Quote:
Posted By KerryL1 on 02/17/2024 6:11 PM
because Mary states in this thread that the CC&Rs' Matrix requires owners to "repair" their decks, how can a Board majority vote that, instead, the HOA is obligated??
My observations:
-- This forum does not know whether this maintenance matrix is in fact in the CC&Rs.
-- If the matrix is in the CC&Rs, then it is not entirely consistent with what MaryL20 posted in the other thread.
-- Either way (either not in the CCRs; or in the CCRs), I figure the board is going to claim that the wording of the covenant is what matters; the board has the lawful discretionary right to deem the waterproofing a "repair"; and so per the covenant (the board declares) the HOA must pay for the "repair."
Quote:
Posted By KerryL1 on 02/17/2024 6:11 PM
A major job of the Board is to enforce the governing docs. And yes, I keep hoping Mary will clarify the wording and doc much better.
More, how can this Board majority assert with a straight collective face that the entire HOA membership of 40 pay for repairs to 10 decks--3 of which belong to directors-- serves the best interests of the HOA per the Business Judgment Rule?
I think the board, being all-powerful at the moment, would say simply that (1) the covenant (not the matrix) says what it says; and (2) absent a conflict of interests, the board has a discretionary right to decide what is "maintenance" and what is a "repair," as long as the board is "reasonable" in the exercise of this discretion.
I actually think it is
not unreasonable to deem the waterproofing a repair. I would not say this. I think waterproofing
is "maintenance." But I also would not say want to go to court over this particular point.
Quote:
Posted By KerryL1 on 02/17/2024 6:11 PM
https://www.davis-stirling.com/HOME/D/Director-Conflicts-of-Interest
"Regardless of whether he has a material financial interest, a director ‘may not make decisions for the association that benefit their own interests at the expense of the association and its members.’ Raven's Cove Townhomes, Inc. v. Knuppe Development Co. (1981) 114 Cal.App.3d 783. A director who breaches the basic fiduciary duties are liable to the Association. (Id.) Where a director finds himself in a position to vote on a matter in which he has a personal interest, he should be recused.”
All of this is relevant, but I do not think it is dispositive here. Corp Code 7233 aside, whether the directors in the OP's case are violating their fiduciary duty is not something that is clear cut IMO. Why? Because the covenant says what it says, and because IMO the board has some discretion in determining what is maintenance and what is a "repair."
Quote:
Posted By KerryL1 on 02/17/2024 6:11 PM
"3. Just & Reasonable. Even if the director makes full disclosure and avoids influencing the vote, the transaction must be fair and reasonable as to the association at the time it is authorized, approved or ratified. (Corp. Code § 310; Corp. Code § 5233; Corp. Code § 7233 .)"
The "just (or fair) and reasonable" part of the above was very much on my mind when I responded to DeanJ a little while ago. But per 7233, and by my reading, it does not kick in until certain conditions are met.
Quote:
Posted By KerryL1 on 02/17/2024 6:11 PM
I also do not think Corp. 7233 is quite the appropriate citation in Mary's case.
Then quote what you think is.
I saw Civ Code 5350 and do not believe it applies.
This is just
my opinion. If you post something to change my mind, I will say so. Else my
opinion stands.
Obviously I am pretty sick of several of you repeatedly characterizing statements of mine (carefully qualified with "IMO" and the like) as my asserting a fact.
I> feel Corp Code 7233 applies, but as I posted earlier and as I wrote Dean, I believe the board could push back. (Plus Dean or anyone is certainly entitled to their opinion that a "transaction" is not taking place.) If the board pushes back on a claim the board is violating Corp Code 7233, then other steps are needed.
All I am saying is Corp Code 7233 is where I would start, as far as violations of statutes and covenants are concerned.