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AdamD (Indiana)
Posts: 42
Posted:
I bought my single family home in a HOA in May of 2014. Since my purchase date, there has not been ONE HOA meeting.

Long story short, after I sent Board a certified letter last September, all Board members quit (so I was told by the management company). Management company has committed fraud (pending investigation with state Attorney General that I started). Supposedly, a new Board has been hand-picked until a new meeting is called. Management company emailed me stating all of the information would be sent out by end of year. Well here it is in January and we have received NOTHING.

We are a rather disconnected neighborhood. Management company took down our Facebook page b/c of a bad review. Randomly, they took down our very basic website last week.

There are a few other homeowners who I know that are just as upset with the apathy of the HOA/management company.

No CC&Rs are enforced, phone calls aren't returned, there's a "ghost Board" that never calls a meeting... only thing they know how to do is collect our yearly HOA fee and management company (a fellow homeowner) knows how to cash her monthly check.

Any advice? I'm at my wits end!
MelissaP1 (Alabama)
Posts: 13,836
Posted:
First off... Realize YOU and your neighbors ARE the HOA. It's not a separate entity. It's NOT a "They or Them"... It is YOU and your neighbors. 2nd establish a list of members. Know your neighbors. Find and recognize who are to be board members. Call a special meeting if you want to discuss the issues. Get a copy of your documents and read them.

HOA's are volunteer organizations that are non-profit. Time to volunteer and get rid of the apathy by doing so...

Former HOA President
TimB4 (Tennessee)
Posts: 21,059
Posted:
Adam,

Is your Association under control of the membership or under control of the developer?

If you're not sure, is the development complete or still being built?
DouglasK1 (Florida)
Posts: 2,046
Posted:
The answer to Tim's question is critical to knowing how to proceed. If the developer is still in control, your options are limited. If the developer is no longer in the picture, then you have more options.

Melissa's point is also good to keep in mind.

I'd say step one is to make sure to read and understand your governing documents, which typically include Covenants (aka CCRs, Deed Restrictions, sometimes other names) and Bylaws. Those documents should explain the process for electing directors (typically an annual meeting). Assuming annual meetings are not being held, there should be a procedure in the docs for calling a special members meeting to recall and and replace the board members. This probably requires a request by some minimum percentage of owners.

Keep in mind that the MC works for the association at the direction of the board, the MC should not be in charge. You and fellow like minded owners need to take back control of the association. Again, this is all assuming the developer is not still in control, if they are, then you might have to wait until turnover to have any input.

Escaped former treasurer and director of a self managed association.
AdamD (Indiana)
Posts: 42
Posted:
MelissaP1: I get that Board members are our neighbors. I have played nice for nearly three years, offering to volunteer and help in any way they might need me. Each offer of assistance fell on deaf ears.

I have all of the documents and know them quite well.

TimB4: My association is under membership control

DouglasK1: Here's the thing, while the documents sure do outline procedures on how to run the HOA, they are not being followed. There are over 400 homes in my subdivision. Getting signatures required for a special meeting could be done, but then what do? Hand the signatures off to the Board? How could I possibly call the meeting? Send all 400 homes a notice at my expense? And if I do this all on my own and the Board refuses to legitimize the special meeting, would it just be a waste of time?

Definitely not wanting to go to court over this.

Any advice is appreciated!
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Adam

In many cases a Special Meeting is not controlled by the existing BOD. It can be controlled by those calling for it. Typically it will be challenged by the existing BOD so you have to be sure you have all your legal ducks in a row. In order to assure such, it might be best to hire an attorney to oversee the Special Meeting.
TimB4 (Tennessee)
Posts: 21,059
Posted:
Adam,

If you don't want to go to court, my suggestion would be to gather support and get yourself elected (or appointed) to the board.
This way, you will be part of the decision process and can make the changes you see needing to be made.

In addition to your governing documents, you may want to check out the following links:

Community Associations network Indiana page lots of good info specific to Indiana

Indiana Nonprofit Corporation Act of 1991 Starts on page 714. Applicable if your Association is incorporated (most are but check to be sure)

Best Practices Reports From Foundation for Community Association Research

Subject: Reserve Studies/Funds 101 A thread on this forum

Hope this helps.

