Dictator President

I am a Director and the Treasurer in a small (101 Units) HOA.

When I recently called our management company to find out why I didn't have access to the Accounts Payable files or the upcoming budget planning for the next year, I was told by the management company representative that I didn't have access to the Treasurer's area because "The president told me to block you from having access to those files".

Should the management company have followed those instructions and blocked me from all access to that area of my fiduciary responsibility as a board director?

This is a two part issue - Part 1 is the TREASURER (an officer of the Board) being blocked from financial material. Part 2 is a Director being blocked. In most circumstances, I would expect all Directors to have access - and, certainly all Officers.

I would call the President and ask if he/she actually gave these instructions, and if the answer was yes, I would ask he/she call the MC and remove the restriction.

Perhaps this is just a mistake? Was there interaction between you and the President prior to this? Have you made any threats or created any incident concerning anything related? Just trying to make sure we have all the information.

If no previous issues, and the President simply wants to control, then it comes to the Board meeting for discussion - a letter specifying it be placed on the agenda is probably appropriate.

I would also have side discussions with the other Board members to see if they have an opinion.

See what happens.

First, the PM should be acting on the direction of the board, so if you have support of other board members you should move to allow the desired access and if motion passes, the access should be granted. Most bylaws specify that the officer positions are elected by the board. In this case if a majority of the board feels the pres is out of control, they can elect a new pres. Note that they cannot remove this person as a director, but can take away their officer position.

Kerry is correct that by Florida law (FS 720 for HOAs, 718 for condos) any member can inspect and copy almost all records.
Also, in Florida the bolded list above is not exactly correct. As far as I can tell, violations and fines levied are included in records that can be inspected, the actual list of exceptions is below:


1. Any record protected by the lawyer-client privilege as described in s. 90.502 and any record protected by the work-product privilege, including, but not limited to, a record prepared by an association attorney or prepared at the attorney’s express direction which reflects a mental impression, conclusion, litigation strategy, or legal theory of the attorney or the association and which was prepared exclusively for civil or criminal litigation or for adversarial administrative proceedings or which was prepared in anticipation of such litigation or proceedings until the conclusion of the litigation or proceedings.
2. Information obtained by an association in connection with the approval of the lease, sale, or other transfer of a parcel.
3. Personnel records of association or management company employees, including, but not limited to, disciplinary, payroll, health, and insurance records. For purposes of this subparagraph, the term “personnel records” does not include written employment agreements with an association or management company employee or budgetary or financial records that indicate the compensation paid to an association or management company employee.
4. Medical records of parcel owners or community residents.
5. Social security numbers, driver license numbers, credit card numbers, electronic mailing addresses, telephone numbers, facsimile numbers, emergency contact information, any addresses for a parcel owner other than as provided for association notice requirements, and other personal identifying information of any person, excluding the person’s name, parcel designation, mailing address, and property address. Notwithstanding the restrictions in this subparagraph, an association may print and distribute to parcel owners a directory containing the name, parcel address, and all telephone numbers of each parcel owner. However, an owner may exclude his or her telephone numbers from the directory by so requesting in writing to the association. An owner may consent in writing to the disclosure of other contact information described in this subparagraph. The association is not liable for the disclosure of information that is protected under this subparagraph if the information is included in an official record of the association and is voluntarily provided by an owner and not requested by the association.
6. Any electronic security measure that is used by the association to safeguard data, including passwords.
7. The software and operating system used by the association which allows the manipulation of data, even if the owner owns a copy of the same software used by the association. The data is part of the official records of the association.

Rich,
Seems like you definitely have proof that he crossed a line. Your role as Treasurer can not be done without this tool that he directed to be removed from your access. This needs to be on the next agenda and have him explain why he acted outside of a board meeting to break your bylaws. The PM also should be scolded because he or she followed his direction. If the President had a valid reason or concern he should have placed it on the agenda in Executive session or main agenda to discuss.

The president should have been advised by PM that he is doing something against the bylaws and if it were me I would want to see the email trail of that conversation. If this comes out at a board meeting maybe some of the other board members will wake up and realize he has too much control and keep an eye out in the future.

