Paid President

HectorR (Florida)
Posts: 84

Posted:

Good morning,we have a an HOA president who is also a employee of our property management company. I questioned the board in a budget meeting as to why they are allowing this. The HOA attorney quickly jumped in and stated that because he is not a director and seeks not interest in profiting from the management company it is ok for him to be an employee.
What can we do about this, there has to be some kind of statue in Florida that can prevent him from being a president and employee.
Help needed, please...thank you.

MarkM19 (Texas)
Posts: 1,459

Posted:

Hector,
We need more information.

How old is your HOA? Is the builder still controlling the board?

How many units and is it Condos or SFHs?

How many board members do you have?

I am sure others will also have other questions as well.

SheliaH (Indiana)
Posts: 6,964

Posted:

Not everything in HOA-land is addressed by a state law, nor does it have to be. Some things should be a matter of common sense (then again, it's been said that common sense isn't so common, so...). In this case, I would consider what the man does for the company. For example, if he works in the HR department and only deals with issues concerning the employees of that company, like payroll, it's probably ok. If HR had to address a disciplinary issue concerning an employee's conduct involving your community, I'd expect him to defer to someone else to address it.

That being said, the appearance of a possible conflict of interest does matter. He is the president, so if could be argued that he's in a position to at least influence the board in its relationship with the management company, such as getting it to pay for additional services or slow down actions to terminate the contract. That's when I would expect him to recuse himself from any discussion or vote on such matters.

Now, where is the rest of your board on this issue and how are officers selected? Most of the time, the homeowners select the board members and the board members appoint officers from among themselves. If that's the case with your community, you could persuade the others to remove the man from the president spot and appoint someone else If they can't or refuse to, vote him out at the next election and attend meetings in the meantime to listen to the proceedings to monitor his actions. If he's already taking steps to prevent any conflict of interest, you need to step back and give him a chance to act appropriately.

Our former president was in a similar situation - he'd gotten a job working for our management company's maintenance department. He was already planning to resign because he'd moved out of the community (hadn't yet sold the house but driving from one side of town to attend meetings was too much). Accepting this job moved things up because the maintenance department did work in our community and the appearance of a conflict concerned him.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

AugustinD
Posts: 5,144

Posted:

Hi Hector, I agree with your concerns in general. But unfortunately I doubt you have a legal leg on which to stand. The best course is to replace the board with people intelligent enough to select a President without this massive conflict of interest and a relationship that appears all too cozy. The HOA attorney sounds kind of cozy with the President and Management Company as well. With the attitude of the President, Management Company, and attorney, watch out for revenge upon yourself. Meanwhile, work behind the scenes to get others elected. Expect a possibility of cheating by the President, Management Company, helped along by the usual incompetent attorney's rationalizing and viciousness, all in the name of the billable hour.

FredS7 (Arizona)
Posts: 927

Posted:

> the appearance of a possible conflict of interest does matter.

Yup. I would also have trouble with the situation described.

Maybe it's just our current political environment...but...the absence of a law specifically prohibiting a particular act does not make it appropriate, ethical, or reasonable.

BillH10 (Texas)
Posts: 1,217

Posted:

Hector, if you have an owner willing to be the President, and he/she is doing a good job, it might be easier--and make more sense-- for the Association to find another management company and keep the President. Competent volunteers/board members are more scarce than management companies.

SueW6 (Michigan)
Posts: 814

Posted:

Conflict of interest would apply if he benefited in a financial way. So he would recuse himself from voting , for example, if the management company wanted a raise, or there was a bid up for consideration in the departent he worked ir at MC - building and grounds, for example.

If this bothers you then spend time looking for other board candidates to run next election time.

SheliaH (Indiana)
Posts: 6,964

Posted:

Bill makes a great point, especially on the performance piece. In fact, if the management company wants to keep this association's business (and perhaps the president if he's a good employee), it may resolve the problem for you by putting him/her in an area where a conflict could be prevented.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Hector

Your BOD President being an employee of your MC can be tricky. While I do not like such an arrangement (and I would work to end it) if handled properly, it could work.

EdC5 (Florida)
Posts: 117

Posted:

At one point I was an employee of the MC that manages my association while also the president of the association. The way we handled the situation was that I had limited duties with the MC involving my association. I would do things such as inspections, routine paperwork, but would not handle the financials (deposits, etc.).

