Overturning Prior Board Decisions

Our community had its first annual meeting this past February and all three Board positions were open for election. Three new members were elected and we each now serve staggered terms. We officially take our seats on March 1st.

The prior Board voted on "for sale" signs at an open Board meeting. The Board voted that no "for sale" signs would be permitted in any common area of the property or in windows in accordance with our Declaration. The decision is in the meeting minutes.

The Board notified the homeowner and the homeowner asked for a special meeting to present alternative options. One Board member was unable to attend and the other two Board members met with the homeowner and decided to allow a small sign. The homeowner also has a box with flyers sitting on the porch in front of their front door. There are no minutes or written summary of this decision.

Our issue now is that another home has gone up for sale and took it upon themselves to use the same signage as the other home. This home is on the opposite side of the street from the first home, which is still for sale. The Declaration was not amended and the rules were not modified by the prior Board.

We don't want to upset our homeowners, but we also do not want to set a precedent that homeowners can just disregard the rules. Is it possible to overturn a prior Board's decision and, if so, what is the best way to go about doing it?

BrianB, thanks for your reply. I like your suggestion. We want to address this issue up front and be as reasonable as possible. As homeowners we warned the prior Board that this would happen. They have now set a precedent that will have lasting repercussions.

Hi PaulM: Our Declaration states "No sign of any kind shall be displayed to the public view on or from any Unit, Limited Common Element or Common Element without prior consent of the Board. Advertising shall not be permitted from any Unit or on any Common Elements or Limited Common Element, provided that the Board may erect, on the Common Elements, a master directory listing Units that are for sale or lease."

It then goes on to say that the Declarant may post a sign advertising sale of units. We are under full homeowner control for about a year now and we removed the Declarants sign a year ago. Our Rules and Regulations go on to discuss open houses and that no signage shall be allowed in Common Elements or in windows.

The first homeowner originally had a sign which was large enough to advertise 20 acres for sale. We are a townhome community with three level townhomes in a upscale area with 66 units. The Board asked homeonwer input at a meeting to determine if our community should erect a master directory. The homeonwers and Board decided against wanting one erected on the property and instead voted no signage of any kind shall be allowed.

If we adhere to our Declaration, no signage should be allowed and realtors and potential buyers still have access to the homes which are for sale. We live on a private road and do not get driveby traffic which might assist in selling a home.

The general consensus (and it was a unanimous vote against signage) which was supported by residents in our community who have been real estate agents, is that most people do their home sale search online. The address of each of these units is posted on the realtor's website. Each of our units has a clearly marked address on a front porch post and each unit has a keybox hanging from the front doorknob.

So do we honor the unofficially changed decision or do we revert to the original vote that no signage should be permitted?

Do what makes the majority of owners happy.

This is exactly what the prior Board did the first time and voted to not allow any signs. I am one of the three members of the new Board. The other homeowners overwhelmingly agreed that no signs should be allowed. They didn't want big for sale signs or small for sale signs and they didn't want a Directory.

The original vote was done because the homeowner asked the Board for consent to allow a sign as the Declaration says no signs withough prior consent. So they voted and agreed they would not give consent for a sign. Then two of the three Board members met privately with the homeowner to hear suggestions for a compromise and then decided to allow the sign.

A change in the Declaration requires a majority vote of the association. The prior Board didn't change the Declaration, but simply voted one to disallow the sign then a second time to allow the sign. There are minutes of the first decision, there are no minutes of the second decision. Homeowners were upset that they were asked their opinion on the matter in an open meeting and the Board agreed with them to their face. Then the Board decided in a private meeting to change their minds.

An additional piece of information, the first homeowner who was permitted to have the sign is friends with one of the prior Board members and happens to live across the street. The new homeonwer likely isn't aware of any of this because they have never attended a Board meeting.

JenN - Going forward the existing Board has the power to make the decision to permit, or not permit the for sale signs. Has the owner that was granted approval, after approval was 1st denied, requested your Board's approval? Shouldn't the owner be required to do so? Seems a letter needs to be sent to all owners reminding them that your Board does not grant the approval to place signs, and that procedurally anyone wishing to do so must request approval in writing none the same.

