/2015 9:28 PM
Walter,

You should have consulted with a real lawyer before diving in head-first.

I did consult a lawyer and he made none of the objections that you raise. He probably wanted my business beyond the $50.00 I paid, but he did cite a case that he said I could use to sue --on behalf-- of the Association.

The only real question I had was, -did I have standing to sue on -behalf- of the Association.

I think I do.

Walt
WalterM3 (Georgia)
Posts: 442
Posted:
The way I got onto this was by requesting all the invoices billed by the HOA attorney for 2013 and 2014.

On 4/30/15 I requested all the attorney invoices for 1/1/15 to 5/1/15. These to be provided by the week of 11-15 May. Again from our Bylaws:

"Inspection of Books and Accounts. All Members of the Association and all holders, insurers or guarantors of First Mortgages shall, upon written request and pursuant to O.C.G.A. § 14-3-1602, be entitled to inspect current copies of the Articles of Incorporation, the Declaration, these By-Laws, the Rules and Regulations of the Association and all books and records of the Association during normal business hours at the office of the Association or other place designated reasonably by the Board of Directors as the depository of such items. Copies of the Articles of Incorporation, the By-Laws and all amendments thereto, shall be furnished to any Owner upon request and upon payment of a reasonable charge therefor."

There has been not a peep from the Board of Directors. I don't think I said, but two of the defendants are still -on- the Board.

So what is next?

2010 Georgia Code
TITLE 14 - CORPORATIONS, PARTNERSHIPS, AND ASSOCIATIONS
CHAPTER 3 - NONPROFIT CORPORATIONS
ARTICLE 16 - RECORDS AND REPORTS
PART 1 - RECORDS
§ 14-3-1604 - Court-ordered inspection

O.C.G.A. 14-3-1604 (2010)
14-3-1604. Court-ordered inspection

(a) If a corporation does not allow a member who complies with subsection (b) of Code Section 14-3-1602 to inspect and copy any records required by that subsection to be available for inspection, the superior court may summarily order inspection and copying of the records demanded at the corporation's expense upon application of the member.

(b) If a corporation does not within a reasonable time allow a member to inspect and copy any other record, the member who complies with subsections (b) and (c) of Code Section 14-3-1602 may apply to the superior court for an order to permit inspection and copying of the records demanded. The court shall dispose of an application under this subsection on an expedited basis.

(c) If the court orders inspection and copying of the records demanded, it shall also order the corporation to pay the member's costs (including reasonable attorneys' fees) incurred to obtain the order unless the corporation proves that it refused inspection in good faith because it had a reasonable basis for doubt about the right of the member to inspect the records demanded.

-------------------

I am guessing once burned, twice shy.

But I will apply for a court order to make them release the records.

To me, the level of corruption of these people is just beyond belief.

Walt
MelissaP1 (Alabama)
Posts: 13,836
Posted:
Just going to state this once.., Suing your HOA is suing yourself and your neighbors...Your board are HOA members, owners, and fellow neighbors... They are NOT "THEY OR THEM". It is YOU and yours neighbors in your HOA... Be careful as HOA Board members can not be sued individually but it is the HOA insurance that will be. Which in turn may raise costs or lose your HOA insurance altogether.

There are better ways to handle this if you just READ your documents... It is ALL in there....
Former HOA President
WalterM3 (Georgia)
Posts: 442
Posted:

I am -not-not-not suing the HOA.

I am suing individuals who sat and in some cases -still- sit on the HOA Board. I am suing them to get back HOA money they dispersed for their own use.

I am suing them because they arrogantly and ignorantly disbursed this money without regard for the plain language of the Bylaws.

If I win, I will be forcing them to return this money -to- the HOA and the homeowners.

Walt
WalterM3 (Georgia)
Posts: 442
Posted:
Quote:
Posted By MelissaP1 on 05/17/2015 5:16 AM
Just going to state this once.., Suing your HOA is suing yourself and your neighbors...Your board are HOA members, owners, and fellow neighbors... They are NOT "THEY OR THEM". It is YOU and yours neighbors in your HOA... Be careful as HOA Board members can not be sued individually but it is the HOA insurance that will be. Which in turn may raise costs or lose your HOA insurance altogether.

There are better ways to handle this if you just READ your documents... It is ALL in there....

Where?

From our covenants:

"Indemnification. The Association shall indemnify every officer and director against any and all expenses, including counsel fees, imposed upon or reasonably incurred by any officer or director in connection with any action, suit, or other proceeding (including settlement of any suit or proceeding, if approved by the then Board of Directors) to which he or she may be a party by reason of being or having been an officer or director. The officers and directors shall not be liable for any mistake of judgment, negligent or otherwise, except for their own individual willful misfeasance, malfeasance, misconduct, or bad faith. The officers and directors shall not have personal liability with respect to any contract or other commitment made by them, in good faith, on behalf of the Association (except to the extent that such officers or directors may also be members of the Association), and the Association shall indemnify and forever hold each such officer and director free and harmless against any and all liability to others on account of any such contact or commitment. Any right to indemnification provided for herein shall not be exclusive of any other rights to which any officer or director, or former officer or director, may be entitled. The Association shall, as a common expense, maintain adequate general liability and officers' and directors' liability insurance to fund this obligation, if such insurance is reasonably available."