Edward J Cooke, CMCA, LCAM

KerryL1 (California)
Posts: 14,550

Posted:

Been away and maybe read this thread too fast so might have missed it: Start with your bylaws, Hector. Do they require that the board president be a director? Many bylaws have that requirement if not most. If your bylaws are silent, see what FL corporations code has to say about this assuming you're a corporation.

HectorR (Florida)
Posts: 84

Posted:

Thank you all for your replies to answer your questions:

How old is your HOA? since 1985
which is unethical
Is the builder still controlling the board? No

How many units and is it Condos or SFHs? Townhomes=548

How many board members do you have? Board of directors were 5 till I resigned in October 2018 there are now 4

I was on the board of directors for two years, I resigned because I was having an extremely difficult time getting the board to understand the following:

The current president is using his personal vehicle to haul away illegal dumping from some of our residents and we are paying for his fuel, tires, and we also paid to repair his transmition all with HOA funds.
I understand he is using his own pickup truck, but never in the years that I have been going has anyone approved such thing. I asked them not to use our funds for such things and they ignored me and continue to do so.
I also mentioned that the president is working as a maintenance supervisor making over $50,000 a year which is unethical and again I was ignored.
I asked them to narrow down the check signatures from every board member to only two ( President and treasure, vice president if one is not available to sign and again I was ignored. it seemed to me that when I found questionable items I kept getting push back and we would just argue so I stepped down.
In Late November the board of directors fired the old management company and now hired a new one, the board had a budget meeting and raised our dues by $3.00 more a month. when I question as to why, they claim cost of living is on the rise. I mentioned to them that when I was on the board I was able to recover over $100,000 $80,000 was an agreement with Comcast for ease of access and the other $20,000 was form unnecessary expenses. I asked them why not use those funds and the president stated that all these funds have been depleted. I challenged him and asked him how can they spend $80,000 in 3 months and his reply was that if I needed to ask the new management company for the documentation.
Its been 5 days since my request via email and as of today I have yet to receive any emails from the new management company ( Gables Professional).
Now I'm really scared, not at the board but of what I found online regarding Gables Professional, read below and please share your thoughts.
https://www.miamiherald.com/news/local/community/miami-dade/article67277507.html

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Hector

So you copped out on being on the BOD and now do not like what is happening. Is this correct?

HectorR (Florida)
Posts: 84

Posted:

I never liked whatvwas going on from the very 1st day I joined the board of directors. Its been a battle for 2 years, I have tried numerous times to fix things with them but yo no avail. I resigned because I know for a fact that what they are doing is wrong and unethical. The homeowners are putting their trust in the board of directors to donthe right thing and I just could not sit there and ignor the whole thing. But I have been arguing this thing two years. The management company in the link I submitted just took over our community last month.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Sometimes you got to ask yourself if you are arguing so much is it with yourself or with others? Who then is the unreasonable one?

The President can work for the MC and get a salary for it. They can't get paid by the HOA. Plus they should not work in the capacity of making decisions for the MC involving the HOA. Being involved in maintenance department most likely has no bearing on the operations/management department of the MC.

Your HOA should be spending as much as it collects in. It may also need to do a cost of living increase. The only questions I would have is for a copy of the expense report. Plus see what kind of improvements or maintenance is happening. Is it positive or negative?

Former HOA President

SheliaH (Indiana)
Posts: 6,964

Posted:

It would really help if you wrote in paragraphs - the bottom part is difficult to read. Although it's ok to provide a link to a story, I believe it's a violation of the rules of this site to use actual names of communities, property management companies, etc. on this site - it's ok to provide a link to a story.

I was on my board for 10 years and it can be frustrating when it seems no one is listening, but it's a five member board (or was until you quit). You are one vote and need to remember votes won't always go your way. You could have written your concerns out and have them added to the minutes and then the rest of the homeowners could decide if they want to keep this board. Going home and sulking because you didn't get our way doesn't resolve anything.

That said, some of this sounds like nit-picking. For starters, what's unethical about the man making $50K? If he's an employee of the management company, that's between them - and I suspect he may be doing work at other communities, not just yours.

