Illegitimate HOA president

Started by MM16 • 46 replies • 395 views

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MM16 (Oregon)
Posts: 11

Posted:

Hello community,
I am looking for some clarification regarding our HOA issue.
We are an 8 unit duplex community in Portland, OR. Badly managed over the years, buildings are from 1930s.
We have been owners for 10 years.
One of the owners got married 4-5 years ago and her husband moved in to live with her.
He was elected president (by voting) in June 2021.
However, he became a legal owner and got his name on the deed almost a year later, in July 2022.
His term was supposed to be 3 years, by our bylaws.
Also, our bylaws and state law require a person to be an owner (not a resident) in order to hold HOA Presidency.
He made numerous bad decisions, acted on his own for project that cost us 30K +, never got the approval from the majority, completely depleted our reserve funds, so we had to come up with a large assessment to cover the loss and replenish our HOA funds. He was using funds recklessly and many times without the approval from the rest of the members.
When we found out that he was not legally elected, he hastily resigned, stating other reasons.
Question:
Are his decisions considered legal?
Can we overturn them and sue him or the Board?
He does have friends in the community who are trying to cover for him and present his actions as legal.
He didn’t have any insurance at the time.

I would appreciate any guidance regarding this situation.

Thanks!

TimB4 (Tennessee)
Posts: 21,062

Posted:

The members elected him to serve as a Director and as a President (they are two different positions).
He served in that capacity.
The fact that neither the Board nor the membership questioned the eligibility of the individual to serve is on them - not the individual.

Expecting that the funds were spent on behalf of the HOA and not for personal gain (repair his automobile as an example), and they were keeping with the applicable provisions of ORS 65.357, 65.361, 65.367, 65.369 and 65.377, I don't think the decisions can be challenged.

They may have been very bad decisions, but they were decisions made on behalf of the association.

Feel free to spend some funds and seek an actual legal opinion (as I am not an attorney).

GregoryT1
Posts: 315

Posted:

Hi OP you stated that he never got approval from the majority. Is that majority of the homeowners or the board?

He got elected without anyone looking at his credentials? Is this a bad actor or bad owners who allowed this in the first place.

I agree with TimB4.

CathyA3 (Ohio)
Posts: 6,299

Posted:

The persons who are responsible for this mess are the board that appointed an unqualified person whom they allowed to make decisions by himself, and the membership who did not keep an eye on what was happening and push back sooner. The membership should have seen that the board was not doing their jobs, removed them, and replaced them with volunteers who would act in the best interests of the association (which would include replacing the president, since it's very likely that your bylaws give the board the authority to appoint and remove officers, with or without cause).

I do not think a lawsuit is a good idea. They cost money (lots), take time (lots), often tear communities apart(*) - and it's likely that the association's insurance would come into play. I don't know how much attention you've been paying to what's happening in the insurance market, but associations are seeing skyrocketing premiums or even losing their insurance altogether. Unless the president wasted a ridiculous amount of money - and a small association probably wouldn't have much - you could easily spend more on lawyers than you could recoup, even if you won in court. And that's without whatever hit you'd take with insurance.

If you're determined to go this route anyway, I suggest getting together with some of your neighbors and buying a couple hours of an attorney's time to explore whether you have any recourse and what your chances are. My usual caution applies: treat this as a financial decision only. So many HOA disputes involve lawsuits because people are ticked off, and when emotions call the shots, financially unwise decisions often result.

(* This is especially true in very small associations since you live on top of each other. It can be very unpleasant to be at odd with neighbors you can't avoid seeing, and you depend on each other in ways owners in large associations don't.)

MM16 (Oregon)
Posts: 11

Posted:

Thanks for the answer, according to what you are saying, he could have stayed a president and continue making decisions on behalf of the HOA since no one checked his credentials = not his fault. I get that. But he resigned right after we discovered that.
Pretty much any person ( including the renters ) could have been elected and serving on the board.
We were not the members of the previous board, so who was supposed to check his credentials?
He made a decision to do extensive work by himself, without consulting any other board member and it wasn’t an emergency repair.
Perhaps it is a question for the lawyer.

MM16 (Oregon)
Posts: 11

Posted:

Thank you so much for your reply, My previous message was intended for the previous comments.
I do agree with almost everything you stated.

TerriS6 (California)
Posts: 3,284

Posted:

Whatever he did as a director or officer during the time his name was not on title can be overturned.

TerriS6 (California)
Posts: 3,284

Posted:

Your association’s insurance likely will not cover or protect him for what he did.

