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HeatherR (South Carolina)
Posts: 2
Posted:
Long story short, there are people on the board that somehow seem to get themselves back on the board every year. Some of these same people have been on and off the board for upwards of 10 years. In the history of this HOA, and thusly, the community, there has been some serious mismanagement of money and repairs. In example, this past summer they paid an architect $26k of the HOA's money to do an acrchitectural assessment on what needs to be repaired or replaced in the community. This fee was not voted on or approved by homeowners. The board recently put up for vote an almost 2 million dollar renovation project, to be supervised by the architect, that would more than double each unit's regime- the vote did not pass, but apparently they are trying to get a special assessment for 28k per unit- as a sidenote, we are a nice community in a somewhat impoverished area, and most do not have the budget for a project of that size, though we do recognize some serious repairs do need to be put up for competetive bid.
In addition to this, we have an incompetent, unreliable, and farily unresponsive mgmt company we want out.
Basically, myself and a group of concerned homeowners have had enough. We feel this community is in trouble. There has been years of apathy from the homeowners, most like being contributed to by the fact that we have almost 40% renter occupied units, but we would like to energize this community, and work towards real changes that are effective and efficient.
Our idea now, is to meet with the small group we already have interested, and plan a non-board meeting for a large group of other concerned indivials, petition to have the board replaced (we are hoping not to have lawyer's fees, so we are trying to petition), and then work on having the mgmt company fired and replaced.

All of that being said, any helpful hints from people who have been there? what do we have to be careful of? any hints? legal issues?
RogerB (Colorado)
Posts: 5,067
Posted:
Good luck Heather. There have been several discussions you can read on this board that may be of help. It will not be easy but you are taking the approach I recommend.

RogerB
Jim (North Carolina)
Posts: 2
Posted:
I am a new board member and also have problems with board members above me doing what the want without informing me. Also we have about 50% renters of 180 units.

I understand it takes 67% of the owners vote to put cap or phase it out and that most likley will not happen.

Jim
Charlotte NC
HaroldS (Arizona)
Posts: 906
Posted:
Does your CC&Rs allow the board to spend such a large amount on an "architectural assessment"? Or should that have been put to a vote? Were no reserves established to cover these probable repairs all these years? After all, it is the group who controlled this board all these years that allowed this to happen. Can you check if there is any connections to this firm and anyone on the board? Or any of the firms who will do the work? You might have a possible lawsuit there in any case, and the board's insurance might not cover them. It sounds like the years of member apathy have emboldened the group that controls the current board. You need to be concerned that owners, especially the rentals, could begin to dump their properties to avoid such a huge assessment. Just another reason to stay out of an HOA. Good luck. Harold
HeatherR (South Carolina)
Posts: 2
Posted:
I don't know Harold? How would I research that, in our convenants and restrictions? I'm confused about the term CC&Rs- sometimes it appears that when someone writes that they are referring to it as it applies to an individual HOA, but sometimes it appears its referring to state law.
I did see in our bylaws it said that all that was needed to spend more than $250, on basically anything, was a vote between the board members! I think for sure if that's what empowered them to make that decision, that by law needs to be changed.
Oh we had reserves, but this place has been so mismanaged and so many bad decisions have been made about architectural repair, that frankly, financially (and for some units, architecturally speaking) this place is a mess.
The other homeowners I have been working with and I have discussed the possibility of a lawsuit, against the mgmt company, and perhaps the board, but we feel that at this time, it would be too long and hard of a process, and we may spend as much in lawyers fees as we would get out of a suit.
RogerB (Colorado)
Posts: 5,067
Posted:
HeatherR, I think you would lose a lawsuit and could end up paying for the prevailing parties costs as well as your own.
Mismanagement is no basis for a suit against the board or the management company unless you are talking about willful wrongdoing or criminal wrongdoing. Normally your board will have authority for all expenditures which are in an approved budget plus any overages due to unanticipated costs. Major expenses beyond those should require homeowner approval of a special assessment or increase in the annual assessment.

FYI, the HOA's Declaration of Covenants, Conditions, and Restrictions is usually referred to as the Declaration or the CC&Rs or the Covenants. The Declaration creates the HOA and is the primary document.

RogerB
HaroldS (Arizona)
Posts: 906
Posted:
Heather - I'm referring to YOUR CC&Rs - they are your governing documents. CC&Rs never refer to state statues. But it would also be wise to review your state statues too in case some might now override your CC&Rs. It is as important to stay abreast of state laws as it is to know your CC&Rs. Something boards might not bother to do. (I'm ready in case our board trys to fine me for something in our CC&Rs that the state no longer allows.)
I'm confused that your board can approve unlimited expenditures over $250. That seems weird. But if that's the case, why are they even asking the members to approve these repairs?
Frankly, I would sue board members rather than a management company solely because if the board mismanaged so badly, their insurance carrier probably wouldn't defend them. Read your management company contract before filing a lawsuit against them. Good luck. Harold
LisaS (Illinois)
Posts: 341
Posted:
Here's the thing...why must it go directly to 'sue everyone'? I agree with Roger- the only ones who will make money here is the attorneys. Historically, you will lose and pay for the privelege.

The first thing you need to do is know EXACTLY what your Covenants (in some states 'master deed') state, what is allowed, what limits there are, etc. Then you need to consult the bylaws. The bylaws in many states are not recorded either by exemption or by laziness of a Board. Consequently, they are an addition to the rules, not the whole story.

You also need to research your applicable state association laws. Once you have all the facts, you will have a better understanding of what was done/why/how to change it.

I agree that the $26k expenditure was insane. Even for a large property, that's too much unless it included plans for structural corrections (perhaps for safety or to bring up to code?)

I guess without knowing more I can't say whether the $1 million is needed for repairs, and whether not doing this de-values the property or the safety of the persons living there. But regardless, there should be an indepth meeting to expalin and clarify...especially with so many zeros attached.

Good luck-
Lisa

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