Board decision from 2003 still in effect?

I became a homeowner and then a member of the Board of our small HOA (9 units and cottages) in 2004.

Apparently, in 2003 the Board and HOA members approved a side fence along the property line and allocated $1000 for this expense. The work was never done.

Another Board member has suddenly re-produced the minutes from that 2003 Annual Meeting and has announced by email that she is enacting the fence-building next week. She is also withholding $1000 of her dues in exchange for paying for the fence.

The other Board members are not allowing the dues 'exchange' because this fence was not in the approved budget for this year. She argues that the expense should still be 'held' in the Reserve Fund since 2003. The Board reminds her that the budget is an annual exercise and this should have been raised at the Annual Meeting 6 weeks ago. The Reserve Funds have since been spent in other ways (e.g., mediation with her in 2006) and we are re-building the reserves this year. We can schedule a new Board meeting to vote on the expense but that is the only acceptable step for amending the budget.

The Board is also reminding her that this fence runs along Common Area and requires the approval of the HOA members. New HOA members would also like to give input on the design from 5 years ago.

My questions are: 1) If such work in a Common Area is to be done in 2008, does it require approval of current HOA members, or is the 2003 vote sufficient?
2) Does the Board need to re-approve such an allocation of funds if the 2003 expense never occurred?

Thank you.

SarahV1: The previous poster has raised some valid issues for your Board to review and consider.

1) Review your official documents to learn where money is to come from for an
'unbudgeted' expense--example; fund overflow from another budgeted area; OR a special assessment divided equally among all residents (with a member vote to be taken); OR as the new fence would now be a NEW capital asset, it will require a member vote which to include it as an added Capital Asset
within the Declaration. It also will require future care and maintenance which impacts the Reserve Fund.

2) Monies designated for Capital Reserve Fund are to be used ONLY for the capital assets (items as stated in your Declaration) and NOT for other purposes.

3) The Board member/owner CANNOT independently decide on installing the fence (see member vote in point 1), nor can she withhold her dues to pay for it. If she is in arrears on dues payments, she runs the risk of being a 'member NOT in good standing', may be in violation and lose her ability to be a voting Board member.

You need to get your information and 'ducks' in a row, and nip this in the bud. You may need to send her a certified letter detailing the specifics and the impact her actions may have.

If the fence is needed and you have the funds (not reserve funds) then build it or if you have the votes you can move to build it next year or even move not to build it at all. Now I'm not familiar with Sterling-Davis but Ohio law and our documents allows the majority of the BOD to take action outside of a meeting as long as it's recorded in the official minutes.

F. Actions Without a Meeting. All actions, except removal of a Trustee, which may be taken at a meeting of the Association, may be taken without a meeting with the approval of (not less than three (3) Trustees, and in writing or writings signed by members having a percentage of voting power required to take such action if same were taken at a meeting. Such writings shall be filed with the Secretary of the Association.

What concerns me is her reasoning behind the withholding of dues.

She plans to ERECT THE FENCE HERSELF -- or have it erected -- and deduct from the dues she owes the cost out of her pocket to have gotten that done.

I would send her a very strongly worded letter that she is to cease and desist from encroaching on the common area for the purpose of erecting a fence, or from hiring someone to erect a fence, or from contracting with someone to erect a fence.

If a fence is to be built, it will be built with and managed by HOA funds and the HOA board or its delegate.

This post does present some procedural problems, but with a 9 unit condo, it appears they are having trouble with community reloations during the last few years. Maybe they should have a "change" in operation. I assume they have a 3 member board, so that leaves 6 folks to be satisfied.
There is one outrider that has caused trouble in the past, from the initial post by causing some extra expenses in 2006. (Court appearence or at least hiring a lawyer) If this is all factual and this "maverick" is again threatening a law suit, this whole thing should be resolved, and resolution will not come from another court case. Given that the Board apparently is keeping records and having meetings and criminal charges are not involved, I believe this homeowner could be rightly considered by the courts as harassing the board. The Board clearly has the authority to act as they feel will benifit the association, and certainly has the authority to resceind any action by a prior board, at least, this one.

So what is the board to do? I would say do the boards business and inform this person she will be subject to a restraining order if she does anything to the common property. Then the board shopuld call a special meeting, re-hash the whole thing publicaly, get comment from all and make a decision by voting in front of all present. Then that is the position of the association, including this maverick. She may oppose the decision all she wants but the die is cast and she has to accept it or move.
That should be the Boards decision, they speak for the owners by law, she needs to get over it and move on. What I am describing, under control of the president, should take no more that 30 minutes to discuss and 15 minuites to vote and rule, then adjurn the meeting.

JosephW - We all know the motion has not been acted upon. But why is the motion still in effect, especially given it's at least 4 years since ratification? This appears to be a Board motion and Board ratified capital improvement. It's not like the community voted on the matter and there's been no turnover in ownership since 2003. Therefore no probably change in sentiment. Since 2003 there's been Board turnover, and perhaps new sentiment. Procedurally is there no precedent for a statute of limitations on Board inaction?

Does the Board have to build the fence? No. The motion passed in 2003 doesn’t automatically go away, but it is easy to fix.

When the original motion to build the fence back in 2003 was approved, and the money for it was appropriated, that money should have been set aside for that purpose until the project was completed and not spent on anything else. The "official" answer is that once a motion has passed, that motion remains in effect until it is either amended or rescinded, whether its 5 years, 10, years, or 100 years later. But that’s “water under the bridge” now.

But, the answer is simple. Since the fence has not been built, simply vote to rescind the motion that was passed in 2003. You can always vote to rescind a motion that was passed previously, whether it was five years ago, last year, or last week, as long as the approved action has not already been taken and cannot be undone. In other words, if the fence were already built, (by the board) it wouldn’t make sense to vote to rescind the motion which was approved in 2003, because the fence is already there. The board does have the right to change its mind. So. simply vote to rescind the approval granted in 2003. If, later on, you decide you want to build the fence, you can’t just go ahead and do it; you would need to approve a new motion to build a fence since you rescinded the old one.

As for the single board member who wants to take it upon herself to have the fence built:

1. No single board member has the authority to unilaterally complete a task on behalf of the board unless the board has authorized the person to perform that task. Who is going to build the fence? Only the BOARD can decide that. No single board member can do it unless authorized to do so. How will the builder be selected? Again, that is a BOARD decision. The decision cannot simply be made by any single board member.

2. The individual has ABSOLUTLE NO RIGHT to withhold payment of association fees in order to pay for the fence. The board can take whatever action is allowed in its governing documents and according to the law. This could include charging late fees for unpaid assessments, interest, collection fees, and on and on. Even to recording a lien against the property.

What if the person has gone ahead and already built the fence?

The board has some options here, too.

1. Vote to have the fence removed and then bill the person who had it erected without board approval (remember, the person was acting alone) for the cost of having the fence removed. If the bill for removal and the assessments go unpaid, take action as above.

2. Leave the fence there and write a letter of thanks to the board member who had it put up thanking them for their donation. Remind them that assessments are still overdue and appropriate action will be taken if they are not paid, and then follow through accordingly.

Gerald,
Interesting synopsis and I expect correct.

I think if I was one of the owners in this condo I just might hire a hit man or turn a gun on myself. To ressurect something this far in the past, to me, demonstrates a clear action to raise a problem, with the sole purpose of seeing how many buttons she can push, and if truth was know, the fence don't have anything to do with it, and she clearly demonstrates she has not given the issue much thought except to stir the pot with it.