ElleN (Idaho)
Posts: 1,338

Posted:

Quote:

Posted By MM16 on 11/01/2024 1:25 PM

One of the owners got married 4-5 years ago and her husband moved in to live with her.
He was elected president (by voting) in June 2021.

And no one objected in any way, shape or form. Legally speaking and if this went to court, the latter supports his being the lawful president even thought he might not qualify as an owner.

Quote:

Posted By MM16 on 11/01/2024 1:25 PM
However, he became a legal owner and got his name on the deed almost a year later, in July 2022.

Not so fast. If your HOA's governing documents are vague about the meaning of "owner," then this man might very well have been an "owner" pursuant to Oregon law on marriage and property ownership, or at least a court might rule thusly.

The biggest problem is this guy did all these things (you claim) and only now is anyone saying anything.

You speak of the president needing approval from "the rest of the members." But normally a HOA's governing documents require approval only from the board.

I think you would have to say much more about what the guy did wrong for people here to judge whether insurance would cover any mistakes or whether the HOA could say take the guy to court.

Do you know if the HOA even had insurance during this period? Does your Declaration require the HOA to have insurance?

Is your HOA subject to the Oregon condominium statute? Is it a condominium?

So far I tend to agree with the others here that you and your fellow owners should take responsibility for your own lack of action (a court might very well say the same, just in legalese) and go forward without trying to nail the guy or try to get compensation from him or the insurer.

By the way, insurance for condos and HOAs these days is a nightmare. Many condo associations and HOAs are no longer insurable.

BillD16 (Texas)
Posts: 973

Posted:

Quote:

Posted By ElleN on 11/01/2024 7:05 PM

So far I tend to agree with the others here that you and your fellow owners should take responsibility for your own lack of action (a court might very well say the same, just in legalese) and go forward without trying to nail the guy or try to get compensation from him or the insurer.

I agree with ElleN. It sounds like you have other pressing problems and you would all be better served by addressing *them* versus going after your former President.

(BTW, his stepping down when informed of the rule doesn't sound like fault to me; based on what little I know, it sounds like he took steps to comply with the rules as soon as he became aware of them).

I'm sorry, but the fact that you said "He was elected president (by voting) in June 2021" makes me think that you need to go and read your governing documents and learn more about how your HOA functions. Oregon or your HOA might be different, but many / most HOAs have Board Members (aka Directors) who are elected by Members. And then Board Officers (like President) are elected by a vote of Directors.

I don't mean to be unsupportive, but it seems like you have a very small, very disinterested HOA, and whatever his faults, this fellow was trying to help out. I'm going to guess he had very little help or support. That he was not technically eligible for the role because he married an owner but was tardy about getting his name on the lease seems like a trivial technicality.

Bill

HOA Board ex-President
Austin, Texas USA

“You can’t put too much water in a nuclear reactor”

GregoryT1
Posts: 315

Posted:

hey MM16 hang in there. Sometimes on this discussion board we get over excited on topics. However the discussion board brings in a lot of experience. They have helped me.

When we have postings we generally have to extract the facts from the story. That is exactly what happens in a court case. You do not necessarily want to go to court. You might need to dig into your docs but I am thinking what the person did was a flawed best interest of the condo assn. What you will need to find out is if fraud was done. That is entirely something else and a different topic.

As we see it he got elected and things were done and no one did any checking. So is it him or is the assn members or the board. I am still not clear on the who, what , when where and the why and how.

Keep posting questions or fill us in on details and we are here to help.

MM16 (Oregon)
Posts: 11

Posted:

Thank you so much, I will do my best and try not too go too wide

Interesting points, however our bylaws clearly state that the person who is elected on the board has to be on the title. Oregon law states the same.
ALSO, I forgot to add - his wife wasn’t the legal owner either, it was her father!
And the former president was a bully, always trying to push his own agenda, inconsiderate screaming psycho. He had 2 friends among the owners and the rest of us tried to expose his wrongdoings with no success. For example - it was voted ghat no one can do anything in the front of their units without the approval of the HOA. Then he creates a new patio for him self! So, that kind of a guy. He treated us in condescending ways, often screaming and yelling. He acted as he owned the community.
He stepped out because he was extremely angry we found out that he was illegitimate. The board of directors didn’t have any insurance at the time. He enabled his friends in the community to benefit from his decisions. Approved the work that had to be voted on. We had to use $30K from our emergency funds to cover that work with totally non transparent invoice! The story is very long for people to read it here.

