Hitler

Started by MarkM33 • 27 replies • 1640 views

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MarkM33 (Tennessee)
Posts: 10

Posted:

Hello. I've recently purchased a home in an HOA where the developer is also the HOA president + God. He is a terrible person to try to work with, and as such, cannot hold any members on the board as he fires them if they don't do exactly what HE wants, or if they question any of his motives. He has somehow gotten the homeowners to hand over power for everything in the association by giving him 4 votes per un owned lot (currently giving him more votes over all of the homeowners combined since there are several undeveloped lots remaining). On top of that, he has been given power to change or amend any of the CC&Rs, rules and minutes at his discretion without any vote from any member. He continues to berate all of the homeowners for their "lack of" responsibility with regards to their yards,parking, etc... when everyone's yards are kept up weekly by a lawn company, yet all of his undeveloped lots sit with knee high grass. He also refuses to show actual bank statements for the funds and only lets us see Excel spreadsheets or Quickbooks statements, both of which can obviously be mocked up or tampered with. Is there anything we can do legally to remove him from the board? Is he legally allowed to refuse to show bank statements so we can verify where our money is going? He is the President, Treasurer, and Secretary. At this point, even if every single homeowner voted to have him removed completely, he still has more votes.

Thanks

MarkM33 (Tennessee)
Posts: 10

Posted:

I should also add that he won't allow us to talk to him or ask him questions, as he always cuts us off on the phone and hangs up on us if we ask him a question he doesn't like or doesn't want to answer, and then refuses to answer another call.

LarryB13 (Arizona)
Posts: 4,099

Posted:

Mark,

This what attorneys and courts are for.

MarkM33 (Tennessee)
Posts: 10

Posted:

IT is to my understanding that an attorney has already been contacted previously before I moved in and was unable to do anything (I don't know how good the attorney was). The problem with contacting an attorney or going to the courts is the cost. If we spend hundreds of dollars an hour for another attorney to look at it and he says the same thing, we've wasted our money and are back at square one. The purpose of this post is to see if anyone has actual knowledge or facts to answer my questions so that way I can better determine if it's even worth trying to get another attorney involved.

MarkM31 (Washington)
Posts: 351

Posted:

Quote:

Posted By MarkM33 on 08/02/2016 8:30 AM
The purpose of this post is to see if anyone has actual knowledge or facts to answer my questions so that way I can better determine if it's even worth trying to get another attorney involved.

And you got this thread off to a good start when you titled it "Hitler".

People should carefully read their documents before they buy, it is common for the declarant to hold all the cards during their time. The OP apparently didn't bother to ascertain this, and now he is in the pickle where all he has is Goodwin's law.

MarkM33 (Tennessee)
Posts: 10

Posted:

I understand that is is common for them to hold all the cards during their time. What I don't understand is how they could theoretically steal any money they want to from the HOA account and refuse to show proof of funds to any of the homeowners who have invested their money into the HOA. Running the HOA is one thing, running it into the ground is another.

DanaT (Tennessee)
Posts: 214

Posted:

Wow, it seems you have your work cut out for you. First things first. This is just my opinion and I belong to a Condo HOA in Virginia.

1. In most states, the Declarant, (Builder / Investor), has more rights then the Home Owners. They also have more votes. However, most States also have a law that requires a Declarant, to turn over the BOD as well as the authority to the "Members", after a certain amount of time or depending on what percentage of units have been sold, in order to change the HOA Instruments. This is Virginia Law, concerning your issue, with a Condo HOA.

"B. If any of the units in the condominium is restricted exclusively to residential use and there is any unit owner other than the declarant, the condominium instruments shall be amended only by agreement of unit owners of units to which two-thirds of the votes in the unit owners' association appertain, or such larger majority as the condominium instruments may specify, except in cases for which this chapter provides different methods of amendment. If none of the units in the condominium is restricted exclusively to residential use, the condominium instruments may specify a majority smaller than the minimum specified in the preceding sentence..

