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DennisG7 (Georgia)
Posts: 155
Posted:
For years our HOA Tennis community has complained that they needed a "shaded area" for players to take a break and watch matches. Last year a new Board was elected and in April they broke ground on a new pavilion located near the tennis courts. After about 3 months of work it was about 80-85% done. Then all work stopped. The county slapped about 3-4 notices on the structure. Essentially it was a Stop Work Notice followed by a Tear Down Notice.

It turns out that the "contractor" not only didn't obtain a Building permit, he was not licensed by the state or the county. No inspections were done during the construction phases and the Tear Down Notice has also been ignored as the HOA has now been taken to court (Dec 2016). It is my belief that our HOA President may have known before and during the construction that the "contractor" had no license, insurance and had never obtained a permit!

Since the court hearing, which the HOA members were not aware of, I have been stonewalled in trying to get an answer on what is being done. Specific questions and requests to the HOA Board get a reply "it's a legal issue" and they can't comment.

The job was estimated at $17K. Some records show we paid at least $15K but the structure is not finished and has no Certificate of Occupancy. I have asked the HOA Board for a copy of the contract (it appears there was none) and what legal actions we have taken. Are we suing the contractor or what? I'm at a loss as to a next step. The issue appears to have been swept under the rug as not a word has been mentioned during the Board meetings. I have not wanted to bring this out in public and have tried to encourage the Board to fix the problem so we can legally and safely use the pavilion. I think that the Board President knew that the contractor was not licensed and had not obtained a Building permit before construction started or during construction but bringing this to light doesn't solve the problem. Any suggestions would be appreciated. Do I need to contact an attorney?

Dennis G
Georgia
DouglasK1 (Florida)
Posts: 2,046
Posted:
Here is a link to your prior thread on the topic:
http://www.hoatalk.com/Search/ForumSearch/tabid/87/forumid/1/postid/218064/view/topic/Default.aspx

Escaped former treasurer and director of a self managed association.
SheliaH (Indiana)
Posts: 6,964
Posted:
If there's a lawsuit pending, the board is correct in waiting until that's resolved before providing homeowners with an update. As long as they ARE taking legal action, that's what you'll have to live with for now because it's easy for information to get misconstrued and possibly leaked to the other side. You may not like to hear this, but that's how legal action works and so you may just have to wait.

Legal action is also a fluid thing and none of it happens overnight- sometimes people settle everything out of court, sometimes you win and then have to fight to collect your judgment and sometimes you lose and have to decide if you're going to appeal, which will take more time and money. If the contractor disappears or declares bankruptcy, that'll make things more complicated and take even more time and money. In the last post, some folks warned that this may end up being an expensive lesson for the association - I know you don't like hearing that either, but you may as well brace yourself for that possibility.

The last post also gave you some great ideas about what to do in the future and that's what you and your neighbors need to focus on (which may mean you'll need to rally together and get rid of this board for not doing its job). For future projects, everyone needs to insist that the board does its due diligence in checking out contractors before doing the work, getting several estimates, checking to see if permits are required and insisting the contractor get them before any work is done, etc., etc., etc.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius
LarryB13 (Arizona)
Posts: 4,099
Posted:
Dennis,

Are you a board member?

The action against your association is a public record and you do not need the board or their attorney to grant permission to see the record. If the records are not available online, pay a personal visit to the courthouse.

The Board and the president have a fiduciary duty to spend the association's funds only for the benefit of the members. Even if the president was not aware that the contractor lacked a license, the president still had a fiduciary duty. At every turn, the president failed to exercise any caution whatsoever. The members are entitled to know this and the president should never be allowed to act for the association ever again.

Your chances of recovering the money from an unlicensed contractor are not good. I hope someone has filed a complaint against him with the state agency that licenses contractors.