MM16 (Oregon)
Posts: 11

Posted:

So, yes, the question remains who is in fact responsible for this? We believe the Board of directors should have checked his credentials before accepting him as a President. We came in already established HOA, they existed since 1980s.
When we found out about this violation, we reported it right away. He caused so much pain and suffering to us and hurt us financially. We experienced a hardship because we had to come up with thousands of dollars to cover for his mistakes.
Seems unfair that he walked out just with a little slap to his ego.

TerriS6 (California)
Posts: 3,284

Posted:

Your Declaration probably states that only an owner can be a member and only a member can be a director. While other directors should have caught that neither one of the couple was a member, any member of the association can enforce the CC&Rs so any member could legally challenge any of the decisions made by this non-member director. None of his votes would count. His being present at the meetings would not contribute to a quorum. People sometimes criticize membership for not paying attention but I believe the purpose of having a board is to take the burden off the members who are entitled to expect their board is doing the right thing. But when you find out something this serious, you have options to remedy the damage caused.

TerriS6 (California)
Posts: 3,284

Posted:

Quote:

Posted By MM16 on 11/01/2024 8:39 PM
So, yes, the question remains who is in fact responsible for this? We believe the Board of directors should have checked his credentials before accepting him as a President. We came in already established HOA, they existed since 1980s.
When we found out about this violation, we reported it right away. He caused so much pain and suffering to us and hurt us financially. We experienced a hardship because we had to come up with thousands of dollars to cover for his mistakes.
Seems unfair that he walked out just with a little slap to his ego.

By the way, as a faux director, he was not covered by the association's directors & officers insurance so he could be personally liable for all that lost money.

GregoryT1
Posts: 315

Posted:

hey MM16 you did something brave you actually got back to us.

This is for the discussion board.

Two patterns I have noticed since being part of the discussion board.

1. I asked why do we keep posting amongst ourselves when the OP does not respond. Someone mentioned we do it because of posterity so we can finally come to some type of answer. Well if the OP is not around anymore on the thread did we really help? We need to make the OP comfortable enough and ask some questions to get better information and that will get better solutions.

2. We at times scare the OP. I heard comments that the OP does not want to hear what we have to say since it is not what they want to hear. I think differently. We come across as being very rude and abrasive and scare the OP. A manager used to say you can attract more bees with honey than with vinegar. This is not all members but enough members that we scare them. This thread does not look like some others that I have seen.

All of us here are trying to help a OP and get some solutions for them. I am glad MM16 is hanging in there with us.

MM16. Hey we are onto something. Let's discuss the details of the biggest financial issue and what exactly happened. This way we can see if fraud or something else was done or not. When dealing with money amounts round up to whole numbers like 10k or 30K as you stated. What was the work who approved it. An example is that patios are done for everybody but no one approved it. The construction company shows up and starts working on it. Did anyone tell them to stop? Who signed the contract? Who is allowed to sign the contract? We would need an objective sequence of events because you might have something there where there could be some action steps. This discussion board members have gone through litigation etc so they have seen everything.

Like I said the discussion board is best when it's a two way communications and thanks for getting back to us. People on the board really put a lot of time all the time in helping out. They are here to help since we don't get paid for it. We must like it.

TerriS6 (California)
Posts: 3,284

Posted:

Well said.

TimB4 (Tennessee)
Posts: 21,062

Posted:

Quote:

Posted By TerriS6 on 11/02/2024 3:58 AM

By the way, as a faux director, he was not covered by the association's directors & officers insurance so he could be personally liable for all that lost money.

I would disagree with that.

Per the OP, he was elected into that position and served in that position.
Granted, per the OP, he didn't qualify but nobody checked until the money was spent.

As an individual elected as a Director and appointed as President, if the money was spent in support of the HOA, I think they would be covered.

Of course, two individuals disagreeing is the reason attorneys and courts exist.

TimB4 (Tennessee)
Posts: 21,062

Posted:

I also think that since the legal action from a member would have to be against the entire Board for failure to verify eligibility - not just the one individual.

Legal action from the Association against the individual for failure to obtain prior approval before spending the money would be an interesting case. Of course D&O insurance would not cover Director v Director actions and, because the board failed to verify eligibility - they would be the negligent party.

