Help!!! SOS! Renegade HOA Board Has Run Amuck!

Hello!

I am a HOA volunteer for my development in Tennessee. My development is a small one (under 50 units) consisting of condominiums. We have a HOA board consisting of four (4) members.

In December 2007, the HOA board suddenly fired the development's management company without consulting the homeowners or obtaining a two-thirds majority vote.

Since then, the four board members have not hired a new management company. The HOA board has also not held any meetings with the homeowners and have exempted themselves from paying association fees. Our development's Master Bylaws are also a mystery. The board members refuse to provide a copy and the homeowners are at a loss as to where they can obtain a copy.

Most troublesome, is the fact that the homeowners have suddenly been asked to start sending their association fees to a PO box. The Treasurer refuses to let the homeowners have access to her books. On one occasion this month, a homeowner visited the Treasurer's unit (the Treasurer wouldn't return calls or emails) and asked to have a meeting with the Treasurer to discuss finances. In return, Treasurer called her a really bad name and slammed the door in her face. In addition, her husband is having troubles with the law and as expected, many of the homeowners are reluctant to send their fees to the Treasurer. The homeowners now being sent letters stating we are to pay late fees.

I have had limited success in finding Tennessee law related to HOA's. The only place I have found information, thusfar, is in the TCA. Section 66 has some information but nothing to the extent to which I had hoped.

The homeowners could really use help and I am running out of avenues of research to pursue. As I stated before, the development is a small one and cannot afford hefty legal fees. Any advice?

Please advise. Thank you for your assistance!

Been there..done part of that..and it will get worse..please follow the good advise..find an lawyer who specializes in HOAs..please don't let it go any further..it will just get more expensive to correct.
Maryn

In December of 2007 they "fired" the management company out of the blue for no reason (that you know of), without asking permission to do so or obtaining a 2/3s vote.

Now they are asking the dues to go to a PO Box and indicating they will collect late fees.

First, I don't think December 2007 is all that long ago. So I'm not sure a month, give or take a few weeks, is adequate time to evaluate "amok" time nor is it extremely long to not have a replacement management company, depending on why the current one was dismissed. Now, if it were December 2006, and things were not quite back on track, I would then be getting a little concerned.

Also, since no one has consulted the by-laws, how do we know they need a 2/3s majority to fire the management company? You say you don't know where to get copies of the by-laws, but that would be my question here, were I to be the one writing for advice. The "by-laws" or other governing documents may well give the board complete discretion in matters such as that.

I would also not be thrilled if someone showed up on my doorstep demanding to see the books, especially since having taken possession of them for less than a month, I may STILL not be finished investigating them myself.

I would have asked the person to leave and come back after scheduling a mutually agreeable time, in which case it's not totally unreasonable for that person to then go out into the community and claim that I might have thrown her out, been rude or whatever.

I'm also not sure how anyone knows that the 4 board members have exempted themselves from paying dues, but I'll let that go for a few minutes.

It's clear emotions are high right now. The board clearly needs to make some serious communication efforts with the community.

However, it also appears there might have been some issues that they themselves stumbled upon with the management company and are just trying to sort them out right now.

I find the comment that the treasurer's husband is having "troubles with the law" a little vague and somewhat inflammatory. What sort of "troubles"? What is the basis for this speculation and/or knowledge? and, quite frankly, if the check is made payable to the HOA, then what difference does it make? If she is the treasurer, she could just as easily write herself or her husband a check and get to your money that way. So are you accusing her of stealing the HOA money? Or just diverting your checks before they are deposited? Sounds pretty outlandish to me.

In addition, if the board is trying to take care of some of the PMs functions immediately, such as collecting dues, it's not unreasonable at all for them to indicate in the billing notice that late fees will be applied. Especially if one of the things they have uncovered is that the PM never attempted to collect late fees that are allowed.

So, rather than an amok board, I see a community who just hasn't been informed of some critical information and needs to have it directly from the horse's mouth instead of through the clearly biased grapevine.

I find it somewhat a stretch to believe that 4 people would just all of a sudden decide to take over a development and steal the funds and ride off into the sunset.