"...except for their own individual willful misfeasance, malfeasance, misconduct, or bad faith."

That is why I am suing these -individuals-. Malfeasance, misconduct and bad faith.

Walt
TimB4 (Tennessee)
Posts: 21,059
Posted:
Walter,

From your first posting a year ago, to this thread today, you have mentioned you desire to bring legal action against individual board members.

Perhaps it would be easier if you simply gathered support and got yourself elected to the Board to be part of the decision process.

WalterM3 (Georgia)
Posts: 442
Posted:

The reason Board members act the way they do is because of the apathy of the home owners.

"The truth is that, for some people, being a board member is a very satisfying position with a number of rewards and perks. The types of people that are attracted to, and truly enjoy, these volunteer positions, too often, turn out to be the neighborhood authoritarians, the control freaks; every neighborhood has them. Abrasive and or adversarial personality traits are not uncommon. These people are the lynchpin of the HOA system; management companies and association attorneys depend upon their willingness to engage in conflicts with homeowners to generate a steady flow of income. And, backed up as they are by an institution that would make any third world totalitarian dictator emerald green with envy, they generally prove to be quite up to the task."

http://www.thehoaprimer.org/commonlies.htm

Walt
WalterM3 (Georgia)
Posts: 442
Posted:
The Entrenched Board

The smaller the power, the smaller are those who seek to possess it.

One of the most disturbing situations to emerge from the growth of homeowner’s associations is the problem of abusive boards. Not all boards are abusive, but many are. An abusive board usually becomes entrenched and wields excessive power.

The entrenched board is made up of individuals who get elected to the board over and over again. As time passes, they become unresponsive to the needs of the community. They enjoy the powers and perks that come with exercising control over their neighbors.

If owners are to fight back against an abusive, entrenched board they must understand why a board becomes abusive.

An apathetic community will always provide a home for an abusive, entrenched board that rarely turns over its membership. Over time, the board increases its authority to a dictatorial level, answering to no one. Owners pay little attention to the boards activities. In fact, most owners are just glad someone else is taking care of association business. There is little communication between the owners and even less political activity. In an apathetic community, the entrenched board serves its own interests. At election time, the entrenched board is able to control the election process because so few owners get involved.

To reverse this trend, a community needs a number of owners to go to board meetings and keep abreast of the board's activities. Though many owners will remain apathetic, some will get involved. This change would go a long way towards creating an association that is reasonably stable, with slow, steady membership turnover. A board like this should remain responsive to the interests of the owners.

The first step towards a cure for the abusive, entrenched board is the creation of a healthy, politically active community. Owners must be willing to join with one another to serve the interests of the entire community. They must understand their community’s problems, develop solutions, and educate other owners. In time, these active owners will replace the abusive board members. Of course, they must continue to encourage a fair and open political process.

The second step in the solution to this problem will have to come from State lawmakers; there is a desperate need for legal reform in the area of community association law. Legislators must create laws that will give owners the legal means to fight back against abusive boards. They must make it easier for owners to remove board members and to recover legal fees and court costs when they prevail in court.

But if reform is ever to occur, the owners must demand it. Reform will come when homeowners refuse to allow their neighborhoods to be turned into gulags. If owners refuse to defend their communities, they know what to expect.
WalterM3 (Georgia)
Posts: 442
Posted:
Sorry, the above is from the link cited in the previous post.

Walt
JonD1
Posts: 2,350
Posted:
So Walter perhaps you missed the purpose of this site.

It is highlighted in yellow on the top of the page.

Yes, you can sue the individual board members in your version of small claims court.

But it appears to me your agenda goes further.

Now you cut and paste sections from an anti HOA website as if that view is reality.

So your source is now clear. HOAs in your view are a threat to property ownership, a threat to the American way of life and the only folks who bother to serve have issues of control. And your solution sure them, run up the legal expenses for the entire community, and post copied nonsense in the hopes others might board the crazy train to anti HOA land.

Funny how folks who can't form their own views simply cut and past the views of others and they become their own.

My guess your compliant will not accomplish anything close to what you have in mind. But maybe some other site can give you some new ideas to serve as your own.

Surely, there has to be more in your life than such a mindless, empty crusade against an imagined enemy! Perhaps not.
JonD1
Posts: 2,350
Posted:
theHOAprimer Chapters Index

Welcome to theHOAprimer. The web book you should have read before you bought a home in a Common Interest Development.

The purpose of this website is awaken a sleeping public to a plague that is threatening to destroy the American dream of homeownership and undermine the common democratic principals so many have fought to preserve for over 200 years. This menace is the corporate, private government known as the Homeowners Association. As briefly as possible, I will tell you how this industry developed, how it works, and who is profiting from the scam. I've presented numerous examples of this world gone mad and offered a few suggestions as to how you might help to restore sanity to your neighborhood.

Words of wisdom from Walter's site. Sound familiar? Who has not heard this nonsense before?
WalterM3 (Georgia)
Posts: 442
Posted:

Jon,

Your agenda seems plain enough.

That is fine. I try and kept mine plain too.

Please keep bumping the thread. I appreciate it.

