Help

We have a BOD that is out of control.
Feb 2006-a lien was placed on a propertyowner who had not paid all of his dues. The problem was selective billing, use of non-existant exemplary powers by the Board. The judge spent almost 2 hours with the parties involved. He looked at the controlling legal documents and told the board that the subdivision plat showed 42 residential lots and they must bill all those lots on an equal basis. He understood why the property owner had not paid all of his assessments. He owns 2 adjoining lots, is billed for both and other owners of 5 lots are billed for 1. He told the property owner to pay the fees, threw out all the fees and other nonsense. In the parking lot the BOD stated that the judge didn't know what he was talking about.
May 2006-annual meeting and CCR's were to be presented, they were not.
Sept 2006-mail out of sweeping covenant changes, no meeting, no discussion, but our CCR's and by-laws didn't require it..but you should see the process for by-law changes! A lawyer friend helped them for free..he never looked at any of the controlling legal documents.
The process was flawed in many ways, words on the original document were changed and some of the owners were notified of the change, others were not. The covenant committe harrassed owners into signing. Some owners threatened legal action if they weren't left alone...on and on.. They were able to get a majority of the homeowners to sign.
November 2006
Papers filed at the courthouse
May 2007
One of the things they changed(or at least think they have changed)is the membership. They don't believe the subdivion plat is important. They believe the minutes from the first meeting of the Association is more important. We have paid for legal council...several thousand dollars. After reviewinng all the documents he told us what is filed at the courthouse is as good as a blank piece of paper. He told us that to change the membership of a mandatory membership association requires a 100% agreement of the property owners. If they agree then it will require going before the county and getting the new subdivision approved, having a new survey and plat done, bringing roads up to state standards(ours are not)changing all the legal documents, etc..the BOD's laugh and say "That's his opinion - we disagree. If you don't like it..take us to court! Sue us! We have insurance and it will cost you all a lot of money!"
We tried to overturn the BOD, were able to secure 2 out of 5 seats. The only way they won, proxy votes that they were able to obtain after many contacts...by email, phone and snail mail. 3 of the board members had a meeting on the road, never invited the other 2, set up a meeting to bring the bylaws into agreement with the CCR's(to make everything really legal), sent out notices. The first time the president saw anything was when they saw the mailout. At the board meeting they voted to increase the personal liability insurance for themselves and said at least 3 times..in case we break the law by mistake.
At a Property Owners of VA meeting the attorney told us:
what they have done is illegal..the covenants at the courthouse need to have a declaration stating just that with clarification as to the reasons. No way is that going to happen with the folks that have the majority on the BOD. The next step is to contact the insurance company and inform them of the illegal actions, and the very real possibilty of a class action law suit.
Anyone else done this? Will the insurance company send someone to investigate?
Talk about frustrated! Guess it's time to nuke, granades haven't worked.
Thanks,
Maryb

Was this originally setup as a voluntary HOA? Confusing! What is the goal here at this point? and what action did the attorney advise? Insurance company probably may not get involved unless someone files a claim as the result of a suit. They may find this and other reasons to non-renew the policy when it comes up for renewal. That doesn't necesararily mean that the insurance company still would NOT pay for the defense in the event of a lawsuit, and it doesn't mean that it will. Commercial insurance liability is complicated and regulated by the states. The insurance company's decision to pay or not to pay may be based on the type of liability policy that they have. They could have "claims made", "occurrence" policies and/or also "tail" coverage. See your attorney or insurance agent regarding this.

I'm not at all in favor of proxies, but you're CCR's probably allow the use of them. States are starting to pass laws to ban proxies and I hope that this movement continues. Our bylaws say that an owner can owner cast a maximum of 5 proxy votes, but that doesn't prevent unethical people from collecting proxies with signature only; and then they can reallocate or distribute these proxies to other friends later own so that others may cast the same votes. Illegal - Probably, but how do you stop it? Prove it. As I've said before, we're going to try to get the community to move over to secure web-based voting in order to eliminate this proxy mess. A lot of the very large HOA's in this area have moved in this direction and it's not very expensive.

Mary, no one can quit being a member of a manditory association. They legally made that agreement when they purchased their property. Read your Declaration of CC&Rs to determine whether or not the association can be terminated. Some CC&Rs are for perpetuity. If it can be disbanded the CC&Rs will provide information on how to do it. For some of your problems it could be easier to amend the CC&Rs and the By-laws and then enforce those changes.

Roger,
Thanks, ours is one of those eternal ones..we have privately maintained roads and the state will not let it die..if the volunteers decided not to step forward..then a MC must be hired. Each deed states the same thing, share equally the financial responsibilites. The BOD doesn't care about the law..just what they want. Clearly 11 lots out of a total of 41 are excluded in the new covenants. Looking at litigation costs it is staggering. I think Monday morning a group will go to the insurance company and ask if they can do anything. Just have to get an idea of how to present the facts. My poor deed is slandered...or so an attorney told me. Never in my life did I ever think people could act like this.
Thanks again,
Maryb