Several questions about CCR & Bylaws

Judy

Generally the Covenants and Bylaws can only be changed by a majority of the owners voting to do. The procedure will be laid out in the docs themselves. Typically Covenants and Bylaws cannot be changed by the BOD.

A BOD has the right to make Rules & Regulations. The R&R's cannot override the Covenants nor Bylaws. Eamples:

If the Covenant's or Bylaw's say the BOD must be 5 to 7 owners the BOD cannot make an R&R saying less then 5 nor more then 7. They could set it a 5 or 6 or 7.

If the Covenants say no fences higher than 4ft, the BOD cannot make an R&R allowing for higher fences.

If the Covenants say no boats or trailers can be parked on ones's property the BOD cannot make an R&R saying they can be parked on one's property.

If the Covenants do not define the pool hours, the BOD can set the hours with a R&R.

1. In the real world of corporations, boards of directors normally lack the skill and/or the time to operate the organization on a day-to-day basis and hire officers to handle those functions. The officer in charge is often called the president. In the bizzaro universe of HOA's, the board members are elected by homeowners and the board members usually select officers from within their own ranks. They do so partly because they know no better, partly because that's what all the other HOA's do, and partly because they refuse to pay salaries to those officers. In such a situation an officer, in this case, the president, may resign from their position as an officer but retain their elected position as a board member. It happens quite frequently and is perfectly legal.

2. Yes, you should be concerned about the landscape project. Not so much the dollar amount as the lack of good judgment as it appears that the president had the work done without prior approval and was reimbursed after-the-fact, using HOA funds for something that benefited him personally.

3. Usually an association has no power to make additional rules that govern how you use your property. The CC&R's are a legal notice as to what you are prohibited from doing and an association usually lacks the authority to expand upon those restrictions.

4. In some states, such as AZ, the law gives owners the right to attend meetings and to speak for or against issues before a vote is taken. I do not know whether Texas has similar statutes. Even without a statute there is nothing to prevent an association from adopting bylaws to give the members the right to speak at a meeting without first being on the agenda.

Judy, there is a well written book by a Texas attorney which extracts the legislation enacted in 2011 and 2013 (and earlier years) which made significant changes to HOA processes in Texas. I strongly recommend you obtain a copy. If you Google Texas HOA Laws or something equally generic, it should come up. He is probably working on the Third Edition to capture the changes made in the 2015 session.

1. Everything depends on the language in the Bylaws and CC&Rs but, yes, the Governing Documents of many associations in Texas state the Board is elected by the members of the Association and the Board then selects the officers from among the board members. If that language is in place, a resignation as President does not automatically mean a resignation from the Board as well.

2. Perhaps not the best way to have handled this. I would ask you however, since the changes were to the common area, what is the issue?. The members of the Association benefit as a group, just as you would have had the Association arranged and paid for the landscaping directly. I would question why a project of this size was not managed by the Association, put out to bid, etc.

Regardless, you have the right under Texas law to see the meeting minutes as well as the bill which was reimbursed. You also have the right to ask questions during the homeowner forum portion of the meeting of the Board. I would suggest you ask for an explanation as to why the Board did not arrange for the improvements to the common area and pay for them from Association funds directly. It is not uncommon for the Association to reimburse a member of the Board (or any member of the Association for that matter) for out of pocket expenses incurred at the direction of and on behalf of the Association but this sounds like something much larger than $65.00 for paper goods for the HOA picnic.

3. The Board generally may develop and publish guidelines, interpretations if you will, of the language contained within the CC&Rs. Some CC&R language specifically encourages the Board to do so.
For example, if the language in the CC&Rs states an association member must obtain approval prior to making changes to the property, such as painting; the Board may (should!) develop, or ask a committee to develop, “paint standards” which provide guidance regarding acceptable colors. With respect to your trash can example; there is probably language in the CC&Rs which assigns the Board responsibility for maintaining the general standards of appearance of the properties in the Association or some such.

4. First, every meeting of a BOD in Texas, excepting an emergency, must have proper notice of the meeting given to the members of the Association, in advance. There should be a forum for property owner comments at every meeting of the Board of Directors. The forum may be listed on the agenda, or it may not. It is generally held prior to the meeting being called to order or, less common, after it is adjourned. The speakers generally are not required to sign up in advance. The members of the Board may choose to engage the speaker, seek clarification, or say nothing other than Thank You. The Board may establish reasonable rules, such as time limits. It’s not unlike the opportunity afforded the public to address the City Council.

Judy

I understand about the book. The Second Edition is the one you want from the Library. Have you tried Amazon or Half Price books for a used edition?

First, I'm not an attorney, not do I represent myself as being one. Any comments and advice I provide are based on my personal experience.

Is your association self managed or do you have a management company? Also, can you provide some general information regarding your association, such as number of members/homes, etc.

Using Assocation funds to reimburse an owner for expenditures to improve their own private property is completely inappropriate. Reimbursement for funds expended by a member of the association to improve the common area, while unusual, is probably justifiable. However, the whole project should have been reviewed and approved by the Board, in advance, and not just the ARC.

The only portion of the meeting allowed under Texas Law to be held privately is when the Board adjourns to convene in Executive Session. Based upon your statement that the President gave a synopsis of the discussion prior to 8:00 PM (which is required when the Board comes out of Executive Session), they may have been meeting in Executive Session. However, you are entitled to a copy of the agenda for the entire meeting, when did they transact normal business not involving collections, compliance, or personnel matters?

You are entitled to request, in writing at any time, a copy of or to review, records of the Association, regardless of whether or not they have been "published" to the Association. Texas Law permits the Association to charge you for copies, based on a schedule published in the Texas Property Code.

You cannot request records pertaining to other property owner accounts, personnel matters such as salaries and performance evaluations, and compliance matters as they pertain to a specific property owner. You can request a copy of the July Financial Report, with one caveat: the July report will depict June transactions unless whomever prepares the reports has already generated the "August" report which depicts July activity. The report depicting July activity is often not ready for publication in most Associations until the 10th or later business day of August.

You said the landscaping was done in a common area. That would be an association expense. Did the board ask him to get it done and promise to reimburse him? If that is the case I see nothing wrong.

This is getting juicy...

So the 3 ft Japanese Maple (less than 2 inch diameter in a 10-20 gal pot) that was planted in the common area cost us $1017.55. No, the president did not ask the board for prior approval, or for reimbursement until after it was completed.

Just this week I sent an email to the MC asking for documentation to support (receipt/invoice etc) this reimbursement. I could buy this tree at HD for $65. Anyway, the MC sent an email to the board (plus the ARC) advising of my request. The MC stated they did not mind telling me it was for landscaping but wanted to know how the bod felt about producing the receipt.

The response from the BO (6 total, plus ARC)

1. (ex-pres) Lets lie to her and say it was for something else
2. Oh your right #1, wink, wink. .... wasn't it for something else we discussed in the spring wink wink
3. Why do we have to answer to owners on how we spend our money
4. (president who received the reimbursement) I don't mind if she gets a copy of the receipt
5. You have to be kidding! If you where not on the board, wouldn't you want to know were your dues are going. give it to her
6. no response as he has checked out and no longer engaging in board discussion via email
7. ARC - no response

Am I not entitled to this? If not, then I'm ok with it and will leave it along. But it sure would of been nice to spend $1000 for several more trees that's needed in our community for shade, instead of this one under a huge oak tree.

JUDY

So what is the bottom line after all the posts? As I see it, all was done properly but you have issues with the cost of installing the tree. Am I correct?

Thanks

Bill - sorry for the delay I've answers your questions.