Maintenance Fee without Board authorization

Started by JackieB4 • 6 replies • 331 views

💬 Join us to post & get advice from 50,000 HOA & Condo leaders.

⚡ Takes 30 seconds

Already a member? Log in

JackieB4 (California)
Posts: 398

Posted:

May-June 2023, I received some excellent advice re: the hassel/runaround I was receiving from Property Management with absolutely no support from other 2 Directors. We are 3 Director Board and meet bimonthly. I promised this site a followup after next meeting (TODAY). Here is what happened; finally got Maintenance Agreement issue on open session agenda: 5 members were present(my home). PM + 2 directors were virtual. I was told by PM that the attorney would be present to explain everything but nada. No mention of her!
The other two Directors are DS and KM. DS was President when the Maintenance Agreement fee was implemented (2015)charging members with a $485. fee to have their ARC application recorded @ County Hall of records. There is NO mention anywhere in our ARC documents, application, CCRs, Bylaws, R/R etc of a Maintenance agreement or any fee. The HOA attorney who processes the recording ($400), collects $85 for notary, but CA is $15 basic notary fee.(Thank you Max) Responses from Directors were: "This is history, who cares? Our legal recommended this. This is standard practice. You're argumentative and holding up the meeting. You bring this up at every meeting. I make a motion to mute this ongoing discussion."
My response: "Since January I have asked for ONE thing-"a copy of the minutes showing the Board approved a Maintenance Agreement. None has been provided but I have documentation of at least 7 Maintenance and Indemnity agreements in PM's files starting in Oct. 2015, 3 RECORDED, 4 are "non-recorded copies in our files but they may have been recorded."
Today's meeting, I responded with "I am appalled that our Fiduciary duty is being ignored by you. Nothing is written; nothing has shown BOD approval; no comments on why our HOA needs it? The law doesn't vary depending on the situation." So the stonewall continues and I am hopefully recruiting potential new Directors for May 2024 election. Meanwhile what comes next? Can they forever just kick the can down the road or choose not to discuss it, as they did in the motion today? Suggestions?

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By JackieB4 on 07/18/2023 10:40 PM
So the stonewall continues and I am hopefully recruiting potential new Directors for May 2024 election. Meanwhile what comes next? Can they forever just kick the can down the road or choose not to discuss it, as they did in the motion today? Suggestions?

If you do not want to wait until May 2024, you and those who feel as you do could try this: https://www.davis-stirling.com/HOME/Statutes/Civil-Code-4365

Otherwise, your best options seem to be to either

-- encourage owners who feel strongly about this (as they should) to ask for IDR, and then elevate to the extent they desire.

or

-- wait things out until May 2024.

I would be trying not to bang my head against the wall in disgust. I would try hard to recognize I simply do not have the power to do anything here unless I want to go all legal (IDR, court, lawyer).

Note: One of the prior threads that spoke about this ARC "maintenance agreement": https://www.hoatalk.com/Forum/tabid/55/forumid/1/postid/349159/view/topic/Default.aspx

JackieB4 (California)
Posts: 398

Posted:

Ellen- your clarity and williness to share it is superb. I am so glad you commented. The 5 owners in attendance actually saw for the first time their Board and property management trying to bury this issue and stopping conversation...allowing no Q & A. I have found that when Directors want to dodge the bullet, they often slap an "executive session" label to a topic. Davis-Stirling does an excellent job clarifying CA law (easy read and online.) The BOD + PM have tried their hardest to intimidate me by holding a special meeting AND not allowing me to attend... to Censure me for "not upholding my fiduciary duties" (LOL) which is Exactly the opposite. The attorney (billable hours) sent the Censure letter and concluded in last paragraph "but you remain the President." I responded "of course...I have not violated anything!" Equally Migraine material, yesterday in EXEC. committee(?) we selected our officers. PM asked who wanted to be President. 2 of us said yes. PM put it to vote among the 3 of us, so 2/1 he is President. He initiated the Maintenance Agreement on 2015 as an officer...but never got approval/no minutes to support a BOD vote. I reminded everyone the members(140) spoke with an election vote of me 62, next 30, next 25. "how is this democratic?
I can't find anything that clarifies how officers are determined and it's not a big deal but I thought it was suppose to be in OPEN session? Actually since other director selected VP, I am now Sec/Treasurer...so CFO with very clear fiduciary duties. I asked PM why the actual paid invoices aren't listed in our Board book so we could click on it to see the details. Most are basic (non questionable) but attorney invoices always capture my attention, even before the CENSURE. We are a simple basic community, no extra frills (pools, parks, tennis, community structures, etc.) PM's response was "This invoice issue isn't standard." If I had the talent, this would make a great documentary film. The most financially prudent approach is sit and wait for a BOD change 5/24. It's grueling for me (retired Nurse Practitioner) to sit still with obvious wrong doing...my entire reason for returning to Board. But patience is a virtue. Again, my sincere thanks.- Jackie