If you are on the board then, yes, you should find yourself an attorney. You need to distance yourself from the president and those board members who are covering up for him. The entire board is at risk of having a derivative action filed against it. In a derivative action, a minority of members asserts that the board members are not doing their job and asks the court to award damages to the association and against the board members. Remaining silent is a good way to become a defendant.
DennisG7 (Georgia)
Posts: 155
Posted:
Since brevity was a key factor in explaining the situation I probably omitted too much info. I am not a member of the board. I've declined serving several times as there are a number of HOA issues that need to be addressed, this being just one. I have however volunteered to take on specific projects for the HOA and have provided the HOA Board written reports, photos and analysis that the board has asked me to do in the past.

I can find no evidence that the Board or the HOA's attorney has taken any legal action against the contractor. There are no law suits filed against the contractor. Also the contractor, according to the city and county licensing office, has gone out of business and no longer occupies an office. The website also indicate that the business is no longer open.

It's my opinion that the "it's a legal issue" response reply I got from the Board President dealt with the HOA being taken to court for violating a couple of county ordinances, specifically no building permit/inspection for a structure and not having a Certificate of Occupancy. The HOA was served in November and had a hearing in court in mid December. The Board President was present and an attorney represented the HOA. A fine was paid, according to court records. I assume that we, the HOA also paid the attorney for representation.

No legal costs appear in the November or December accounts/expenses statements. As we are now in mid February I would assume that court and legal expenses would be posted in our records but nothing has appeared. This looks to be a case where the HOA President's comments regarding "it's a legal issue" actually relates to the HOA being taken to court for violations and he does not want to share that info. He may not be aware that I have seen the court documents. I have not told him I'm aware of the court hearing and fines we have paid.

There are only a few people in the HOA that are aware the pavilion was never permitted and was ordered torn down by the county. I think only a couple of people are aware of the court appearance and the costs associated with that. Meantime we have a building, unfinished, with no Certificate of Occupancy, that can't be completed according to the county, and has been ordered torn down. The only costs that have been documented is about $15 -$17K for initial construction in April-May 2016.

My suggestion to the HOA President is to go to the county and work out a deal that gets the building completed and a Certificate of Occupancy issued.

To date the pavilion has been sitting since the first week of July with no further action. I have refrained from presenting all of this in our HOA Member meetings and had hoped the Board President would get this situation corrected but after nearly 9 months I am not hopeful. My primary concerns are: get the pavilion finished and determine what the actual costs are for this project.

DennisG7
SheliaH (Indiana)
Posts: 6,964
Posted:
Why on earth did you expect the board president to come clean about this if he and the rest of the board (who are just as responsible) didn't say anything 9 months ago? How does one say hey, we hired a contractor who didn't have a license or insurance, didn't get a permit (ultimately, it's the property owner's responsibility to ensure the work is up to code), spent $17K for the work - but now the county has ordered it torn down and we had to pay a fine, and will have to pay more money for that work?

Did you really expect anyone to admit all this voluntarily? And you wonder why nothing's happened after 9 months?

I suspect you're concerned this is about to cost homeowners a lot of money to fix - and you're probably right. But if you want this to change, you may as well accept the fact that YOU will have to take the first step - and maybe a few more. I'm not talking about hiring an attorney (yet) - you need to start walking your community and talking to your neighbors to enlighten them about your concerns. Or send out some letters detailing what you've found out so far and strongly suggest everyone attend the next board meeting to demand answers. Be sure the board members also get a letter so they'll know where you stand. At the very least the homeowners should be told what will happen to the building - tear it down and start over or work with the county in bringing it up to code or whatever was wrong with it. If this IS currently being addressed by the association attorney, ask for some sort of deadline where homeowners will get an update (and if there isn't one, an explanation as to why).

If the neighbors get truly upset and start talking about recalling the board (which they probably should do), I suggest you rethink volunteering for the position - you seem concerned enough about all this to make an effort to find out what was going on or not, and that's exactly the type of person needed to turn this around. If you don't want to join the board, you'll need to find several people who are willing to step up and do what you want. Keep in mind this won't get fixed overnight as I said earlier and if you're correct about all this, the people running things now aren't going to deal with it or they're afraid to. So the next step is up to you.

I wish you and your community luck.


If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

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