Special Meeting for Removal of HOA Board and Management Company

We have in our community 135 condos and specific problem. Our Board members never got majority of our votes during the annual election. They don't have record for 2018 and they did not publish anything after the election. For 2019 they got just 25 votes and hired a new Director to fill vacancies. Again they never informed homeowners about the results of election. To be elected they need 70 votes (51%) or at least 34 (25%) Their explanation was that they did not reach quorum, therefore there was no meeting and nothing was published to homeowners. I got however minutes after I requested release of this information. Several days ago they placed minutes online (document from April 2019). Since new management company came in May 2017, our HOA fees were raised from $264 to $550 a month. They intend even to take lien (4 million dollars). All of homeowners are appalled, but cannot do anything. We started petition and collected so far more than 40 signatures for removal of Board, firing of management company and reversal of HOA fees to the level in 2018 ($381). We plan to make one time payment and manage repairs. We need exactly $264 to cover all operating cost - fixed and variable. Everything above is for reserve fund and for repairs.

We called yesterday for special meeting. Agenda is to count votes from petition which is calling for removal of Board and management company, election of interim Board which will act as emergency board until we have regular election held end of April every year. I got from association lawyer today an email and I realized that they plan to stay until new election in April. She also stated that we need to elect new interim Board with secret ballot (as we do with regular Board).

What we need to do to fire Board members and to remove management company so that they cannot prolong decision. Can we remove members at the special meeting and at the same time elect interim Board at that same meeting. Meeting agenda calls for it. Petition asked for removal and people signed it and sent back. Is that enough or if not - what we need to do to be prepared for special meeting?

Ena

A Special Meeting must have a very defined agenda. If removing members of a BOD, it must be defined who they are to be replaced by such as: Remove Sue Smith and replace with John Jones. Remove Harry Smith and replace with Mary White, so on and so on.

Then the new BOD can decide to replace the Management Company, lower the dues, etc.

Got to walk before you can run.

May I ask who is going to replace these board members once removed? Do you all have any candidates willing to be voted in? Any management company ideas? Do you know what you want to hire the Management company to do?

It's one thing to want people out... It's another trying to get people in you want...

I think you can wait until April 2020 for the new board elections to make changes to the HOA board via the scheduled election. An emergency board will do nothing but cause more confusion and need replacing by a permanent board of directors. More importantly, be prepared to lead the HOA come April if changes occur via elections.

Once in "power," if you're still facing high drama within the HOA, you're not "HOA Boarding" the right way as it should be quite boring.

thank you for the advice, but management company is running board. they select candidates
who apply to be on board. one of homeowners wanted to go and applied but it was not selected.
which means that for this election they will do the same. if i would apply they would not select
me as a candidate. but they would place the homeowner who did not sign petition as he wanted to
be placed on board by management company. management company should not do this - this causes conflict
of interest.

i find that what management company is doing is having elements of fraud. they were claiming
that they did not publish results of election as annual meeting did not occur and that there
were no minutes, so they did not publish. we should be having the way to remove this type of board
by calling an emergency meeting. and we definitely want an interim board which would be able to fire management company and revert our HOA fee to 381. after that point we would elect board and then we would decide whom to place on board from the pool of applicants - homeowners.

petition is also about not allowing current Board members to run for this year election.

Ena,

Can you provide related excerpts of your CCRs, Bylaws, etc to us?

Specifics are going to be needed.

Augustin is being exceptionally helpful, Ena. and is right, you have a lot of homework to do.

You must read not only your CC&Rs but your bylaws too. It's the bylaws that usually has all the information about elections. It's there, for instance, that you'll see when elections to the board must be held.

You need to get a group together who agrees with you and you can study your documents together. It's difficult if not impossible to try to to make changes by yourself. More important, you all can chip in to hire an HOA attorney to help you learn how to proceed.

thank you Augustine. this is really helpful. it is rather disturbing how they are treating some of homeowners - it is really discriminative. one homeowner wanted his phone to be connected to the gate phone system and they said that not everyone is supposed to have it. this is everything outrageous and we feel completely helpless.

EnaP, thank you for posting the excerpt from the CC&Rs. It is very helpful.

