Breach of Fiduciary Duty!

ChristinaN1 (Missouri)
Posts: 2

Posted:

We have many issues with our HOA. I don't know where to begin. I have done much research and discovered that our governing documents are not in order. According to our state laws our restrictions should be renewed every 20 yrs and must be voted on and recorded with 2/3 of owners at the recorder of deeds. This has not been done this way since 1975. There have been several amendments but nothing to show that it was approved by a vote. Our finances have been even worse. We have absolutely NO TRANSPARENCEY!!! Besides all that we now face an even more serious issue. We have a secretary that is doing very suspicious activities and even can be considered criminal. We found out she has not allowed any trustees on the computer and has full control of everything with no oversight from the current board. We discovered that there was an execution of garnishment sent to our HOA and she hid it from the trustees and responded and paid it. We ask for a private meeting to bring this to their attention, and they invited her in and just insulted us. They discussed our private meeting with other owners and said we accused her of stealing money. That was never said and we have that documented. The garnishment is nowhere to be found and the trustees refuse to investigate even with a letter from our attorney. What should be our next step? I do feel that there is a cause of concern that our community is in jeopardy of a great financial loss. We get inadequate finance reports.

AugustinD
Posts: 3,698

Posted:

Is this a condominium? Or is it a neighborhood of stand-alone, single family homes?

Is the Board running elections every year?

ChristinaN1 (Missouri)
Posts: 2

Posted:

This is a single family home community. They did not hold an election last year because no one wants to be a trustee.

AugustinD
Posts: 3,698

Posted:

Quote:

Posted By ChristinaN1 on 04/04/2022 3:08 PM
They did not hold an election last year because no one wants to be a trustee.

Competent HOA attorneys advise that the quickest route to replacing a rogue board is to demand that elections be run and have people who feel as you do run for the board. Do you have a group of people who feel as you do?

CathyA3 (Ohio)
Posts: 6,299

Posted:

Quote:

Posted By ChristinaN1 on 04/04/2022 3:08 PM
This is a single family home community. They did not hold an election last year because no one wants to be a trustee.

And there's your problem. You'll need to have enough neighbors who see things your way and *who are willing to step up and do the heavy lifting themselves*.

We see many questions on this site that boil down to this. People will complain, and when it's time to do the work to fix it, it's "oh, no, not me, toooo busy". It's so much easier to sit on their duffs and blame "them" for not doing their jobs, forgetting that they are "them". If too many folks are happy with the status quo, you'll have a tough time convincing them that the status quo isn't serving them well.

Just to play devil's advocate, we also see many questions where a homeowner is convinced that the board is up to no good, and when we probe further the homeowner has no solid evidence to back up their claims. Lots of big emotions, though. The angriest homeowners are often ones who don't understand how HOAs work and who mistake normal business practices for nefarious deeds.

Of course there is no excuse for rudeness or for not producing records that homeowners are entitled to see. And if the board is not taking care of essential business, that's bad. If your HOA is a corporation, for example, and they failed to keep up with the necessary filings, and your have any common areas or amenities, then these things are almost certainly uninsured. This would make homeowners personally liable if someone were injured on common property and sued the HOA. If this doesn't scare you, it should.

The quickest way to learn if you actually have a problem is to talk to a lawyer who is well versed in HOA law and see what that person has to say.

In all cases, dealing with an HOA issue will boil down to fix it, live with it, or move. Fixing it will take a lot of work and allies and possibly money - you can't do it by yourself. Only you know whether you can live with it, or if it's smart to do so. Moving is a pain in the rear but often the quickest solution to a difficult problem.

Roll up your sleeves and get to work.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By CathyA3 on 04/05/2022 5:50 AM

Posted By ChristinaN1 on 04/04/2022 3:08 PM
This is a single family home community. They did not hold an election last year because no one wants to be a trustee.

And there's your problem. You'll need to have enough neighbors who see things your way and *who are willing to step up and do the heavy lifting themselves*.

We see many questions on this site that boil down to this. People will complain, and when it's time to do the work to fix it, it's "oh, no, not me, toooo busy". It's so much easier to sit on their duffs and blame "them" for not doing their jobs, forgetting that they are "them". If too many folks are happy with the status quo, you'll have a tough time convincing them that the status quo isn't serving them well.

Just to play devil's advocate, we also see many questions where a homeowner is convinced that the board is up to no good, and when we probe further the homeowner has no solid evidence to back up their claims. Lots of big emotions, though. The angriest homeowners are often ones who don't understand how HOAs work and who mistake normal business practices for nefarious deeds.

Of course there is no excuse for rudeness or for not producing records that homeowners are entitled to see. And if the board is not taking care of essential business, that's bad. If your HOA is a corporation, for example, and they failed to keep up with the necessary filings, and your have any common areas or amenities, then these things are almost certainly uninsured. This would make homeowners personally liable if someone were injured on common property and sued the HOA. If this doesn't scare you, it should.

The quickest way to learn if you actually have a problem is to talk to a lawyer who is well versed in HOA law and see what that person has to say.

In all cases, dealing with an HOA issue will boil down to fix it, live with it, or move. Fixing it will take a lot of work and allies and possibly money - you can't do it by yourself. Only you know whether you can live with it, or if it's smart to do so. Moving is a pain in the rear but often the quickest solution to a difficult problem.

Roll up your sleeves and get to work.

Well said.