How can our HOA remove incompetent Board and poor Management

Gilea

Any chance the property is in a city with the initials T.O.?

Also don't want to minimize your concerns, but Carol may be on to something. Or, as in my HOA, you might have two operating budgets because there are two "areas" in your HOA, say, detached homes and condos. (We have three)

Btw, did you "approach" the board at an open board meeting? Or in some other way?

In CA you must have at minimum an annual review of your books, which must be mailed to Owners. Our CPA does an audit every year. Does anything like that happen in yours?

Are you, Gilea, familiar yet with davis-stirling.com? It's compiled by a CA HOA law firm and has a lot of useful info in it. Scroll down their Main Index to topics that apply to your HOA and learn.

But tell us, how is your HOA configured? All detached homes? Or are you condos (which the problems with the stairs suggest)?

Forgot to add,

To address bad management companies, you will need to complete all of the following steps (in that order):

1) Have individuals on the Board willing to do this.
2) Read the MC contract to see what the terms are.
3) Two options:

a) If, according to the terms of the contract, the MC is not performing the Board may serve notice to terminate

or

b) Solicit bids and, once another company has been selected, serve notice (in accordance with terms of the existing contract) that the current contract will not be renewed.

I am not sure were you're going with this. I don't want to disclose our HOA name or management company. However, it is very close to that area. I will say our management company manages a large number of properties and yes they do manage some properties in T.O.

Yes, I understand all of that. The BOD is not willing to listen. For a lack of a better word it seems that some of the Board members are in cahoots with the management company.

Larry, I am not sure if you're joking but that is certainly a thought that has crossed my mind. I am not looking for sympathy just an answer to a question.

Realistically with just a group of 5 your chances of removing any board would be slim.

To be honest some of your troubling claims just might have a rational explanation.
The fact you believe there are two operating accounts does not by itself single trouble.
The fact those two accounts have the same numbered checks does not signal trouble.
My suggestion best to work to inform yourself with facts about how and why things have been done.

Your rental problem is a double edged sword. Due to falling property values many owners are now left with the only option of renting their property in the hopes someday they will get into the black. My belief not going to happen. If you now try to,limit rentals where does that putative owners? With a property of no use to them.myou could see a rise in fire sales just to get out.myoumcould see a rise in foreclosure becuase they have no other option.

Do you know where the large amount of revenue was spent that you claim?
Do you know how many owners are current in their dues?
Have you done a reserve study?
And the checks written covered what costs? One million dollars was spent on what?

What are your monthly dues amounts?
I think you need to get a clearer understanding of the financial operations before you decide to dedicate the time and effort to remove your board.

Jon, the high number of rentals is not our biggest concern. It just makes it very difficult to remove BOD or management with so many owners not active in the HOA. Moving forward, I agree that having two operating accounts with identical check numbers doesn't necessarily mean something is wrong. However, what person that has any understanding of financial/banking would do something so stupid. When you open a checking account you can start checks at any number. Not to mention checks which are unaccounted for. We've spent countless hours reviewing bank statements, vendor disbursement and ledger. We have all of 2014 bank statements. We have looked at every check written and after balancing the year numbers don't add up. Yes, I do know where a good % of the money was spent, water, trash and insurance. Yes, reserve study, done in 2013, recommended we have at least $750,000 in reserve. We had $220,000 at the end of 2014. There is roughly 30 delinquent owners. We have a clear understanding of the financial operating, I am a former small business owner with 10 employees. Our question is what options do we have? We'll never be able to get a quorum. Can we request a member special meeting (5%) of the voting power and then at that meeting due to a lack of quorum request another meeting? Or should we take our records to the Sheriffs department, hire an attorney or ?????

One other thing to note, even if you effect a recall, if the existing BOD members can solicit enough proxies, they could just get re-elected again at the next annual election. Do you have access to names/addresses of the owners? You might want to consider mounting a proxy gathering effort of your own before the next annual election. If that can't happen, then you might have to resign yourself to the fact that just like federal, state, and local elections, the winner is not who you would have preferred and you are governed by people who you'd rather not be governed by.

Gilea

Doing a recall or getting majority control of a Board, is tough, but made even more difficult in your situation. Not impossible though. First thing you need is a membership list with mailing addresses, including offsite addresses. This is available to you under Corporation Code §8330 and within ten days. Make the request to the Secretary of the HOA in care of the management company.

Proxies are allowed in their Bylaws. Their attorney is the same one as the owner of the management company. The $90K is not for an engineer, but a handyman. Maintenance issues are high because these were apartments converted into condos back in the early 1980's.

David

In looking at the financials I had, it showed one operating and two reserve. One of the reserve account was CD which may have been converted at a later date.

There was no issue with reaching the FDIC limit here.

According to their Bylaws, as long as a majority present vote to adjourn they are able to postpone to a second meeting at which time quorum is 25%. This gives them a better shot.

John

I am looking at their Bylaws. It can be done for annual or special, but only one reduction.

Richard, you're absolutely right. We had 1 operating account, a cd, and reserve account in 2013. The CD account was closed in March 2014. In Sept 2014 a second operating account was opened. It is a small world. Yes, we do have a serious problem. I am worried about the complex going bankrupt not to mention the decay of the buildings. Without mentioning names what can you tell me about the conflict of interest between management and maintenance. I had a feeling something was going on. Do you live in the local area???

GileaH2, I wish you good luck in your efforts. I know almost nothing about CA HOA law. I think Richard is giving you some very good advice.

Florida is known for its confusing and toothless HOA law but I thought California and Sterling-Davis was supposed to prevent a lot of shenanigans like Gilea is describing, no? It does sound like a unique situation, though, with many absentee owners and a management company run by a lawyer who also happens to be the HOA's attorney.

