Well, This is Fun...

We just received word from our management company that nobody volunteered to fill the single open position we had up for election last week. (Note: one of the board positions had been "filled "by a tenant Officer, so there should have been open spots.)

Nonetheless, the board president, who was our single remaining director, stepped up and resigned.

We now have no board. Our management company is in charge and paying the bills. Their contract should be ending some time around October unless our incredibly foolish former board members agreed to a clause allowing auto-renewal.

Your intrepid reporter will be keeping you informed as this very interesting story plays out.

I'm planning to request a copy of our contract.

This situation could end up working out for the best. I just got off the phone with one of our experienced former board members who said she's willing to serve if I do, and the two of us form a quorum.

Our recently departed former board members actually did some damage. In addition to not complying with our governing docs, they booted top notch vendors because the ex-president didn't get along with them. These vendors included the top management company in our area (the builder I work for uses them for the majority of their new companies) and our law firm which, in exchange for a reasonable retainer, provided free training and unlimited free 15-minute phone calls which more than justified the retainer. I follow this firm on social media, and they're going from strength to strength and have expanded into a second state.

It's always a bad sign if a board doesn't want to learn how to do their jobs better. It was sometimes a challenge what battles to pick.

The management company will try to hold a second meeting of the membership when they can arrange for meeting space. One mistake I think they've made is that they didn't give brief "elevator speech" on the realities of receivership, which means most homeowners won't be alarmed enough. But that's a job for any day.

This situation may be resolved without too much bloodshed...

communities, sheesh! My typing skills have really gone down the tubes...

Some of the answers are in my response to Bill.

The only officer we have is a tenant.

If I'm willing to serve, we'll have a functioning board again. But this is definitely "if". Virtual/hybrid meetings are a must - I'm not willing to get covid, and I'm keeping my eyes on the avian influenza that wrecked our egg supply last year*.

(* The virus has jumped into a number of mammal species, and there are some hints that it is spreading among them. If this virus becomes transmissible among humans, we're off to the races again and we're not prepared for a second pandemic this soon. The good news with this virus is that we have antiviral drugs and companies are already working on vaccines. The bad news is that it's lethal, with death rates over 50% and close to 100% in some bird species. We got off easy with covid even although it may not seem that way.)

Is his/her being a tenant a legal problem? Or just 'inadvisable' in your opinion?

I guess he or she stays until removed by the board?

I understand. I think you are right. No board to oversee an officer means the officer can do nothing. He or she best not do anything, including holding him- or herself out as any officer, other than resign.

Your plan looks really good, Cathy. I think I recall some growing concerns of yours about your Assoc. Remind me: I think you've served on HOA boards or an HOA board previously? I know you have a lot of knowledge from your positions with a developer.

quick now's your chance to try and dissolve the COA!

Monday Morning Musings...

This may be the exception that proves the rule, but you remember how we often comment that getting homeowners involved in committees and other opportunities can promote community engagement and create a pool of future volunteer board members?

Well... as far as I can tell our departed board did just that. And it appears that this created some unrealistic expectations on the homeowners' part and they got upset when these expectations weren't met. So instead of engagement, we have simmering discontent - at least among the folks willing to show up for an annual meeting. Although that is engagement of a sort, I guess...

This is consistent with my experience with trying to use committees. Long story short, they caused problems and got nothing done.

Judging from what I saw on the outside, our former board members made two mistakes. One, they treated the association more like a social club/democracy and less like a corporation, which is where the unreasonable expectations came from. Second, they mishandled the Vocational Dissident crowd and allowed them to take over.

In contrast, when I was on the board we were more businesslike and acted like the ones who were in charge - because we were. We made it clear that we were running a business whose job it was to maintain our jointly owned assets, that this was "Job One" for us, and that we all benefited from this. Partying was not on our agenda, although if others wanted to do it we were fine with it.

So, the folks who followed the recommended path blew up the place. The "humorless" folks who didn't follow that path had a steady stream of board volunteers (although not as many as we wanted) and a mostly content membership (including the Vocational Dissidents who simmered down after consistent managing).

Don't know if we can generalize from this. I suspect the outcomes depended in part on the skills and personalities of the board in charge and that my fellow directors and I were more capable overall (we even coped with a Vocational Dissdent on the board, which was interesting - I gots skills, me).

I am concerned about stepping into a mess. If I do end up on the board again, one of my first goals is polling the membership - I want to find out if there are real issues or only manufactured ones.

FWIW, your 'concern' is a sign that you're thinking rationally.

And getting a read from the membership is a good first step.

As feisty as the membership might be, they realize that you're coming in to Clean Up Dodge, right? Perhaps that's a poor metaphor. I can't help but think they would look warmly on change. For the first month or so.

Bill

If you agree to be on the board, would a Town Hall board meeting be worthwhile, with the meeting serving the purpose of giving an overview of the legal structure of condominiums? Not that it would be well-attended. But first impressions are everything. Given past mistakes, perhaps some things need to be set straight early on?

I agree about committees. They are too rarely up to speed on where they fit in and condo/HOA law in general. On the other hand, a number of people here believe, from experience, that having committees is better than not having them.

How healthy is the reserve fund? :-)

From across the miles of the internet, it sure sounds like it to me.


How's that web site coming?