Do you know how many of the condominium units are owned by the Declarant? If the Declarant still owns a lot of the condominiums, then this gives the Declarant a lot of voting power.

Also, from section 6.8 it appears that the quorum for a meeting of the members is likely 51%. Condominiums and HOAs typically have much lower turnout for annual elections. Has your condominium association been achieving the required quorum for its annual meetings? If not, then an election cannot be lawfully held.

Some questions:

1. Have there been updates to the Bylaws? (many Bylaws are written allowing the Board to change the Bylaws - and, most states don't require their recording - not sure about CA) ... I'm playing to Augustin's comment re requirement for quorum
2. When you say "For 2018 they don't have any data, so turnout was even worse." what does this mean? Who is they? What do your neighbors say happened?
3. Sometimes an annual meeting in April 19 will have minutes in draft until the next year - i.e. if the meeting was April 19, then the minutes will be approved at the next annual meeting, likely April 20?
4. What happened at the 2019 annual meeting?
5. Are your directors "hired?" As in being paid? Or, are they just volunteers for the Board?

Why did you not vote for several years? Are most of your neighbors of same mindset?

George,Thanks for the reply.

1.We have CC&R and we have Bylaws
2. nothing happened - homeowners not being satisfied with the work of Board did not return ballots. I meant with 'they' Board or management company.
3. this is not logical for me, that they wait for a year to publish. in any case they (Board or management company) did not publish results neither for 2018. they just don't publish results as they did not reach quorum or did not collect at least 25% of votes.
4. nothing happened again - they realized that they collected 26 out of 135 ballots and Board discussed whether to re send ballots or to appoint a new director. so they appointed a person to the Board to open position. there were no reports. it was an open forum and board listened to membership comments.
5. i did not use proper word - they were appointed, they are volunteers who enjoy power.

most of my neighbors think the same. some of them told me that they don't go to the meetings, as they are afraid to start the fight and be arrested. and people who live here are really very decent and quiet. i don't live all the time at the property - last year i was not even here.

While there are more details likely to come forth, it does not sound like there is a major issue, here.

The annual meetings don’t get 51%, then adjourn, then restart, them don’t get 25%, so the current Board meets and appoints directors. Given it is the Board appointing, vice membership electing, they can likely appoint anyone they wish? Augustin?

Thanks, Kerry!

Ena - how about you do what Kerry suggests - get together with neighbors to review and understand your governing docs, what has occurred exactly at the last meetings someone attended. Perhaps get an informal group together, including Non Resident Owners via phone, and ask the management company and/or members of the Board to attend and answer questions?

I am increasingly concerned that the core issue is an increase in assessment, combined with owners who don't even attend annual meetings, let alone board meetings. The increased assessment could be to make major repairs that were not noted in the reserve fund study. They could be for a major repair that was simply not funded for properly by the reserve fund.

Thank you Kerry and George. We have three parts in our HOA document
1. CC&R
2. Bylaws
3. Rules and Regulations added in 2006

We don't have it in our bylaws but this is California Civil Code
section for elections and meetings. We never received any results
of any election. All minutes created during the annual meeting when
ballots are counted, stayed in draft status, because quorum was not reached.

Actually I was constantly said by property management company that there were no minutes as meetings did not occur because of lack of quorum.

From CIVIL CODE SECTION 1363.03-1363.09

(g) The results of the election shall be promptly reported to the

board of directors of the association and shall be recorded in the

minutes of the next meeting of the board of directors and shall be

available for review by members of the association. Within 15 days of

the election, the board shall publicize the results of the election

in a communication directed to all members.

(d) The minutes, minutes proposed for adoption that are marked to

indicate draft status, or a summary of the minutes, of any meeting of

the board of directors of an association, other than an executive
session, shall be available to members within 30 days of the meeting.

The minutes, proposed minutes, or summary minutes shall be

distributed to any member of the association upon request and upon

reimbursement of the association's costs for making that

distribution.

Homeowners who live offsite would like to attend meetings, but they are always
scheduled for Thursday evenings. They cannot come here after the work because of
long commute.

