Treasurer holding funds hostage

Started by TerryZ • 19 replies • 1668 views

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TerryZ (Washington)
Posts: 6

Posted:

I am a new President of our HOA and the vice president and treasurer do not agree with some of the agenda items that I have listed for the upcoming meetings so they have decided to not show up for these meetings. We have a very small group and because they are multiple lot owners, when they do not show we do not have a quorum so I am not able to hold an official meeting. I have made three attempts. Does anyone have any ideas for me. The membership is very upset that our mile long gravel road is not getting fixed according to county standards.

RobertG (Arizona)
Posts: 505

Posted:

How many board members do you have?

How about trying making an agenda that includes all the items except the one(s) that the others take exception. Get some things done so the homeowners see the board does exist. Encourage homeowners to come to the board meetings no matter what happens. If enough see what is going on, maybe the homeowners will take some action to sway the other board members to at least show up to make their points on what they believe is right.

Others may not agree with this, but, just because there is not a quorum, there is nothing that says you still can't have the ability to talk about the issues just like you would run a board meeting. The only thing different would be that you could not take any action. However, you could have all the discussion you want. Just because you don't have a quorum, that doesn't mean you stop and all go home.

RickR3 (California)
Posts: 42

Posted:

Check your CC&R's, ours include an item that if a Board Member misses 3 consecutive scheduled board meetings then they are removed from the board. It does keep the board members making the meetings.

Rick

JoeW1 (New York)
Posts: 728

Posted:

TerryZ - There is a distinction between a resident vote and a Board vote. Board members cast one vote as Board members regardless as to the number of units they own.

If your Board consists of 3 members (you, the Pres, and the Treasurer) than yes, you have an issue with quorum. If there are 3 other Board members including yourself that show up than you have no issue with quorum.

If the county has standards regarding the fix of the road, than call the appropriate county department for their oversight support.

PaulM (Pennsylvania)
Posts: 1,347

Posted:

TerryZ: Robert is correct--a quorum is required to take action/decision on a matter; without a quorum you can certainly have discussion.

However, it sounds as though the Board members collectively are not enjoying the same 'vision' for your community. The way to resolve is NOT to go ahead and be a Lone Ranger, but request that Board members (only) sit down to try to determine what it is that you can all agree on, then take the difficult issues one by one listening to the pros and cons. You all have to find common ground so you can move forward, otherwise you will be beating your head against the wall.

IMO, it would not serve the community well to try to hold a meeting by 'yourself' without the rest of the Board. Have you been elected officials to the Board or have you been appointed? Is this the first Board of your association?

As far as the gravel road getting fixed according to county standards, this is a situation between the developer and the county/municipality itself. The developer had to agree to certain standards at time of development and he must abide by the regulations. You can certainly check with the municipal office in which you reside to determine the status of this project. It may be that the developer is still answerable to the local heirarchy to resolve any outstanding projects that are not up to standard. It may take time for him to re-do, then have inspection, etc., but once you learn the status it will be very helpful to the Board and residents.

Jadedone4 (Virginia)
Posts: 495

Posted:

Terry, allow me to make a few critical points.

Depending on where you are located, you may have "open meeting" law guidelines that you MUST follow - therefore having a "meeting" with just the board, may not be legally possible.

If you are the President of the board, you establish the Agenda. Your governing documents may dictate the frequency of the association's meetings, but as President you control how items are presented during meetings. This does not mean that you have "omnipotent" power - just that you reside over the meetings and as such control the flow.

If you are posting the meeting's Agenda for all members to see, and holding the meetings accordingly, even without a quorum, there are official actions that can take place. Glass is half-full, or half-empty applies.

Open the meeting as President, acknowledge that you failed to achieve quorum, noting the absent board-members for an official record.

Look to your governing documents for the criteria for removing absent board-members, and follow requirements to the letter of the law.

I am sure that your documents speak to how to fill those "vacancies" that you have just created when a board-member fails to attend "X" number of meetings.

Make sure that you keep membership fully aware of these actions. You do not have to be negative about the situation, simply (just like most here have agreed meeting minutes should be), address the absences for a duly called meeting, open the meeting, take the minutes of "failure to realize quorum" with the attendees, and absent members noted.

TerryZ (Washington)
Posts: 6

Posted:

Our HOA has not been handled properly since its inception. The first thing the original board was charged to do was to write by-laws. This was never done so the duties of officers is very vague. We have the CRR's and a road and trail maintenance agreement. This states that we need to have 2/3 of total membership present in person or by proxy to hold an official meeting. Here lies the problem. No matter what we say or how we try to conjole the membership will not step up. We never have 2/3 show.
We have 4 board members in a community of 24 lots. They have powers other than setting dues amounts and holding meetings.
How can we get things started? any suggestions?
There is nothing in any of our documents that states that a board member will lose their position if they do not attend a certain amount of meetings.

