Conduct Board business via Special Owners Meeting?

As the very new President and new resident of an 18-month old HOA (since turnover), I've discovered that it's unlikely the other two Board members are going to be cooperative and meet to conduct the Association's business. In fact, we still don't have a FY2022 budget, which the Declaration/By-Laws require be presented to the Owners no later than Dec. 1st.

It's also unlikely there's 75% to remove them, and that would just push the animosity that's here to the forefront. However, the President can call a Special Meeting of the Owners if petitioned to do so by a majority of the Owners. That's probably an achievable option.

At such a meeting, can the business of the Association that would normally be conducted by the Board at a Board meeting be conducted? For instance, agents who the Board (which has never actually met) have delegated responsibilities to are supposed to have signed contracts that last no longer than a year. Can we act to end these agents acting?

The By-Laws state that no business may be transacted except as stated in the notice, but assuming the business item is on the agenda posted in the notice, the Owners can debate and decide what to do, just as if the Board is functioning normally, right? It seems the only limitation would be a new item of business no one had notice of coming can't be presented from the floor.

I need to do some planning for the rope-a-dope I'm getting from the two people I have to work with on the Board who have no concern for the fact one other person, who's not even on the Board anymore, continues to spend the Association's money with no oversight and no budget because he was once the President and got himself to be given the title of Property Manager, which he uses to generate whatever work and expenses he wants to make. They're fine with doing nothing. But a lot of people here aren't. And I think if we can take action using this method, we can get by until they term out late in the year.

Thoughts?

Interestingly enough, the By-Laws say,

"(B) Unless otherwise provided in the Declaration, the Association, through the
Board of Directors, may exercise all powers of the Association, including the power to do the
following:

(1) Hire and fire Managing Agents, attorneys, accountants, and other
independent contractors and employees that the Board determines are necessary or desirable in
the management of the Condominium Property and the Association."

Now, I think the argument can be made here that it's the Association that has been granted the power, and that this clause empowers the BoD to act on the Association's behalf as a practical matter, but such delegation of authority doesn't also strip the Association of other means of using its power, such as at a Special Owners Meeting. It says the Association may exercise all powers of the Association, so the Association seems to be able to order the BoD as to how it shall actually execute any given decision.

It's nice to know I can call a SOM myself, but I think politically a stronger message is sent if it's done via majority petition. If it's just me, I risk coming off as the new guy trying to take over when all I'm trying to do is get the affairs of our business in order - focusing on the process far, far more than any given decision - and end the refusal of the few old guard to share meaningful financials with Owners.

The only "business" so far that's been "agreed on" via email is one of them putting the kibosh on doing a small project that was proposed by responding "let's wait", which was the option I gave to hold it until the meeting. Other than one email from one saying they might be able to decide when to meet "after the end of this week", I don't hear boo from them. They did this to the last President, too, even refusing to give him access to any Association materials, including books and supporting documents. At least I have those and a few invoices that have been scanned. I've even been stopped by a couple people in the building and asked if they're talking to me, and when I decline to answer (I think Board dynamics should stay within the Board - I have to work with the hand the Owners deal), I get the response, "Yeah, I thought so."

If I call the attorney (who I had to on a new matter so ensure a correct response to a real estate agent, so we've actually chatted), that's going to generate a bill, and while I can probably count on their intransience and neglect to get it paid because our bookkeeper seems to just pay whatever she gets sent with no approval or oversight, I'm very reluctant to adopt tactics that, at best, skirt the right way to do things, especially since my mission is to get them, and everybody here, to start doing things not only legally and ethically, but by using best practices. I think going to the HOA attorney on my own needs to be the final option, taken only after I exhaust all others, including the pressure of a majority of the Owners letting it be known they've had enough. And that's something I think I can put together to see what happens and use whatever can be accomplished at a SOM to push forward.

Yes, and yes. This is where it would be valuable to know what Ohio case law is, but I would agree that the OH NPCA is pretty explicit. Its language of "shall be exercised" in the context of the phrase "... require that action be... taken" seems to argue that when the "law, articles, or the regulations" say something is to be done, then the BoD is obligated to do it, and does not have the option to simply blow it off. But, I would also agree that this significantly limits the Association to take action apart from the Board that hasn't been explicitly called out for it to do so by the Owners. And that is the focus of this thread.

But this is a good discussion for me, because it helps guide the conversations I need to have. If I can get 50% simply to demand a meeting, then the challenge is to find a handful of others who are willing to acknowledge that the current obstructionists have to go, however distasteful that process may be. And being able to say, look, we clearly have to do these things, and the only body that can do them is the Board, and these people refuse to do them, then it's up to the 50% to get the holdouts turned around.

I do need to have a conversation with an HOA attorney, if for no other reason than to confirm this. Perhaps there's a decision out there that does provide a path to break up this logjam without the 75% vote to remove or forcing a group of owners to sue themselves with the intention of getting a court to make an order. You mentioned the possibility of the President being able to declare the positions empty and appointing new Board members, and I already have one person lined up. But I see so many potential pitfalls of allowing such a process that it's hard to imagine it's an option, especially because there's no attendance provision in our docs for Board members.

I'm currently creating the books for the past 15 months and discovering how much the one owner who has decided his title (granted not by the Board, but at an Owners meeting because no one here knows the difference) means he can spend whatever he wants has blown thru the Association's monies. No wonder no one's been able to get meaningful financial information.

Our By-Laws require both a minimum of a 10% reserve as part of each year's budget and to issue a special assessment after the books are closed for the year to make up any shortfall of expenses exceeding the budget. Right now, that's about $400/unit, and climbing. This isn't a suggestion; it's a requirement right in the By-Laws. And I'm pretty sure no one knows (yet) this is coming.

Thanks.

Oh, and definitely talk to a lawyer. What Mr. Condo Commando is doing may not rise to the level of embezzlement but it does not comply with the laws governing HOAs or nonprofit corporations. He's also unlikely to go quietly just because homeowners vote him out (he has access to the association's accounts, yes?) - so you'll need some authority on your side.

I should qualify the above: An attempt should be made to do a proper, lawful recall of the rogue directors. But this takes time, like a month or more, easily. Plus getting a quorum of owners is often not possible. Then getting the required number of owners to vote to remove certain directors is often not possible. Meanwhile HOA/COA operations are frozen.

Talk to the HOA/COA attorney about your options.

I'll dust off my usual response and note that people in troubled HOAs/COAs have three options: live with it, fix it, or move. Simple in theory but it can be difficult in practice to choose the right one.

Some situations shouldn't be lived with, and I'd find this one unacceptable.

Fixing it can involve a lot of time, effort and even legal expense. At the very least you need allies among your neighbors who will support you and take on some of the work. Recall efforts can fail if no one else is willing to step up and replace the recalled directors.

Moving may sound like the most drastic of the options but it is often the easiest of them. Whether this one works will depend how easily you can replace your current situation with something equivalent or better. It's a seller's market in many areas around the country, so probably not the best time to buy.

I hear you about the realty TV show...