previous board kept no minutes

hi, what remedies do owners and a new board have against a previous board who not only acted outside of their legal authority with regards to how to spend common funds. But more importantly , kept no minutes. We have been asking for some meeting minutes or records to tell us when and how certain decisions were made. However, it turns out. the decisions were not made according to they should have been. no meetings. no official discussions.etc. Basically one or two board members informing others ,,this is the way its going to go.

Now we (the new board) are trying to audit the contracts that were signed illegally. However, we can't even get a straight answer as to how the contracts were agreed upon. there are no records. .. Just a signed contract, and former board members saying they did have the authority.. blha blah..

I guess i'm asking.. How can we begin to unwind the wrongs that the previous board did, when they didn't even keep minutes or records . .. We have a contractor that overcharged us by about 100,000 .. for work that he did not do.. and i'm not kidding here.. the president paid him without even checking. She also refused to listen to owners who were complaining about the lack of completed work. ..

Now the new board is going to try and go after the contractor. Luckily, they actually filled out work orders and signed off on work that we can prove was not done. so this is actual fraud. .But I keep hearing that the previous board is completely protected from any negligence claims.. and how can we even prove negligence when they didn't even keep records..ugggg

LaskaS, do you suspect violations of the state criminal code where you live that you think the local district attorney would actually prosecute? Even if the current board brought suit against the ex-board members in a civil action, it's unlikely the court would impose any meaningful penalty on the ex-board members. I do not know all the details, but I think there is enough to do without trying to put together a HOA-Nuremberg like trial of the ex-board members. Maybe dedicate one board meeting to putting on record all the mis-steps of the previous board, for the sake of transparency. Give the ex-board members time to state their side. Put all in proper Minutes. Then move on.

Laska is looking how to hang people for mis-deed versus move on.

Laska,

While good to get some ino T, you need to spend your time with a trusted attorney.

The rear main seal on an automobile cost about $1.00. For a Certified Mechanic to replace this seal cost about $500.00.

The material cost of a $400.00 Callaway Golf driver is about $100.00. The sale price of such is $400.00.

The tool a plumber uses to plunge a clogged toilet is about $10.00. For the plumber to do so, the cost is about $125.00.

Need I go on?

Laska,

So the Board made a bad business decision.
Granted, it appears to be an expensive decision.

In court, boards are protected by the business judgement rule if they make bad decisions.

Laska,

Get busy, fix the stuff and stop lamenting.

Move on.

Suing your HOA is suing yourself and your neighbors. Do you really want to add onto the costs they are facing by the alleged bad construction work? If that issue isn't already expensive enough?

It's time to just move forward. You wanted change. You got it. So stop trying to change it back and blame the past. This is an opportunity stop making it an excuse to keep beating a dead horse...

luckily,, I was continually asking for the contract, and continually questioning the bait and switch.. and other owners were beginning to understand that we were being kept in the dark, being told one thing,, when another was done.. and all the while , owners were prevented from rebuilding their homes .. the president said, if owners rebuilt their units.. and it wasn't done how the board dictated.. they would come in and make the owner tear out their work.. this was just ridiculous.

we have a city permitting department,, every owner already knew they were required to get permits and inspections... however, the boards misinformatoin and threats caused 8 months in delays ...

anyway, ,, that's in the past.. we are on the board now.. luckily, I along with other volunteer homeowners who know something about building and contracting were able to stop that president picked contractor from actually completing any work ,, other than the work that was the hoa responsibility,,,

the president had decided that she was going to use common funds to put up sheetrock and do electric inside each unit.. this is a clearly outlined in our declaration as the responsibility of the homeowner.. .... and not only was she going to uuse common funds,, she was going to pay 8 to 10 x the market price for materials and work!....... and none of the other board members would listen,, they just stuck their heads in the sand..
even when clear fraud was pointed out.. they didn't do anything,, ..

