HOA Board refuses to sign easement. HOA will loose $50,000

JackS20 (North Carolina)
Posts: 271

Posted:

Is this letter I plan to send to other board members to harsh?
2 of the 3 board members hate me and routinely email me personal insults.
The other one I hardly know but he seems nice. He's new to the board so might not realize his mistake.

Draft Demand Letter / Statement

Last fall, over 80% of the membership voted to approve an easement deal with the City, granting access to build a paved greenway through our park around 2040 in exchange for a $50,000 payment to the HOA.

The City has now provided the final paperwork, but three of the five board members are refusing to sign — despite the fact that, as of two weeks ago, our bylaws were amended to remove the board’s veto power. Even before this amendment, the board could only block an item if it received less than 70% approval — and this measure passed overwhelmingly.

I have worked on this agreement for four years on behalf of the community, and it is frustrating that board members are attempting to overturn the clear will of the voters.

This refusal has serious consequences:

It deprives the HOA of $50,000 in secured funds.

It violates the bylaws and the ethics agreement each board member signed.

Board members are obligated to represent the community’s vote, not personal preferences.

If the paperwork is not signed within 10 days, I will have no choice but to pursue legal action to enforce the membership vote and hold individual board members personally accountable for any financial loss to the HOA.

With the annual meeting one month away, this issue will be presented directly to the membership if unresolved

ElleN (Idaho)
Posts: 1,339

Posted:

Have you motioned to consult an attorney and ask the attorney whether directors are required to sign?

Also will the city accept just the President's signature, since this is not a board decision?

DeanJ
Posts: 1,786

Posted:

I don’t have a comment to aid you in this situation, but who authorized you to represent the HOA in a negotiation with the city and was the HOA’s attorney ever involved in this process?

SheliaH (Indiana)
Posts: 6,964

Posted:

(Why do I get the feeling that JackS20 and Wendy M5 are the same person? Some of Jack's emails read a lot like something Wendy would say)

Anyway, is there some reason why you can't discuss all this during an OPEN board meeting? You have your opinion, which is fine, but I think you should give your colleagues the opportunity to say why they have reservations about this in front of everyone. The personal stuff is a distraction, but this is where you rise above it and focus on the subject at hand. If other homeowners attend the meeting and hear all this, they may decide that (1) insulting you is all these board members can do because they can't or refuse to apply careful thought and have chosen to ignore the community vote or (2) they've changed their minds - it happens to everyone for many reasons. It may be other homeowners have also reconsidered and let their feelings be known to these board members. Could it be they haven't gone to you because they don't like you either?

As for threatening to sue, be careful what you wish for - you may get it. I believe you're on the board, so if you're going to sue, you'll need to resign and pursue this, otherwise it's a conflict of interest. Focus on their apparent disregard of the community vote, the information everyone received so they had an opportunity to vote one way or another (and voting has its consequences, good and bad) and the need for the money (e.g. increasing reserves). If this starts getting personal, it will get ugly and nothing will get done. .

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

ElleN (Idaho)
Posts: 1,339

Posted:

Quote:

Posted By JackS20 on 09/04/2025 5:50 AM
Board members are obligated to represent the community’s vote, not personal preferences.

Board members might be legally obligated to comply with the community's vote on certain issues, pursuant to what the Declaration says about these certain issues.

But Boards have a fiduciary duty to not comply with the community's vote and desires on other issues.

I do not like your wording at all.

Why isn't your board consulting an HOA attorney about the several disputes related to this proposed easement? If you respond, "Because an attorney is too expensive," then you have no place speaking about fiduciary duty. Fact: This easement is a highly legal and complicated matter, with liability implications, tax implications and more. You have a fiduciary duty to motion to consult an attorney.

ElleN (Idaho)
Posts: 1,339

Posted:

https://www.hoatalk.com/Forum/tabid/55/view/topic/forumid/1/postid/363030/Default.aspx

TerriS6 (California)
Posts: 3,284

Posted:

The board has no say. This is a membership decision. The membership can vote to remove any directors that will not honor their decision.

ElleN (Idaho)
Posts: 1,339

Posted:

The best approach (both legally and cost-wise) may very well be for the owners to replace the directors.

TerriS6 (California)
Posts: 3,284

Posted:

They can't rewrite the bylaws to start veto power AFTER the members have voted.

And your CCRs probably say that granting use/exclusive use such as this is the province of the membership. The board can't veto a member vote. If they could, then they could veto every director election and stay in power forever. That veto power is UNENFORCEABLE! The CCRs take precedence over the bylaws.

