Stepping away from the HOA Board

I volunteered to help the board (for a year) because we had trouble keeping a requirement of 3.
When I leave at the end of the year, and the board can't maintain their 3 member requirement,
does the property management company assume control? I appreciate your feedback.

No. Property managers ARE NOT board members! Their primary purpose is to run the association's daily operations under the board's direction. This doesn't mean micro managing - the board makes decisions, such as making changes in the collection policy and the property carries them out, and may also notify homeowners of the change.

Your community has big issues if it can't keep three board members, but sadly this is a problem everywhere, regardless of the size of the board. Propke forget the association is 5gem and their neighbors, as Melissa often says, so if you want the association to do this ir that, you need homeowners willing to work on the board.

Here's what can happen if you don't get enough board members. The last one standing may appoint a homeowner or two, but if they can't or won't serve, that board member can then petition the court to place the association in receivership. That means the court will appoint a receiver to run the association until the homeowners come to their senses and elect a board.

Until then, the homeowners will have NO SAY WHATSOEVER in how the association is run because the receiver only answers to the judge. Assessments will increase a lot because the homeowners will have to pay the receiver's fee (which can be several hundred an hour), court costs, attorney fees, fund reserves and pay the association's routine monthly expenses. Scream if you like, but you'll have no choice but to pay because the receivers primary job is to ensure the association's bills are paid.

Think you can just sell at that point? You can try, but be prepared to take a beating on the sales price. And who would want to buy a home in a community under receivership? Good luck with that.

You can quit and risk this coming to pass or you could what you should have done when you agreed to serve for a year - start looking for your replacement and guide him or her on what's required so he ir she hits the ground running. Better yet, schedule a special homeowners meeting and turn this into a come to Jesus affair, educating them of the "joys" of receivership. Then see who steps up and begin to educate them.

You might also consider staying on for another year or two, continuing to look for a replacement. Consider it a stop-gap measure to prevent your property values going down the toilet because a bunch of incompetent and/or power mad people too charge because mo one else would.

Your move - good luck to you and your neighbors.

Do your governing docs allow a non owner to be a Board member?

Since a board needs a quorum of at least two to make decisions on behalf, what is a PM supposed to do if there is only one? I have had it happen twice and both times sent a notice of resignation to the Secretary of State.

Hi Shelia, thanks for the candor. I will be looking for a replacement to be sure. In fact,
your come to Jesus discussion should happen sooner than later. Appreciate it!

Ditto the questions KerryL1 asked.

Also is this a condominium association?

Hi John, good question. From what I read in the CCR's, you have to a lot owner. Thanks for responding back.

Hi Max, thanks for your input. Do I understand you correctly...you've been in a position of being the only board member left and you had to send notice to the Secretary of State? Isn't a resignation letter to the Property Management Company enough?

Guy,

If no one is willing to serve on the board, then the remaining member should petition the court for receivership.

Receivership is not a great option. The Assessments will likely increase to pay the court chosen receiver. The receiver works for the court, not the Association and, with the courts permission, can impose special assessments to get any work done they deem needed.

My suggestion is to explain to the membership this potential reality and I would expect you get volunteers.

If in receivership, I believe no lender will lend money to a unit buyer.

Max, I appreciate your response, thanks - G

I see that IL corporations require bylaws. Is it possible they've been misplaced? How the heck do you know what officers your HOA must have or how many directors, or the distinction among different types of meeting without bylaws?

You don't need three directors, you need a quorum of three to conduct business, which would be two. As a management company, could I continue? Maybe for a while. I could pay utility bills to keep the lights on and the gates open. I have emergency funds limits to handle emergencies. I have resigned from 2-3 associations where they couldn't get a board and I just file a form RA-100 with the Secretary of State.

Can you conduct business with just two directors?

Where chronic apathy is a problem I'm not convinced receivership is a bad thing. Sometimes people need a kick in the ass to wake up. If the owners don't want to step up and fill the minimum amount of Board seats then they get what they deserve.

Guy,

I was actually in this situation a few years ago.
I took the following steps to keep from going into receivership.

1) Inform the membership of the need for volunteers and potential receivership.
2) Have the current board pass a motion that I (being the remaining board member) could renew contracts and issue checks for normal expenses and emergency expenses without additional approval.
3) I made plans to appoint my wife and adult child onto the board (thus giving us a 3 member board on paper with me doing the work).

Fortunately, I never had to do steps two and three because step one had individuals step up and volunteer. Many were at the last minute and from the floor (as was allowed in our governing documents).

Problem is, based on experience, it's the people who DO know the governing documents that they (management companies and attorneys) don't want on the board.