TerriS6 (California)
Posts: 3,284

Posted:

Quote:

Posted By TimB4 on 11/02/2024 5:58 AM

The law and the governing documents give power and authority to duly elected directors. The resident was not eligible to be elected a director. If he was only an officer, he still would not be eligible to vote with the board. All the board's actions that included him were evidently ultra vires, or beyond the powers of the corporation - if it's a corporation. It was not a duly elected board. There was no authority to spend the association's money with a non-director voting on actions. He is accountable to the association.

TerriS6 (California)
Posts: 3,284

Posted:

Quote:

Posted By TimB4 on 11/02/2024 6:02 AM
I also think that since the legal action from a member would have to be against the entire Board for failure to verify eligibility - not just the one individual.

Legal action from the Association against the individual for failure to obtain prior approval before spending the money would be an interesting case. Of course D&O insurance would not cover Director v Director actions and, because the board failed to verify eligibility - they would be the negligent party.

Any member can sue to enforce the CC&Rs or the law. Whether or not the duly elected directors can be held liable for verifying a candidate's eligibility is one thing. Knowingly making decisions to spend association funds when one knows he has no authority to spend the money is another.

TerriS6 (California)
Posts: 3,284

Posted:

MM16, you may want to check the statute of limitations for suing him. Now that he's on title, you can get a judgment and collect on his assets.

TimB4 (Tennessee)
Posts: 21,062

Posted:

Here is an interesting article that (toward the end) looks at what might happen if someone isn't qualified to serve:

HOA Board Member Disqualified: What Happens to Actions He Participated In? From HOA Leader

Again, it starts out not being applicable to the issue being discussed. However, at the end of the article, it is very relevant.

ElleN (Idaho)
Posts: 1,338

Posted:

Quote:

Posted By MM16 on 11/01/2024 8:19 PM
Tour bylaws clearly state that the person who is elected on the board has to be on the title. Oregon law states the same.

As BillD16 pointed out:

In nearly all HOAs, the HOA is run by both directors and officers (President, VP, treasurer, secretary, other) and directors. The Bylaws typically require the owners to elect the directors. THEN the directors, among themselves, vote for the officers (President et cetera).

It would be best if you quoted exactly what your HOA's bylaws say about how the President is selected. Then note that another section speaks to how directors are selected. Also quote what the requirements are to be an officer and especially, the President.

TerriS6 (California)
Posts: 3,284

Posted:

Quote:

Posted By TerriS6 on 11/02/2024 3:55 AM
Your Declaration probably states that only an owner can be a member and only a member can be a director. While other directors should have caught that neither one of the couple was a member, any member of the association can enforce the CC&Rs so any member could legally challenge any of the decisions made by this non-member director. None of his votes would count. His being present at the meetings would not contribute to a quorum. People sometimes criticize membership for not paying attention but I believe the purpose of having a board is to take the burden off the members who are entitled to expect their board is doing the right thing. But when you find out something this serious, you have options to remedy the damage caused.

Tim, re your link, that's what I wrote above; his presence wouldn't count toward quorum and his vote wouldn't count. But as president, he probably did a lot of things he wasn't authorized to do.

ElleN (Idaho)
Posts: 1,338

Posted:

Quote:

Posted By TerriS6 on 11/02/2024 6:23 AM
MM16, you may want to check the statute of limitations for suing him. Now that he's on title, you can get a judgment and collect on his assets.

And he countersues because of this (and probably other things):

Quote:

Posted By MM16 on 11/01/2024 8:19 PM
The board of directors didn’t have any insurance at the time.

MM16, be advised: Courts will not hold a HOA director or officer accountable unless bona fide, criminal conduct, prosecutable by the local district attorney, occurred. Why? Because the courts, statutes (federal and state) and governing documents alike recognize that these are volunteers, and deterring people who are unpaid from serving on boards is a mistake.

I also remind the OP that either Oregon statutes, this HOA's governing documents or both likely require that officers and directors be indemnified for mistakes they make, unless, like I posted above, the mistake is a bona fide crime.

"Indemnified" means the HOA pays for the mistakes. Meaning you are back where you started: Paying for this guy's mistakes. But if you know this now, you can save a ton in attorney's fees.

From what the OP has described, I see no crimes. Shoddy behavior based in ignorance and questionable ethics maybe, but no crimes.

Hopefully the thread starts the OP on a path to greater understanding of the legal structure of HOAs and helps prepare him/her for a meeting with a competent HOA attorney. Though I have seen enough to believe that the OP should not pursue compensation from either the owner in question here or the board in power at the time. Instead, take this experience as a great education in how HOAs are run.

