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BarbaraM21 (California)
Posts: 39
Posted:

Here's the situation. I am brand new on the HOA Board of Directors. Attending the first BOD meeting and already I see big-time trouble! I may be wrong and, therefore, would like to throw this out to you.

The President has hired a guy who has a revoked contractor's license to work on our skylights and roof! This fellow he hired is also the 1st Vice President and on the ARC Committee. I figure, the "employee/VP/ARC" guy, told the President that his license was "INACTIVE" and, therefore, he needed to hire him as an employee at $35.00 an hour. No one voted on this, President took it upon himself to do this.

At the first meeting I attended I question this employee business??? Can you be on the Board, both VP and ARC Committee, and be an employee at the same time? What is your License @? Well, I hit a nerve, big time! This VP told me he didn't have to give me that information. When I insisted, he did shout it out. I looked it up and this license is REVOKED!

I haven't said anything yet because I'm not sure if I'm right; however, this seems like a mess to me. In the first place he is doing work over $500. He put in a sliding glass door in a property that he knows is the HOA's nemesis. When I asked if this property owner, who is running a B&B out of her home got ARC approval or better yet a permit from the county, he told me it wasn't necessary because it was in the original plans 10 years ago when the previous owner owned the house.

I suggested if nothing else, there was definitely a conflict of interest here with him approving this sliding door and then installing it to this problem owner without inspections or approval from the county.

I didn't discuss it further because I wasn't sure if I was right.

This property owner is breaking all HOA rules by running a business out of her home while living in her garage, now with a sliding door. She now doesn't have a garage which is also breaking rules. OMG, HOA fines her, but she doesn't pay. They do not know how to collect fines. I suggested Small Claims Court.

Anyone know the answers to my concerns sure would appreciate your input!

Thanks
KerryL1 (California)
Posts: 14,550
Posted:
Welcome to the Forum, Barbara, but what a mess you have as a new director!

Is there any document that gives your president the authority to hire contractors? Or do your bylaws say the board (which means all of you directors acting at a meeting) hire contractors?

Even if the VP disclosed his conflict of interest, he should not have voted on this contract. Did he? do you happen to know if he has liability insurance? Or workers comp?

I think you need to put this on your next executive session agenda and see if the other directors will terminate the contract. But, is there a contract?

Can you tell us some basics? How many are on your board? How many homes are in your HOA?
LarryB13 (Arizona)
Posts: 4,099
Posted:
Quote:
Posted By BarbaraM21 on 07/10/2015 3:39 PM
The President has hired a guy who has a revoked contractor's license to work on our skylights and roof!


When you say "our," whose property are you referring to?

Quote:

This fellow he hired is also the 1st Vice President and on the ARC Committee. I figure, the "employee/VP/ARC" guy, told the President that his license was "INACTIVE" and, therefore, he needed to hire him as an employee at $35.00 an hour. No one voted on this, President took it upon himself to do this.


It is likely legal to hire him but it shows a lack of good judgment from both the president and the VP. It just does not look good to hire someone who is also a board member or officer.

Quote:

At the first meeting I attended I question this employee business??? Can you be on the Board, both VP and ARC Committee, and be an employee at the same time? What is your License @? Well, I hit a nerve, big time! This VP told me he didn't have to give me that information. When I insisted, he did shout it out. I looked it up and this license is REVOKED!


A revoked license may indicate that he got into some serious trouble over his workmanship or it may be that he just failed to renew his license. Dig deeper and see what you can find out.

Quote:

I haven't said anything yet because I'm not sure if I'm right; however, this seems like a mess to me. In the first place he is doing work over $500.


If he is truly working as an hourly employee then the value of the work does not matter. If he is charging by the job then his lack of license matters. If he is working for multiple people his lack of license matters.

Quote:
He put in a sliding glass door in a property that he knows is the HOA's nemesis. When I asked if this property owner, who is running a B&B out of her home got ARC approval or better yet a permit from the county, he told me it wasn't necessary because it was in the original plans 10 years ago when the previous owner owned the house.

I suggested if nothing else, there was definitely a conflict of interest here with him approving this sliding door and then installing it to this problem owner without inspections or approval from the county.

I didn't discuss it further because I wasn't sure if I was right.


BIG RED FLAG! You have an officer of the HOA performing work as an unlicensed contractor without building permits or ARC approval and the house is one with a history of violations and unpaid fines where an unlicensed B&B is operating without proper zoning permits. (At least, that is what I recall from another thread.)

Break open your piggy bank because you need to start dropping a lot dimes. Report this guy to whoever licenses contractors. Report the homeowner to your local zoning authority and building department.

You would not be out of line to ask both the president and the VP to resign at the next board meeting. These morons have the worst judgment I have heard about in quite some time.

LarryB13 (Arizona)
Posts: 4,099
Posted:
Quote:
Posted By BarbaraM21 on 07/10/2015 3:07 PM
I don't mean to Hijack your post, however, I need help with kind of the same situation.

Our HOA states no commercial businesses! We have a big-time offender. She has opened a Bed and Breakfast out of her home and, when she rents the home out, she lives in her garage which she converted, without permits, without permission from our ARC Committee, to a granny unit!

She is breaking not only our rules but the County's zoning regulations! We are zoned, RI, Single family dwelling only! She is with Airbnb, has a very nice website and even advertised our pool and marina for their use. The HOA has sent letters, only to be ignored, the county has sent letters, only to be ignored. Fines, forget it, they are ignored. We were able to take her pool and marina key away! This has been a fight for one year now.