It occurs to me that one of the causes of homeowners' relative cluelessness about HOAs/COAs is that short attention space. You can't learn much of anything in 3-minute chunks. I don't have an answer to this, although I certainly admire the problem. /snark

Yes, but also no - because I think we mean different things by "legal relationship".

Officers act under the guidance of the board. They have no independent authority. If there is no board, then any action the officer took would involve acting on their own authority and thus not lawful.

This is similar to the situation with our manager. She can continue to pay bills and do the things that are spelled out in her contract which is still in force. However, she can't take on new tasks unless authorized by the board - and the board does not exist. This is why associations that can't elect a board go into receivership - so that someone can lawfully conduct business. Both the manager and any officer who acted on their own authority when there is no board are risking legal action against them once a receiver or a new board is in place.

Legal relationships are not transitive. In other words, if A has a legal relationship with B, and B has a legal relationship with C, this does not automatically create a legal relationship between A and C.

In the case of tenants, it's the lease that creates the relationship with their landlord. If the association is not a party to the lease, it's hard to argue that there is a legal relationship there. Similarly, it's property ownership with the CC&Rs attached to their deeds that create the relationship between owners and the association. The tenant does not sign a purchase agreement, so the legal relationship is not there.

* Different states/communities may do this differently, though. *

Ohio's condominium act defers to the association's governing docs with regard to eviction of tenants. Our rental restriction requires a formal lease with a minimum of six months' duration, and the lease must state that the tenant is obligated to comply with our CC&Rs and other community rules and regulations. But we still can't evict a tenant, which fortunately we've had no need to do.

For lesser violations of the CC&Rs, we must enforce against the landlord, and our CC&Rs state that explicitly - ie. members are solely responsible for the actions of their guests/invitees/etc. We may send a tenant a copy of the violation notices, but any hearings/fines/whatnot will involve only the landlord. The landlord may pass on fines to their tenant, but that will be because of the terms of their lease - my association has no authority to fine tenants directly. This is verbatim from our attorney.

Related to this, boards need to be aware of something called "tortious interference", which is basically someone sticking their nose into a legal relationship to which they're not a party. In some states associations may not contact a tenant *at all* for any reason, and the landlord/member can take legal action against the association if the board or manager ignore this.

As usual, different strokes - and there is no such thing as a simple issue in Community Association Land.

True enough, for the officer positions that are defined in the bylaws and/or state law. For example, our bylaws list the duties for the President, Treasurer, and Secretary.

The issue I see is that the board invented this officer position, and its functions and duties are not defined anywhere in writing, as far as I can determine. If they were ever written down, they weren't published in the minutes(*) which only announced the appointment. Which means that these functions officially exist only in the departed board members' heads.

In addition, to the best of my knowledge this person did not perform an essential function as the treasurer would. So we can't reasonably claim urgency or need to justify this person's taking action. And in fact, the email in which our manager announced that we had no board did not mention this officer at all.

Finally the evidence strongly suggests that this position was invented for the express purpose of not filling a vacant board position, even though there were qualified persons willing to serve. So the appointment itself was tainted.

We're in uncharted territory.

(* The minutes were published on our previous community website. However, at the end of last month the board/manager implemented a new website - without warning and during a period when people are trying to pay assessments. People couldn't log in, and when instructions finally arrived and the dust settled, we discovered that none of the information from our old website is in the new one. It's a nice looking empty website. Ain't we got fun...)

I doubt that is legal - the management company would have no legal authority to run the organization without a board. It seems this would receivership area.

I misspoke. They can continue to pay the bills that result from current contracts that are in effect because these were negotiated by the board at the time. But they can't renew these contracts or enter into any new agreements on behalf of the association. You're correct about receivership.

We typically start negotiating new contracts for the coming year in early fall, so we need to get on with it. I'm surprised that we haven't had an announcement about a new meeting yet. It's worrisome that I'm the only one who seems to feel any urgency about this. It's too bad that the announcement about not having a board right now did not include a brief statement about the painful realities of receivership - maybe they thought that this crossed a line into advising the membership.

The Ohio Condominium Act states:
"(A) All unit owners, their tenants, all persons lawfully in possession and control of any part of a condominium property, and the unit owners association of a condominium property shall comply with all covenants, conditions, and restrictions set forth in a deed to which they are subject or in the declaration, the bylaws, or the rules of the unit owners association, as lawfully amended."

This seems like a legal relationship, or perhaps we can just say tenants shall comply. The tenant does not have to sign anything. It is a law.



The law says:
"Except as otherwise provided in the declaration or the bylaws, a unit owners association may initiate eviction proceedings..."
Interesting wording. It does not say "unless prohibited" or the opposite "if allowed." It just uses a more vague language "Except as otherwise provided."

I'm guessing your docs are silent on eviction, which means it is not otherwise provided, so you can initiate eviction proceedings.


I understand that you can't fine tenants, because it is not in your CC&Rs. I think that is true for most CC&Rs. But the law says you can enforce the CC&Rs on tenants through the courts and recover your legal fees (in theory).

Please quote your CC&Rs on: must enforce against landlord and members are solely responsible for the actions of their guests/invitees/etc.


That is stated quite strongly. In many states the law allows an association to deal directly with tenants. In other states with no direct laws about tenants, it's also possible, but good to know your legal options in regard to tenants.