What do your governing documents say about who signs such an agreement and how many signatures are necessary?

Your members are in the driver's seat.

DeanJ
Posts: 1,786

Posted:

Quote:

Posted By TerriS6 on 09/04/2025 1:55 PM
The board has no say. This is a membership decision. The membership can vote to remove any directors that will not honor their decision.

No Terry, this is not a membership decision. Business conducted by the HOA is the responsibility of the board and an owner may not go off a negotiate anything on behalf of the HOA then drag it back to owners for approval.

If this board did anything wrong, they should have sent a letter to the city explaining the person claiming to represent the HOA is not authorized to do so.

TerriS6 (California)
Posts: 3,284

Posted:

Wrong. The membership owns the common areas. Only the membership can grant that kind of agreement.

DeanJ
Posts: 1,786

Posted:

The share holders of IBM own the corporation too, but they can’t do this either.

TerriS6 (California)
Posts: 3,284

Posted:

Different type of corporation with different laws.

LoriM15 (Florida)
Posts: 1,009

Posted:

Quote:

Posted By TerriS6 on 09/05/2025 3:35 AM
Wrong. The membership owns the common areas. Only the membership can grant that kind of agreement.

Not necessarily true. Depends on the governing documents.

In our documents, the board has the right to negotiate, purchase and sell common areas on behalf of the membership without a vote. In fact, we are in the process of doing thise with three parcels. In our case it turns out the developer quit claimed them to the wrong entity so we are selling from one of our entities (separate corporations) to the other, but we could have sold them to the county or an outside company without a membership vote.

TerriS6 (California)
Posts: 3,284

Posted:

Crazy

ElleN (Idaho)
Posts: 1,339

Posted:

Quote:

Posted By LoriM15 on 09/05/2025 8:32 AM
In our documents, the board has the right to negotiate, purchase and sell common areas on behalf of the membership without a vote. In fact, we are in the process of doing thise with three parcels.

I have seen this at other HOAs as well.

But I ponder the fact that the plats or other maps are often an exhibit to the Declaration. So changing these exhibits means a vote of the membership is required.

Bring in the HOA lawyer.

TerriS6 (California)
Posts: 3,284

Posted:

Very good point.

ElleN (Idaho)
Posts: 1,339

Posted:

Quote:

Posted By JackS20 on 09/04/2025 5:50 AM

Last fall, over 80% of the membership voted to approve an easement deal with the City, granting access to build a paved greenway through our park around 2040 in exchange for a $50,000 payment to the HOA.

Using form 1120-H will tax this $50,000 at 30%. The advertised number should probably be $35,000.

Figure another $10,000 for attorney's fees.

Now you are down to $25,000.

Why does the city want this so much? Why are they willing to pay?

All you seem to see is the money. All I see is a city land use department up to no good, like helping some (already very wealthy) developer.

TimB4 (Tennessee)
Posts: 21,062

Posted:

I suspect that once the city paves it, their park will become a public park that the HOA will have to maintain.
Even if just the walkway is public, there will be added maintenance to the park because individuals will use the park anyway.

DeanJ
Posts: 1,786

Posted:

Quote:

Posted By TimB4 on 09/05/2025 11:15 AM
I suspect that once the city paves it, their park will become a public park that the HOA will have to maintain.
Even if just the walkway is public, there will be added maintenance to the park because individuals will use the park anyway.

It would be very interesting in a deposition to listen to the plaintiff explain why he was authorized to negotiation on behalf of the corporation on this matter and answer question concerning income taxes, and future HOA obligations, expenses, and civil liability as he is arguing he is damaged financially as an owner.

LoriM15 (Florida)
Posts: 1,009

Posted:

Quote:

Posted By ElleN on 09/05/2025 9:58 AM

Posted By LoriM15 on 09/05/2025 8:32 AM
In our documents, the board has the right to negotiate, purchase and sell common areas on behalf of the membership without a vote. In fact, we are in the process of doing thise with three parcels.

I have seen this at other HOAs as well.

But I ponder the fact that the plats or other maps are often an exhibit to the Declaration. So changing these exhibits means a vote of the membership is required.

Bring in the HOA lawyer.

Our attorney (and a separate attorney for our other entity) are involved. We are not changing the plat of the community. Each parcel within the plat is recorded in the county records as a separate item for tax and ownership reasons. My parcel is owned by me, even though it was on the original plat and you can do a title search and see where the ownership changed. The common areas are mostly owned by the HOA. Most of the lakes are owned by our other entity. One of the common area parcels is still owned by the original developer who went bankrupt over 20 years ago. We found that a few of the parcels are owned by the wrong entity and that needs to be corrected. None of this is crucial, but we just want to get the records straight.