Here is the complexity, the prior homeowners did not obtain written approval. It was like a handshake amongst friends.

The prior Treasurer said to me in a phone conversation, "Jenn, I understand in your line of work you document everything, but that's not the way I work. I prefer just to have a phone conversation and hash things out." I am a CPA and yes, I document everything.

Unfortunately now our new Board has been put in a position of enforcing things or reversing decisions because some of the prior Board took it upon themselves to run our HOA and our community like a frat house. Let me take that back, I think frat houses are more organized and professional than our HOA has been over the past year.

JennN - The prior Treasurer did not say anything out of line because your own Declaration requires consent of the Board, and unfortunately doesn't state that written consent is required.

One option is to send a letter to all owners advising them it has come to the attention of the current Board that there was a verbal agreement between the previous Board and a homeowner that was issued subsequent to, and contrary to that Board's public ruling to uphold the Declaration prohibiting the display of for sale signs. The existing Board is inclined to uphold the Declaration and prohibit the display of signs, but at the very least, the owners wishing to display a sign must according to the Declaration seek Board approval first. Enclosed is a brief Q & A pertaining to the display of signs. Please use the self-addressed postage envelope and kindly return it to the Board to determine if the matter will be placed on the agenda for the entire community to once again discuss.

I would seek a way to overrule the previous Board's decision, uphold the Declaration, and seek the written input from all owners for forward movement. In other words, try to make the majority happy.

The Board needs to write a policy for guidelines for signage: size, placement, time frame, etc. - - - since the Declarations say that persons posting signage must approach the Board for prior consent BEFORE is goes up.

It does NOT say that there can be NO signs, it does NOT say the Board approves the signs, it simply says that the Board must give the OK (consent)prior to the sign getting posted OR the Board can erect a generic sign, listing ALL the units up for sale or lease.

The Board might as well get some structure to this process, since it is an on-going issue.

Quote from original poster:
"No sign of any kind shall be displayed to the public view on or from any Unit, Limited Common Element or Common Element without prior consent of the Board. Advertising shall not be permitted from any Unit or on any Common Elements or Limited Common Element, provided that the Board may erect, on the Common Elements, a master directory listing Units that are for sale or lease."

On what basis would the Board deny the sign??!!!

That's why I said they MUST have a written policy. If it ain't in writing, it doesn't exist - and they can't NOT consent.

It says that signs need consent, not that there can NOT be signs.

Talk about a lawsuit brewing . . . .

"No sign of any kind shall be displayed to the public view on or from any Unit, Limited Common Element or Common Element without prior consent of the Board.
THIS SAYS THAT PRIOR TO DISPLAYING, GET CONSENT FROM THE BOARD. THEY CAN'T DECLINE "CONSENT" UNLESS THEY HAVE A REASON. HOW IS THAT DETERMINED IF THEY HAVE NO WRITTEN PROCEDURES OR GUIDELINE?

"Advertising shall not be permitted from any Unit or on any Common Elements or Limited Common Element, provided that the Board may erect, on the Common Elements, a master directory listing Units that are for sale or lease."

THIS SAYS THAT THERE IS NO ADVERTISING, ONLY IF (PROVIDED THAT) THE BOARD PUT UP A SIGN.(Which you said they did not want to do)

The best thing would be for this Board to erect a master directory sign. That would stop ALL signage, except at the common elements. It could be done tastefully and subtlely.

GeraldT4, I like what you have to say.

We read our Declaration as no signs are allowed, without prior consent. That is to say that if someone doesn't ask for consent, there are no signs allowed. The general homeowners were polled at the prior meeting and decided against all signs, including a tastefully erected master directory.

Our Declaration also states that "No waiver by the Board of any requirement shall be effective unless expressed in writing and signed for the Board." The Board didn't document anything regarding their 2nd decision in writing. They didn't document the decision in any subsequent meeting minutes as also required by our Bylaws. The homeonwer received no written communication stating they could have the sign.

If decisions such as this are not in writing, it opens the door for ANY homeowner to say "the prior Board verbally granted me permission." This is not the way to conduct business and an HOA IS a business.