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By JackieB4 on 07/19/2023 10:31 AM
Ellen- your clarity and williness to share it is superb. I am so glad you commented. The 5 owners in attendance actually saw for the first time their Board and property management trying to bury this issue and stopping conversation...allowing no Q & A.

FWIW and for one, in California I think the board majority was in its legal rights to disallow owners' Q&A at this time. If you want citations on the point, please feel free to ask. On the other hand, that the other owners may have seen the sleaziness here is outstanding. I say: Good job by you.

Quote:

Posted By JackieB4 on 07/19/2023 10:31 AM
I have found that when Directors want to dodge the bullet, they often slap an "executive session" label to a topic. Davis-Stirling does an excellent job clarifying CA law (easy read and online.) The BOD + PM have tried their hardest to intimidate me by holding a special meeting AND not allowing me to attend...

Got it. You are getting "The Treatment." By all appearances the HOA attorney is happily heating his/her pool by maintaining he/she is obliged to follow the board majority's wishes here. The HOA attorney has either concluded or rationalized that the maintenance agreement could be argued to be both lawful and unlawful. And as I am sure you know, this is because the HOA attorney makes money from the "maintenance agreement."

Because the HOA attorney has deemed you an "adverse party," in my experience the other directors likely are in their legal rights not to include you in a meeting that discusses this dispute.

Can you clarify who is President at this time? Is it one of the other two directors? Or is the PM also the President? And do the bylaws permit the president to be a non-director?

I agree that the selection of officers in California does not qualify as an exec session topic. Selection should be done in an open meeting, exactly as you say.

I went through a similar situation as a director on a 3-director board with an incompetent manager. I did not want to be "a quitter." I served (got through) my full one-year term. However today with the benefit of hindsight I probably should have resigned. Just a few things from that period made me feel better, like the HOA attorney, on the job for a mere eight months, quitting a month of so after I was voted off the board at the annual election. The HOA attorney had written a letter or two to me, warning me yada based on lies from the board majority. I responded back with the facts. She did what the board majority wanted but my sense is she thought either the majority's focus was ridiculous; HOA soap opera is ridiculous; or the sexual assault (not rape) that a HOA vendor perpetrated on another owner was not handled correctly by the manager or board. The latter is what began all the conflict. The HOA attorney eventually spoke directly to the owner involved, and I think this was a turning point for the HOA attorney. The following month the HOA attorney quit. Several years have passed, and this attorney has never practiced HOA law since. Such is part of my own backstory. Lesson for me: Never underestimate the power of cognitive dissonance to eat one's mind alive. Is board service worth it, through thick and thin?

You are welcome.

You have my greatest gratitude for working as a Nurse Practitioner during the pandemic.