You need to determine what type of HOA you belong to. If your HOA is incorporated or not. If your State has any Special Laws, that govern HOAs. If you can provide that information, you will receive a wealth of knowledge from the members in this community. Above all:

PUT ALL CORRESPONDENCE IN WRITING! This will benefit you down the road, if legal issues arise.

MarkM33 (Tennessee)
Posts: 10

Posted:

Quote:

Posted By DanaT on 08/02/2016 8:52 AM
Wow, it seems you have your work cut out for you. First things first. This is just my opinion and I belong to a Condo HOA in Virginia.

1. In most states, the Declarant, (Builder / Investor), has more rights then the Home Owners. They also have more votes. However, most States also have a law that requires a Declarant, to turn over the BOD as well as the authority to the "Members", after a certain amount of time or depending on what percentage of units have been sold, in order to change the HOA Instruments. This is Virginia Law, concerning your issue, with a Condo HOA.

"B. If any of the units in the condominium is restricted exclusively to residential use and there is any unit owner other than the declarant, the condominium instruments shall be amended only by agreement of unit owners of units to which two-thirds of the votes in the unit owners' association appertain, or such larger majority as the condominium instruments may specify, except in cases for which this chapter provides different methods of amendment. If none of the units in the condominium is restricted exclusively to residential use, the condominium instruments may specify a majority smaller than the minimum specified in the preceding sentence..

You need to determine what type of HOA you belong to. If your HOA is incorporated or not. If your State has any Special Laws, that govern HOAs. If you can provide that information, you will receive a wealth of knowledge from the members in this community. Above all:

PUT ALL CORRESPONDENCE IN WRITING! This will benefit you down the road, if legal issues arise.

Yes there is a 2/3 statute written in the CC&R's that says the vote turns over to the homeowners once 2/3 of the homes have been developed and sold. However, the developer isn't building houses actively (we believe on purpose in order to keep the power to do what he wants). There's been one house sitting there 50% completed for almost a year. I've been emailing everything I can but he won't email you back. He will call you so it's not in writing. He know's what he's doing.

JoyceR2 (Virginia)
Posts: 156

Posted:

Guessing the developer is in trouble probably with contractors etc. Know the name of the developer? E-mail is not official mail. Certify whatever you send him regular mail.

Research civil cases on the developer. He may be using your money to pay his way out of whatever he might be hiding.

There clearly needs to be some clear state and federal laws passed to protect HOA communities.

DanaT (Tennessee)
Posts: 214

Posted:

Quote:

Posted By MarkM33 on 08/02/2016 8:56 AM
Yes there is a 2/3 statute written in the CC&R's that says the vote turns over to the homeowners once 2/3 of the homes have been developed and sold. However, the developer isn't building houses actively (we believe on purpose in order to keep the power to do what he wants). There's been one house sitting there 50% completed for almost a year. I've been emailing everything I can but he won't email you back. He will call you so it's not in writing. He know's what he's doing.

OK, then it seems you will need to look for the "Time Limit". According to your State, this is a requirement and it is to be found in your Declaration. "Report of the Tennessee Advisory Commission on Intergovernmental Relations
Protecting the Interests of Homeowners: An Overview of Concerns Related to Homeowners Associations".

"In order to protect their investment, developers maintain control over HOAs during construction until a date or event specified in the declaration, the governing document of the community.

If I was in your stead, I would contact the Tennessee Advisory Commission, and reference their report.
https://tn.gov/assets/entities/tacir/attachments/2015Tab_9HOA.pdf and ask them if they can point you in the right direction. Keep in mind that most State Agency, WILL NOT provide legal advice. Just let them know, that is not what you are seeking, just guidance to any State Agency, who can help assist you via State Laws that deal with your issue.

