Seeking advice dealing with rogue board members/officers

I have been a member of my association for nearly four years. I was a renter for a year and then bought my townhouse three years ago.

At our last year's member meeting, the current president passed a hat around and asked for folded up pieces of paper after he said he felt like he had been doing a great job. Seven of us were present, out of 21 homes, and he also pulled out some "proxies" he had on the table. I then asked what it took to be a board member and he told me I was one since I was an owner and had come to the meeting. He then "appointed" several other "board members." My wife was elected Treasurer/Secretary and began taking notes (the first time minutes have ever been kept it turns out).

I dug out my Bylaws and realized I did not have a copy of our CC&R's. No one in the association had them, either. I was able to track them down at our County's records department and provided copies to the officers and explained that nothing we had been doing was correct according to our governing documents. We are supposed to have elections for Board members every two years (which had never been done since I lived in the community) and those Members are then supposed to appoint the officers. Additionally, the Treasurer is specifically excluded from the position of Secretary. I then called a monthly board meeting, also a community first (and us board members/officers have held monthly meetings since), and explained that I would be willing to serve as Treasurer and my wife would serve as Secretary.

One of the issues that was brought up by both me and the vice-president is that she and the treasurer (my wife for the past year) had not been able to get access to the checkbook or bank statements. Our checks were being signed by either the president alone or our property manager. Our property manager, a whole 'nother can of worms, was basically billing us to collect dues from the po box, deposit them in the bank, and write checks to our vendors. But he wouldn't send out statements, assess late fees, or send collection letters, or provide any other services a property manager generally does in some of our opinions. Basically, the president and vice-president were the two people who were running around calling and fixing everything and handling all the affairs. My point to the group was that with me acting as Treasurer and them continuing to run the daily affairs, we might as well save the money paid to our property manager since those were duties he was hired to do anyway.

We then called a general meeting, which had the largest turn-out as long as the members could remember largely in part to me and my wife sitting on every single home's couch and listening to them for an hour about what had been going on for the past decade and their concerns moving forward. It turns out we actually have a community of people who are interested in pitching in to some extent but have been pushed away and alienated by the actions of the previous officers. Some of those issues include the vice-president kicking children out of the pool, telling people we don't like kids around here (I explained to her the FHA and liability issues with her past behavior as I understood them and that has since toned down as far as I know), the president screaming in people's faces about things like oil stains and past dues (I have also directly witnessed these screaming episodes as well as been on the receiving end of one and had to talk multiple vendors into coming and giving us bids only under the promise that he is no longer in charge of the entire operate because they mentioned they wouldn't deal with that kind of abuse anymore that had occurred over the years).

We then explained we'd be doing a secret, mail-in ballot and that we needed an independent inspector. The president appointed his next door neighbor, who we later learned was related by marriage thereby voiding the entire election process a month later. We're now in the process of re-doing the election only this time my wife and I went around to the homeowners and asked them which three they trusted and we've asked and received confirmation the three mentioned unanimously would count the votes next month.

Once we got the bank statements it turns out the president was paying his son to trim the trees and clean the pool and paint the eaves. I'm not sure what else I'll find the further I dig back, but from the members' stories this has been going on since even before he was the president with the one previously. We have a pool guy and we have a landscaper and the painting (and concrete repair) were only done to specific homes and not all of them. So it's very difficult to understand how any of this is appropriate even if there is a reasonable explanation--it doesn't look good.

The president unilaterally approved a patio replacement for $2,000 for his friend. This same friend then laid a concrete sidewalk around the entirety of his single family home (we have 17 town homes and 1 single family home on each corner of the association, but all are treated the same as far as the governing documents are concerned with the exception of the family homes are supposed to be paying more than the town homes but they don't. He also told the owner that he could plant three trees along our fence line.

Finally, I just received a $6K tax bill because the president has not been filing the paperwork with our secretary of state since 2010 and our status as an association has been suspended that long so the tax board back taxed us the last 7 years with penalties and interest.

When I confronted the president with the documentation I had, he resigned as president but refused to step down as a board member. As far as I can tell, none of us are actually board members but we're working with what we've got until the election results. He's currently running for a position even though he's refusing to participate in any of the day to day operations and has just recently stopped attending the board meetings.

My question is two-fold: what can I do to reign in this rogue president? Anything I do from a legal avenue is going to incur damages to the rest of us.