An assessment increase of $3 shouldn't break anyone - and yes, cost of living is a thing. It's great that you found savings when you were on the board, but you didn't say when the last increase occurred. Even with the savings you found, costs in other areas could have risen enough to make the increase necessary. That said, the president's response was inadequate - he could have given you the monthly income/expense reports and you should be able to see where the money went. Given the size of your community, I can see where $80K could be used up in 3 months and as a former board member you should have a decent grasp of what the association pays for (didn't you look at the budget)?

I do wonder about the association paying for the president's tires and transmission - but it appears the president took some initiative in hauling away the illegal dumping (although it may have been better to call the city or county and have those homeowners cited). Those homeowners should also be billed for the work and then the board can negotiate some sort of fee to cover the president's expenses, which should be backed up with documentation. If none of that happened, make this known to the rest of the community and it can then decide if this president and everyone else should remain on the board.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

SheliaH (Indiana)
Posts: 6,964

Posted:

It would really help if you wrote in paragraphs - the bottom part is difficult to read. Although it's ok to provide a link to a story, I believe it's a violation of the rules of this site to use actual names of communities, property management companies, etc. on this site - it's ok to provide a link to a story.

I was on my board for 10 years and it can be frustrating when it seems no one is listening, but it's a five member board (or was until you quit). You are one vote and need to remember votes won't always go your way. You could have written your concerns out and have them added to the minutes and then the rest of the homeowners could decide if they want to keep this board. Going home and sulking because you didn't get our way doesn't resolve anything.

That said, some of this sounds like nit-picking. For starters, what's unethical about the man making $50K? If he's an employee of the management company, that's between them - and I suspect he may be doing work at other communities, not just yours.

An assessment increase of $3 shouldn't break anyone - and yes, cost of living is a thing. It's great that you found savings when you were on the board, but you didn't say when the last increase occurred. Even with the savings you found, costs in other areas could have risen enough to make the increase necessary. That said, the president's response was inadequate - he could have given you the monthly income/expense reports and you should be able to see where the money went. Given the size of your community, I can see where $80K could be used up in 3 months and as a former board member you should have a decent grasp of what the association pays for (didn't you look at the budget)?

I do wonder about the association paying for the president's tires and transmission - but it appears the president took some initiative in hauling away the illegal dumping (although it may have been better to call the city or county and have those homeowners cited). Those homeowners should also be billed for the work and then the board can negotiate some sort of fee to cover the president's expenses, which should be backed up with documentation. If none of that happened, make this known to the rest of the community and it can then decide if this president and everyone else should remain on the board.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

AugustinD
Posts: 5,144

Posted:

I would not be hard on HectorR for resigning from the board. These HOA boards are often the worst of amateurs. HOA Board accountability can be difficult to enforce. My counsel is, when the issues are big, only run for the board when a like-minded majority is running with you. I think the issues at Hector's HOA are big enough. Yet Hector does not have a majority who thinks as he does about these issues.

It sounds like Hector did his best. As a matter of law, I believe he has more and better options to enforce accountability as a non-director than as a director.

HectorR (Florida)
Posts: 84

Posted:

Again I thank everyone for their responses, I only want what is best for our community. My house is completely paid off and I pay my dues a year in advance.
Let me give you an example as to why I need some advise on the beat way to remove all the board memebers.
When I was on the board the property management company that was there before had their own lawn company whom was not doing a good job. I brought up to their attention and gave them 90 days to correct the issues. 90 days went by and as board memebers we decided to move foward and terminate their contract. The management company stated that if we terminated their lawn contract then they would terminate the maintenance staff which included the president as an employee.
Could you belive that the president, vice president and the presidents wife who also serves on the board decided to wait 4 more months because they did not want the president to loose his job as a maintenance ?
The HOA attorney knew about this and I was totaly against it becuae the president is making decisions base on his best intrest and not the interset of the home owners.
Im not being selfish or nit picking, its my investment which I worked hard for and care about.
This is one example of many more.
I need some advise, how should i handle this?

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Well can you blame the guy? Seriously, he's losing his job! So that's kind on the personal side. Something I don't think the lines should cross. You get rid of a President in a HOA and they are just VOLUNTEER unpaid. You get rid of their Job of how they make their living, then that's kind of a line crosser.

I've fired our lawncare person and he lived in our community. Was a member. That is why we had 1 year contracts only. We also did not go through a MC. It was a hired outside contractor. So we had the power to terminate. They still kept their membership in the HOA but they no longer our lawncare contractor.