As Joyce mentioned, make your issues know in writing via Certified Signed Returned Receipt. If this knuckle head refuses to sign for it, you will get it back. DO NOT OPEN IT! If you need to go to court, let the Judge open it. If you do open it, it will be worthless to you.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

I saw this and reminded me of my nickname when I was president... Anyways, me thinks the OP protests too much? Sorry but going to put this out there for a devil's advocate/different view perspective. The reality is the Developer is fully in charge of your HOA. They do not owe you much of anything except to keep the boat afloat.

So what if they "take" your money and don't show you what it goes for? What do you care? You don't need to. What you need to know is if you do NOT pay your dues what happens. Your in a contract now and it requires you to pay up. When it's time for you to be an advocate for your fellow members, hopefully then you will step up. Right now, you and your fellow members are stuck with the developer control.

A HOA is funded by it's members for it's members. So your money goes where it is needed or wanted to run the place. Until the place goes broke or doesn't live up to it's requirements, chill out. Let the man do his job and hold out till it's put into your hands...

Former HOA President

DanaT (Tennessee)
Posts: 214

Posted:

Hey Mark, your State is also a one party state for wire tapping. Start recording all your conversations with this knot head and keep them for your records. They can be used in court if the need arises.

Tennessee's wiretapping law is a "one-party consent" law. Tennessee makes it a crime to intentionally intercept any wire, oral or "electronic communication" to overhear or record a phone call or conversation unless one party consents to the conversation.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Mark

Look up the expression playing the Nazi card.

LarryB13 (Arizona)
Posts: 4,099

Posted:

Quote:

Posted By MarkM33 on 08/02/2016 8:30 AM
IT is to my understanding that an attorney has already been contacted previously before I moved in and was unable to do anything (I don't know how good the attorney was). The problem with contacting an attorney or going to the courts is the cost. If we spend hundreds of dollars an hour for another attorney to look at it and he says the same thing, we've wasted our money and are back at square one. The purpose of this post is to see if anyone has actual knowledge or facts to answer my questions so that way I can better determine if it's even worth trying to get another attorney involved.

So what you are saying is that you have not contacted an attorney yourself. Instead, you rely on rumors that nothing can be done. In order to have an abusive situation there must be an abuser and a willing victim. Enjoy the abuse.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Mark,

Having just purchased a home in TN, I know that the market for resale is very high and (I believe) because of the prices, the market for newer homes are not as active.

As you are aware, and others have pointed out, in an Association where the developer/declarant is in control of the Association, members basically have to wait out the time frame for turn over. Even when control is turned over to the membership, depending on the governing documents and the #of votes per lot for the developer, it's possible that the developer will still have control of the membership vote.

There are many things one can do prior to turnover and instead of fighting with the declarant, you may want to organize a group of homeowners to be ready when the turn over takes place (as there can be a lot of work that is required). You also want a group of homeowners ready to make a claim on the developers performance bond with the city if things are not finished or not finished correctly.

Here is some info on turnover/transistion (so you can be prepared):

Subject: HOA Transition from developer

Subject: Transition to Homeowner Control problems Your own thread from a year ago

Subject: HOA transition from developer control to homeowner control

Best Practices Report #7 - Transition a 55 page pdf document from the Foundation for Community Association Research

Developer/Homeowner Transition: A Guide To Success from Neighborhood link

TRANSITION PLAN a 10 page pdf document developed by an HOA (specifically for their HOA but still good info)

For the future:

Best Practices Reports links to all the reports by the Foundation for Community Association Research

Others have answered your specific question of what can be done now: if you want to force transition (remove the developer from the board), you need to take the issue before the courts. However, even if this was done, the voting power (which the court would likely not change) would still have the developer control the vote of who gets on the board and they could simply vote themselves back on in the future. This is why I suggested preparing now for transition in the future.

As for the tall weeds on the developers lots, contact the county or city health department. There are typically statutes on this issue.

Hope this helps,

Tim

DaveD3 (Michigan)
Posts: 796

Posted:

He's the developer. He can likely damn well do as he pleases....officially... per your documents.
One of the perils of buying into a developer-controlled development.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By DaveD3 on 08/02/2016 7:01 PM
He's the developer. He can likely damn well do as he pleases....officially... per your documents.
One of the perils of buying into a developer-controlled development.

and that is the truth.....