We, on the Board do not know how to collect the fines! I suggested small claims court, but the rest of the Board said, then what? How do we collect?

Anyone have any ideas?

I brought the other post over here to keep all this together.

Aside from their lack of judgment discussed above, your fellow board members appear to be stupid beyond belief. Like typical HOA board members, all they can think of is fining and they cannot even figure out how to do that! Fines are just one tool that an association can use. All other legal remedies remain available.

The situation you describe is a lawyer's dream come true. You have just one owner causing problems but there may be hundreds of defendants should you choose to sue. AirBNB is certainly a co-defendant. So is the mortgage lender who enabled the owner to put this nuisance in your midst. John Doe 1 through 1000 and Jane Doe 1 through 1000 should cover all the guests who took part in this sham.

An attorney should be able to get an injunction to shut this b&b down on the same day you hire him. The b&b has no right to operate.

Has anyone called your local zoning office? How about the sales tax collectors? Hotel taxes are prime revenue for most local governments.

Has anyone contacted the mortgage lender? Most mortgages have a clause that says that all rents collected must be paid to the lender.

Has anyone reported the property alterations to the local building department?

PitA
Posts: 1,416
Posted:
Has anyone lifted their pinky finger above desktop level ?

As in actual work and diligence.
BarbaraM21 (California)
Posts: 39
Posted:
Oh yes, have contacted every agency in the county regarding this illegal business. Even went as far as notifying the agency she has her website on. Sorry, shouldn't have mentioned the name of the business.

I have been working on this as a property owner for over one year. I have photos of cars and renters, dates, and times. I have even spoken to some of the renters at various times. Small talk, asking where they're from, etc., (acting as a secret agent! LOL) so I know these people are just not friends.

Thus far I have personally contacted Fire Department for safety violations, County Tax for collecting but not turning over Occupancy tax money at 14% to the County, Health Department for not having inspections, and of course our HOA Code Enforcement.

Now that I am on the board, it seems there is more than meets the eye here. Therefore, once that is all cleared up, we may be able to move forward with the problem property owner and get real action.

I like the lawyer injunction idea. Wonder if that really can be done right away? Even so, what if she defied that? Then court, money, hmmmm? I don't know if HOA is willing to put out thousands for that? However, I had mentioned attorney before and thought once we prevailed we could ask for court and attorney fees? Here again, maybe this would be too how to collect that? Liens on property doubt if she would sell soon. Unless a sale can be forced after so much time. HOA talked about collection agency, as this would go on credit report, but so would a lien right?

Guess we can sit back and wait for County to red-tag the house for violations. Hope I'm alive to see it!
KerryL1 (California)
Posts: 14,550
Posted:
I may have missed this, Barbara: have you notified your county's building or zoning departments?
BarbaraM21 (California)
Posts: 39
Posted:
Yes I sure have. They will act on this problem, but told me it would take time. I expected a couple of months; however, it's been over a year now.
TimB4 (Tennessee)
Posts: 21,059
Posted:
Barbara,

The comment that the President hired . . . has me more concerned than anything else.

Did the Board authorize the President to hire this individual?

If not, and if the governing documents doesn't grant such authority (the fact that the President signs all contracts is not authority to enter into a contract without board approval), then make a motion to remove the individual as President due to exceeding their authority.

However, if the Board approved the contract, then place the blame where it belongs, on the Board. Use this as a learning experience to insist that every contractor be licensed and insured. That a minimum of three bids be obtained for work to be done and that references be provided.
BarbaraM21 (California)
Posts: 39
Posted:
Thanks, Tim. I'm brand new, will have to refer back to old minutes.
BarbaraM21 (California)
Posts: 39
Posted:
Read old minutes and they did vote on having this person do the job! New Board now disagreed with that decision and work has stopped!
TimB4 (Tennessee)
Posts: 21,059
Posted:
There you go.

The President did what the Board directed and signed the contract.

The new Board, fortunately, had time to stop the work and find a licensed and insured contractor.

It's always good to do a little research to find out why something occurred so steps can be taken to correct such actions in the future.
KerryL1 (California)
Posts: 14,550
Posted:
Tim's advice is a good extension of my earliest reply. And if you have support, yes, the prez should be removed for the office of president. And the VP should be removed from that office too. It takes a majority vote of the board and you do not have to give a reason (in CA).

Only the H/Os can removed them as directors.
TimB4 (Tennessee)
Posts: 21,059
Posted:
Quote:
Posted By KerryL1 on 07/12/2015 2:36 PM
It takes a majority vote of the board and you do not have to give a reason (in CA).

To be realistic,

It also takes a Board member willing to serve in their place as President/VP.

Expecting that those removed will be a little ticked, they likely won't agree to take any other position. Therefore, you may also need to have others double up on Officer positions (if allowed by governing documents) or others outside of the Board willing to serve as Officers but have zero vote on any issue before the Board (as they would not be Directors).
BarbaraM21 (California)
Posts: 39
Posted:
Got it! Under control! And they thought I was just another pretty face! LOL
GenoS (Florida)
Posts: 4,276
Posted:
Quote:
Posted By TimB4 on 07/12/2015 2:47 PM
To be realistic,

It also takes a Board member willing to serve in their place as President/VP.

Bingo. Same for when owners want to recall directors; having someone else ready to step up to fill the position(s) is a necessity. The importance of this cannot be overstated, and I think this is where a lot of situations start to go from bad to worse.

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