Secondly, while I was able to explain to the homeowner the reasoning the trees couldn't remain (their roots are going to invade our security gate in time *and* they are butted up against that brand new sidewalk he just laid), none of us are knowledgable enough about the law to move forward on the issue of the sidewalk.

My understanding is that it's an exclusive common use area. One suggestion is to have the home owner sign a paper saying he'll be responsible for any repairs to it in the future. My position is that we can't hold the next owner responsible for it, it sets the precedent that if you want to take common property you can just lay concrete on it then it becomes "yours", and I'm not even sure we can hold a homeowner to that contract in court if it comes to that because California law is clear that exclusive common areas have to be repaired by the association.

One of my ideas was to figure out the life expectancy of the sidewalk and then assess him an appropriate increase in dues monthly until a fund was created to cover that expense. I don't know if we can do that and I've tried looking up special assessments but can't really decipher how they work. For example, we paid for his porch to be replaced (without any approval from a board, the membership, or the architectural committee, which are all spelled out as required in our governing docs) but can we ask for that money back? He's agreed to pay it back if we determine he was supposed to, but I don't know if we're allowed to specially assess someone for something like an exclusive common use area like one's front porch.

That is, if we specially assess someone for a repair that we're supposed to do under California law, does that subvert the intent of the law? Or are special assessments always supposed to be spread out among the memberships equally and that's how it should be handled (i.e., everyone was supposed to pay $100 dollars to cover the $2,000 porch replacement)?

Last board meeting we noted all of these *financial* discoveries (kept the abusive yelling off the record) and called for censure. The membership will get those minutes before the ballots are returned so I doubt he'll be re-elected. Worse case scenario if he somehow mustered enough votes (we still have cumulative voting) is that he'll be a 1 to 2 vote every time he tries to siphon funds from the association.

This is a complex situation and hopefully I haven't lost everyone with the length and extent of issues presented here.

Well, I'm afraid it's too long for me, MichaelB, but welcome to the forum and it's great you're willing to serve your community.

Since I cannot read your entire post carefully, I'll just ask: why doesn't the "Board" vote the president out of that office? Oops, I just noticed he resigned. So... the rest of you will have to put things on the agenda and outvote the president. How many were supposed to be on the board according to your bylaws?

(I do think it would've helped if you made the president issue and the trees/sidewalk issue as two separate postings. But We do have some here who will be able to offer advice.)

If everything you say is true, vote the president out as an officer. They still remain a Director with voting rights.

You and your wife SHOULD NOT be serving on the Board at the same time. While it may be acceptable per your governing documents, morally and ethically it is a no-no. Have one resign and appoint a replacement for one of you.

Pardon my french, how in the hell can a complex of just 21 units have a tax bill of $6K. The most you should be paying is the filing fee of $15 for the SI-100 form.

He resigned as president, so someone take over. He is still a director.

Get someone competent to review your books. Have a discussion with your property manager and have them describe what their actual function is per their contract. It is a lot easier than you think.

My wife and I are not both serving on the board--she is merely an officer. In our association, only the president needs to be a board member. At this point, neither me (the treasurer) nor the vice-president consider ourselves board members but someone has to keep the ship afloat until the ballots are returned. We and our association see nothing inappropriate with her keeping the minutes and sending out mail while I keep the books. We have dual signatures on our checks--me and the vice-president. We've made it clear we won't be in a position where both signatures would come from the same household (e.g., me as the president/vp/treasurer with her as a pres/vp/treasurer). I'm glad we're on the same page otherwise.

Before we voted to sever our relationship with the property manager, I asked him what he thought his job entailed and outlined what our expectations were for him. There is no contract and one has never existed since 1983 when his father took over the account. He's essentially kept billing the same for the past 20 years. He was happy to let the account go since it seemed like it was more of a burden to him. Thank you for that advice. I'm glad we're on the same page there.

The president resigned. I agree he retains rights to vote as a board member. I also agree with you that, while our docs don't disallow family members serving on the board, it's ethically and morally inappropriate. In fact, the past president tried to nominate his wife to run for the board but after the meeting she thankfully offered us a letter declining the nomination. People keep asking both my wife and I to run but we explained that we prefer to lead by example. My wife and I are both public servants (she is a program director for the county's mental health department and I'm a professor of law at a state university) and we are approaching this like we do all of our service obligations--feeling that people who don't necessarily want to do a job but willing to out of duty are often the best public servants. This isn't a power play by any means, to be clear, we're just trying to clear up the situation and get the association moving in a positive direction.