Walt
MelissaP1 (Alabama)
Posts: 13,836
Posted:
So if you sue them as individuals that means they can each sue you back? Can you handle paying out each one of their counter-suits for their legal expenses? Since the court can indeed force you to pay THEIR legal defense expenses for your lawsuit if your to lose. Lawsuits are funny they way... They work BOTH ways!

Again, if you were to "win" what kind of "win" would it be? They pay back the money? Wow let me think what will happen with that money... It will go right back into the HOA budget to pay for all the legal expenses it occurred. Sorry but no individual in your HOA is going to be receiving a "reimbursement" check. A HOA is ONLY funded by it's members for it's members. The money if it were to go back, would just go to cover expenses like legal or insurance costs. Not a very good "victory" for your self appointed "hero" status is it?
Former HOA President
LarryB13 (Arizona)
Posts: 4,099
Posted:
Quote:
Posted By WalterM3 on 05/17/2015 5:37 AM

I am -not-not-not suing the HOA.

I am suing individuals who sat and in some cases -still- sit on the HOA Board. I am suing them to get back HOA money they dispersed for their own use.


How, exactly, did they use this money for their own use? You previously wrote that they paid the association attorney to attend a deposition where the association was not a party. A stupid idea, for sure, but I fail to see how they derived any personal benefit from this.

BTW, the D&O insurance will pay for their defense and association funds will pay for the deductible. If the insurer does not drop your association entirely, your HOA will pay higher rates in the future due to your claim. Your lawsuit will put the association even further into the hole. I am sure all your neighbors will appreciate the higher assessments you are about to cause.

Quote:

I am suing them because they arrogantly and ignorantly disbursed this money without regard for the plain language of the Bylaws.


And you are doing so with arrogant and ignorant disregard for the law.

Quote:

If I win, I will be forcing them to return this money -to- the HOA and the homeowners.


You have zero chances of winning. Yours is a frivolous lawsuit filed with reckless disregard for the law. Your best hope is that the judge is not too much of a hard-nose because he has the authority to hit you with a judgment that will require you to pay the association's expenses.
WalterM3 (Georgia)
Posts: 442
Posted:
Wow, I just totally disagree.

I rebutted all your points. And unlike you, I consulted a lawyer licensed to practice in Georgia.

The president of the HOA was served by subpoena on 8/29/14 to appear for deposition on 9/8/14. She, or someone caused the HOA attorney to be engaged for services on 9/3, 9/4, 9/5 and 9/8 totaling $1,140.00. There was no regular Board meeting during that time requiring that a majority of the Board members approve the action -in writing- with an Action Without Meeting.

The HOA Bylaws clearly state that Actions Without Meeting must -precede- the action.

No AWM was recorded.

That is malfeasance; it was done in bad faith. That being the case, the Board members are not, and cannot be indemnified by the HOA.

Walt
JonD1
Posts: 2,350
Posted:
Quote:
Posted By WalterM3 on 05/17/2015 7:31 AM

Jon,

Your agenda seems plain enough.

That is fine. I try and kept mine plain too.

Please keep bumping the thread. I appreciate it.

Walt

My agenda Walter is to clarify attempts by folks such as you to spread nonsense as if it were your own.

Yes HOAs are destroying the American dream and the democratic process. How could you see it any other way?

Did anyone force you to buy or own in an HOA?

Is anyone preventing you from leaving? Now that you have uncovered the plot ruin home ownership in America that is.

Rather you choose to clog the courts with nonsense in the hopes or having the board refund funds while the HOA that means you and your neighbors incur more legal fees.

And you really have nothing better to do with your time?

Perhaps, run for the board? My guess your chances of success would be slim.

Perhaps, investigate methods of change? My guess being proven right is more important .

Yes, I will bump your posting and your $50 law degree your are welcome.

Please let us know the outcome of your complaint. And please refrain from posting cut and paste BS from another site and passing it off as your own words of wisdom.

Just how many HOAs have you lived in? But you willingly speak in generalities about those who serve on boards. People you don't know and never will.
Or to be more accurate you post the words of others as if they represent a picture of every HOA across America.

The big bad HOA is taking over and Walter is fighting them.

Here's a thought. You and your neighbors are the HOA. Your neighbors serving on the board are also members of the HOA not some foreign enemy
you seem to have found.

Yeah, that online law degree money well spent............
WalterM3 (Georgia)
Posts: 442
Posted:
Quote:
Posted By JonD1 on 05/17/2015 12:05 PM
Posted By WalterM3 on 05/17/2015 7:31 AM

Yes, I will bump your posting and your $50 law degree your are welcome.


Thanks.

Walt
WalterM3 (Georgia)
Posts: 442
Posted:
Quote:
Posted By MelissaP1 on 05/17/2015 10:47 AM
So if you sue them as individuals that means they can each sue you back? Can you handle paying out each one of their counter-suits for their legal expenses? Since the court can indeed force you to pay THEIR legal defense expenses for your lawsuit if your to lose. Lawsuits are funny they way... They work BOTH ways!

Again, if you were to "win" what kind of "win" would it be? They pay back the money? Wow let me think what will happen with that money... It will go right back into the HOA budget to pay for all the legal expenses it occurred. Sorry but no individual in your HOA is going to be receiving a "reimbursement" check. A HOA is ONLY funded by it's members for it's members. The money if it were to go back, would just go to cover expenses like legal or insurance costs. Not a very good "victory" for your self appointed "hero" status is it?