LarryB13 (Arizona)
Posts: 4,099

Posted:

Quote:

That is true only if the homeowners are unwilling to assert their rights.

For example, the developer is collecting assessments in the name of the association. He has a fiduciary duty to both the homeowners and the association regarding what he does with those funds. The OP wrote that the developer "also refuses to show actual bank statements for the funds and only lets us see Excel spreadsheets or Quickbooks statements, both of which can obviously be mocked up or tampered with."

An appropriate response from any homeowner in that situation would be to sue for an accounting. This is not an uncommon kind of lawsuit and it would require the developer to disclose all funds he has collected, spent, or retained in the name of the association. More importantly, it would force the developer to retain an attorney who is likely to give his ass a royal chewing.

This, of course requires at least one owner to quit whining and start acting.

MarkM33 (Tennessee)
Posts: 10

Posted:

Lol... What do I care where MY money goes to and for? Are you kidding me? Every homeowner has the RIGHT to know where their money goes to make sure nothing is happening under our noses. Not to mention the fact that its MY money in the first place, and regardless of whether or not it goes to an HOA or not, I want to make sure what I'm paying for is what I'm getting. I pay my dues on time every year and follow all of the rules. I don't think I'm wrong for wanting to make sure that they are doing what they are supposed to do instead of just "taking their word for it." If I had a dime for everytime I trusted somebody just because of their word and got burned, I'd be a rich man. You sound exactly like this developer, and it's attitudes like yours that cause homeowners to question actions of the board in the first place.

MarkM33 (Tennessee)
Posts: 10

Posted:

Quote:

Posted By MarkM33 on 08/03/2016 6:42 AM
Lol... What do I care where MY money goes to and for? Are you kidding me? Every homeowner has the RIGHT to know where their money goes to make sure nothing is happening under our noses. Not to mention the fact that its MY money in the first place, and regardless of whether or not it goes to an HOA or not, I want to make sure what I'm paying for is what I'm getting. I pay my dues on time every year and follow all of the rules. I don't think I'm wrong for wanting to make sure that they are doing what they are supposed to do instead of just "taking their word for it." If I had a dime for everytime I trusted somebody just because of their word and got burned, I'd be a rich man. You sound exactly like this developer, and it's attitudes like yours that cause homeowners to question actions of the board in the first place.

This is in response to Dana's reply.

MarkM33 (Tennessee)
Posts: 10

Posted:

Quote:

Posted By MarkM33 on 08/03/2016 6:44 AM

Excuse me.. Melissa's reply. This board doesn't have an edit feature or one that I can see anyway.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

So if you rent an apartment do you care what that money goes toward? Do you demand that the apartment complex tell you their accounting sheets? Better yet? What about when you rent a hotel room? Do you need an expense report for that? When your in a HOA that is under DEVELOPER CONTROL you are just a TENANT to them who contributes to the income of the HOA. Until your under your OWN and OWNER control, what the Developer does is what they do. Which I am not going to waste a second worrying about till it's my time to take over.

Former HOA President

DaveD3 (Michigan)
Posts: 796

Posted:

Quote:

Posted By LarryB13 on 08/02/2016 10:22 PM

Yes, but...
recourse is only available to the extent that the Developer is ACTUALLY violating the restrictions/rules/covenants/whatever. Most developers have carte blanche privilege when it comes to changing and approving things. They do that on purpose. He can likely change/waive restrictions at will with no approval from anyone else, since he has the control.

Likewise with accounting. Do the documents require an annual audit? Do they require that the financials be available for review by the membership while under developer control? They may well not, in which case it's simply too bad for Mark and the others.