At the last board meeting the vice-president and I (the only two "board members" who attended since the past-president resigned as an officer and then refused to attend the board meeting) we implemented a set of rules that weren't addressed in our docs:
1. Must be a homeowner
2. Must be current on dues
3. Can't serve with family members
4. Position can be vacated if member misses more than 2 consecutive meetings or 3 total in a year.

The taxes stem from the fact that our status as a corporation is suspended so we lost our tax exemption status. Our tax bill for each year going back to 2010 is $800/yr + late fees + interest.

Virginia law may differ from California law on this or you may not be knowledgeable about current case law in your state. In my state, at least, the courts have ruled Boards can make operating rules that are in the best interest of the association (cf. http://findhoalaw.com/director-qualifications/ and http://findhoalaw.com/laguna-royale-owners-association-v-darger/ )

Our bylaws define delinquency.
The context of this discussion is serving as board members, not serving the association in general.

Perhaps home ownership will become an issue in the future. If that occurs, the benefit of the board establishing electoral rules as compared to an association amending bylaws is that they can be altered as necessary without the time and expense of the latter.

I did unintentionally muddy the waters with all of these issues in one post.

My concern in regards to the past president is how to handle the interpersonal abuse he is inflicting on our members and any financial impropriety while avoiding a lawsuit. His tenure as president is over and if he is re-elected as a board of director the new board can remove him if he continues being recalcitrant.

The trees have been resolved.

The sidewalk, however, is our main focus going forward. I should have separated that from the rest of the post because it's been lost in the discussion.

Fortunately, you found (in my opinion) the correct web site.

Many on this site, myself included, have cleaned up messes within their Association.
Granted, my mess was not the same as your mess, but everyone shares what their perspective of the situation (as described) is and we all try to learn from it.

I applaud you and your fellow members who took the time to be interested in the Association and discovered what you did find. You and others then stayed to figure things out, clean up what you can and move forward.

Welcome to the Forum.

Having claimed a certain level of legal expertise and giving me a directive, I suggest you cite the codes you imply currently exist that would supersede the previously cited legal opinion of our court. Additionally, I will point out that I have implemented nothing, but rather the board of directors did after a vote, which was properly documented into the meeting's minutes and distributed to the membership. If you are a member of the association you are welcome to challenge the rules implemented but if you are not then you have no standing to contest them. Belaboring this issue is pointless.

I'll state this as plainly as possible:

I did not ask your opinion on this matter. I also do not appreciate your attempt to personally attack me. I did offer, however, to engage with this discussion if you are willing to provide something credible other than your non-expertise opinion regarding the subject matter. I now rescind that offer.

Additionally, your assumptions about the structure and nature of our governance is inaccurate--the latter due to your inability or unwillingness to read plainly written English. I'd appreciate if you refrain from commenting further in this thread. I don't appreciate your hostility and it's serving no purpose other than to dissuade me from returning to a thread I created for assistance.

I am going to finish this off by saying, while you may be professor of law at a state university, I do this for a living. Based on your posts and the citations you posted, IMHO, I seem to have a little more expertise in this field than you.

Anyways, have a nice whatever.

Michael,

I agree that this only becomes an issue if someone challenges.

However, we on this site do encourage to have things done correctly.

For example: Qualifiers on eligible Board members.

Using the reference you provided, http://findhoalaw.com/director-qualifications/, the article states the changes should occur by amending the Bylaws or Election rules. My experience is only with Bylaws and not election rules. If you amended the election rules of your Association, then I expect you will likely be good to go. Your initial posting about adopting the changes did not specify the fact that you amended any document which left some, like myself, to conclude the Board simply made up a resolution or simply noted the results of a motion in the minutes.

As for removal of a sitting Director for missing meetings or being delinquent in their assessments, I personally believe you will need to amend the Bylaws to withstand any legal challenges. I base this on the expectation that your Bylaws provide for a method of removing a sitting director. If this expectation is correct, then certainly an argument can be made on the basis of expressio unius est exclusio alterius .

