Board violated information agreement about elections and did not disclose conflicts of interest

Curious as to people's thoughts about the situation below:

Background

Last year, owners in my HOA were mad at the board due to (I think) a lack of transparency. After last year's annual meeting, at which owners showed up in force and yelled at the board about a lack of transparency, the board agreed to hold elections this year in a more transparent manner. The board specifically agreed on a timeline of soliciting candidates for board elections this year and promised that proxies this year would include directors' and candidates' names and bios and would allow owners to vote for specific persons. This agreement was circulated to all owners in the HOA by email. It wasn't a signed agreement, but it was a list of specific points that the board had agreed, and a lawyer who lives in the HOA wrote the email.

Issue #1: Agreement Not Followed

Despite the agreement, this year the board did the same thing as it did in years past: it simply sent out a notice of the annual meeting, including a proxy saying, "The undersigned appoints ___ to vote for all matters as he or she may desire at the annual meeting, including the election of directors." That's pretty much it. Directors' names weren't given, and there was no solicitation of candidates. The cover letter instructed owners to return that proxy to the property manager.

The board did comply with one other part of the agreement, so the board clearly remembered the agreement.

Issue #2: No Disclosure of Conflicts of Interest

Further, in my state (NY), a recent law requires the board to include in an annual report disclosures of "related party transactions", which are deals between board members and related parties, or a statement that there are no "related party transactions". This disclosure was not included in the annual report. At least one board member doesn't live in the HOA and works for the property manager, so there might have been a "related party transaction" there; I don't know.

Questions

1 Why would a board violate an agreement that had been circulated to all owners? Is the board just testing owners to see if they respond?

2. As an owner, would you be mad about this?

3. Would you make an issue of this if you were an owner?

I'm NOT looking for legal advice; I'm just seeking views about what you'd think of this situation if you were an owner.)

Thanks.

What Jared said. Rally your neighbors together and this time VOTE THEM OUT - no more promises and excuses.
Of course, you will need to have people willing and able to step up and take over, because I suspect they will have a lot to unpack and start turning around.

And since you've been asking some good questions, I suggest YOU consider volunteering. It may be nothing will change until you get involved to make it happen.

Thanks. The management company was copied on all emails to the board re: the agreement, and the management company handled negotiations between the board and owners. Both the boar and the management company know of the agreement. The board complied with one part of it, so clearly they haven't forgotten it (and it's all in writing, too).

Are the board members not members of the HOA? Like fellow homeowners? Or are you still under developer control?

Not sure it's a conflict of interest if one is working for the MC and on the board as long as they don't own the MC. The MC is a paid contractor to the HOA. They can be fired but the employee/board member will still work for the MC. Our Treasurer owned our accounting firm we used. She was a homeowner and owned an accounting firm. Licensed/insured company with a good reputation. Why would we not want to hire her company?

If it's that bad, then get enough people to step up and run for the board. Follow the rules to do that. Want to make a difference then put the work in NOT a call into a lawyer...

? my thoughts ?

! W/T/F/C !

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Who The F#ck Cares

Some advice from the NY State Attorney General (abbreviated):
HOW TO HANDLE PROBLEMS WITH YOUR
HOMEOWNERS ASSOCIATION
Members of homeowners associations who are unhappy with how their association
is acting (or not acting) often do not know what they can do. This paper is designed to tell such
homeowners about some of their rights.

In most cases there is no government agency that can help unhappy owners who are
having problems with their homeowners association (HOA).