ElleN (Idaho)
Posts: 1,338

Posted:

For the OP's reference:

Appeals courts (for one) have heard a number of cases where corporate boards violated the bylaws but no one said anything for a long time. How do these courts rule? If the violations went on for a long time with no one saying anything, the courts typically rule that the bylaws were lawfully amended 'by acquiescence' or 'course of conduct.' This is even though the bylaws' own procedures for amending were not followed. Cool huh?

Why do the courts rule this way? Because otherwise, and as is touched on above, untangling the mess is cost prohibitive.

TimB4's article touches on this a bit, without actually using the legalese that the courts use (e.g. "acquiescence").

TerriS6 (California)
Posts: 3,284

Posted:

ElleN wrote: "MM16, be advised: Courts will not hold a HOA director or officer accountable unless bona fide, criminal conduct, prosecutable by the local district attorney, occurred. Why? Because the courts, statutes (federal and state) and governing documents alike recognize that these are volunteers, and deterring people who are unpaid from serving on boards is a mistake."

Not so. Just one example: Palm Springs Villas II Homeowners Assoc, Inc. v. Parth 2016 California

TerriS6 (California)
Posts: 3,284

Posted:

MM16, verify the application please...

ORS 65.367
Liability for unlawful distributions

Text
Annotations
(1)Unless a director complies with the applicable standards of conduct described in ORS 65.357 (General standards for directors), a director who votes for or assents to a distribution made in violation of this chapter or the articles of incorporation is personally liable to the corporation for the amount of the distribution that exceeds what could have been distributed without violating this chapter.
(2)A director held liable for an unlawful distribution under subsection (1) of this section is entitled to contribution:
(a)From every other director who voted for or assented to the distribution without complying with the applicable standards of conduct described in ORS 65.357 (General standards for directors); and
(b)From each person who received an unlawful distribution for the amount of the distribution whether or not the person receiving the distribution knew it was made in violation of this chapter or the articles of incorporation. [1989 c.1010 §91]
Source: Section 65.367 — Liability for unlawful distributions, https://www.oregonlegislature.gov/bills_laws/ors/ors065.html.

ElleN (Idaho)
Posts: 1,338

Posted:

Quote:

Posted By TerriS6 on 11/02/2024 8:13 AM
ElleN wrote: "MM16, be advised: Courts will not hold a HOA director or officer accountable unless bona fide, criminal conduct, prosecutable by the local district attorney, occurred. Why? Because the courts, statutes (federal and state) and governing documents alike recognize that these are volunteers, and deterring people who are unpaid from serving on boards is a mistake."

Not so. Just one example: Palm Springs Villas II Homeowners Assoc, Inc. v. Parth 2016 California

No. The appeals court sent the dispute back to the trial court. All the appeals court indicated is that it is possible that the President-Director in question crossed the line and might be liable, so the trial court needed to do more fact finding.

The courts almost always cannot make things right. When they do, it is after many years and at great expense, yielding at best a Pyrrhic victory.

ElleN (Idaho)
Posts: 1,338

Posted:

Quote:

Posted By TerriS6 on 11/02/2024 8:22 AM

ORS 65.367
Liability for unlawful distributions

The statute section defines "distribution" to be "payment to a person from the income or assets of a corporation, other than a payment of reasonable value to a person for property received or services performed or a payment that furthers the corporation’s purposes."

I do not see any "distributions" being made here.

MM16 (Oregon)
Posts: 11

Posted:

OP here. Thank you all for replies. I am totally open to other people’s opinion.
1. Confusing part is his legitimacy - his term was 3 years, became the legal owner in the second year and most of the his financial mess was created in the second year.
Was his term illegal all the way? I believe it was. But it is a gray area. We can probably overturn all the decisions made before he became the owner but they didn’t hurt us financially that much.

MM16 (Oregon)
Posts: 11

Posted:

2. More info on 30K issue:
The owner next to us bought it 11 years ago and used it as a rental ever since. They had a deck on the common space that was illegally built by the previous owners and current owners used it as a part of their rental. It was big and precluded other owners from using that common space. A couple of us complained to the HOA but were ignored. We wanted to put a table and chairs for everyone to use but the deck was not allowing us so. Over the years, the deck became dilapidated and the owners wanted to replace it and keep it for them selves. A neighbor across from them objected heavily and we voted for the deck to be removed and space to be available to the rest of us as per bylaws. We agreed to pay for demolition and for the new set of stairs fir the owners. Once the contractors removed the deck, well, they found dry rot! The owners wanted HOA to cover it, most of us objected since the deck was illegally built and they new that but made the deck available for their renters and charged more $$. Those neighbors are known for trying to take advantage of the HOA in the past but they became friends with the new president and he was trying to convince us that they were naive (hardly believable, they have properties on West and East coast) and try to cover dry rot from HOA funds. That was 7-8K job. My husband and I objected and even mentioning a lawyer getting involved. They stopped everything. That was November last year. They demolished the deck and covered the removed siding with tarp. In March of this year they started moving forward and we inquired about the payment. The president informed us that they decided to change the windows on that side and will pay a portion of the siding. We objected again. Before we even blinked or got any response, the whole siding was removed and upon our questioning who authorised it and who is going to be paying for something we never discussed we got the answer- the HOA! Here is what the president said - the owners decided to replace windows, their second story window had huge AC installed by their previous tenant. During installation he removed the part of the siding under the window to secure the AC. Once the contractor removed ghat window, they found dry rot under and asked the owners if they should remove the rest of the siding to check for dry rot - owner contacted the president and he gave them verbal ok to proceed. Never asked the board, never contacted anyone. Our buildings are from 1930s, each siding has dry rot, more or less. We were furious knowing that it will cost thousands and thousands more for the siding and that require a proper planning. We were outvoted at the meeting because he has 2 very rich owners friends who wanted cover for him and a third very rich guy who owns 2 condos and sides with them all the time.

MM16 (Oregon)
Posts: 11

Posted:

Tim84 thank you for the info, it is helpful. I have to really read it carefully as I am not familiar with the law language

MM16 (Oregon)
Posts: 11

Posted:

EleN thank you so much for your insight. It is helpful too, but according to what you are saying we stand no chance, because it is a volunteer position and we gave him a power to act on our behalf, we are responsible. I don’t really understand why people go to court and sue HOA anyhow if it seems doomed? But again, it may just be a reality I am not aware of.
I have to look at the bylaws to see what they state exactly.

GregoryT1
Posts: 315

Posted:

It looks we have a governance issue. You have a small condo assn. They roll real different than the big condo outfits. I am in a tiny one.

How many directors are there? Also did they get elected or not? That is the political part.

The dry rot is good old fashion facility maintenance that did not happen. . Does anyone have a history on the siding? When was it last replaced? Dry rot I am assuming it's wood siding. Is the siding dry rotted or the stick construction compromised? That is the underlying support beans, rafters etc. So does it look like the entire siding is rotted in all areas? How many structures or is this one entire structure? If you dry rot all around then no maintenance was ever done. If dry rot was around the problem areas only like the deck and the AC then that was specific to the owners. The deck and AC is a problem since prior owners did something and the HOA did nothing.

MM16 (Oregon)
Posts: 11

Posted:

Hi GregoryT1, thanks for your input and encouragement.
We have 8 units/7 owners ( one person owns 2 rentals).
3 people in Board of directors, president, secretary and a treasurer. They all got elected,, except that secretary resigned 7-8 months ago stating he was unhappy with the HOA business conduct.

MM16 (Oregon)
Posts: 11

Posted:

As for the dry rot, they found it under the window where their tenants’s AC was mounted and pointed out that since the renters removed the part of the siding that caused dry rot to spread. We don’t know how much damage was really there from the negligence or from their AC. The siding is wooden, we couldn’t find any info regarding the maintenance except the painting, I believe every 10 years.
Moreover, they wanted HOA to pay for the window installation as well, citing dry rot.
Looks like that any of the owners can go ahead with the window replacement and force the HOA to pay for the siding as well. The owners also wanted to add insulation and that can be done only by removing the entire siding.
We feel we have been manipulated into paying for more work then necessary.

GregoryT1
Posts: 315

Posted:

hey MM16

This part will deal with the owners. I am thinking there is one unit one vote. Also I am thinking in elections simple majority wins. So with six owners and one (double owner) you have to figure who stands with who. The treasurer who resigned fled. What I mean you basically have three responses flee, fight of freeze. So they left in disgust. Also I am assuming the three directors who got voted slotted into these positions. I could be wrong and the directors got elected and they appointed the officers?

The prior president was he elected as a director or appointed?

You will need to run a party ticket of three like minded folks to be directors. The treasurer might be a candidate. If the three of you lose then you will be the safeguard for all of the rules in the condo assn and hit them high or low for every item. That will be a separate discussion. The past is just that but going forward you and others will need to act differently to affect change. Tough sledding ahead but comes down to if there is a will there is a way.

