Ethics and Etiquette of Being a Board Director

A question I keep asking myself lately is how I am expected to behave as a Board member in the midst of potential illegal violations if I were to be voted onto the board?

A little background:

A red flag last year when we requested that an audited financial statement be done by a third party CPA since no AFS has been done in the condo's 17 year existence. This was met with aggressive opposition by the entire board and the board president spent an hour and a half talking with my husband wanting to know what our motives were.

Second red flag in 2021, the pool gate latch malfunctioned allowing anyone access to the pool. As a former aquatics director, I advised chaining the gate shut to comply with insurance company policy to minimize liability which would have left the handicap ramp access gate still usable for access. Nope, says board president. Gate not repaired for 10 days. To underscore how dangerous this was, in Raleigh NC April 2022, a 2 year old toddler drowned in a community association swimming pool by getting access through a malfunctioning gate. The parents have sued the HOA. If I understand HOA liability insurance, the malfunctioning gate latch voided the policy and owners are now on the hook to pay all awards the court awards the plaintiffs.

Third, the vast majority of HOA records disappeared from the website and it has taken months to get most of them back up. Board meeting minutes for 2019, 2020, 2021 and 2022 are still not published.

Fourth, NC law requires the annual notice to owners that they have a right to mediation in disputes with the Board. There is no evidence this annual notice has ever been published by the Board.

Fifth, NC Law requires that board meetings be accessible to owners to both listen as well as to have a way to express their concerns. Board meeting dates and times are secret, requests by owners to address their concerns to the board are ignored.

Sixth, NC law requires that within 30 days of a board election, the names and addresses of the board members be made available to the owners. Hasn't been done in the past 3 years and currently they are overdue for this year's board election.

Seven, NC law requires that 2 days after the notice announcement of the annual meeting that a mailing list of owners and their addresses be made available to all owners for the purposes of communicating with other owners about the meeting, to campaign for board, to solicit proxies, etc. There is no evidence that our board has ever informed owners of this right. I ran for the board and my requests for this mailing list was answered with shenanigans by the property management company and silence from the Board. What resulted was the board president acquired all the proxies, and proceeded to vote himself and 2 board cronies back into office.

Finally, at the annual meeting this past November, it was announced as fait accompli the plan to install as many as 54 4X6' storage sheds in the common areas under the buildings for owners to either buy or rent from the Board. THere had been no mention of this issue in the upcoming meeting agenda and it came as a surprise to most owners who had had no input into the decision. There are 117 units in the condominium so 54-60 sheds will not be enough to be equally available to all owners. Changing the common area into limited common area, even exclusive, cannot be done according to our Declaration without 100% unanimous vote from the owners. Decreasing the percentage owner interest to be less than the percentage as declared is illegal under NC law because the NC courts have ruled it creates a "disproportional assessment" for those unable to acquire one of the exclusive sheds. So the sheds began appearing under the buildings, staircases, in front of elevators and the fire inspector was called to investigate. It turns out that some of those sheds were violating the fire code and no one from the Board or the property management company had filed any of the three necessary applications for permits with the Fire Marshal, the zoning department (we are in a flood zone) or the building department so a stop work order was issued November 28 by the fire marshal. It was pointed out to me that unpermitted accessory buildings can cause insurance to go up, they can void the policy, or the insurance company can drop us altogether for "intentional disregard for regulations".

I don't want to discuss the numerous issues that constitute the back story in this thread. It's clear that we have a board that is highly secretive, will not communicate with owners, is willing to flout regulations and laws, etc. My question is, if I were a board member while this was happening, do I have an obligation to remain silent so the board appears unified? Does the board president have a legal right to be the sole voice of the board? If I witnessed a willingness of the other board members to not follow the laws, how do I extricate myself from being complicit in this? I'm rather astounded by the utter and complete silence of the members of our board...no email, no phone calls, no social media, nothing..zip. The president controls all dialog and he's barely talking. It gives the appearance of solidarity but I have a hard time believing 7 people all agree to everything, especially since one board member is an attorney. Even if I voted against a motion, if there are no meeting minutes documenting that, where is the evidence I took a stand?

Right, wrong, or otherwise . . . my personal thought/opinion is that I don't give up my rights as an individual person, homeowner, and/or Board Member to have my own thought/opinion/decision that may be different than those of other individuals, homeowners, and/or Board Members. But the extent to which I would make that thought/opinion/decision known or not known (silence versus verbalized disagreement versus disagreement documented somewhere tangible to a potentially varied audience) would largely depend on the specific situation or activity/decision being acted upon by the Board. Many times silence is interpreted as agreement. So if one remains silent, then they could forfeit the opportunity to express a differing opinion.

So my answer would be "no" to your question about being obligated to remain silent.

The Board President may have whatever rights are assigned to them within the HOA documents as well as whatever the rest of the HOA Board Members and homeowners allow. So docs may indicate that President is to be the voice of the Board, then it is possible that is the case. And if by agreement or possibly the absence of disagreement (silence), the remaining 6 Board Members are allowing the President to be the sole voice of the Board, then that is what may happen.