They can't use the HOA legal resources for 2 reasons:

1. The Board is not being sued.

2. The issue is malfeasance and bad faith. They cannot be indemnified on that basis.

Further, they have no counter suit because they can't show any damages.

Walt
LarryB13 (Arizona)
Posts: 4,099
Posted:
Quote:
Posted By WalterM3 on 05/17/2015 12:03 PM
Wow, I just totally disagree.

I rebutted all your points. And unlike you, I consulted a lawyer licensed to practice in Georgia.


I am sure the judge will be just as amused by your $50 online consultation as the rest of us.

Unlike you, I read the statutes. And unlike you, I have never taken a case into a court where the litigants are so illiterate that they may commence an action with an oral complaint dictated to the clerk. Just how ignorant are you people?

Quote:

The president of the HOA was served by subpoena on 8/29/14 to appear for deposition on 9/8/14. She, or someone caused the HOA attorney to be engaged for services on 9/3, 9/4, 9/5 and 9/8 totaling $1,140.00.


The plot thickens!

It appears that the president of the HOA was subpoenaed to appear as a witness in her official capacity. She had no choice but to appear. A wise witness brings his attorney with him/her when being deposed. Now that you have revealed a few facts that you conveniently omitted previously, this expense goes from needless to a wise expenditure. Only the most ignorant of members would dispute the propriety of this expense.

Quote:

There was no regular Board meeting during that time requiring that a majority of the Board members approve the action -in writing- with an Action Without Meeting.


There is no statutory requirement for approval at any particular time. A majority of the board members may sign off at any time to approve the expense if approval is required.

Quote:

The HOA Bylaws clearly state that Actions Without Meeting must -precede- the action.

No AWM was recorded.

That is malfeasance; it was done in bad faith. That being the case, the Board members are not, and cannot be indemnified by the HOA.


Actually, the board had no discretion in this matter. You yourself quoted from your covenants:
"Indemnification. The Association shall indemnify every officer and director against any and all expenses, including counsel fees, imposed upon or reasonably incurred by any officer or director in connection with any action, suit, or other proceeding (including settlement of any suit or proceeding, if approved by the then Board of Directors) to which he or she may be a party by reason of being or having been an officer or director."

The board had no authority to deny paying the expense. No action was required as the board is not only authorized to make this payment but is also required to make this payment. Denial of this expense would be a breach of the covenants.

You and all other owners agreed to this condition when you purchased property subject to the covenants. It is you, not the board members, who seeks to violate the covenants. It is you who is acting in bad faith by knowingly purchasing property subject to covenants and then seeking to undermine them with frivolous actions.

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

Now that you have added:

The president of the HOA was served by subpoena on 8/29/14 to appear for deposition on 9/8/14. She, or someone caused the HOA attorney to be engaged for services on 9/3, 9/4, 9/5 and 9/8 totaling $1,140.00.

I say the expenditure was proper. I would expect our BOD to pay for such.

WalterM3 (Georgia)
Posts: 442
Posted:
Quote:
Posted By LarryB13 on 05/17/2015 1:04 PM
Posted By WalterM3 on 05/17/2015 12:03 PM

Actually, the board had no discretion in this matter. You yourself quoted from your covenants:
"Indemnification. The Association shall indemnify every officer and director against any and all expenses, including counsel fees, imposed upon or reasonably incurred by any officer or director in connection with any action, suit, or other proceeding (including settlement of any suit or proceeding, if approved by the then Board of Directors) to which he or she may be a party by reason of being or having been an officer or director."

The board had no authority to deny paying the expense. No action was required as the board is not only authorized to make this payment but is also required to make this payment. Denial of this expense would be a breach of the covenants.



Do partial quotes much?

Here is some more:

"The officers and directors shall not be liable for any mistake of judgment, negligent or otherwise, except for their own individual willful misfeasance, malfeasance, misconduct, or bad faith.

If they get the HOA attorney to help them, and then lose, what then?

This is the other thing:

"...to which he or she may be a party by reason of being or having been an officer or director."

That doesn't apply here at all.

I hope I remember my HTML tags. I haven't actually had to use them manually for 15 years or so.

Walt
WalterM3 (Georgia)
Posts: 442
Posted:
Quote:
Posted By JohnC46 on 05/17/2015 1:13 PM
Walter

Now that you have added:

The president of the HOA was served by subpoena on 8/29/14 to appear for deposition on 9/8/14. She, or someone caused the HOA attorney to be engaged for services on 9/3, 9/4, 9/5 and 9/8 totaling $1,140.00.

I say the expenditure was proper. I would expect our BOD to pay for such.


Too bad this HOA president didn't follow the clearly stated rules for such.

Under Georgia law such expenditures must be approved by a majority of the Board of Directors <1>in writing prior to the action.

They didn't do that.