I wrote letters to almost all homeowner who live off - site. They are all outraged.
When I said that we cannot sell properties because of high HOA fees and that BoD wants to take
lien, there is a simple explanation.

Average HOA fees for this zip are 25% lower than ours. Last time
the fee increase was from $381 to $457 (2019). $381 is HOA paid by other similar properties. Difference
in 30 years period makes us pay ca. $27000 more in HOA than other properties around. We had immediately drop in our property values. This time (2020) fee increased to $550. Nobody will ever
come to see our properties if we would like to sell. This is enormous HOA fee for Sacramento.

Now - Board would like on top of it to take lien so that we can replace balconies and each homeowner will need to pay $30.000 for it. When a buyer comes to purchase property and hears about
it, he decides not to buy. And this is our situation.

i completed my MBA and my MSc in English language all in writing with excellent grades. this is the first forum where people appear not to understand at all what i am writing about. i might have used several words which were out of context but important to understand, but it appears that whatever i write confuses you.

i never wrote that there were no election. i actually took directly from the minutes what happened and wrote it here.

there was annual meeting in April 2019 and quorum was not met as most of homeowners did not return ballot.nobody approved and signed minutes. they stayed in draft form and were never published.
i was told that Board did not publish minutes because the meeting did not occur as quorum was not met. which was weird to me, but let's live it this way. what happens every year is following: Board is never elected neither with approval of 25% of homeowners. they appoint a director instead and continue to serve. i sent you excerpt from CC&R as it appears that after two years directors should be terminated. but i need legal advice to get interpretation.

in any case according to Civil Code they needed to publish results within 15 days. our CC&R was updated in 2006 when elections rule obviously changed in California exactly with this code.

it appears that our Board will serve this way in perpetuity. just reshuffling a bit. thanks all of you for your valuable input. some advice was very helpful. i truly appreciate your time.

I think that what happened, Ena is that since there was no quorum, there really was no meeting and no election. So...there are no results to publish.

When you say every home will have a $30,000 lien, does that mean every home needs to spend $30,000 for deck repair? We need decks repaired in my HOA too but not all of them.

It's one thing to become proficient in English writing, but HOA language and the language in our governing documents is another language to learn.

for example, I don't think anything about elections are in your CC&Rs, but probably in your bylaws. But your bylaws were NOT brought up to date or they'd say that Owners may vote absentee, by mail-in ballot even if the bylaws don't say that. This is because state law prevails over an individual HOA's bylaws.

Most condominium and HOA members are like you. But for your reference: In many or most situations, to be successful in battling a condominium or HOA board, one must study the CC&Rs and applicable statutes.

I agree with George that, if the annual meeting fails to achieve a quorum, the board has a duty to fill the open board seats with appointees. (Having all board seats filled is not always required. But HOA/condo attorneys recommend it.)

I think what Kerry wrote above is a better starting point than what I proposed. It is less confrontational and may get EnaP better information.

Thanks to Kerry for the tip about the election rules. EnaP, I would include in the above proposed letter a request for the election rules, as required by California Civil Code 5105.

EnaP, I too struggle to understand your wording. E. g. using the word "lien" when I believe you meant "loan." I appreciate your continuing to hang in there as folks here ask questions and you explain.



-- You say they are similar but I suspect not so. Age, how well the condo has been maintained in the past, different features (like balconies), quality of construction can make a huge difference. What you should be looking at is the annual budget and also actual expenses. Line item by line item, is what is being spent reasonable?

-- Grrr, is "$30.000" some European thing? You mean the cost of the $4 million loan (before interest) is about $30,000 per condominium unit. Do not for a minute think that two Masters degrees in the United States qualifies you as being able to write English well. I have two Masters, in technical subjects where over half of the students did not speak English as a first language. The professors did not care. It was a mill churning out students, paying the salaries of the faculty. (I am posting this paragraph because I do not want to play 'good cop' while others are playing 'bad cop.' The language barrier here is not trivial. EnaP, you're cool to want to get on the board. But if you want to communicate effectively and impressively, I suggest you get someone to edit your writing during your campaign.)

-- EnaP, also ask the board for the proof of why the balconies need to be replaced. Nationwide you are entitled by law to see records that show why such infrastructure repairs are needed.