DeanJ
Posts: 1,786

Posted:

Quote:

Posted By LoriM15 on 09/05/2025 7:01 PM

Posted By ElleN on 09/05/2025 9:58 AM

Posted By LoriM15 on 09/05/2025 8:32 AM
In our documents, the board has the right to negotiate, purchase and sell common areas on behalf of the membership without a vote. In fact, we are in the process of doing thise with three parcels.

I have seen this at other HOAs as well.

But I ponder the fact that the plats or other maps are often an exhibit to the Declaration. So changing these exhibits means a vote of the membership is required.

Bring in the HOA lawyer.

Our attorney (and a separate attorney for our other entity) are involved. We are not changing the plat of the community. Each parcel within the plat is recorded in the county records as a separate item for tax and ownership reasons. My parcel is owned by me, even though it was on the original plat and you can do a title search and see where the ownership changed. The common areas are mostly owned by the HOA. Most of the lakes are owned by our other entity. One of the common area parcels is still owned by the original developer who went bankrupt over 20 years ago. We found that a few of the parcels are owned by the wrong entity and that needs to be corrected. None of this is crucial, but we just want to get the records straight.

Sounds like you are doing it 100% correct. Just curiosity, who has been paying the property taxes on parcels owned by the wrong entity?

CathyA3 (Ohio)
Posts: 6,299

Posted:

I can certainly see why the board hesitates to sign this agreement. I suspect homeowners are dazzled by the $50,000 without considering what they're losing in exchange. I boldly predict that the associaiton will spend that money and more dealing with the consequences of this easement.

My community has an easement (not even on our property), and it is a continuing source of conflict. According to the terms of the agreement, our only option when the other parties violate the agreemenet is to hire our lawyer to send them a Nasty-Gram or take them to court. And the other parties have deep pockets - we do not. They can sue us into bankruptcy, and we can't return the favor. In short, if we don't have the money to protect our rights, our rights are violated on the regular.

I curse the day when the developer of our community basically threw us under the bus. And I've learned a lesson about looking for such agreements before I buy property.

CathyA3 (Ohio)
Posts: 6,299

Posted:

Quote:

Posted By TimB4 on 09/05/2025 11:15 AM
I suspect that once the city paves it, their park will become a public park that the HOA will have to maintain.
Even if just the walkway is public, there will be added maintenance to the park because individuals will use the park anyway.

Tim hit the nail on the head. Beware of entities with deeper pockets offering to give you something. Once the HOA signs away their right to control their property, that right is gone.

CathyA3 (Ohio)
Posts: 6,299

Posted:

The more I think about the city's proposal, the more outraged I am by it. For $50,000 they take away the HOA's ability to control *its property*? It's kinda insulting. This deal is all upside for the city, and all downside for the HOA once that $50,000 is gone. Guess who's on the hook if some random person gets hurt while speeding along the path on his bike or rollerblades...?

Just another example of cities getting HOAs to pay for stuff that cities should pay for. If the taxpayers want a park and walking trail, they can jolly well pay for it themselves.

If I were living in a community that agreed to something like this, I'd organize the fastest home sale in history. There are so many ways this deal can go sideways...

CathyA3 (Ohio)
Posts: 6,299

Posted:

Quote:

Posted By TerriS6 on 09/05/2025 3:35 AM
Wrong. The membership owns the common areas. Only the membership can grant that kind of agreement.

Actually no. If this is an HOA with single family hoomes, the common areas are owned by the HOA, which is a corporation. This is unlike a condominium, in which the members are tenants in common and own an undivided interest in the common areas. The governing documents should clarify this. Typically the number of areas that require homeonwer vote for approval are very limited - eg., elections, amendments to the CC&Rs and maybe bylaws, and other things that will be spelled out in the CC&Rs. Acquiring or selling off property is one of those things. But that's not what's going on here.

In neither HOAs nor COAs do homeowners have the authority to negotiate agreements on behalf of the association (unless the state laws are very different). Only the board has that authority. If one or more owners represented themselves aa having this authority in discussions with the city, then they're dangerously close to committing fraud. Any vote on a fraudulent agreement has no validity.