If you witness things unlawful, improper, unethical, etc. and you feel strongly about your views, then insist that you position be documented in minutes, or otherwise document them yourself in a letter and/or email to whoever you think needs to receive it (other Board Members, Management Co, HOA lawyer, all homeowners, the press, etc.).

All that said, if you are the odd person out among a Board of mostly like-minded or similar-acting folks (especially ones with possibly questionable/nefarious motives), then I wouldn't expect that you'll be there long unless you are strategic, thick-skinned, and lucky.

Keep in mind that you only get 1 vote out 5 (or however many are on your Board)

Thus, if you want to open your meetings to homeowners, you can ask for that to be put on the agenda. Without support of others, however, it may not be put on the agenda, or if discussed, it may not be approved.

NC LAW says board meetings must be open to the public at regular intervals

From Common Interest CommunItIes In north CarolIna: Second Edition
Chapter 10: Board of Directors and Officers

§ 10.02.12. Members' Attendance at Board Meetings
Homeowners associations and condominium associations are not public bodies. As
such, North Carolina’s open meetings laws do not apply to these associations. Nevertheless, board
members for planned communities and condominiums, regardless of when formed have to make
their board meetings open at “regular intervals” to owners.

Further, the executive board meeting
has to provide lot owners an opportunity to attend a portion of an executive board meeting and to
speak to the executive board about their issues or concerns. The executive board may still place
reasonable restrictions on the number of persons who speak on each side of an issue and may place
reasonable time restrictions on persons who speak.

There is no definition of what “regular intervals” means, but it does not necessarily
mean every meeting if the board meets monthly. Rather, it could mean every other meeting or
twice a year. Or, it could mean every monthly meeting, but only for the first 10 minutes of the
meeting. The purpose of the PCA and the Condominium Act in this regard is clearly designed to
facilitate open communications between the owners and their boards. Thus, decisions by the board
on which meetings to make open should be made with this purpose in mind. It is worthy of note
that the statute uses the phrase “regular” intervals. Thus, each board should decide, preferably
at the beginning of the year, which meetings will be open and communicate the schedule to the
membership. The board should stick to this schedule — whether it is every meeting or every other
meeting, etc. The statute provides no guidance as to how members know of when board meetings
are held and which meetings are open. Presumably, any method of communication that is fair
and reasonable would meet the spirit of the law. Since many board meetings are not set a year in
advance, but rather may be set at the end of each meeting, communicating the next board meeting
by emails, website or newsletter would be sufficient in most instances.

Further, when members do address the board, the members cannot do so without any
limitations. Rather, the board has the right to set time limitations on the people speaking. If a board
meeting is scheduled for one hour and there are 10 people who want to speak, then the board can set
two minute limits on the members speaking and cut off speaking in 20 minutes. The board should
try to be as accommodating as possible and give as many people as possible an opportunity to
speak. However, the board need not hold a meeting for hours on end or entertain lengthy, repetitious
comments from members to the detriment of the board’s other business that it has to conduct during
the meeting. After all members have had a chance to speak, the members may be required to leave
the board meeting. While the PCA and Condominium Act allow and encourage owners to address
the board about their issues and concerns, members do not have the right to participate in the
meetings through making and seconding motions and debating on motions before the board.

Allowing members to address the board on a consistent basis and communicating
the board’s desire for input from its members can be an effective tool against membership apathy. It
can also go a long way to dispel suspicions about the board and their intentions. Making meetings
open also allows the board to learn about specific situations in the community they may not be
aware of at all or knew little about. Many owners do not understand the way in which business gets
done in an association and making board meetings open for at least a portion of the meeting can be
educational to both the board and the members.

JeanneH wrote: "A question I keep asking myself lately is how I am expected to behave as a Board member in the midst of potential illegal violations IF I were to be voted onto the board? [my emph.]"

Does this mean you're not on the Board now, Jeanne?

Great advice and some good questions I had not considered.

To answer your questions...

Who is the board supposed to contact about what? First, there was no mention in the agenda for the annual meeting of the topic of changing the common area to limited. There appears to be two classes of owners, i.e. those who knew months ago of the project and the majority who had no idea until it was presented as a done deal at the annual meeting. There were no emails or letters sent to owners seeking their input on the project. Second, after the annual meeting there were requests by owners to express their concerns to the Board which were ignored. Comments on the association's Facebook group were ignored. It was only after sending letters via Certified Mail that the Board president responded by email this past weekend but the response only acknowledged receipt of the letters, the claim that the association attorney had approved of the plan and that the attorney would advise them on following the statutes. One Board director refused the Certified Mail and had it sent back unopened. Not good optics imo.

As for the property manager, the one person who hands on manages the property is not credentialed. Her boss has taken over the communication with the owners and he is the CEO of the property management company and is also credentialed via CAMICB. His boss, the owner of the company, is not credentialed. THE CEO is the only CAMICB credentialed person in a company managing ~100 community properties. I did note that the Code of Ethics for CAMICB requires that those holding that certification, "Be knowledgeable, act, and encourage clients to act in accordance with any and all federal, state, and local laws applicable to community association management and operations."