Tim
KerryL1 (California)
Posts: 14,550
Posted:
Very good advice to you from all, Adam.

If you don't want to go to court, you MUST unify with your fellow homeowners and take joint action. Just one benefit is sharing the expense of mailers or even a one-time visit with an HOA attorney.

Start with calling a special meeting of the members via the petition process. As you say, it'd b pretty easy. At the very least, you'll find enough to get a for group together to move forward and make the necessary changes.

SueW6 (Michigan)
Posts: 814
Posted:
I'd have a "town hall" gathering of concerned homeowners. Surely, there are other people who are worried about property values, too.

Get a plan of action at that meeting.

Your Board needs to identify itself and what it is doing.

SheliaH (Indiana)
Posts: 6,964
Posted:
I have no issue with what’s been suggested so far – as Melissa said, the homeowners are the HOA, and so if anything’s going to change, they have to step up. I know the prospect of contacting over 400 homes is overwhelming, which is why you need to get some like-minded neighbors to help you.

Start with the ones you’ve spoken to who are just as bugged about the situation as you are. You may need a few meetings to review the documents to see what’s needed to call a special meeting and find a place to hold it. If you don’t have a clubhouse in your community, use a nearby church or community center. Pool together some money so you can send out a letter or split up the neighborhood and have everyone go out and collect signatures.

If you know who sits on the “ghost board,” present the petition to them AND the property manager, telling them this meeting is going to happen whether they show up or not. And get an attorney to help ensure you’re trying to make change according to the steps listed in your documents (if the “board” threatens to sue, let them – you do the right preparation and let them try to defend themselves if they can)

You said you filed a complaint with the AG, so you’ll want to keep the investigator in the loop (remember, they can’t represent you individually, but may be able to compel the property manager and ghost board to talk to you – personally, I’d be leaning on the property manager in a painful way!)

At that meeting, you need to discuss the lack of a functioning HOA board and what may happen if the community doesn’t get its ish together (do a search on this website or Google HOA receivership to see what that entails and how it can put a serious hurt on your wallet). It may be this meeting will prompt everyone to vote out the current board, such as they are or they’ll all quit – if and when that happens, you need to have people ready to step up and serve as board members (starting with you).

You've already figured this out, I'm sure, but sadly there will be some homeowners (maybe more than a few) that really won't give a rat's behind about any of this. As long as things seem to be going ok, the assessments aren't "too high" (whatever that means) and no one interferes with their lifestyle, they don't care who runs the HOA. Don't worry about them (at least not yet) - provide the information to everyone and rally together the ones you can.

Like you, I worry about a homeowner also owns the management company. That’s not good because there’s too much of a risk for a conflict of interest, so this will be among the first thing the new board will need to address. You’ll also need to have the finances audited to see where the money’s going (or not). That’s another reason to get an association attorney – you may have to deal with the property manager in court if she doesn’t cooperate.

You’re in Indiana, so if HOA board “bidness” is new to you, I suggest you check out the Community Association Institute website Tim mentioned. I know there’s a central Indiana chapter (I represented my own HOA when I served on the board). If you’re in the area, I believe they still hold periodic seminars for board members on a variety of subjects. All of the board members need to join (the association should pay for it) and attend those seminars so they’ll learn best practices of running an HOA. Or join on your own so you can check out their materials and educate yourself.

One more thing – you don’t say how old your community is, but if it was established on or after July 1, 2009, it’ll be governed by IC 32-23-5 of the Indiana code. Here’s a link (this was prepared by one of the major HOA law firms in central Indian) – get comfy and start reading, because this will also dictate how your community should be run. http://eadsmurraypugh.com/wp-content/uploads/2014/10/Indiana-HOA-Act-as-of-2015.pdf

Good luck to you.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius
AdamD (Indiana)
Posts: 42
Posted:
Thank you for all of the advice. I have scoured many websites regarding HOA law in Indiana, but for some reason the Community Association Institute is new to me, so thank you for this suggestion.

My HOA was formed in the 90's so IC 32-23-5 isn't applicable (there hasn't been a vote to adopt it either).