TerriS6 (California)
Posts: 3,284

Posted:

Quote:

Posted By CathyA3 on 09/06/2025 2:13 PM

Posted By TerriS6 on 09/05/2025 3:35 AM
Wrong. The membership owns the common areas. Only the membership can grant that kind of agreement.

Actually no. If this is an HOA with single family hoomes, the common areas are owned by the HOA, which is a corporation. This is unlike a condominium, in which the members are tenants in common and own an undivided interest in the common areas. The governing documents should clarify this. Typically the number of areas that require homeonwer vote for approval are very limited - eg., elections, amendments to the CC&Rs and maybe bylaws, and other things that will be spelled out in the CC&Rs. Acquiring or selling off property is one of those things. But that's not what's going on here.

In neither HOAs nor COAs do homeowners have the authority to negotiate agreements on behalf of the association (unless the state laws are very different). Only the board has that authority. If one or more owners represented themselves aa having this authority in discussions with the city, then they're dangerously close to committing fraud. Any vote on a fraudulent agreement has no validity.

Actually, yes. Our association is the same. Because the members each own an undivided interest in the common areas, only the membership can authorize such a use. Evidently, that happened.

LoriM15 (Florida)
Posts: 1,009

Posted:

Quote:

Posted By DeanJ on 09/06/2025 7:59 AM

Posted By LoriM15 on 09/05/2025 7:01 PM

Posted By ElleN on 09/05/2025 9:58 AM

Posted By LoriM15 on 09/05/2025 8:32 AM
In our documents, the board has the right to negotiate, purchase and sell common areas on behalf of the membership without a vote. In fact, we are in the process of doing thise with three parcels.

I have seen this at other HOAs as well.

But I ponder the fact that the plats or other maps are often an exhibit to the Declaration. So changing these exhibits means a vote of the membership is required.

Bring in the HOA lawyer.

Our attorney (and a separate attorney for our other entity) are involved. We are not changing the plat of the community. Each parcel within the plat is recorded in the county records as a separate item for tax and ownership reasons. My parcel is owned by me, even though it was on the original plat and you can do a title search and see where the ownership changed. The common areas are mostly owned by the HOA. Most of the lakes are owned by our other entity. One of the common area parcels is still owned by the original developer who went bankrupt over 20 years ago. We found that a few of the parcels are owned by the wrong entity and that needs to be corrected. None of this is crucial, but we just want to get the records straight.

Sounds like you are doing it 100% correct. Just curiosity, who has been paying the property taxes on parcels owned by the wrong entity?

Both or our entities are non-profit (one is the HOA, the other is a stormwater association) so no taxes on our properties. The common areas still owned on record by the bankrupt builder are also tax-exempt. The important one we want to switch over is a right of way that we have always maintained. The county doesn't care who owns the property because they don't get any taxes. Interestingly, one of the properties owned by the bankrupt developer is a lake that borders our community and next one. We have never maintained that particular lake, but our lake and wetlands vendor says he gets paid to take care of it from the other condo association. So they must be aware that technically they don't own that piece either.

The only way I found out that some of the property is not owned by the right entity is that I was researching to find out who owns a particular tree. An owner has put a security camera on the tree facing his unit. He thought the tree was owned by his condo sub-association. The plat shows it belongs to the master association - and then I looked at the next parcel over and saw that it's owned by the wrong entity. I went through the county records and made a spreadsheet for every non-residential parcel in the plat. We discovered some interesting things. No one knew for 25 years that some of the property is wrong.

JackS20 (North Carolina)
Posts: 271

Posted:

Update: Secretary resigned, pretty sure it was due to other reasons than this issue, but this probably pushed him over the edge.
3rd board member signed so we are good to go.

I am always amazed by the conspiracy theorist thinking about how the city is trying to screw over the little poor HOA. The city is looking to build a 30 foot long bridge, pave a nice walking path and I'm guessing it will easily cost 1/2 million to 1 million. their own documents say on average a greenway is $1million per mile.

they are not taking over our park. the easement they want is the size of a football field on land that floods a few times a year that no one would ever want. Yet we have people online on facebook claiming that they might build apartments there. When the city was considering buying all 10 acres of the park instead of a 2 acre easement, we had people yelling on facebook what a dumb idea it was. then I post images of the flooded land the city was considering and asked them what the HOA shoudl do with flooded land and then crikets.

People are upset about things changing. Doesn't matter if change is good, any change is reason for a complaint.

anyways, thanks for feedback. Glad to have a board that obeys the governing docs. If they would of gotten away with this, then they would of felt free to do anything with unchecked power. Only the VP was foolish enough to want to start a lawsuit over this. Luckily he's all talk and no action.

