CONFIDENTIALITY

Daniel,

Because this is an "amenity" that the owners bought into, they definitely should have some say as to whether they want to accept the financial responsibility for or not or let it go into a lease. I agree with your Board, that they should be the ones doing any negotions as for cost and the other business ends of thie talks BUT they should be representing the wishes of the membership. This becomes an issue between the Developer and individual owners because this was a promised amenity that the Developer is now renigging on.

Look at it from a logistics perspective. If the owners were to get involved in the legal end of this, it would be a nightmare as for getting consistancy on what, when, and how much specifics. That is what your Board is elected to do and that is to "Represent" the membership but they should be following the wishes of what the members want.

Daniel,

Good advice from Donna and Susan, BUT. . .

If these negotiations between the developer and the BOD involve advice from an attorney it could fall under the client-attorney privilege. So there may be some things the board cannot discuss with the membership. However, before anything is carved in stone, the board should certainly make the members aware of what is being proposed. And depending upon what your docs say, the members may even be required to vote on the issue.

The AZ open meeting law outlines what can be discussed in a closed session of the board; however, I know LA doesn't have much in the way of HOA laws. So, if your docs are silent on this and there is no state law, IMO, the board has license to do as they please regarding what they perceive to be confidential matters.

Susan,

I do not mind if the Board was elected. Out of 7 Board members
4 were appointed by the Board, even the president!!!

To go back to one of the original issues, negotiations are one of the areas that can be done in executive session, and like it or not, the back and forth do not have to be presented to the owners. Any actual decision must be handled at a regular, and open meeting. This is basically so that whoever is negotiating on the other side isn't faced with trying to negotiate with every owner. Also, negotiations broadcast at an open meeting would quickly find their way back to the developer, putting the association at a disadvantage. This doesn't stop the owenrs from asking questions or putting forth their opinions, it just the best process. Since the agreement will be between the association and the developer, the board is the elected representative of the owners. It is their job to negotiate in good faith for the owners they represent.

Having said that, this is a very touchy area and I hope the board has retained good professional help to work with them. We don't know from the original post whether the clubhouse was ever included in the original price or part of the association. Often, developers retain ownership of some of the amenities hoping for them to be an ongoing cash source. This is, or was common in Florida where the amenity was often a golf course and country club. It sound like the developer is trying to hang on during this economic crisis, with the overhead of the clubhouse that was probably built with more housing planned than has been built or will be in the near future, therefore, his desire to move some of the operating costs of to those who are already there while retaining ownership until the economy turns around. Don N's been through this (if I remember correctly) so heed his warnings.

Last, who appointed the directors, the developer or owner/directors. If the developer, then it opens up a whole batch of problems.

Joe