What do the documents actually say, what authority do they give the developer, and is he ACTUALLY in violation? He might be in violation, in which case Mark and co can file suit, but he might not be. He could have written things SO broadly so as to give himself power to do everything that he's doing. Power that the board will have to live with eventually, of course, because the records of apparent violations that he approved will be nowhere to be found.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Quote:

That's like saying to the thief you are simply seen as a meal ticket. What do you care if they rob your home.

Regardless of how the Declarant chooses to view a homeowner, they are in fact not a tenant but a member of the Association. As a member, applicable State statutes and governing documents typically specify that members have a right to review/inspect the financials.

JoyceR2 (Virginia)
Posts: 156

Posted:

Amen....to that!

MarkM33 (Tennessee)
Posts: 10

Posted:

Quote:

Posted By MelissaP1 on 08/03/2016 8:25 AM
So if you rent an apartment do you care what that money goes toward? Do you demand that the apartment complex tell you their accounting sheets? Better yet? What about when you rent a hotel room? Do you need an expense report for that? When your in a HOA that is under DEVELOPER CONTROL you are just a TENANT to them who contributes to the income of the HOA. Until your under your OWN and OWNER control, what the Developer does is what they do. Which I am not going to waste a second worrying about till it's my time to take over.

You have said some of the most illogical statements I've ever read. You cannot compare a rented apartment or hotel to an OWNED home. Renting an apartment or hotel room has no investment in the building or in the room. If I pay x amount of dollars a year in HOA dues, and I have the "what do I care what happens to it" mentality... what's to say that the president pockets the money and doesn't pay the HOA's bills? What happens when the HOA's insurance and certifications expire because nobody was allowed to do their due diligence and look into the financials to make sure everything was being properly handled? It is our RIGHT as homeowners to know where our money is going. My money is my money, and if it's supposed to supplement the HOA as stated in the CC&R's and bylaws, I want to make sure that's what's being done, and I don't see anything wrong with having a right to do so. You don't have to worry about things like this when renting an apartment or hotel... because you have no physical or financial investment in it unlike when you own a home in an HOA.

MarkM33 (Tennessee)
Posts: 10

Posted:

Quote:

Posted By DaveD3 on 08/03/2016 11:01 AM

Posted By LarryB13 on 08/02/2016 10:22 PM

The developer is in violation of several of the rules, but continues to say that he needs "leniency" from the homeowners because he has "so much on his plate." For instance, he complains about the smallest things regarding people's yards. He wants each yard cut every single week without fail, no plants overgrowing by any amounts, flowerbeds completely cleaned, trimmed, pruned, etc (I understand ALL of this and don't disagree with any of it), however, his own home (he lives in the model home of the neighborhood), is completely in violation of the CC&R's. He has an uncompleted fence around the house with boards missing, grass that is never cut, parks his car in the empty lot next to him on the grass, his yard is always trashed with leaves, empty soda cans in his bushes (all violations of the CC&R's). The model home looks worse than any other house in the HOA whether they are actually in violation of any rules or not. Not to mention the undeveloped vacant lots that he owns have knee high grass growing yet complains to the homeowners if their grass grows above 3 inches, saying the homeowner's yards are hindering his ability to sell because it looks bad...

DaveD3 (Michigan)
Posts: 796

Posted:

Mark,
Your documents are probably written with language that says, in effect:
a) It's the board's responsibility to enforce the rules
b) If the board doesn't enforce the rules, each and every member has the authority to seek relief via court order to have the rules enforced.

Just like the board could file suit against you to force you to mow your lawn (or remove a fence or whatever) likewise, you can do the same if the board fails to act. The process should be the same. You go to an attorney, they send a nastygram-notice the offending party seeking relief(compliance), and if that doesn't work, the attorney petitions the court. In Michigan that court request is for a "restraining order" which apparently is more broad than how we normally hear it used. It's a court order to force certain behaviour on someone.

I suggest finding that section of your documents, citing it in a letter to the board of directors (developer) and request compliance in the specific areas where they're not. Assuming of course that the documents aren't providing diplomatic immunity to the developer in those areas.

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