MichelleB - I agree in theory with most of what you post but if an MC is fired, there should have been immediate communication to the community. A defensive position, of which the Board has taken, is not in anyone's best interests, nor neighborly. I say defensive because the Board is disregarding the community. No communication to the community of the transition period between MC's, no reassurance to the community that everything will run smoothly, etc. That to me is blatant disregard and actionable. The Board seems to be self-managing right now. I don't know about ShaunaB's HOA but in mine, self-management is not permitted unless the community votes upon it. Bottom line though, the worst thing that an owner could do is not pay what they owe in maintenance to the association. That's plainly foolish and cause for late fees.

Gosh, some really good responses here--thank you for your help!

Sorry I am being rather vague on some of the items. I am a "newbie" here and according to the rules of the forum, I was trying not to get too specific on names and details.

Let me give a little more detail on things where I can. I will take MicheleD's comments and address them for more clarity.

“First, I don't think December 2007 is all that long ago. So I'm not sure a month, give or take a few weeks, is adequate time to evaluate "amok" time nor is it extremely long to not have a replacement management company, depending on why the current one was dismissed. Now, if it were December 2006, and things were not quite back on track, I would then be getting a little concerned.”

RESPONSE: I agree that December 2007 isn’t that long ago. However, the extremely hostile attitude and actions of the board members that the homeowners have encountered is what is very disconcerting.

“Also, since no one has consulted the by-laws, how do we know they need a 2/3s majority to fire the management company? You say you don't know where to get copies of the by-laws, but that would be my question here, were I to be the one writing for advice. The "by-laws" or other governing documents may well give the board complete discretion in matters such as that.”

RESPONSE: The former PM told us in one of our “town hall” meetings, that according to our bylaws we need two-thirds majority for all major decisions. That is why I want to get a copy of the bylaws to confirm it.

“I would also not be thrilled if someone showed up on my doorstep demanding to see the books, especially since having taken possession of them for less than a month, I may STILL not be finished investigating them myself."

RESPONSE: I agree, I wouldn’t be thrilled either! However, homeowners have tried contacting the Treasurer by phone and email (numerous people, numerous times) and she refuses to respond to anyone. Are we missing something here? Should we be doing things differently? If so, what else should we be doing besides phoning and emailing? I understand if the Treasurer hasn’t had the time to look at the books; however an acknowledgement of the attempts to contact her would have been nice. Something along the lines of “I have received your calls and emails and will be back in touch with you when I have had time to examine the records in greater detail” would have been a little better than calling the woman who came to her house a "B!t@h" and slamming the door in her face!

“I'm also not sure how anyone knows that the 4 board members have exempted themselves from paying dues, but I'll let that go for a few minutes.”

RESPONSE: We know this because at least one of the board members has point blank told fellow homeowners that the board have exempted themselves.

“I find the comment that the treasurer's husband is having "troubles with the law" a little vague and somewhat inflammatory. What sort of "troubles"? What is the basis for this speculation and/or knowledge? and, quite frankly, if the check is made payable to the HOA, then what difference does it make? If she is the treasurer, she could just as easily write herself or her husband a check and get to your money that way. So are you accusing her of stealing the HOA money? Or just diverting your checks before they are deposited? Sounds pretty outlandish to me.”

RESPONSE: I can see how that comment would be somewhat inflammatory without knowing the bigger picture. To avoid accusations of libel, I am not going to elaborate in any further details on why he is having troubles other than to say that the type of activities he has been involved with have directly impacted our community, thus the collective concern. To answer your question about “our basis for this speculation/and or knowledge”, I can tell you that the husband is in court today (1-22-08) for his actions. PLEASE NOTE: I would like to clarify that I’m not stating no am I are aware of of any malicious activities the Treasurer has had with our money thus far.

“In addition, if the board is trying to take care of some of the PMs functions immediately, such as collecting dues, it's not unreasonable at all for them to indicate in the billing notice that late fees will be applied. Especially if one of the things they have uncovered is that the PM never attempted to collect late fees that are allowed.“

RESPONSE: The former PM was very diligent about collecting dues and imposing late fees and collections proceedings. I know because the homeowners have received actual physical documents from the former PM at previous meetings outlining this.