Walt
WalterM3 (Georgia)
Posts: 442
Posted:
Quote:
Posted By LarryB13 on 05/17/2015 1:04 PM
Posted By WalterM3 on 05/17/2015 12:03 PM


It appears that the president of the HOA was subpoenaed to appear as a witness in her official capacity. She had no choice but to appear. A wise witness brings his attorney with him/her when being deposed. Now that you have revealed a few facts that you conveniently omitted previously, this expense goes from needless to a wise expenditure. Only the most ignorant of members would dispute the propriety of this expense.



As I stated a while back, the suit was for defamation. She wasn't called in any official capacity.

She didn't bring her attorney. She brought the HOA attorney. And I am guessing corporations cannot be defamed. The HOA president was not a party to the suit. She was a deponent.

The $1,140.00 was paid to the HOA attorney for the convenience of the president.

And, as I have said probably 5 times, such expenditure must be approved in writing by a majority of the Board members prior to the action. That is the law.

Walt


WalterM3 (Georgia)
Posts: 442
Posted:
Quote:
Posted By LarryB13 on 05/17/2015 1:04 PM
Posted By WalterM3 on 05/17/2015 12:03 PM


It appears that the president of the HOA was subpoenaed to appear as a witness in her official capacity. She had no choice but to appear. A wise witness brings his attorney with him/her when being deposed. Now that you have revealed a few facts that you conveniently omitted previously, this expense goes from needless to a wise expenditure. Only the most ignorant of members would dispute the propriety of this expense.



As I stated a while back, the suit was for defamation. She wasn't called in any official capacity.

She didn't bring her attorney. She brought the HOA attorney. And I am guessing corporations cannot be defamed. The HOA president was not a party to the suit. She was a deponent.

The $1,140.00 was paid to the HOA attorney for the convenience of the president.

And, as I have said probably 5 times, such expenditure must be approved in writing by a majority of the Board members prior to the action. That is the law.

Walt


WalterM3 (Georgia)
Posts: 442
Posted:
Quote:
Posted By LarryB13 on 05/17/2015 1:04 PM
Posted By WalterM3 on 05/17/2015 12:03 PM

Unlike you, I read the statutes. And unlike you, I have never taken a case into a court where the litigants are so illiterate that they may commence an action with an oral complaint dictated to the clerk. Just how ignorant are you people?



Yeah, I figured someone would get on that.

I wouldn't be surprised if your state didn't have the same thing in the Rules for your small claims court.

Walt
LarryB13 (Arizona)
Posts: 4,099
Posted:
Quote:
Posted By WalterM3 on 05/17/2015 1:52 PM
Posted By LarryB13 on 05/17/2015 1:04 PM
Posted By WalterM3 on 05/17/2015 12:03 PM

Unlike you, I read the statutes. And unlike you, I have never taken a case into a court where the litigants are so illiterate that they may commence an action with an oral complaint dictated to the clerk. Just how ignorant are you people?




Yeah, I figured someone would get on that.

I wouldn't be surprised if your state didn't have the same thing in the Rules for your small claims court.

Walt


Over the last 40 years I have practiced law on my own behalf in courts at every level of the state and federal government. Not only is there no provision in either the statutes or the rules of civil procedure for commencing an action orally, I never even heard of it until you mentioned it above in this thread. The closest we come to that is that in the lower courts forms are available but it is up to the litigant to fill them out.
LarryB13 (Arizona)
Posts: 4,099
Posted:
Quote:
Posted By WalterM3 on 05/17/2015 1:48 PM

And, as I have said probably 5 times, such expenditure must be approved in writing by a majority of the Board members prior to the action. That is the law.

Yes, Walter, you have claimed that at least five times.

For some reason I am not inclined to accept your assertion that the law requires approval before spending money. Maybe my reluctance is rooted in the fact that you cited the wrong statute in your complaint but nonetheless insisted that the one you cited is applicable. And since I did read the statutes I did not see any requirement for approval before the expense was incurred, even though in this case the expense is required to be paid by provisions in your covenants.

All I am asking you to do is provide a citation to the statute that says, in effect, that the expense "must be approved in writing by a majority of the Board members prior to the action."

MelissaP1 (Alabama)
Posts: 13,836
Posted:
So the President was subpoenaed for a defamation case and used the HOA attorney to represent? The problem is where? The President represents the HOA/Corporation as a WHOLE. Which means the HOA would pay for the President representation in court. It will also be paying for the HOA to represent against you in your own lawsuit.

No personal attorney was needed on the President's part. The issue could be if the President had used their own attorney and then sent the bill into the HOA for re-imbursement. That could be of some merit. Otherwise the President did not do anything wrong nor the board in spending this money.

Former HOA President
TimB4 (Tennessee)
Posts: 21,059
Posted:
Quote:
Posted By WalterM3 on 05/17/2015 7:01 AM

"The truth is that, for some people, being a board member is a very satisfying position with a number of rewards and perks. The types of people that are attracted to, and truly enjoy, these volunteer positions, too often, turn out to be the neighborhood authoritarians, the control freaks; every neighborhood has them. Abrasive and or adversarial personality traits are not uncommon. These people are the lynchpin of the HOA system; management companies and association attorneys depend upon their willingness to engage in conflicts with homeowners to generate a steady flow of income. And, backed up as they are by an institution that would make any third world totalitarian dictator emerald green with envy, they generally prove to be quite up to the task."

http://www.thehoaprimer.org/commonlies.htm

Walt,

As others have said, you are aware that you have insulted those from whom you have asked for help?