Just a thought.

As you said, I do not have access to your governing documents. I do not have access to the documents your Board provided your membership that made those changes. I certainly don't know CA statutes. I do not have standing to bring any legal action concerning the Boards decision. I'm simply offering an opinion based on my experiences and from my perspective on the statements you made.

By the way, the requirements Richard referred to (owners mailed a draft, 30 day comment period, etc.) is outlined in CA Civil Code §4360

Again, all of this really only becomes an issue if challenged.

Hi Tim,

Thank you for responding. I doubt my husband is going to return to the thread, but I'm willing to continue the conversation because we do need some guidance. The events he described have been going on for over a year. He wrote a condensed version but even that was too lengthy.

The law is being followed and the board is not just making rules up whenever they meet. He may not think of himself as a board member until the next election, but he was appointed to fill a vacant seat according to our Bylaws and the community sure wants him there. It's not fair to suggest this is an attempted take over. Michael was supportive of the president until recently when the financial problems came to light. He doesn't know how to handle someone screaming in our members' faces whenever he gets agitated. He doesn't know what to do about the finances, either.

The guy who had his porch replaced and the sidewalk made seems to be cordial about everything. He said if he was supposed to pay for the porch himself he will pay the association back. He said if he has to tear the sidewalks up he will but he would like to be reimbursed. The side walk isn't a bad addition, but it wasn't put in according to our CC&Rs. He asked the president if he could do those things and was told yes even though the rules say the president couldn't authorize them. The issue is we are trying to come up with a solution that doesn't penalize him but doesn't create more problems for us in the future.

The issue with who are board of directors is complicated by the fact that no one (at least anyone currently alive) had read the CC&Rs or Bylaws (and literally did not even know what they were when they were brought up in discussion). It seems that the President has always held votes about his officer position, but there is no evidence that he was ever voted in as a board of director (both because the association has never had a lawful election during his tenure and because no one knew they were supposed to be electing Directors rather than Officers). My husband's logic, and one the members agreed with when it was brought to their attention, was that since they elected a president, a vice-president, and a treasurer at the general meeting that those officers step in as interim Directors until a proper election concluded. It stands to reason that if the members had known they were supposed to be electing Directors rather than Officers they would have simply done that instead but still elected the same people.

It's entirely possible the President was elected properly in 2010. He himself doesn't know and there is no record of whatever happened. That's the reason my husband doesn't consider himself a properly elected (or appointed) board member. It's not a big issue other than he has requested at each board meeting to table all new, non-emergency issues or issues directly related to the election be tabled until the new board is elected. He also has invited all candidates on the ballot to participate in the board meetings in the interim. So now we are working out contracts with the landscaper, pool crew, and gate repairs, etc. since we never had contracts other than hand shakes and the people deliberating on those contracts are the current board members and two additional people who are running on the ballot and then me who is not a board member but I am the secretary. So now we have regular meetings with usually 6 people attending and I keep the minutes, whereas before there were no meetings at all (except the yearly one) and the president would just decide whatever he wanted to do on his own.

The design of our layout is that we have ten townhouses on one side of the culdesac and seven on the other side of the street. Then a single family home on each of the corners. The yard area around the family homes and our front yards are common area. The sidewalk was never approved by anyone. What happened was the homeowner came to last year's meeting and said his porch was cracked. The President said we have to fix that since it's a common area. The member then asked if he could plant trees somewhere for shade and the members voted yes. He didn't say where he would plant them and there wasn't a quorum of members. The homeowner then went and bought three trees that afternoon and planted them along our fence line (nor mine and my husband's, along the security gate of the association) and then he got bids for his porch.

While the porch was being replaced, the owner told the concrete guy to lay a sidewalk around his house, down the common yard area in the front of the culdesac and then down the common yard area in between his home and the start of the townhouse next to him. These both lead from his porch and wrap around to the fence of his back yard. He did not ask anyone, not even the president, he just did it.

The reason the sidewalk violates the rules is because they state that all changes like that have to be approved by an architectural committee first and obviously he would have to at least ask someone for permission first. OR the other rule that might apply is a super majority of owners can give up common area to a single homeowner to make it privately owned.

We don't have a specific reserver account. We just have a bank account and whatever we have over our expenses is left in there. That's how the porch was paid for. We were asking if that was the right way to pay for it or were we supposed to do a special assessment? That's for the porch, which is not at issue as to wether we were supposed to repair it as an association.