Again, good luck to you and I'll leave the California people to provide you with info.

Gilea,

They can't use them for Board meetings, but are special for annual or member meeting, where you are trying to achieve quorum. There are three basic proxies, one for quorum purposes only, the other a directed proxy, where they vote according to the direction on the proxy, and the third is a general proxy giving the holder the ability to vote on your behalf in a manner they may choose.

Gilea

I have reviewed your CCRs and Bylaws and I see nothing that prohibits members from getting a list. As Kerry mentioned, CA law would trump CCRs in this case, specifically Corporation Code §8330.

Richard, Am I wrong ???? (Article 11.5) of our CC&r's states "Records not subject to inspection" a. "Membership list" "To protect the privacy and security of the association's members, the association list may not be inspected or copied".

Below is when your HOA must give you the documents named; the last one is Membership List. As Richard points out, the two laws cited in that section show that though you need to write why you want to he list, you do NOT have to give them a copy of the letter you want to send to H/Os.

In HOAs, there is a hierarchy or ranking of documents with higher level ones, like state laws taking precedence over lower level ones, like CC&Rs, bylaws, Rules & Regs.

Once again, I urge you to visit this site for a lot of important info. When you write to ask for a copy of the contract with your HOA's MC, your written "reason" simply need be "I want to see what I'm paying for."

Now, contracts aren't on the list below, but you'll find them elsewhere on this site.

"DEADLINES FOR PRODUCING RECORDS
Associations must produce records within the following time frames:

Board & Member Meeting Minutes: Shall be available to members within 30 days of the meeting and distributed upon request (Civ. Code §4950)); minutes prepared during the current fiscal year, within 10 business days following the association's receipt of the request (Civ. Code §5210(b)); minutes of prior years within 30 calendar days receipt of the request (Civ. Code §5210(b)(2));

Committee Minutes: Minutes of committees with decision making authority for meetings commencing on or after January 1, 2007, within 15 calendar days following approval (Civ. Code §5210(b)(5));

Fiscal Records & Governing Documents: Any record or statement available pursuant to Civil Code §5300 (budget, reserves, lien policies, insurance, financial statement, etc.) or Civil Code §4525 (governing documents, assessments, violations, construction defects, etc.), within the time frame specified;
Current Fiscal Year: Records for the current fiscal year, within 10 business days receipt of the request (Civ. Code §5210(b)(1));

Prior Fiscal Years: Records for the previous 2 fiscal years, within 30 calendar days receipt of the request (Civ. Code §5210(b)(2));

Membership List: Within the time frame specified in Corporations Code §8330, i.e., 5 business days (Civ. Code §5210(b)(6))."

Read more: Deadlines for Records http://www.davis-stirling.com/tabid/1582/Default.aspx#ixzz3mDLTmy3x
from Davis-Stirling.com by Adams Kessler PLC.

I would like to thank everyone who has responded to our questions and concerns. You've made us feel like were not alone in our quest. THANK YOU AGAIN!

KerryL1, Yes, I understand. I read corporate code 8330 section (2 c.) seems to say they don't have to give out names and addresses? As I told Richard we will certainly give it a try. Thank you for your input.

I agree with you Richard. Unfortunately for Gilea, it looks like a judge will have to make that call because the HOA will probably stand on 11.5. IMO, Gilea should follow 8330 request procedures without providing a copy of the proposed letter. If the HOA does not provide the list or a reasonable alternative, then Gilea needs to decide whether she wants to take it to court. If she does, seems like a fairly straightforward process.

No, I was not kidding. You purchased in good faith and your co-owners are not doing their parts. I say screw them.

If you sell out you are likely to take a loss, so move out and rent your unit to the most despicable elements of society at top dollar since no one else wants them. Let those non-participating owners suffer the consequences of their own non-actions.

One more time Gilea, your Board and/or MC must provide you with copies of H/O's addresses in CA. Please read the below opinions of, and the references, to CA Civil Code. This Civil Code supersede or trumps or overturns your bylaw 11.5. Your bylaw may NOT be more strict than state law on this topic.

When you get these, you and your small group sends out a sincere factual letter to all owners or all absentee owners asking for their vote or proxy to recall the board.

You cannot "recall" the MC!! Only the Board can fire it. And once again, Gilea, why aren't you & your small group reading the Davis-stirling.com web site on recalls?? Or better yet, you might want to consult with an HOA attorney to make sure you proceed legally for the recall attempt.

MEMBERSHIP LIST

Except for telephone numbers and email addresses, members have the right to inspect and copy the association's membership list (Civ. Code §5210) except for those who chose to opt-out of the membership list. A membership list is defined to include the member's name, property address, mailing address. (Civ. Code §5200(a)(9).)

Copy Costs. Associations can bill the requesting member for the direct and actual cost of copying the membership list. Associations must first inform the member of the costs before copying the requested documents. (Civ. Code §5205(f).)

Deadline for Producing. The right to inspect is at reasonable times, upon five business days' written demand. (Civ. Code §5210(b).)

Purpose for Request. The member requesting the list shall state the purpose for the request, which purpose shall be reasonably related to the requester's interest as a member. If the board reasonably believes that the information in the list will be used for another purpose, it may deny the member access to the list. If the request is denied, in any subsequent action brought by the member the association will have the burden to prove that the member would have used the information for purposes unrelated to his interest as a member. (Civ. Code §5225.)

Read more: Membership Lists http://www.davis-stirling.com/tabid/588/Default.aspx#ixzz3mJj1MNrM
from Davis-Stirling.com by Adams Kessler PLC.

Kerry, I am aware that we can not "recall" the MC. I never said that. WE have a contract with them which can be renewed at the end of the year. I will continue to read davis-stirling.. Thank you, again