In the mean time, I think the best course of action is to rally the troops. We will meet next week to discuss the rollout of a plan I am putting together. I put together a small website to inform fellow homeowners of issues plaguing the HOA/Management Company. We will go door-to-door with flyers pointing homeowners to the website. The website has a subscribe popup when loaded, so hopefully other homeowners will feel compelled to stay in the loop. If by then, the new HOA Board Members haven't set a date for the annual meeting, we will elicit signatures needed for a Special Meeting.

To be honest, the idea of putting together a Special Meeting for a HOA of over 400+ homes seems a bit daunting, even for a small group. Hopefully it won't get that far, but I will step up to the plate if need be to see it gets done. Enough already!

All the best to all out there!
TimB4 (Tennessee)
Posts: 21,059
Posted:
Adam,

Holding a special meeting would only be the start of the work to be done (and may not be needed).

Gathering support and having firm volunteers for Board members at the annual meeting is the least expensive route to go. Proxies, if allowed, can be a big help here.

Even if you do get a special meeting, the meeting would be to recall the current board and replace them with who?

This is why I said it's best to gather support and have firm commitments from individuals who believe as you do first. Many are willing to follow. Few are willing to volunteer to do the work. You being elected to the Board may be able to accomplish a few things, but without support from other Board members you will likely accomplish very little (if anything at all).

Gather support and get a group together who are willing to serve to make your Association better.
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Tim's advice on it is best to rally support and make BOD changes at election time is sound advice. Aim toward that.

As I said earlier about Special Meetings being tricky. They are limited to the reason they were called. As an example a SM can be called to replace BOD Members Jane Smith and Harry Jones with Bob White and Helen Brown. It cannot be called to just recall Smith and Jones. It must specify who is to replace them.
KerryL1 (California)
Posts: 14,550
Posted:
Sounds like you're on the right track, Adam.

Several years ago when my HOA had a arrogant & ignorant board, a small group-maybe 13-- of us newer Owners formed and met to learn & discuss our docs and CA state laws. We then called a meeting for any owners to attend and dispersed into several "break-out" groups that discussed their ideas to improve our HOA overall, e.g., communication, board meetings' organizations, CC&Rs relevant to governance, etc.

Of 200+ condos with 43% absentee Owners (at that time), about 80 attended, which we liked. Form there several of us volunteered to run for the board in the upcoming election a few months off. while we didn't gain a quorum of the Board, we did at the election a year later. During that year we were a minority on the Board, we still a got a lot down re: adhering to state laws and our own docs. Our then-new management co. (MC) was a big help--think they could see the writing on the wall.

Onward, Adam!
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Adam

In one 700 homes HOA it took us two election cycles to change the direction of our BOD. A group of about 20 of us started the movement. We held meetings, met with neighbors, set up information tables, collected proxies, did mailings, etc. We collected a few bucks from other owners and had a war chest to use. We even hired a lawyer to help us oversee the next Annual Election. We managed to get 2 on a 7 person BOD at that election. The existing President (and much of the problem) was not reelected to the Presidency. There were still some issues as he controlled a few BOD votes but things started going in the right direction. We had a lot of 4 to 3 BOD votes that year. We got back at it come the next Annual Election and we got 2 more on the BOD. We had a lot of 5 to 2 votes after that. Nothing went the ex-Presidents way after that. He basically stopped participating as a BOD Member. Come the next Annual Election when his term was up, he did not run at all. The place is now a model in democracy and runs very smooth.

It takes time but changes can be made. It will require time and work not just bytching on an Internet chat.
GenoS (Florida)
Posts: 4,276
Posted:
JohnC46, did you encounter a lot of pushback from the other board members in that first year while you were all still in a minority position on the board? I'm thinking in terms of bad-mouthing, casting aspersions on your "agenda", instigating rumors, accusations of "undermining the board", etc.
KerryL1 (California)
Posts: 14,550
Posted:
So, Geno, though you didn't ask me, our minority position did give rise to the horrid majority cast aspirations on us 2 of 7 (sometimes 3 of 7) but we kept sticking to our documents & state laws and everyone monthly board meeting the homeowners saw that we 2-3 were decent, lawful, poised, ,et c. and as noted we got 4 of 7 a year after. As in John's case, the jerks didn't not seek reelection.
JanetB2 (Colorado)
Posts: 4,219
Posted:
If ALL of the prior Board quit ... simply get together enough owners to make a quorum via proxies or in person for a special meeting. Prior to "Special Meeting" have an informal meeting with all owners to discuss with each other prior to meeting how many BOD positions need to be filled and who is willing to step up to plate. This is potentially makes it easier regarding ballots sent prior to meeting for proxy votes, but keep in mind generally in most states people can also be added from the floor during the meeting.

