Board going broke and Mgr. possibly overstepping boundaries

A special meeting was called to let us know that the board and mgmt. co. took us broke. They, of course, blamed rising insurance costs. However, our sister board let us know that this is not true. The new community manager controlled the entire meeting down to telling everyone when they can and cannot talk (including some board members), and yelled at homeowners or cut people off who joined by zoom if she didn't like what they said (they were not rude, just made suggestions. Also, we took a poll about changing the landscaping in our own front yards, to make it cheaper to maintain ( we own it, the community maintains it). She said "if we get some homeowners to agree to the change, then we can just force it on everyone else." How does she have a right to say that? It seems that would be between community members and the board. I told her that we own our yards, nothing in the CC&R's allows that (in fact, the CC&Rs say that the landscaping cannot be removed or destroyed by anyone)-- and so she cannot do that. She tried to bypass me, which I spoke up about. It seems odd that this manager is controlling everything instead of board members. What is she allowed to do, and what is she not allowed to do?

Thank you. They said that the Reserves are dry (yet they want to spend $300,000. to paint our houses, which makes no sense). When we asked how they could afford that, they said "it needs to be done." They also said that we are almost insolvent and the court will appoint an attorney to manage the community.

They took out a $1.88 million dollar loan against our community and did not pay it back as promised, so the manager said that the bank might take our houses. I told her that's highly unlikely as a first move, and she raised her voice at me.

Re. insurance-- they insured us with a premium condominium coverage even though we're SFRs. The VP is an insurance agent and insists we need to pay extra to insure our homes and common areas as condos, even though we all insure our homes and are a planned community. Then they say that the insurance rates are taking us broke. Our parent board said that they've tried for years to help our community board lower insurance rates, and told them we don't need condo insurance-- and they ignored them. Our parent board called our community board "likely rogue" when we went to talk to them, but said they can't directly interfere.

If by "they" you mean the board, then you need to continue to get informed. Unfortunately, and because this is an intensely legal matter with statutes and case law involved, the board's hands are going to be largely tied as to what it can say.

You can ask the board if the board, on behalf of the HOA, has filed in court asking for a receiver. You can ask the board if any owner has filed in court, asking for a receiver. Report back here what the Board (or manager) says.

If this situation really is in court, I think there is an outside chance the court ordered the HOA to take limited direction from the manager, at least temporarily, just to keep the HOA's bills paid. For legal reasons, I do not see a court appointing a management company as a HOA/COA receiver.

Mostly you have to keep seeking answers to questions. After asking the questions above, I think your next step should be to look up the HOA in court records, at the local (state) courthouse. Usually identifying whether a party like the HOA is in active litigation can be done by going to the court web site and using a search engine. You could also see if there is a free legal clinic at your local courthouse. Then attend the clinic and ask if the clinic's staff can help you determine whether your HOA is in active litigation. Ask for the details on any litigation involving the HOA going into receivership.

Getting help from HOATalk on this particular issue will be difficult. This is largely due to the constraints on what can be posted. E.g. HOATalk members are not supposed to post identifying information, including anything that could identify the HOA.

I'm learning about HOAs, have studied all of our documents and some Statutes. I sent a Certified Letter requesting info. that was signed by over 20 residents, and they ignored it. This mgmt. co. has been our company for 10 years now. Most of the board members came on 9 years ago, became President, VP and Treasurer. Within months, they fired the old mgmt. co., hired this one, took out the $1.88 million dollar loan, then changed the bylaws allowing themselves to stay on indefinitely. I looked the current mgmt. co. up on Yelp and homeowners from other communities stated what is happening here-- "they will come in, tear out your landscaping, destroy your community, raise your dues, and refuse to respond." They have a 1 1/2 star rating. It's exactly what we're going through and our board refuses to fire them. Some board members have quit over this. We have two new board members who are starting "committees" of homeowners. We have another meeting tomorrow. I have worked as a Paralegal and am aware that the manager made claims that were completely not in lines with the local laws and community documents.

Then I think what the board meant is that if the HOA became insolvent, a court would appoint an attorney as receiver, to run the HOA because the court would deem the Board incapable of doing so.