Board president selling his home

Started by SueR7 • 12 replies • 1811 views

💬 Join us to post & get advice from 50,000 HOA & Condo leaders.

⚡ Takes 30 seconds

Already a member? Log in

SueR7 (Georgia)
Posts: 5

Posted:

Our board consists of 2 people who were chosen by the original developer. The developer is still listed as the CFO, though all of the lots have sold and all houses complete by the end of this year.
Our board president has just listed his house for sale. For about 5 yes he and the other board member were the only residents. No minutes of meetings were kept and they have no idea where the HOA funds collected from each sale are. In addition, no dues have been determined yet.
My question is whether those familiar with HOAs see a conflict of interest as the Board President is eager to sell his home, yet insisting he remain president.
I feel like we've walked into a chaotic mess. Thank you

MarkM31 (Washington)
Posts: 494

Posted:

Read your CC&Rs. They will lay out who is a member of the HOA, who can be on the board and how officers are chosen. Also pay close attention to the declerant section, that is where the builder starts the HOA, and remains on it (and usually in control) until a certain number of units are sold.

On the face of it, the president is out, as is the builder. Somebody needs to get others involved post haste

RichardP13 (California)
Posts: 3,868

Posted:

I happen to manage a property where the President must be a director, but directors need not be owners.

Best to read your governing documents.

SueR7 (Georgia)
Posts: 5

Posted:

I have read the CCR's again. It states the declarants shall appoint no less than 3 members (any lot owner) to the Architectural Control Committee. The declarants consist of the President who is selling his house and the Sec/treasurer.

There is no mention of when the declarants should leave their post, nor how long they may serve. When we moved in last summer, we were told the President and Secretary/Treasurer had decided to stay in office for another year as they knew what the vision was for the subdivision.

The CFO is still the registered agent for the HOA though he owned no lots since last Fall. He lives overseas. New home buyers are still being assessed a ,$110 fee. The builders were also required to pay this fee when purchasing lots. The funds go to the CFO and our two declarants do not seem to know where these funds are or their function.

Also, the HOA holds no common property in the subdivision, yet the CCR's stipulate expenses to maintain the entrance and the signs will be added to the assessment. I've asked about water and electricity availability at the entrance (for plants and lights) but the two declarants do not seem to be able to get either systems working. This land actually belongs to the first 2 lots.

I'd like to propose that we hold a meeting to vote in Officers in the next month. But, I will be met with strong opposition from the two who have been in charge for years.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Sue

Has the declarant turned over the association to the owners? Do you not have an annual meeting?

SueR7 (Georgia)
Posts: 5

Posted:

I suppose that is a No. The CFO is the original developer and all lots have now been sold so he owns no land. The CCR's and bylaws state the HOA will be run by the lot/home owners once all lots are sold. The corporation still shows the developer, who lives overseas, as the CFO and all HOA correspondence goes to him. In addition to the fees paid by each person who has bought a home or a lot being routed to his LLC.

The two board members appointed by the developer will not release information and/or claim to not know where funds have gone, etc. We've had 2 HOA meetings since last Fall, with a third this afternoon. The agendas are not given out until we arrive at the meeting. Which generally means chaos ensues as people are surprised by the agenda topics.

I honestly have a feeling that they will announce what annual dues they have decided upon today and that the President has no intention of stepping down, though his house is for sale. Or he may appoint the sec/treasurer to President.

I think it's time we be allowed to vote for our own Board of Directors.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Well you can all get a committee together to start in organizing for the transition. Which when the developer decides to turn over, will be very valuable. However, understand it will NOT be an official HOA board. That is still at the discretion of the Developer. Which when held by a developer the board members don't have to be owners. That usually changes after turn over to the owners. Something that will have to be rewritten in your CC&R's when that happens amongst removing all developer references.

Former HOA President

SueR7 (Georgia)
Posts: 5

Posted:

The Board members who are residents and property owners have stated they arethe 'official' board and have re-elected themselves for 4 years running. The bylaws state that 'any action of the Association shall be deemed valid upon the majority vote of the property owners'. Doesn't that mean that we can vote on Board Members or other issues.

The two board members have allowed a vote of the residents/lot owners on one item thus far. Is that not valid?

They are also assigning dues to each of us with no documentation or financial transparency. Is that allowable? The President has given varying numbers as to what the dues are to the realtor and potential buyers of his home.

Lastly, the CCRs state that the 'Declarants are the owners of the real property refernced in...' (gives detail of plat map of subdivision). This is also reiterated in the Definitions section 'owners of the property'. How can the original purchaser of the majority of these lots remain on as CFO and still have control of the group? He does not want to be involved with the HOA per the Sec and Pres, does not want correspondence from members, and doesn't attend meetings. The fund that have been paid to him through each subsequent closing (2 or 3 time over on some lots) are not in reserves for the HOA. We have no funds according to the Pres and Sec/Treasurer. In fact, the Sec has opened a bank account in which to deposit the dues that she and the Pres are coming up with.