Stuff happens ... what is important is how well you pick yourselves up and move forward.
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Quote:
Posted By GenoS on 01/19/2017 5:28 PM
JohnC46, did you encounter a lot of pushback from the other board members in that first year while you were all still in a minority position on the board? I'm thinking in terms of bad-mouthing, casting aspersions on your "agenda", instigating rumors, accusations of "undermining the board", etc.

Geno

I was not on the BOD. I was on the ACC and from the ACC came one of the main reasons for change. The ACC had refused all requests for sheds (though I was in favor of allowing such) when the Covenants said out buildings were allowed. One owner and his lawyer came to an ACC Meeting and told us that having refused all requests, the ACC was in fact banning them when they were allowed. I contacted the BOD and we met with the HOA lawyer. The HOA lawyer agreed and said we should workout some guidelines to allow such.

Problems had been building on the BOD and when this issue arose the President said the BOD should ignore it because if anyone sued, it would take years for it go through the legal system. The HOA lawyer said this was not good advice and he was uncomfortable with it. The President said if you are uncomfortable, we can always get another lawyer. This was the straw that broke the camel's back for two BOD Members, one of which formed a group (of which I was part of) to bring about changes.

BOD terms were 3 years and the President had been President for two and had two more years to go on his second BOD term. He had several other BOD Members in his pocket thus many of the contentious votes (such as have the ACC draw up plans for sheds) were 5 to 2. When we went after the BOD, the President was making all sort of accusations but over the years he had alienated many owners so our change group saw him as an easy target. We just had to do the work to make it happen. As I said earlier, in the next Annual Election we knocked several of his people of the BOD and replaced them with our people. At the next annual meeting we knocked several more of. He was left with one supporter.

I can be done. It takes time and work.
KerryL1 (California)
Posts: 14,550
Posted:
two of the best parts of doing it th way John's & my hOA die is (1) very low cost and (2) we got to know a lot of our neighbors and unified against tyranny.
AugustinD
Posts: 5,144
Posted:
Quote:
Posted By JohnC46 on 01/20/2017 6:30 AM

[snip for brevity]
Problems had been building on the BOD and when this issue arose the President said the BOD should ignore it because if anyone sued, it would take years for it go through the legal system. The HOA lawyer said this was not good advice and he was uncomfortable with it. The President said if you are uncomfortable, we can always get another lawyer. This was the straw that broke the camel's back for two BOD Members, one of which formed a group (of which I was part of) to bring about changes.

Thank you for sharing this interesting anecdote, John. Maybe rogue boards do not constitute a majority of all boards nationwide. But they certainly seem common.

It is nice to read of a HOA lawyer who won't put up with a rogue board. When a board violates the governing documents with impunity (like the board you describe), I think all that is bad does tend to build up over time, from unnecessary costs to disgruntled owners to greater risks of not one but many lawsuits, all leading to lower property values.
BobD4 (up north)
Posts: 1,002
Posted:
Quote:
Posted By JohnC46 . . . the President said the BOD should ignore it because if anyone sued, it would take years for it go through the legal system. . . .

- In an age of recording devices everywhere, respectfully that ex Pres even joking about that is no longer a smart move.

- Another good one heard at this site : "Don't worry about it. Our insurer will defend us !"

( I have run that one by several insurers & an owners association insurance specialist : There's a big difference between 'defending the insured' & indemnifying for illegality. They agree that for an insurer to be dragged into underwriting what is likely illegal, would by itself be outside any public interest, much less what most insurers would knowingly underwrite )

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