JackS20 (North Carolina)
Posts: 271

Posted:

by the way city has all liability and maintenance for the easement.
HOA's playground is used on average 12 hrs a month. It is anticipated that will increase to 20 hrs a month when the greenway is made in 2040. in other words additional maintenance is negligible since so few people use it already.

TerriS6 (California)
Posts: 3,284

Posted:

Congratulations.

DeanJ
Posts: 1,786

Posted:

Quote:

Posted By JackS20 on 09/07/2025 8:04 PM
Update: Secretary resigned, pretty sure it was due to other reasons than this issue, but this probably pushed him over the edge.
3rd board member signed so we are good to go.

I am always amazed by the conspiracy theorist thinking about how the city is trying to screw over the little poor HOA. The city is looking to build a 30 foot long bridge, pave a nice walking path and I'm guessing it will easily cost 1/2 million to 1 million. their own documents say on average a greenway is $1million per mile.

they are not taking over our park. the easement they want is the size of a football field on land that floods a few times a year that no one would ever want. Yet we have people online on facebook claiming that they might build apartments there. When the city was considering buying all 10 acres of the park instead of a 2 acre easement, we had people yelling on facebook what a dumb idea it was. then I post images of the flooded land the city was considering and asked them what the HOA shoudl do with flooded land and then crikets.

People are upset about things changing. Doesn't matter if change is good, any change is reason for a complaint.

anyways, thanks for feedback. Glad to have a board that obeys the governing docs. If they would of gotten away with this, then they would of felt free to do anything with unchecked power. Only the VP was foolish enough to want to start a lawsuit over this. Luckily he's all talk and no action.

Jack,

I asked you 2 simple questions early in this thread. Who authorized you to negotiate with the HOA and was the HOA’s attorney involved in this process?

The person who got away with something was you.

TimB4 (Tennessee)
Posts: 21,062

Posted:

Quote:

Posted By JackS20 on 09/07/2025 8:07 PM
by the way city has all liability and maintenance for the easement.
HOA's playground is used on average 12 hrs a month. It is anticipated that will increase to 20 hrs a month when the greenway is made in 2040. in other words additional maintenance is negligible since so few people use it already.

Good to know.

If I understand correctly, you expect the playground to be used by the general public after the greenway is built, is this correct?

If it is correct, have you talked with your insurance carrier about making the playground public?

Will there be additional costs if the playground is public (ADA access, regulations, etc.)?

If the playground is not to become public, I would suggest a six foot fence with controlled access to minimize liability issues.

JackS20 (North Carolina)
Posts: 271

Posted:

Quote:

Posted By TimB4 on 09/08/2025 8:06 AM

Posted By JackS20 on 09/07/2025 8:07 PM
by the way city has all liability and maintenance for the easement.
HOA's playground is used on average 12 hrs a month. It is anticipated that will increase to 20 hrs a month when the greenway is made in 2040. in other words additional maintenance is negligible since so few people use it already.

Good to know.

If I understand correctly, you expect the playground to be used by the general public after the greenway is built, is this correct?

If it is correct, have you talked with your insurance carrier about making the playground public?

Will there be additional costs if the playground is public (ADA access, regulations, etc.)?

If the playground is not to become public, I would suggest a six foot fence with controlled access to minimize liability issues.

spending $2000 on a locked gate with security code was voted down. We have a sign that says for private HOA use only. I'm sure everyone reads that and obeys it.

DeanJ
Posts: 1,786

Posted:

Quote:

Posted By JackS20 on 09/17/2025 6:52 PM

Posted By TimB4 on 09/08/2025 8:06 AM

Posted By JackS20 on 09/07/2025 8:07 PM
by the way city has all liability and maintenance for the easement.
HOA's playground is used on average 12 hrs a month. It is anticipated that will increase to 20 hrs a month when the greenway is made in 2040. in other words additional maintenance is negligible since so few people use it already.

Good to know.

If I understand correctly, you expect the playground to be used by the general public after the greenway is built, is this correct?

If it is correct, have you talked with your insurance carrier about making the playground public?

Will there be additional costs if the playground is public (ADA access, regulations, etc.)?

If the playground is not to become public, I would suggest a six foot fence with controlled access to minimize liability issues.

spending $2000 on a locked gate with security code was voted down. We have a sign that says for private HOA use I'm sure everyone reads that and obeys it.

Whoever the master negotiator was should have included any fencing and gates in the agreement with the city.