I would think that at the end of the month, the Treasurer would be given a detailed report of all monthly transaction a y-td P/L, balance sheet, and any other financial business. The management company would make the financial report at the board meeting, but the treasurer should be able to answer questions, too.

Perhaps your request for “access” is too micro- management of the day to day activities. It is not necessary to look over the shoulder of the MC through the month. But a more detailed end of the month report should be provided to you at that time.

Some would even argue that the role of the treasurer - with a paid management company doing the bookkeeping - is to simply sign checks and sign reports to the state and IRS. The treasurer is not an auditor or bookkeeper.

I don't know FL's laws on this, Sue. but now, in CA, the board must review the finances monthly (vs quarterly as previously). I think that's right. Richard'll correct me if I'm wrong.

And in any state the board is ultimately responsible and must practice due diligence re: it's finances.

You really don't need the other directors for a recall if it comes to that - the homeowners who voted for all of you are the ones who can vote to recall the president. They might also want to do the same for the board members who sit there and let things like this happen. Check your documents to see what it says about recalls or special homeowner meetings - homeowners usually have to sign a petition to call for a special meeting and the board has to honor the request.

If you decide to bring this up at an open board meeting (if your chat with the president doesn't go well), you might want to invite your neighbors to attend. They need to sit and listen to what you have to say and then see how it unfolds. It's one thing for people to act a fool in private, but in public, it gets more difficult to bamboozle a bunch of people (unless no one gives a damn to begin with - and then they deserve what happens to them.)

However this ends, I also hope you and your colleagues (if they grow a spine) have a serious talk with this property manager about his/her role in all this. Better yet, if the property manager has a supervisor, talk to him or her. It's true they work at the behest of the board, but I think both sides should expect each other to act in an honorable manner. If these folks don't care about that, perhaps you should consider getting another company. Good luck!

Sue,
I disagree with your statement basically saying let the management company spend the HOA $ without oversight. I think every treasurer has a Fiduciary Duty to verify how funds are being spent.

A example of how bad things can happen. When I was first elected to our board and assigned the treasurer position I wanted full access and received it. I noticed that we were paying 25K annually for our Insurance coverage. I told the PM and the board that we need to go out for additional bids. The PM quickly told me that this agent is the best around and he does over 100 account for other HOAs that her company manages. I told her we can verify just how good he is when we get 2 more bids for the same services. I demanded it and when she went to the current vendor and explained he came back and said he just found a 10K discount annually for us. 10K that he was overcharging us and probably every other HOA they managed. Needless to say he lost our business. This was 10 years ago.

Many PMs spend other peoples money with very little regard. They actually do not have the time to challenge every invoice or shop for multiple bids unless directed by board members who care.

Mark,

I reference to an insurance company over billing $10K on $25K policy, there has to be additional commissions that by law must be disclosed to the client. If they don't they are subject to losing their insurance license.

In 9 years I have been involved in roughly 150 associations. Only one person has really reviewed financial records of an association and that one person was deemed to be a troublemaker.

I will suggest to a Board they bid out large contracts every three years and large projects when needed. Every invoice is reviewed prior to payment, and if there is an error, it is corrected prior to payment. I run my business as if I was in their shoes.

I have signing authority on all checks. This is part of my agreement and is known prior to the fact. Not all boards meet on a monthly basis. Not all my association are full management, some a strictly financial only. I have the ability to post invoices on a web portal to have Board member approve prior to payment. No one avails them of that option. Because of a 20 day window, all utility, when possible, are setup with auto-pay. All financials are prepared monthly with copies of all invoices and utility bills attached. Board financials and homeowner financial are posted to a web portal for the appropriate people to view and print if needed.

They are some questionable management company as well as HOA attorneys. Unfortunately, and I speak for California, there is no oversight. Bottomline, per the governing documents, it is the elected, or appointed, board's responsibility for management of their association.

You can lead a horse to water, but you can't make them drink

Bottomline, per the governing documents, it is the elected, or appointed, board's responsibility for management of their association.

Bottomline, per the governing documents, it is the elected, or appointed, board's responsibility for management of their association.

Bottomline, per the governing documents, it is the elected, or appointed, board's responsibility for management of their association.

IMO, Richard & RoyalP are exactly right.