Members starting a seperate bank account for dues

Started by ShirleyC • 8 replies • 1339 views

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ShirleyC (California)
Posts: 117

Posted:

Our HOA board is not following cc&r's or state laws requiring workers comp coverage on contractors and is also refusing to give any information to members. We have asked what the gardeners schedule is an no one on the board knows. We have asked for bank balances at the beginning and end of the current fiscal year and we were ignored. Using the bank balances provided at the annual meeting, adding income less expenses there is a $5000 difference.

We have 14 units and are a PUD.

Six of the fourteen owners want to withhold payment of dues to the Association by putting them in a new account to be held until the board complies with the rules, CC& R's etc.

Can we do this, or do we have to wait until these people pass on? We have tried to vote them out but they have been here so long the people that don't want to be involved refuse to vote them out.

MicheleD (Kentucky)
Posts: 4,491

Posted:

Wow. what state do you live in that requires HOAs to have workers comp on contractors? They are not employees of the HOA, so we don't have to do that here.

Don't have a clue about the separate account.

I suppose it would be some sort of escrow account? I have no idea how that would work.

Good luck to you.

HaroldS1 (Arizona)
Posts: 314

Posted:

Shirley - this subject of an escrow account was just discussed here in June - http://www.hoatalk.com/Forum/tabid/55/view/topic/forumid/1/postid/21080/Default.aspx
Even tho I am not so sure it is legal. The best advice is still to always pay your assessment irregardless.
Unless your documents allow an escrow account, or the board acknowledges your escrow account, the fact is they can declare you delinquent and charge penalties, interest, and even foreclose for non payment.
The six of you constitute 43% of the owners and should certainly constitute a quorum. You only need a quorum to call a special meeting to recall and replace your board. Are you telling us the other eight owners all attend (or provide proxies) to vote for the present board? That's 100% of you voting. Quite an amazing feat. If that is the case, you will have to convince two more owners to join you or last resort is to file a lawsuit against the board. Good luck. Harold

BradP (Kansas)
Posts: 2,640

Posted:

Shirley:

I would not advise that, if you do then the HOA can consider you deliquent and get into a whole mess of trouble. The better scenario is to either vote them out when they come up for election or to try and get them recalled using your documents.

As Michele asked, what state requires WC insurance on contractors? That doesn't sound right because contractors are normally independent contractors and the HOA wouldn't have to have insurance. However, I don't know every state law.

ShirleyC (California)
Posts: 117

Posted:

The contractors the board is using are not covered with workers comp....we want them to hire only contractors that carry workers comp. Sorry for the confusion......

Jadedone4 (Virginia)
Posts: 495

Posted:

Shirley, is the board aware that by their actions they are placing the community at-risk for a claim of WC from a contractor..?

More importantly, are they aware that in doing this, they are (potentially) in violation of the board's "DOL" insurance, which more than likely will NOT cover a board who makes such mistakes, either repeatedly, or with full knowledge of the errors?

As a practically matter, it is always recommended for an HOA (or any entity that does not "employ" workers) to treat them, and require that the have workman's compensation insurance, as Independent Contractors.

Hate to sound corny, but you really do get what you pay for.. most times in this scenario... a professional and skilled contractor fully understands the "two-way" protection that WCI provides him, his worker's and the HOA.

BradP (Kansas)
Posts: 2,640

Posted:

Shirley:

You should never hire a contractor without insurance, that is a major red flag when taking bids or anything. I know you know this, but what happens when they damage or hurt someone and don't have insurance? The board really needs to think about the situation they are putting themselves in. Not a good one!

GloriaM (North Carolina)
Posts: 829

Posted:

Shirley:

You all need to pay your dues. You cannot without a court order legally withhold your dues in an escrow account and not be considered late and be sent to collections.

Although I have witnesses an HOA that did successfully place their dues in an escrow, it was done through the courts.

I would suggest the group find another avenue in which to get things done, through your MC or board.

PaulM (Pennsylvania)
Posts: 1,347

Posted:

ShirleyC: You have stated two issues of concern to you:
- Financials not given and you suspect a $5000 difference...
Don't your CC&Rs speak to the Board allowing a resident to see the financial report/balance sheet provided they follow the process to do so?
Have you requested to see the latest financials according to the request process?

- CC&Rs & State Laws requiring workers comp coverage on contractors
Please explain your State and State Law which requires this coverage and
what do your docs, CC&R, state about it which the Board is not doing? There has been a lot of discussion recently on this forum re the pros and cons of hiring contractors without workers comp coverage.

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