Selling of land

Hello,
I just went to our annual meeting this past Saturday,6/23/07. I belong to a R.V. park in West Virginia. At this meeting, it was announced that we were selling 5 lots of land, that belong to the association, on the Potomac river, to raise money for repairs that are needed in the park. It was said that only park members could buy the lots at auction, the following Saturday, 6/30/07. My question is, since all of our park members were not given more notice, either by mail or phone calls, if this is legal, and what can we do. We have over 1500 members, and if you missed this meeting, you would not know about this sale. Water front property is at a premium in this park, and is going for a lot of money. They are starting bids at $50,000, and we have to have a $2,500 deposit to put our name on the list if we intend to bid, and $5,000 at day of the auction, and 30 days to come up with the remaing. Not everybodt has the means to come up with this amount of money, with this short of notice. Closing date for prebidding sign up , is at close of business this Friday, 6/29/07.
Thank you for any information you can give me.
CarolynB2

If your association owns valuable land, I would assume there should be something in your documents as to how that property can be sold, leased, or otherwise used. Since all members have an ownership interest in this property via membership in the HOA, I would think it odd for the BOD to have sole discretion to sell the property. Seems like this is something that would need to be approved by the proper percent of the owners. How do they know the owners want to sell these lots? I hardly think selling HOA assets would be a part of "the day to day activity" of the board. Could be some of those board members have their eyes on those lots and chose this short notification to curb the competition. Read your documents well to see if the board has this power to sell. Harold

Following is from my By-laws. It give the Board the power to convey property except when selling common area. I think this power may be given to most Boards.

ARTICLE VII POWERS AND DUTIES OF THE BOARD

The Board of Directors shall act in all instances on behalf of the Association, except as provided in the Nonprofit Corporation Act, the Colorado Common Interest Ownership Act, the Declaration, or these Bylaws. The Board shall have, subject to the limitations contained in these said documents, the powers and duties necessary for the administration of the affairs of the Association, including the following powers and duties:

d) enter into, make, perform or enforce contracts, licenses, leases and agreements of every kind and description. Acquire, hold, encumber and convey in the name of the Association any right, title or interest to real or personal property, provided, however, that Common Areas may be conveyed or subjected to a security interest upon the consent of Members to which at least eighty percent of the votes in the Association are allocated and in accordance with C.R.S. § 38-33.3-312;

Hi Carolyn:

I'm struggling a bit with your question...The board's fiduciary duty would seem to be that they maximize the profit for the HOA in the sale of this land. An auction might accomplish that, but no guarantees! It would be worthwhile to ask a real estate agent to give your an estmiate of the value of these parcels...if the board, friends of the board, or relatives of the board end up as buyers, then I would say that there would be a huge conflict of interest going on there. If the procedure on the sale of these parcels is in violation of your documents, by all means get a lawyer involved and get an injunction on this!

J. Patrick Moore, CMCA