RogerB (Colorado)
Posts: 5,067

Posted:

Terry, I would start by amending the By-laws using a mail-in ballot. Attach the proposed amendments with an explanation for why the changes are needed. One change can be to reduce the percentage required for a quorum from 2/3 to 1/3 (or whatever percentage is reasonable). Another change I would suggest is to have an odd number of Board members, perferably 3 (or 5). Another is to allow amendments to By-laws at a members meeting by a majority vote of those voting when a quorum is present. You can review other HOA By-laws posted on the internet to pick and chose for your association.

TerryZ (Washington)
Posts: 6

Posted:

The two board members who do not show up to the meetings say that in order to send out a ballot we need to have a meeting with 2/3 present to make a motion to send out a ballot. Is this not the case? Is there some documentation of this that I can present to them because this would solve everything if we can present the proposed by-laws to the HOA members and have a mail-in vote.
I think you see my dilemma.

GloriaM (North Carolina)
Posts: 829

Posted:

Terry:

You only need the 2/3rd to vote, not to have a meeting. If proxy ballots are an acceptable form of voting in your state, then you can amend by mail out proxy ballots. It does not require a meeting.

JM2 (Oregon)
Posts: 439

Posted:

Hi Terry:

Another thing (regarding Gloria's good posting) is that there may be a way for regular members of the HOA to do petitions for votes, meetings, etc. - check those out. If these two board members will not have a board meeting, you as an ordinary owner may be able to proceed with a by-law change as needed (unless these two own too many lots).

One suggestion above is to see what they will agree to, and delete other issues from the agenda. Let the other owners come to the open forum time to voice their support for the controversial issues that are not on that agenda, so that the Board can see that there is some groundswell of support for those issues.

And, of course, there's always the option to remove the board members via owner petition for a meeting and vote.

J. Patrick Moore, CMCA

TerryZ (Washington)
Posts: 6

Posted:

Thank you for all of your insight. I will look into it all and try to get things on track.

LarryS3 (Washington)
Posts: 13

Posted:

Our Bylaws state that if a Director misses 3 consecutive regular meetings they can be removed from the Board. Check your Bylaws.

TerryZ (Washington)
Posts: 6

Posted:

We have no by-laws. We have the CC&Rs and a Road and Trail Maintenance agreement. Neither document has any provision for removing an officer. The road and trail document states that there must be 2/3 majority present or by proxy to hold an official meeting.
Neither document states that we can not have a by mail vote on by-laws but we do need 2/3 majority to vote the by-laws in. Since these unreasonable people have multiple lots it is virtually impossible to get the 2/3 we need to even get by-laws voted in.
It's a very frustrating situation.

PaulM (Pennsylvania)
Posts: 1,347

Posted:

TerryZ: You state you have no Bylaws at all, only CC&Rs and Road & Trail...
- Have you referred to your state's planned community act or condo act?
- Have you referred to other like-communities in your area for their bylaws?
- Have you drafted a copy of Bylaws and put them up for vote?

Don't know what Road & Trail Maintenance Agreement is, but CC&Rs and state docs may override this doc.

RogerB (Colorado)
Posts: 5,067

Posted:

Terry, if you do not have By-laws by what process do directors get elected to the Board? And by what process do officers get elected? And by what authority does the Board take actions such as spending money and calling meetings? If you do not have By-laws I suggest the Board set up a By-laws committee to draft By-laws. Then have a mail in ballot vote, if you can not get a quorum to hold a meeting. Do this after the Board reviews, modifies as desired, and approves the committee's proposed By-laws.

GloriaM (North Carolina)
Posts: 829

Posted:

TerryZ on 7/1/2007 6:32:29 PM
Subject: RE: Treasurer holding funds hostage

The road and trail document states that there must be 2/3 majority present or by proxy to hold an official meeting.

Terry:

Re-read your quote above; 2/3rds majority present or by proxy. This means you can have a vote via proxy ballot. So if you have 100 members and you put out the vote to all 100 via by mail, you would need 2/3rds of them to vote either a yes or a no vote.

BradD2 (Florida)
Posts: 418

Posted:

I know this is going to sound horrible but I am the type of person that wants to get things done and over with; I hate the endless delays that some people cause.

Collect 2/3rds of the votes by walking door to door and then vote everything through that you want and get to work. Get that road fixed and then vote out the other two board members. If you have 2/3rds of the proxies then you alone can make every decision; be careful power corrupts.

GloriaM (North Carolina)
Posts: 829

Posted:

Brad:

Unfortunately sometimes this is the avenue in which some boards have to do in order to have the quorum of votes to amend anything. Many boards have been sucessful in getting documents amended because they have gone door to door asking Owners who didn't turn in their proxy to please vote.

TerryZ (Washington)
Posts: 6

Posted:

I would love it if this process were so simple. The problem we have is that we live in a very rural area. Only half of the property owners live in the area. The rest have purchased their property intending to sell at a future date. The few people in the community that are causing problems have multiple lots and thus it is extremely difficult to get the 2/3 to pass anything and one of them holds 5 proxys (another multiple lot owner).
We have 4 officers only. No board of directors. We have just decided to go ahead and get the road and gate fixed and send the treasurer the bill. If she doesn't pay then everyone will get sued I suppose. Safety overrides stubbornness.
Thanks again for all your input.

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