Many here have been waiting nearly a year to put in a fence or a shed. A few have been told they can by the 2 Board members, while others get conflicting answers as to what's acceptable.
If there is no official HOA board as you say then I'm wondering how we can proceed wih fences, voting, dues, etc??

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Your still developer controlled. They have the final say. That President/Secretary has been assigned the duty's to run the HOA. There isn't much you can do than prep for a turn over.

Now for the HOA having no funds. What do you mean by that? No funds to do certain projects or improvements? That's not that unusual. It's just to collect in what it spends out. So this may also explain the difference in dues quotes. The budget could be in flux still. No one may not know what the budget really is.

Former HOA President

SueR7 (Georgia)
Posts: 5

Posted:

I just clarified with the Sec. The owner of most of the lots, which have now been sold and hve houses on them, stated he doesn't want to be involved any longer? He is the CFO.
How can we get the HOA turned over?
Also, each builder and each subsequent homeowner paid a fee to the CFO. Those funds are not available to the Pres or Sec, they do not know what happened to them/
essentiall, 30 lots with fees paid two ot three times over to supposedly 'recoup the owner's costs' The fee srae still being collected each time a lot or house changes hands.

There are no due yet. And no expenses.

NigelB (Texas)
Posts: 254

Posted:

Quote:

Posted By SueR7 on 03/25/2018 10:43 AM
The Board members who are residents and property owners have stated they arethe 'official' board and have re-elected themselves for 4 years running. The bylaws state that 'any action of the Association shall be deemed valid upon the majority vote of the property owners'. Doesn't that mean that we can vote on Board Members or other issues.

The two board members have allowed a vote of the residents/lot owners on one item thus far. Is that not valid?

They are also assigning dues to each of us with no documentation or financial transparency. Is that allowable? The President has given varying numbers as to what the dues are to the realtor and potential buyers of his home.

Lastly, the CCRs state that the 'Declarants are the owners of the real property refernced in...' (gives detail of plat map of subdivision). This is also reiterated in the Definitions section 'owners of the property'. How can the original purchaser of the majority of these lots remain on as CFO and still have control of the group? He does not want to be involved with the HOA per the Sec and Pres, does not want correspondence from members, and doesn't attend meetings. The fund that have been paid to him through each subsequent closing (2 or 3 time over on some lots) are not in reserves for the HOA. We have no funds according to the Pres and Sec/Treasurer. In fact, the Sec has opened a bank account in which to deposit the dues that she and the Pres are coming up with.

Many here have been waiting nearly a year to put in a fence or a shed. A few have been told they can by the 2 Board members, while others get conflicting answers as to what's acceptable.
If there is no official HOA board as you say then I'm wondering how we can proceed wih fences, voting, dues, etc??

While I can't really speak to your governing documents, they should specify under which conditions the HOA is turned over to owner control. The declarant will usually set up two classes of voting membership and give themselves more votes per lot than purchasers of the lots who will only have one. Once a specified limit is reached (for example the number of individual votes outnumber developer votes, or all lots are sold) then the HOA is turned over to the community, who would then hold an election and elect directors in the numbers specified in the declaration and by laws.

The governing documents should also specify by how much assessments may be raised by the board without voter approval - it is generally around 10% per year.

Financial transparency (the right of the membership to review financial records of the association) would be contained in the laws of your State

MarkM31 (Washington)
Posts: 494

Posted:

Quote:

Posted By SueR7 on 03/25/2018 11:43 AM
I just clarified with the Sec. The owner of most of the lots, which have now been sold and hve houses on them, stated he doesn't want to be involved any longer? He is the CFO.

I don't understand what you are saying. Does the CFO own the lots or not?

And are you sure your CC&Rs are silent on declerant turnover. That would be rare, but not uheard of. If they are in fact silent, then use the sections that address HOA membership, voting rights and special election and call a meeting and vote. Almost all CC&Rs allow members to call a special meeting

KerryL1 (California)
Posts: 14,550

Posted:

I'm confused too. It seems t me that Sue & a few other owes should chip in to gather to get the opinion of an HOA attorney.

Is that possible, Sue? By the way, how many lots are there in your HOA? How many (if you know this) are by people who aren't and don't work for the developer (declarant)?

there might be a lot wrong, but inflict of interest isn't on of them. In addition, the president can continue to serve so long as he's an owner IF ownership is a requirement to serve on the board.

🎯 You've read this entire discussion

Join the conversation with 50,000 HOA & Condo Leaders:

✓ Ask follow-up questions
✓ Share your experience
✓ Get expert advice
✓ Access 350,000 discussions

Create Free Account →

⚡ Takes 30 seconds

Already a member? Log in here