JackieB4 (California)
Posts: 398

Posted:

Ellen, Being deemed an "adverse party" seems like a compliment considering who is sending the pushback. The 5 owners definitely saw the sleaziness. Unsure at this point if it will make a future difference? I have a clear conscience. The new President, as of yesterday, is an owner/member and was on the Board in 2015 when this PMC was hired (his PMC from his prior community.) Exec vs General session agenda has been a great part of this food-fight. Your prior situation reminded me of all the moving parts many of us "volunteers" continue to experience. THE ROAD TO HELL IS PAVED WITH GOOD INTENTIONS. I raised 5 kids; dealing with a rogue board and fraudulent PM is water off my back. Do I enjoy it...not in the least! Do my kids think I am insane...of course. Do owners appreciate it? Most are clueless because 4:30 mtg bimonthly doesn't fit their work schedule, coupled with it being often changed (date) at last minute. Until their ARC app doesn't get approved or they have lived here long enough to know for 30 years no Maintenance Agreement was required or necessary, "everything is OK."

Here is why Adverse is a badge of honor: 2020, attorney misadvised my neighbor on our sideyard fence. It cost me $3500 survey + copy of CCR's in small claims court, to eventually get "oops" from this same attorney. #2 2022-Our annual election material didn't arrive; I asked PM about it and was told your elections are every OTHER year. I cited the page and she hung up on me. And in CA, it reset the clock for 105 days...so my prior Presidency was 4 meetings. In May, I was Re-elected by landslide but supposedly ?demoted? to sec. treasurer yesterday. It makes me CFO of our HOA Board with even more emphasis on who's cooking the books...so let's get this party started. #3 Agenda's continue to have wrong date. "Wednesday July 18". "Nope, is it Wed. or July 18 which is Tuesday." #4 I want to open invoices to see details. Received another pushback.
Hollywood, after the strike, a documentary awaits.

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By JackieB4 on 07/19/2023 1:27 PM
[snip but all noted] #2 2022-Our annual election material didn't arrive; I asked PM about it and was told your elections are every OTHER year.

Oh my. I would be seething, not just at this blatant cluelessness but the additional cluelessness that it likely portends.

I agree "adverse party" is a badge of honor here.

JackieB4 (California)
Posts: 398

Posted:

I thought I would add a recent update on the $485 MAINTNENACE AGREEMENT that is recorded with County Hall of records for exterior changes to our homes (140 SFH). PM forwarded to me:
"Homeowners do not have to enter into this agreement it is an option they can apply for during architectual application process. Legal said it did not need to be officially adopted and can be dealt with case by case as they have been doing it since 2016."
To SUMMARIZE the history here. 140 SFHs built in 1985-86. We are still guided under our original CCRs/ Bylaw documents. I was on ARC/Landscape committees for several years, then the Board/Director for years. We are 3 Directors. I upgraded (2002-03) exteriorly my home and yard/fences with the typical ARC appl., no fee, no problems. I took a hiatus from Board & committees for several years but 2022-2023 heard from a few members about this MA $485 recording fee required with ARC appl. I went to our PORTAL for updates.
1- No mention of any fee with ARC application.
2- 2016 Open session minutes had it listed as agenda item. The minutes from that meeting and future meetings have NOTHING, no discussion, no reason, no Board approval.
3- When I ,as President, put it on open session agenda, expecting an OOPS, the 2 Directors + PM met privately in a sudden Exec. session, of which I was blocked, to CENSURE me. "YOU HAVE VIOLATED YOUR FIDUCIARY DUTIES." Actually I was upholding them by asking about this MA $485, brought to my attention by owners. The Censure was meant to intimidate but didn't.
4- Annual elections each May- I am Sec/Treasurer. I have had in on agenda, bimonthly meetings, for over a year; PMC has changed Managers 3 times in the year. The issue became a "kick the can down the road, with today's Manager emailing me "Legal said it does not need to be officially adopted." Per Manager "it's been discussed and no action needs to be taken." ie:no agenda item! Legal has made tons of money with the censure and recording fee, although they "can't find" exactly whom they received the $485. from?

🎯 You've read this entire discussion

Join the conversation with 50,000 HOA & Condo Leaders:

✓ Ask follow-up questions
✓ Share your experience
✓ Get expert advice
✓ Access 350,000 discussions

Create Free Account →

⚡ Takes 30 seconds

Already a member? Log in here