Previous Boards Bad Spending

Started by MicheleG • 3 replies • 1155 views

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MicheleG (Florida)
Posts: 4

Posted:

What happens when a current Board finds that previous Board incorrectly spent association funds. In our neighborhood we received a letter stating the current board found some of our dues (to the tune of $25/extra month) were spent spraying a private property ditch. The current board corrected, but now some homeowners are saying we need to hold the previous board accountable for repaying the monies? Is current board responsible to go after those funds. The previous board says they thought the spraying of the ditch was part of the HOA's common area responsibility.

We are now caught between the homeowners that want to go after the previosu board and current board saying that they have corrected the problem and it would be very hard to prove the previous board acted with malice. Does anyone have any experience like this?

Mickey

RogerB (Colorado)
Posts: 5,067

Posted:

Mickey,
Yes. Forget it! Unless you have absolute proof in writing that the previous Board was made aware that the ditch was not HOA common area plus why it should not be sprayed. Then you could prove wrongdoing. Besides their statement of being unaware, there could be other extenuating circumstances such as to prevent problems within the common area. As long as they acted in good faith they definitely are not liable.

To pursue this would only be wasting the HOA's funds. Even if the HOA won in court they would ultimately be the loser. The HOA's D&O insurance, the Corporate shield, and/or their indemnification under your By-laws would protect the past Board members.

BradP (Kansas)
Posts: 2,640

Posted:

I agree with Roger, forget about it. Unless you are talking about 10's of thousands of dollars of misspent money and you have absolute proof that they knew this and did it anyway it is a waste of time and effort and money. I can understand the frustration though.

MicheleG (Florida)
Posts: 4

Posted:

That is what I thought, thank you for confirming my train of thought!

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