As a Board member, I do find it satisfying. I'm satisfied that I'm keeping those type of individuals you describe from controling a board. I could, of course, choose to be apathetic and simply let them do the job if they want it. However, I wouldn't want to live in that type of community. This is just one of the reasons I ran to serve on my board.

If I recall, you have served on your Board. Were you one of those control freaks you quote about?
GenoS (Florida)
Posts: 4,276
Posted:
I've seen that website. It was obviously written by someone with a strong dislike of HOAs. It's a site with a thin veneer of objectivity on top of a whole boatload of hostility and bitterness. There are obviously "bad" HOAs but not all of them are, and the person behind that website doesn't disguise his contempt for all HOAs with no regard for any point of view but their own.
BanksS
Posts: 403
Posted:
Walter,
Perhaps you are right that the expense paid was improper and against procedure but is it worth going to court for $1400. Boards are Imperfect and as you say there is potentential for some people to let the control go to their heads. Does this situation rise to the level of a lawsuit. From what you have posted, I would say no.

Is there more to the story than this one issue? I too have asked for information from the board where I live and I get the run around every time I ask for something but I am persistent and they eventually comply with the request. Keep the board on their toes by continuing to ask for documents and voicing your opinions about HOA matters. Attend meetings, I live in a state where open board meetings are not required which makes getting information even more of a challenge. Choose your battles carefully though. Certainly point out the error but let it go.

My neighborhood is very apathetic too so I keep the Board on my radar and I think it has helped with communication. The board has recently become more inclusive and more eager to include member involvement. But that could be. Because they recently asked for a special assessment so they want money but I am going to give myself some credit for the board's more recent transparency.

WalterM3 (Georgia)
Posts: 442
Posted:
"For some reason I am not inclined to accept your assertion that the law requires approval before spending money."

"A quorum shall be deemed present throughout any meeting of the Board of Directors if a majority of the number of Directors is present at the beginning of such meeting. A decision of the Board of Directors shall be by a majority of those Directors present at a duly called meeting and every act or decision done or made by a majority of the Directors present at a duly held meeting at which a quorum is present shall be regarded as the act of the Board."

-- Bylaws Article IV, Board of Directors, Meetings, Section 6.

Section 7. Action Without A Meeting. Any action by the Board of Directors or by any committee appointed by the Board of Directors required or permitted to be taken at any meeting may be taken without a meeting if, prior to such action, one or more written consents describing the action taken are signed by no less than a majority of the members of the Board of Directors or of such committee, as the case may be. Such written consent or consents shall be filed with the minutes of the proceedings of the Board of Directors or of the appropriate committee and such consent or consents shall be treated for all purposes as a vote at a meeting . Action taken under this provision is effective when the last Director or committee member signs the consent, unless the consent specifies a different effective date.

-- Bylaws Article IV, Board of Directors, Meetings, Section 7.

WHEREAS, the Board of Directors and members of the Association have determined it to be in the best interest of the Association to amend and restate the By-Laws of the Association as set forth herein below; and

WHEREAS, the following Amended and Restated By-Laws of the Association have been proposed to the Membership and recommended for approval by the Board of Directors, and have been approved by a majority vote of the membership of the Association.

In recognition of the foregoing, the attached are hereby adopted.

----------------------------------------------------

The laws of Georgia require that a Majority of the Board Members approve ALL actions. If the action is not undertaken at a regular meeting, an Action Without Meeting may be done if it is done "prior to such action."

Hope all that formatting works. My emphasis throughout.

NO Actions Without Meetings were recorded at all during 2013 or 2014.

If it is not on paper it didn't happen.

A majority of the Board had to approve in writing BEFORE that $1,140.00 was disbursed.

To pay the attorney without the proper ground work was malfeasance, it was bad faith.

Walt

WalterM3 (Georgia)
Posts: 442
Posted:
"Perhaps you are right that the expense paid was improper and against procedure but is it worth going to court for $1400[sic]."

Yes. It is. The malfeasing Board members should pay that money back to the Association.

Walt
WalterM3 (Georgia)
Posts: 442
Posted:


"President. The President shall be the chief executive officer of the Association and shall preside at all meetings of the Association and of the Board of Directors. The President shall have all the general powers and duties which are incident to the office of the president of a corporation organized under the Georgia Nonprofit Corporation Code, and shall in general, manage, supervise, and control all of the business and affairs of the Association . Without limiting the foregoing, the President shall have the authority to sign, with the Secretary or any other proper officer of the Association authorized by the Board of Directors, any contracts, deeds,
mortgages, bonds, policies of insurance, checks, or other instruments which the Board of Directors has authorized to be executed except in cases where signing or execution thereof shall be expressly delegated by the Declaration or these By-Laws or the Board of Directors to some other officer or agent of the Association, or shall be required by law to be otherwise signed or executed."

-- Bylaws, Officers Article V, Section 5.

The HOA president can only authorize payments approved by a majority vote of the Board members.

Someone authorized payment to the HOA attorney of $1,140.00. This was based on a subpoena issued to the president on 8/29/14. The HOA attorney performed services on 9/3, 9/4, 9/5 and 9/8. No regular board meeting fell on any of those dates requiring an action without meeting.