Hope this clarifies somewhat. I have absolutely no doubt whatsoever that being a board member is a difficult and thankless job! God bless them for even volunteering to do the job! However, business should be done in a professional manner no matter if it is a Forutne 500 company or a small HOA.

We are diligently trying to work with the board, but they need to work with us as well. As such, trying to settle this in an amicable and adult manner should be a top priority. The homeowners are just trying to get a good idea of what their rights and remedies are given the current situation. Without clear research tools available for our state, we need all the help we can get!!!

Thanks for everyone's responses--they are greatly appreciated!

Shauna,
Do an on line search of your county court house records.
Seach for, Business Licences, non-profit corp, search your name, search deeds section, search tax records, etc.

Get what you can get. Google, individual names, Property Management names.

With the # of units you have look at self management, you sound like you could even do the job.

Search your developer, contact him and request documents about turning over place to owners. Someone knows and there are records and you will need them as time passes. Get a supporter to help.
Don't try and hide what you are doing, everything in the open and as you say, then sit down with owners and work it out.

Hi, Shauna, and thanks for some of your clarifications, but I still am very hesitant regarding the SOS.

A couple things, for the sake of further clarification. Please don't take my comments personally by any stretch of the imagination. I'm trying to view a dynamic, 3D scenario through a static, 2D environment.

First, I'm not sure it would be libel if it's a true statement, not made maliciously. In other words, if he is "in court today" over the legal issues, then what he has been charged with, or is defending himself against, is a matter of public record. Simply stating what the charges against him are is not libel. If he is defending himself against, say, extortion or embezzlement, or some similar criminal act, then I can see the neighborhood being concerned, but if it's for a civil action, say breach of contract, then maybe not.

Anyway, this comment: RESPONSE: The former PM was very diligent about collecting dues and imposing late fees and collections proceedings.

If the former PM was very diligent about collecting dues and imposing late fees, then why would the neighbors be concerned that the board would be doing the same thing? That confuses me somewhat.

Also, I still am somewhat ambivalent about taking third-hand information at face value in cases like this where flow of critical information is impeded. Like I said, the treasurer may have reacted harshly. Then again, the story may be embellished by someone who is ticked off at not having gotten anywhere with her. A board member may have said something to another homeowner in a way that was misinterpreted as exempting themselves.

I remember an instance years ago where I had mentioned to a neighbor that the board members were paying their dues early that year because we were running in the red and would not be able to pay the remaining expenses for the year. This neighbor then proceeds to tell another neighbor that the board was not going to pay some bills and was giving ourselves a waiver of some sort on the year's assessments. In fact, what we were doing was paying two years worth of assessments in the same budget year, to prevent a cash flow issue at the end of the year.

In your'all's case, since the board is not stepping forward to fill the information void, they are setting themselves up for all sorts of mischaracterizations, comments taken out of context, and false stories making the rounds, and they have to accept that they are totally responsible for the brushfire that is brewing.

I find it difficult to believe, though, that a 4-member board of a 50-member community has absolutely no supporters.

They had to be elected by someone. If there is so much apathy that they were only elected on the strength of their own votes for each other, then the community was in deep doo-doo long ago.

On the other hand, if there is a contingent of members concerned about the activities that have developed, and the board members themselves have imposed some sort of communication black out, I would probably suggest that 2 or 3 of the more articulate and less emotional of the concerned members approach some of the board's supporters and talk to them to see what they can do to possibly help get a foot in the door.

I would be as conciliatory as possible, stressing that the main thrust is to get accurate information into the community as quickly as possible to avoid what is rapidly becoming a PR nightmare at best, and, as someone else mentioned, an actionable issue at worst. The goal should always be what is best for the community. The board may well be thinking that is what they are doing, acting in the best interest of the community. But if they aren't sharing any information with anyone, it's really hard to make that determination.

Also, I just have to ask: Were you close to the former PM? Are the people who are viewing the board's actions as those of a renegade board also close to the former PM? Is it possible that some of that loyalty might be flavoring the perception of the board's actions?