Board or ACC decision authority

I am a board member of our Property Owner's Association (POA) and hold the position of ACC Chairman. This board position and the ACC Chairman are not defined in the restrictive covenants, just that there are at least three elected board members and those board members appoint the officers (President, VP, Secretary, and Treasurer). I was the previous Chairman of the ACC and resigned my position a few years back due to conflict with the board.

At this last November's annual elections for the Board of Directors (the offices have not been staggered and are only annually offices) I was elected to the Board and it was going to be a complete board change out. So, the outgoing Board made a proposal to add two more board positions to the Board at the annual owners meeting and to no longer appoint the officers and just fill those positions by the five board members, thereby creating the ACC Chairman position as the fifth Board member's duties. Due to my experience I volunteered to be the Chairman of the ACC. The ACC is the only active committee. There is a Design Review Committee established by the Covenants, but the board has not appointed anyone because the vacant lots in the development are not up for sale. Once those lots come up for sale and are purchased, the DRC will probably be established (possibly be filled by the same members on the ACC).

The Covenants specify that "With respect to all matters that are, by the terms of this instrument, to be decided by the ACC, the decision of the ACC shall be final and binding on all parties." The Covenants also specify that ACC "Approval shall be limited to outward appearance only and shall not include any responsibility or authority to review for structural soundness, interior design, compliance with building or zoning codes or standard, or any other similar or dissimilar factors." The ACC recently approved a project within the allotted time for a lot owner to build a pool cabana for a previously approved in-ground pool as well as a garage. In the same request the owner requested a variance to the setback requirements for the garage. The ACC approved a variance to the setback requirements of the garage to the rear lot line (City only requires five feet, but the Covenants stipulate thirty feet), the owner wants to build it fifteen feet from the back lot line. Another variance the owner requested was to be his own prime contractor. The owner provided information concerning his history and knowledge of construction principles and all the work will be permitted and inspected by the city. The ACC approved this variance as well. The ACC voted 2-1 for approval, so it was a majority vote. The one member who voted against was probably in violation of the Covenants because he was questioning the proximity of the sewer line for the cabana to the pool. This is a permitting issue and specifically forbidden to be considered by the ACC.

The real issue with all of this is that a Board member, who is the President, is now asking for a Board meeting to meet at the owner's property to determine if the Board approves this owner's project. I have never seen anything like this in the five and a half years I have lived in this development, or for the three years I served on the ACC.

I am worried that we could have a legal matter on our hands because the Board is operating outside of the covenants, and I know this owner and I know he will sue if we show up afgter he already knows the ACC has approved his project. In fact, he is pulling his permits on Tuesday.

Is the POA it risk here? I'm advocating for the owner because I believe this is highly inappropriate and outside of our Covenants.

I am attaching a copy of our restrictive covenants as a text file. They are pretty bad and really need to be re-written, voted on and approved by 90% of the lot owners. Paragraph 4 covers the authority and duties of the ACC.

Thanks for any feedback.

Tom

Without reading the posted Covenants, I say an elected BOD can override any Committee decision. Typically when a Committee makes a decision one does not like, they can appeal the decision to the BOD thus this says the BOD can override any committee decision.

In the OP's post something smells fishy which is why would the President would take it upon himself to call for the viewing/meeting unless there were some objection to the ACC's decision. Maybe as an owner, the President does object to the committee's decision which would be his right to do so as an owner.

The bottom line is committees do not run an association. The elected BOD does.

TomC12, to me, three legal points are important here:

-- The Declaration states decisions of the ACC "shall be final and binding on all parties."

-- The Declaration states the Board may remove and replace members of the ACC.

-- From case law, when either a Developer, ACC or a Board grants permission to a member to do something that varies greatly from the original scheme of the grounds, they are not on solid ground.

My HOA's Declaration has wording similar to your HOA's Declaration. My HOA had quite a brouhaha over an architectural situation in the past year. It concerned second level hard surface floors at my condo. The conflict culminated in three ACC members being replaced. The original three ACC members were furious, claiming they could not be overridden. I am not wild about my HOA's board, and have a high opinion of the ACC members, but I think the board got this one right. The Board was staying within the covenants; shielding the HOA from lawsuit vulnerability; and also taking action that minimized hard surface floors on second level condos being a nuisance.

I believe when an ACC appears to be going well outside the covenants, I think a Board has a duty to step in and hold a meeting with the ACC. If the ACC will not change its mind, the board should replace the ACC's members. The HOA attorney should be consulted as needed. If a Board does not do this, and some kind of construction that varies greatly from the covenants and general scheme of the HOA is permited, then another member distressed at the variance has some standing to sue the HOA and enforce the covenants. My first blush impression is that the ACC is operating more outside the covenants than the board.

Similarly, if it is a board that grants a variance that goes well outside the covenants, the board is holding the association vulnerable to a lawsuit.

With regard to who's who as a director and officer: What do your Bylaws say about how many directors serve on the board and stand for election each year? Be aware that many HOA's Bylaws specify that the positions of President, VP, Secretary and Treasurer are not necessarily held by diretors. Some HOA's Bylaws state that the President, VP, Secretary and Treasurer are "officers" who may be non-directors. Typically the Board appoints the officers.

How many of those elected as directors oppose the ACC decision?

Sorry, that text file is way out of format. Here's a PDF version.

Simply put if the ACC already approved and the owner has approval letter or action is noted in ACC meeting minutes ... the owner gets what owner requested. Does the BOD really think that after approval and expenditure of $$$ after approval via HOA documents that they can take it back?

FYI ... Never give up and state you are willing to resign vs. standing up for what is right.!!! Potentially you are under a misconception ... Keep in mind if anyone sues an HOA it affects EVERYONE ... potentially all pay the price for attorney, court costs, etc. because HOA fees are spread equally. BOD and Committee Members are required to exercise essentially a fiduciary duty ... In essence BOD and Committee are to treat or exercise judgement to maintain or improve value for other members property the same as if it was your own personal property. You have done that and a reason why you are an excellent choice to represent others.

Personally ... I would like to not see that wasted. Members like you are needed in the HOA community.