No such AWM was recorded -at-all- let alone before the action as required by the laws of Georgia.

That is malfeasance; that is bad faith.

Walt
JonD1
Posts: 2,350
Posted:
Like many zealots who live to prove their point Walter is incapable of hearing anything but his own views.

Appears for just $50 he now has all the legal answer and to think some spend years obtaining a law degree when Walter completed
his learning curve in maybe 15 minutes.

My guess despite what Walter thinks the HOA lawyer will appear to defend those board members Walter now charges with malfeasance.
My opinion no board member required to appear in court as a result of their position on the board should ever appear without representation.

My guess Walter's crusade will fail. My guess even if successful his actions will result in more legal costs to his entire community.

That of course is of no concern to folks like Walter. Proving his point after all is all that matters.

My guess Walter has had prior conflict with the board. Now he sees himself as the self-appointed enforcer of all rules and codes as he sees them.

My guess most would view him as fruit loops. Understanding he walks in locked step with the viewpoints expressed on the site he uses to support his limited views of each and every HOA in America.

I hope in the end Walter gets all that he deserves and more.

Yes in his mind, Walter is the self-appointed guardian of the community. My guess his neighbors view him quite differently.

All aboard the crazy train............
MelissaP1 (Alabama)
Posts: 13,836
Posted:
FYI... A HOA being a corporation has to be represented in court by a lawyer. However, it can be represented by a board member IF agreed to. Most people I know would NEVER repesent themselves in court due to the fool for a client thing. So the President had no choice but to be represented by the HOA attorney... Plus subpeonas happen quick with no time for budget considerations. I got subpeoned once the day before trial.

Out of curiousity was this defamation lawsuit brought by you? Plus how did you know about the dates and costs if this information was not made available?
Former HOA President
WalterM3 (Georgia)
Posts: 442
Posted:
Quote:
Posted By MelissaP1 on 05/18/2015 1:37 AM
FYI... A HOA being a corporation has to be represented in court by a lawyer. However, it can be represented by a board member IF agreed to. Most people I know would NEVER repesent themselves in court due to the fool for a client thing. So the President had no choice but to be represented by the HOA attorney... Plus subpeonas happen quick with no time for budget considerations. I got subpeoned once the day before trial.

Out of curiousity was this defamation lawsuit brought by you? Plus how did you know about the dates and costs if this information was not made available?

I did not bring the suit.

As I have said I don't know how many times, I am not suing the Board. The president at the time resigned a few month later, about 15 months short of her term's expiration. She is not a party for anything the HOA did; she is a defendant because of her actions. These include malfeasance and bad faith.

Here is an excerpt from the February minutes. My first request for information on this went out on January 22.

Future Policy for Calls to our Attorney:

"Randy opened this subject up for discussion by those present. Elaine mentioned that
the board had previously discussed this in January and had the formulated a proposal
where no board member would be allowed to make a call to the attorney without the
prior email notification and approval of all other board members. This would, of course,
be only in the event that all other resources had been utilized and exhausted, and there
was no other recourse available other than the attorney. [The management company] would always be the first
resource to be contacted for advice. Additionally, the attorney would be advised of this
procedure and she would only take phone calls from board members. If a home owner
contacts the attorney, it would be at their own expense. It has been made clear to [the attorney]
that no calls from the community should be accepted and the HOA will NOT pay for any
communication of that type. Board members will discuss the subject of the call and
agree before the call can be made. If a board member does contact the attorney
anyway (without approval by other board members), that board member will be
responsible for payment of those fees."

Parentheses in the original.

How about that.

That didn't happen back in September. Back these some of these same people committed malfeasance and bad faith.

Walt
WalterM3 (Georgia)
Posts: 442
Posted:
Quote:
Posted By JonD1 on 05/17/2015 9:29 PM
Like many zealots who live to prove their point Walter is incapable of hearing anything but his own views.

Appears for just $50 he now has all the legal answer and to think some spend years obtaining a law degree when Walter completed
his learning curve in maybe 15 minutes.

My guess despite what Walter thinks the HOA lawyer will appear to defend those board members Walter now charges with malfeasance.
My opinion no board member required to appear in court as a result of their position on the board should ever appear without representation.

My guess Walter's crusade will fail. My guess even if successful his actions will result in more legal costs to his entire community.

That of course is of no concern to folks like Walter. Proving his point after all is all that matters.

My guess Walter has had prior conflict with the board. Now he sees himself as the self-appointed enforcer of all rules and codes as he sees them.

My guess most would view him as fruit loops. Understanding he walks in locked step with the viewpoints expressed on the site he uses to support his limited views of each and every HOA in America.

I hope in the end Walter gets all that he deserves and more.

Yes in his mind, Walter is the self-appointed guardian of the community. My guess his neighbors view him quite differently.

All aboard the crazy train............

I guess you'll soon be invoking Godwin's Law. That often follows ad hominem attacks.

I wonder if some of the people commenting on this thread don't match this model:

"So what, if anything, is wrong with the people that are so desperate to be on a volunteer board of directors? My own, admittedly untrained, observations lead me to believe they are simply troubled individuals in search of some measure of self-aggrandizement. To me, the worst offenders always seemed to be angry, bitter people totally lacking in humor with an inclination to take themselves way too seriously. And if I was to be painfully honest, I'd have to admit that my experience and research clearly indicates that the worst offenders are likely to be retirees.