Now not sure why the Wife of the President is on the board. It's 1 vote per house. So only one spouse can be a member. Unless there is other circumstances/rules not aware of.

Understand your presenting your argument/view as one that costs a man his job. What response do you expect to have come out of this? I would atleast give the person a chance to find another job or have hired another MC. It's kind of the decent thing to do. If you all had fired the MC, he'd still lost his job but it would be the MC's responsibility.

Former HOA President

KerryL1 (California)
Posts: 14,550

Posted:

Hector, it's not true that co-owners cannot both serve on the board at the same time. They certainly can UNLESS your bylaws say only one co-owner at a time may serve on the board.

As asked before, do your bylaws, Hector, say that the president must also be a director? Have you read your bylaws and other governing documents?

Meantime, I can see why you'd quit the board. When always outnumbered as a director, it's hard to anything done unless you can get neighbors to attend open board meetings and add their opinions. Unless you want to spend a lot of money trying to prove in court that your board is not fulfilling its obligations to your HOA, the other option is to gather neighbors together and have them vote out the current board members either via a recall election or at your next annual election. If you're unwilling or unable to gather support, you're probably stuck with this board.

I'm curious about how it's possible that you personally gave the gardeners 90 days to improve their performance. Who gave you that authority? Boards only should have that authority and should vote to give vendors notice to improve or vote to terminate vendors.

GenoS (Florida)
Posts: 4,276

Posted:

Quote:

Posted By KerryL1 on 01/05/2019 10:21 AM
Hector, it's not true that co-owners cannot both serve on the board at the same time. They certainly can UNLESS your bylaws say only one co-owner at a time may serve on the board.

Bingo.

HectorR (Florida)
Posts: 84

Posted:

Sorry for the late response, I thank you very much. I'm work I g with three other home owners to gather up signatures and vote out the members. Myself and the other 3 home owners are willing to get on the board. Another thing is that when ever I send an email to the board asking them when certain things are going to be repaired or addressed, they always respond back and they seem to copy the HOA attorney.
They all see me as a problem and I think that they are trying g to intimidate me with the attorney.
I know I have done nothing wrong but ask questions and they are making me feel very uncomfortable.

HectorR (Florida)
Posts: 84

Posted:

Sorry for the late response, I thank you very much. I'm work I g with three other home owners to gather up signatures and vote out the members. Myself and the other 3 home owners are willing to get on the board. Another thing is that when ever I send an email to the board asking them when certain things are going to be repaired or addressed, they always respond back and they seem to copy the HOA attorney.
They all see me as a problem and I think that they are trying g to intimidate me with the attorney.
I know I have done nothing wrong but ask questions and they are making me feel very uncomfortable.

RoyalP
Posts: 1,104

Posted:

Quote:

Posted By KerryL1 on 01/05/2019 10:21 AM

..... I'm curious about how it's possible that you personally gave the gardeners 90 days to improve their performance. Who gave you that authority? Boards only should have that authority and should vote to give vendors notice to improve or vote to terminate vendors. .....

..... as board memebers we decided to move foward and terminate their contract. .....

KerryL1 (California)
Posts: 14,550

Posted:

My Question, RoyalP, was about this sentence that Hector wrote: "I brought up to their attention and gave them 90 days to correct the issues." UNLESS the board had voted to assign Hector authority over the landscaping, only the board should have voted to give then 90 days, etc. 🤪

I don't know why the board copies the attorney as you think it does, Hector. Could they want the attorney to write to you to stop writing to the board so much?? In our contract with our management's company (MC), the HOA & MC agree that requests for maintenance should go only to the property manager (PM) not to board members. What does your contract say about this topic?

It's good that you & others are banding together to recall the board. I think every state is different, but they all have exact procedures to "vote out" directors, which would be a "recall" election. Your group must read about th procedure and do it exactly right.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Copying an attorney is usually a bullying tactic that quite often works. Our BOD recently back down an owner threatening legal action. Emails on a subject (lawn maintenance) went back and between the BOD and the owner. In the owners last Email she threatened legal action. The BOD replied that as she threatened legal action, all further communication would be via our attorney.

She tucked her tail between her legs and apologized saying she did not mean it and would not do it. A resolve was reached shortly there after.

We never contacted our attorney. The threat to do so worked.

When threatened with legal action, I say bring it on.