I live in crap micro condo and the first five years was delusional state of being fat, dumb and somewhat happy. Last five years a rollercoaster since big items start showing up. We are in a much better state than we ever been and lot more work ahead of us. We never had elections.

Not that we need to as long as we have correct governance and transparency which we have.

Something has to give or change.

GregoryT1
Posts: 315

Posted:

Quote:

Posted By MM16 on 11/02/2024 12:00 PM
As for the dry rot, they found it under the window where their tenants’s AC was mounted and pointed out that since the renters removed the part of the siding that caused dry rot to spread. We don’t know how much damage was really there from the negligence or from their AC. The siding is wooden, we couldn’t find any info regarding the maintenance except the painting, I believe every 10 years.
Moreover, they wanted HOA to pay for the window installation as well, citing dry rot.
Looks like that any of the owners can go ahead with the window replacement and force the HOA to pay for the siding as well. The owners also wanted to add insulation and that can be done only by removing the entire siding.
We feel we have been manipulated into paying for more work then necessary.

The dry rot issue is part of the HOA. Also are you stating you have a group of duplexes so you have multiple buildings? You will need to dig into your docs to find out who is responsible for what. I am in condo and we are responsible for windows. If the siding is screwed up can they reinstall the existing windows or are window HOA? Who pays what is important.

A decent link for windows and siding.

https://johnmccarterconstruction.com/which-should-you-replace-first-windows-or-siding/

So with your thread you have really illustrated the problems with condo and hoa. It's a toxic waste drum of legal, facility management, politics and a business enterprise. Throw in the people factor and it make anyone want to move to an island. I kid you not.

Be positive and always think of action steps to take. A step at a time. keep moving. and hang in there.

TerriS6 (California)
Posts: 3,284

Posted:

Quote:

Posted By MM16 on 11/02/2024 10:33 AM
OP here. Thank you all for replies. I am totally open to other people’s opinion.
1. Confusing part is his legitimacy - his term was 3 years, became the legal owner in the second year and most of the his financial mess was created in the second year.
Was his term illegal all the way? I believe it was. But it is a gray area. We can probably overturn all the decisions made before he became the owner but they didn’t hurt us financially that much.

Yes it was illegal all the way unless there was a 2nd election. He was not eligible to be a candidate therefore his election was invalid.

ElleN (Idaho)
Posts: 1,338

Posted:

Quote:

Posted By MM16 on 11/02/2024 11:08 AM
I don’t really understand why people go to court and sue HOA anyhow if it seems doomed?

by my massive reading of HOA cases, I think the most frequent reason to sue their HOA is to enforce either the bylaws, covenants or state law. Here what you all want is to be 'made whole' for the harm the President did. Homeowner association lawsuits like the latter are rare.

The case TerriS6 cited is worth a read. As interested, see https://www.davis-stirling.com/HOME/Case-Law/Palm-Springs-II-v-Parth

Caveat: The appeals court ruling was not about the substantive claims. Instead and as is common, the appeals court ruling was about procedural problems with the summary judgment ruling by the trial court.

What I find interesting is the plaintiffs choice to sue the President where the facts do not seem all that much on the side of the plaintiffs, and the risk of the Plaintiffs losing seemed IMO high.

I just read an update to this case. The case went to trial in 2018. The (former) HOA president won, and on grounds like those described in posts above. See https://www.fiorelaw.com/case-law-parth-trial-court-decision/

BillD16 (Texas)
Posts: 973

Posted:

Quote:

Posted By MM16 on 11/02/2024 10:33 AM
2. More info on 30K issue:
The owner next to us bought it 11 years ago and used it as a rental ever since. They had a deck on the common space that was illegally built by the previous owners and current owners used it as a part of their rental. It was big and precluded other owners from using that common space. A couple of us complained to the HOA but were ignored. We wanted to put a table and chairs for everyone to use but the deck was not allowing us so. Over the years, the deck became dilapidated and the owners wanted to replace it and keep it for them selves. A neighbor across from them objected heavily and we voted for the deck to be removed and space to be available to the rest of us as per bylaws. We agreed to pay for demolition and for the new set of stairs fir the owners. Once the contractors removed the deck, well, they found dry rot! The owners wanted HOA to cover it, most of us objected since the deck was illegally built and they new that but made the deck available for their renters and charged more $$. Those neighbors are known for trying to take advantage of the HOA in the past but they became friends with the new president and he was trying to convince us that they were naive (hardly believable, they have properties on West and East coast) and try to cover dry rot from HOA funds. That was 7-8K job. My husband and I objected and even mentioning a lawyer getting involved. They stopped everything. That was November last year. They demolished the deck and covered the removed siding with tarp. In March of this year they started moving forward and we inquired about the payment. The president informed us that they decided to change the windows on that side and will pay a portion of the siding. We objected again. Before we even blinked or got any response, the whole siding was removed and upon our questioning who authorised it and who is going to be paying for something we never discussed we got the answer- the HOA! Here is what the president said - the owners decided to replace windows, their second story window had huge AC installed by their previous tenant. During installation he removed the part of the siding under the window to secure the AC. Once the contractor removed ghat window, they found dry rot under and asked the owners if they should remove the rest of the siding to check for dry rot - owner contacted the president and he gave them verbal ok to proceed. Never asked the board, never contacted anyone. Our buildings are from 1930s, each siding has dry rot, more or less. We were furious knowing that it will cost thousands and thousands more for the siding and that require a proper planning. We were outvoted at the meeting because he has 2 very rich owners friends who wanted cover for him and a third very rich guy who owns 2 condos and sides with them all the time.

If I were you, I’d forget about all of this “illegal President” stuff and figure out how to deal with the dry rot issues y’all seem to have. From what I recall of seeing this come up before, the first matter to resolve is who is going to pay for it? (Ie, individual owners or the HOA?) And next, you’ll want an inspection to find out what all needs repair and how much it’s going to cost. It may not seem like it, but it seems like you live in an older building that has not been properly maintained, so exposing this dry rot problem is largely a good thing. It’s not some spooky quantum thing where everything is fine as long as no one knows it’s there; it’s there even if no-one observes it.

Good luck with this,

Bill

HOA Board ex-President
Austin, Texas USA

“You can’t put too much water in a nuclear reactor”

GregoryT1
Posts: 315

Posted:

Bill THANKS!!!!!!!!!!!!!!!!!!!!!!

I was being polite in my posts but Bill stated the obvious. Move on and move forward. Tackle the dry rot and you have some politics ahead of your with the elected directors.

Everyone else your conversation is a good one but it needs its own thread. I see two separate thread subjects. The validity of the incorrectly elected official The second how good is legal counsel.

MM16 hope there is enough information for you to take steps. If you need clarification points keep posting or open a new thread.

TerriS6 (California)
Posts: 3,284

Posted:

The first thing I would do is read all the minutes - hopefully they were taken - and determine all the votes and other actions the "president" took. Then I would check the statutes of limitation for what you think he did that was unlawful. Did he authorize any expenditures? Write any checks? Approve any payments? Hire any vendors? If so, get copies of anything with his signature on it. One question I have is would the association itself have to sue him or could individual members sue him? And would the current board members support such an action if the former is true?

GregoryT1
Posts: 315

Posted:

MM16 went above and beyond in giving quantity and quality of information. The President was in with the board. I don't think a small condo assn even has minutes. 15 years plus in my condo we had no minutes. Looking for documents and what he signed etc etc is moot at this point. An illegal deck and illegal AC unit and this condo assn did nothing. It looks like that contributed to the dry rot. There is a big unexpected expense that reared its ugly head and the manner that it was taken care of the OP was not happy with. However what was done (construction method) might have been the correct thing to do. In any case the OP has their hands full with so many items that trying to do signature investigation is not worth the time.

Most small condos are the Mickey Mouse associations and they run into issues on governance and standard operating procedures.

TerriS6 (California)
Posts: 3,284

Posted:

Quote:

Posted By GregoryT1 on 11/03/2024 5:23 AM
MM16 went above and beyond in giving quantity and quality of information. The President was in with the board. I don't think a small condo assn even has minutes. 15 years plus in my condo we had no minutes. Looking for documents and what he signed etc etc is moot at this point. An illegal deck and illegal AC unit and this condo assn did nothing. It looks like that contributed to the dry rot. There is a big unexpected expense that reared its ugly head and the manner that it was taken care of the OP was not happy with. However what was done (construction method) might have been the correct thing to do. In any case the OP has their hands full with so many items that trying to do signature investigation is not worth the time.

Most small condos are the Mickey Mouse associations and they run into issues on governance and standard operating procedures.

Note my comment "hopefully they [minutes] were taken." My comments are based on what it appears the poster wants to know and how to prove it.

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