You’ve probably heard people described as difficult to be around. These are usually the kind of people who are going to see your board positions as an opportunity to set themselves upon pedestals when, apparently, no one else would."

http://www.thehoaprimer.org/board.htm

Yeah. A friend of mine in the 'hood says they were the kids who had their hats thrown out the school bus window.

I mean, after all, I have shown clear malfeasance by members of the Board -- disbursing money in clear disregard for state law. But some of you remain unfazed, make personal attacks, attack the whole State of Georgia, or just disappear once your research is shot to pieces.

Walt
JonD1
Posts: 2,350
Posted:
So Walter comes to this site and posts cut and paste quotes about those serving on HOA boards
As if these observations apply to each and every board member in America.

But that's just fine.

Then Walter goes on to ask for opinions and when provided goes on to attack those different from his own
based on $50 worth of legal advice.

And as to his suggestion some might disappear after exchanging with him. Just maybe they have concluded
It would be a waste of their time to continue.

Walter's only concern is being proven right, what damage and cost his actions might impose on the
property are of no concern to him.

We will see how this all plays out. Unless Walter disappears....
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Walter would not be the first strident poster that disappears when the court ruling does not go his way.
LarryB13 (Arizona)
Posts: 4,099
Posted:
Somehow I suspect that in a few months Walter will be back ranting and railing about how the HOA must have bribed the judge to dismiss his case.
WalterM3 (Georgia)
Posts: 442
Posted:
Maybe the HOA Board of Directors won't have to put anything else like this in the minutes:

"Randy opened this subject up for discussion by those present. Elaine mentioned that
the board had previously discussed this in January and had the formulated a proposal
where no board member would be allowed to make a call to the attorney without the
prior email notification and approval of all other board members. This would, of course,
be only in the event that all other resources had been utilized and exhausted, and there
was no other recourse available other than the attorney. [The management company] would always be the first
resource to be contacted for advice. Additionally, the attorney would be advised of this
procedure and she would only take phone calls from board members. If a home owner
contacts the attorney, it would be at their own expense. It has been made clear to [the attorney]
that no calls from the community should be accepted and the HOA will NOT pay for any
communication of that type. Board members will discuss the subject of the call and
agree before the call can be made. If a board member does contact the attorney
anyway (without approval by other board members), that board member will be
responsible for payment of those fees."

"...no board member would be allowed to make a call to the attorney without the
prior email notification and approval of all other board members."

That is sorta kinda where they got in trouble back in September and that is why I filed on them.

Walt
WalterM3 (Georgia)
Posts: 442
Posted:
Quote:
Posted By WalterM3 on 05/18/2015 12:51 PM
Maybe the HOA Board of Directors won't have to put anything else like this in the minutes:

"Randy opened this subject up for discussion by those present. Elaine mentioned that
the board had previously discussed this in January and had the formulated a proposal
where no board member would be allowed to make a call to the attorney without the
prior email notification and approval of all other board members. This would, of course,
be only in the event that all other resources had been utilized and exhausted, and there
was no other recourse available other than the attorney. [The management company] would always be the first
resource to be contacted for advice. Additionally, the attorney would be advised of this
procedure and she would only take phone calls from board members. If a home owner
contacts the attorney, it would be at their own expense. It has been made clear to [the attorney]
that no calls from the community should be accepted and the HOA will NOT pay for any
communication of that type. Board members will discuss the subject of the call and
agree before the call can be made. If a board member does contact the attorney
anyway (without approval by other board members), that board member will be
responsible for payment of those fees."

"...no board member would be allowed to make a call to the attorney without the
prior email notification and approval of all other board members."

That is sorta kinda where they got in trouble back in September and that is why I filed on them.

Walt

In fact, when I saw this information in the February Minutes – the official record of the corporation – I told the president that she had placed an admission of guilt into the Minutes.

That is about their usual level of acumen.

The old president – to whom I sent a request a couple of months ago to show me the paper trail the law requires – she answered the e-mail, but didn’t address the question. Of course now she is a defendant in this action.

Walt
TimB4 (Tennessee)
Posts: 21,059
Posted:
Quote:
Posted By WalterM3 on 05/18/2015 12:51 PM

If a home owner contacts the attorney, it would be at their own expense.

Actually, if the attorney is the registered agent for the Association (which is typical), they are obligated to take and respond to any calls. How they respond depends on the issue being presented.

The Association would likely be responsible for the attorney's time for the performance of duties as the Associations registered agent.

It would be up to the Association to try to recoup from the member.

We actually had this exact situation. A potential buyer contacted the registered agent and we were billed for 15 min. of the attorney's time.

We then identified ways to prevent this, which was to:

1) Instruct the attorney to inform the individual to contact the Board (and provide numbers) - hoping this would minimize the cost to us.

2) Draft a large type cover page for the disclosure package instructing the potential buyer to contact the President of the Association via e-mail for any questions about the package.

3) Encourage sellers to include the Associations website address on their listing. This provides contact information to any potential buyer and allows the buyers to view all of the governing documents prior to making an offer.

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