The sidewalk wasn't approved and wasn't paid for by us. It wasn't approved by anyone, not even informally, the guy just wanted it done while the porch was being poured and decided to do it. So now it's our responsibility because it's poured on our property OR we have to then vote to give it up to him so he's solely responsible for it.

So we were talking about it and we can either have the guy write something up saying he will pay for it if something happens to it but we can't make the next homeowner in however many years adhere to that agreement. My husband was concerned that we might not even have the ability to hold him to the agreement since the courts might rule it's an exclusive common use area and we're responsible for repairing it. The other members said well the guy says he'll repair it if something happens to it, but my husband pointed out that if he really believed he was responsible for the concrete around his house he would have repaired the porch himself instead of billing us for the $2,000.

The problem he raised with voting to give ownership of the sidewalk to the homeowner is that it sets a precedent that if you want to take some property from the association you simply do what you want with it and leave us with the prospect of either taking you to court or giving it up. My husband explained it like this at a meeting: what happens if one of us decides we want to control our front yards? Can someone simply start pouring concrete and then we either have to force it to be torn up or we have to vote to give it up. Or we can simply ignore it which is basically giving it up without a vote. None of those are good options.

The trees were resolved easily enough. Everyone agreed they should just be pulled out.

As for the rule changes. They have been going through the appropriate comment period and to be clear they aren't about removing anyone ever. They were simply adopted to establish who was eligible to run, not remain on the board. They don't address what happens if a Director becomes delinquent just that if you are during nominations you aren't eligible to run. My husband just wrote some bullet list here I guess in response to people questioning his ethics in this thread but those aren't exact. The rule about showing up is written as a recommendation and basically states that if you aren't willing to show up to the meetings you should give up your seat. But it's not written in a way that gives a board authority to forcibly remove a sitting Director. It's more of a, "you agreed to attend board meetings when you ran for office and if you don't want to or can't for some reason you should step down and let someone fill in your place so the job can be done."

I guess we should start at the obvious question of whether an association can amend bylaws without any cost (or minimal cost). The votes exist to amend them, but we don't have the money to pay for an attorney to do it or know how to file them properly. My husband dug that site up and presented it to the members as a cost saving mechanism, they weren't intended to (and they don't) exclude anyone interested in running for office this election cycle. The bottom line, however, is that they aren't an issue right now and he didn't want to focus on them in this discussion. If we could find a competent lawyer willing to revise our docs for hundreds of dollars instead of thousands of dollars we would because my husband thinks the original documents written in 1983 probably have all kinds of things in them that aren't legal anymore.

Welcome, Amy. I hope Michael will continue to read these postings. I want to return to your "rules," etc.

First, Tim asked what kind of HOA your association is? The answer is that in CA all Common Interest Developments (CIDs) follow the same requirements that are found in the (CA) Davis-Stirling Act. If incorporated, and it sounds like you are, you also follow CA Corporations Code.

Davis-stirling.com is compiled by a CA HOA law firm and gives opinions & advice on all things, HOA. Its Main Index directs you to any topic that interests you. The complete legal code can be accessed and there's also a Case Law section.

Re: Bylaws, as others noted, they trump other documents that a board might craft. Since 2006, all CA HOAs must have Election Rules (tho' many don't comply). So the "rules" the Board made are a start. Apparently your Mgmt. Co (MC) failed to inform your board of the Election Rules requirement. BUT, despite Michael's citation, they may not conflict with your Bylaws. Adding quails that don't xist in your Bylaws COULD be challenged. I don't think any of your owners, however, are going to quibble about that or take you to court.

Check Davis-stirling.com's Main Index, too, for what might be called "Hierarchy of Documents." Sad to say, I cannot have it on my screen simultaneously with this forum.

There well may be others who could help with the sidewalk issue--I'm not one of them. The thing is they can't tell from your subject line that it's a topic at all. And once on this thread, they may give up due to the length of some posts.

Richard actually is quite knowledgeable if sometimes unfriendly & dismissive. He & I--neither of us HOA attorneys-- have had disagreements, but I still exchange thoughts & arguments with him.

Again, I'm certain your fellow Owners appreciate that SOMEone is trying to fix the messes.