💬 Join us to post & get advice from 50,000 HOA & Condo leaders.

Create Free Account →

⚡ Takes 30 seconds

Already a member? Log in

SuzyC
Posts: 36
Posted:
Specifically code 13464(a)Improper Deferrals. Deferring maintenance to avoid spending money or raising dues is harmful to the membership because it (i) exposes the association to litigation and potential liability for damage caused by the deferrals, (ii) lowers property values, and (iii) increases the cost of the eventual repairs (which can result in huge special assessments). In addition, it may expose directors to claims of gross negligence, breach of CC&Rs, breach of statute (Civil Code §1364(a)), and breach of fiduciary duties. Under those conditions, the business judgment rule will not protect the directors from personal liability.

I have served several times on the board at our HOA. I am not a new person or novice, but I walked into a situation that I am not sure how to deal with. I took a year off and returned to an available spot upon the board just this last January. Our board already approved the budget for the fiscal year and this was just recieved to all the homeowners. Our board is not maintaining the building despite us having a nice reserve paint is 2 years late, chunks of cement are missing from our buildings over hang on the street side. We have torn worn out tattered window coverings that I read in an email is ok with our board ( this was voted on before I was active. )

I have asked them about the over all maintenance and I was shocked when I was told that this doesn't affect our over all property value and is purely aesthetic! ( 3 out of 4 board members concurred to this! I pointed out the above and the guy who stated this told me "we are on solid ground and have no worries about legalities" I don't think he read the above paragraph which is legal regulations.

I decided to take pictures through out the building and made a kind, gently flyer stating the reserve study guidelines, our current budget approved ( the year 2008 the board voted on $200 for paint maintenance!) and the pictures show what our property looks like from the street. Vandalism, paint chipped, 10 year old paint on building, torn window covereings, chunks of cement missing the list goes on. I made a reference to the above DS ACT and asked, Do you think this building looks good from the street? DO you know where your dues are going? Are you aware your board approved $200 for paint for 2008? If you do not like what you are reading, come to a meeting, run for a position on our board at our annual meeting and make a difference. Make 2008 a motivational, one filled with promptness and desire to act within the laws that govern our HOA. Ask the board to be responsible and act now.... you have that right it's your money, your home, your investment.

These are anonymous and yes, it may sound silly, but our homeowners have no clue about what isn't being done, how to read a budget or even what the davis sterling act is.

Is there anything else i can do besides be the bad guy at the table who keeps insisting on cleaning this place up?
JaneK (California)
Posts: 175
Posted:
SuzyC,
Doesn’t sound like a good situation. You are saying the money is in the reserves and the majority of the board doesn’t want to spend it to maintain the property? Why? It will only cost more in the long run as the DS act says. Would they be willing to talk to a real estate agent or appraiser concerning maintenance and property value? I beg to differ about looks affecting property value and that falling concrete you mention could definitely get you sued.

$200 for paint and maintenance?!?! How big is your building? How many units? How old? Mine has 50 units and it runs into five figures easily.

The only other thing I might suggest is to call the carrier of your D&O insurance, a breach of fiduciary duty could mean no coverage. Possibly breach of contract, most CC&Rs contain a statement that says something like, ‘These CC&Rs are for protecting, preserving, and enhancing the value, desirability, and attractiveness of the said real property and every part thereof,…’

Good luck to you, I know what it’s like to be the minority on a board when the rest of the board won’t obey the law.

Jane
SuzyC
Posts: 36
Posted:
Our building is a 60 unit building. We have reserves in the excess of about of more than $150K
SuzyC
Posts: 36
Posted:
and it was built in 1985!
JaneK (California)
Posts: 175
Posted:
SuzyC,

About the same age as our buildings, and probably in similar condition. Your board of directors really needs to do some work before the building ends up condemmed. I don't know how true, but Ive heard of complexes being condemmed for lack of maintenance, but for lack of money and no one wanting a special assessment, not because the board wouldn't spent it.

We just went thru some major repairs, siding and trim replacement, numberous doors, frames, trim, etc. We're a bit different from you, it is the homeowners' responsibility to do this work. We still face a shortage of funds to really fix the common area elements such as asphalt and sidewalks, trees. etc.

Let me know if you are successful in convincing the rest of the board to do the maintenance.
Jane
PaulM (Pennsylvania)
Posts: 1,347
Posted:
SuzyC: Based on this post and your other post, as well as Noelle's post and Noelle's photos which you have posted, I wonder if there is more going on here behind the scenes.

I understand the energy with which you are trying to make some inroads with the other Board members. Since you are a 'veteran' Board member of many terms as you have stated, you well know the responsibilities which go with the fudiciary duty assigned to the entire Board to spend money wisely while ensuring property values.

If you have read responses made to Noelle, you will see many posters feel that a newsletter expanding on all that is 'wrong' with the present Board is not the ideal way to handle the situation. But, that is there for you to digest further if you choose.

As a current Board member, you have the ideal opportunity to see the financial condition of the Association. You have at your disposal the 2008 budget by line item vs. fund balances to date and to be realized by year-end. From this is to be determined where the money will best be spent. Apparently the budget was approved and ratified prior to your coming to the Board recently. And, it sounds like this is where Board members are not in sync. All you can do is present your arguments for and against, and vote as a group on the issues at hand.

You, as a veteran, know full well what you are in for. But, you will go further if you are able to investigate, communicate and help coordinate a plan for association improvements with money spent wisely and which the entire Board can be proud of.

🎯 You've read this entire discussion

Join the conversation with 50,000 HOA & Condo Leaders:

  • ✓ Ask follow-up questions
  • ✓ Share your experience
  • ✓ Get expert advice
  • ✓ Access 350,000 discussions
Create Free Account →

⚡ Takes 30 seconds

Already a member? Log in here