Look at the Not-for-Profit Corporation Law, the New York State law which
governs the establishment of most homeowners associations. The decisions made by courts in
cases involving the law are the case law which interprets the statute.
The Not-for-Profit Corporation Law (NPCL) is published as volume 37 of
McKinney's Consolidated Laws of New York Annotated ("McKinney's") which can be found in
law libraries, many lawyers' offices, and in certain public librarie
Important provisions of the NPCL and the sections, in which they are found,
include the following:
An HOA may have different classes of members. NPCL §601.
By-laws may be adopted, amended or repealed by the members with the
appropriate vote, as provided in the by-laws. NPCL §602.
A meeting of the members is to be held annually. NPCL §603.
Members may call special meetings, as authorized in the certificate of
incorporation or by-laws, or if at least 10 percent of the members wish to do so.
NPCL §603.
Directors may be elected at a special meeting. NPCL §604.
Proxies (authorizing another member to vote for you) are permitted subject to
provision in the bylaws or certificate of incorporation. NPCL §609.
Members may request that elections be supervised by an inspector. NPCL §610.
The right to vote may be limited by the certificate of incorporation or by-laws.
(For example, there may be no right to vote until the developer gives up control.)
NPCL §612.
Action may be taken on written consent of members without a meeting. NPCL
§614.
Members may demand to see the corporate books and records of accounts, minutes
of meetings, and a list of members. NPCL §621.
A derivative action may be brought by five percent or more of the members of the
corporation. NPCL §623.
Directors may be removed with or without cause, as determined by the certificate
of incorporation and by-laws. NPCL §706.
Unless restricted by the certificate of incorporation or by-laws the board of
directors may take action without holding a meeting if all members of the board
consent in writing to the action. NPCL §708.
Certain actions by a director or officer constitute a conflict of interest, and may be
void or voidable if no disclosure was made. NPCL §715.
Directors and officers must act in good faith and with reasonable diligence, care
and skill. NPCL §717.
Directors and officers may be sued for misconduct. NPCL §720.

Resolving the Problem: First Approach
If the board of directors is not complying with its own certificate of incorporation,
declaration or by-laws, you should point this out, in a tactful way, expressing the expectation that
the matter will be corrected. Sometimes this is all that is needed to solve a problem. If a simple
oral request to an officer of the board fails, you can write a letter. It should be factual, brief and
not hostile. Keep copies of any letters that you send, and notes of telephone conversations (the
date, time, who called whom, and the gist of the discussion) in case the matter is not quickly
resolved.
An attempt to influence the board is always more persuasive if it is presented by a
significant number of members. If your problem is one that others are affected by, it is worth
organizing the other members. If you do, and the attempt to change the situation is not successful,
the organized group can always seek to elect new directors at the next annual meeting.

Retaining a Lawyer
If your efforts to resolve your problems with the board fail, you may want to retain
a private lawyer. The Attorney General's office cannot recommend private lawyers. However, a
few points may be helpful.
. It is a good idea to select someone with experience in
handling HOA problems. You could begin looking
for an attorney by talking with members in your or
other HOAs and with attorneys in other specialty
areas. If this fails, you may wish to contact a local
Bar Association for referrals.
. Some lawyers will not charge for a single initial
consultation or will charge only a minimal fee.
. Most lawyers will attempt to resolve any matter
through negotiation before considering litigation, as
litigation is costly and usually lengthy. Litigating
against the board of an HOA, people
with whom one lives, can also be very unpleasant.

In Conclusion
If serious problems arise, which the board is not addressing, such as a bank's
threatening to foreclose on a mortgage on the Association’s common property or a developer's
failing to pay common charges on unsold houses or lots, it is important to act swiftly. Often such
problems can be resolved, relatively simply, if members organize and act right away.
Remember that members of HOA boards are usually other owners who are serving
without pay. They generally want to resolve problems and keep peace in the community.

Good luck!
Attorney General of the
State of New York

How did #2 (non-resident on the BOD) happen? Some Bylaws do allow non-residents to be an Officer, but rarely.

You say no true election. What makes you say that? Only reason I can think of is no Quorum established thus no election allowed and existing BOD stays in place.

John,
From someone who is doing battle now, some lessons I've learned:
Determine whether you are alone or if you have company.
KNOW your objective and be able to clearly articulate that in front of counsel.
Know your own level of commitment and be ready for abuse.
KNOW your documents
Get all of the provable FACTS together and be able to present them. (Be ready for defamation threats)
If part of a group, KNOW your group. Are they in for the fight or do they turn at the first hint of intimidation?
Are they even on your side? (Be ready for surprises)
If considering counsel, do your homework and speak with more than one.
Be ready for the long haul. The "wheels of justice" move exceedingly slow.

For what it's worth.

Best of luck.

Very good advice.

Being able to keep looking for "the biggest picture", respectfully should include asking oneself : are the possible outcomes really where I want to go at this point of my /our life ( lives ) ?

Looking back at particular scenarios most annoying 30 years ago, many of us hopefully might say : "I could NOT care less about it now". But that ain't the case for all of us.

The bigger picture, respectfully, may turn out to be sometimes that yes we're being wronged. But the price of getting justice or due process ( or whatever ) is far greater than sucking up aggravation or moving. Or just letting stuff slide until the universe resolves it . .

Whether so or not, the Bigger Picture needs constant checking . . .