gosh,,i don't want to describe it again,, it's just the worst year ever!.. but in the last 6 weeks or so,, the new board and volunteers had put a stop to t he nonsense.. we have stopped the sinking ship,, and now we have to actually finish what should have been done 8 months ago.. as well as,, we have to now spend countless hours trying to find out what exactly happened,, and see if there are any legal rememdies the hoa has against some of these contractors who billed and were paid for work they did not do..

contractors who had sweetheart deals that had no oversight,..,,yet the board president paid them ,, without every having actually taken a vote.. she just informed the other board members after the fact...

it's just sickening,, And then she has the nerve to tell several owners,, "i don't care,, i can do whatever i want,, I have immunity"..... well,, this is clearly an abuse of power and procedure,,and for that,, we will investigate all of our options to have her personally liable for the ammounts of money her negligence,, and actions outside of her legal authority cost the hoa... .l.. we are doing many things at once.. the primary focus is getting the common areas rebuilt,,and communicating clearly with any and all owners about what is going on.. we also have begun the audit process which is ridiculously impossible because the prevoius board didn't keep any minutes,,and the previous board won't admit they were wrong.. even though they clearly realize they were wrong,, they won't admit it, because then they open themselves up to liablilty,,,

this is way outside of the business judgement rule.. the business judgement rule requires reasonable inquiry and prudent investigation,,, none of this was done!

again,, i don't think it's beating a dead horse..

this is not about just bad work.. or shoddy work.. this is the hoa being billed for work that was never performed.. and the former president went around the checks and balances in place( board vote, approval of the work, agreeing on the invoices and paying them) and she got inhouse checks cut to pay the contractor.. before the work was every verified..

Laska,

I wish you luck.

LaskaS, good for you for asking here and continuing to read answers that maybe you do not want to read. I figure your board and you maybe should meet with an attorney. For $10,000 or hopefully less, the attorney will review the documents the board has and hopefully give a wise opinion.

My first blush impression, based on some reading here and elsewhere about much smaller HOA disputes, is that going to court over this is going to cost on the order of $100,000 or more. Especially with three different contractors (and so three different defendants' attorneys) involved along with possibly the prior board members, who may very well be able to use a defense attorney paid for by any insurance the HOA has.

melissa ,

How can you make the statement and assumption that we can't accurately or clearly define our losses.. Nothing could be further from the truth.. We can to the dollar define our losses..

and as for you saying work that I perceive wasn't done.. um,,again, you don't know what your talking about.

If a contractor billed us to paint replace damaged doors out of 200 original.

and it turns out, that by the time the contractor started.. 100 of the doors had already been replaced by individual owners at their own expense.

despite this, the contractor turns in invoices for 200 doors.. each invoice signed off on and claiming that the door was replaced,,

that is not perceived work done or not done..

geez.. do you seriously think I was talking about work i perceived wasnt' done.. give me a break.

i must have not explained correctly,,

the contractor was contracted to replace the damaged rotted doors that were on the property,,, with a max possible 200 doors... only those doors that were flooded were to be replaced,,

the contract was not for 200 doors.. the contract was for the number of rotted doors out of 200...

the contractor was specifically asked,, what about those doors that owners replace themselves..

the contractor told the owners,, well we won't charge for those doors..

.. turns out,, they turned in invoices for every single door out of 200..

... this gross fraud should have been caught by the project manager,, but um,, the project manager never showed up. ,

the president of the board paid all the invoices without checking.

It doesn't sound like you all had a "Project manager". Don't depend on the board members to be one. They should have assigned a person to be the project manager. Whether it was the President or another person/member.

I did several large projects in our HOA. Did act as the "Project Manager" because had the experience/knowledge to do so. However, other HOA's may not function that way. Hence why they hire MC's to handle things. Your HOA just sounds like it was over it's head in handling this emergency.

Sorry but as I read this, it just comes off as the board and membership was over it's head when the emergency hit. Your going to make mistakes. You all have already been paying for them. Now let's stop that bleeding and move on. This time with eyes wide open and not filled with tears of the horror show of losing everthing to a flood.

Thank you for the update. In Texas, I do not think $30,000 is COA chump change (and costing only a few thousand in attorney fees). Good job!