Challange HOA, ie: Legal fees

During my time in watching this form, I am quite amazed at how many
times posting state "go to court". For an individual(or group but not having
majority) to challange a BOD is quite difficult. I have been there and done this.
After spending approx. $20,000.00 in legal fees, only to have the HOA/BOD attorney
continue to file motion after motion, an individual or group soon runs out of
money. The BOD and attorney however is always spending other peoples money,
(homeowners) If BOD's had to spend their own $$, homeowners would probably have
more of a voice when bringing an issue. Any Thoughts?
Edie

Claude,

Sorry, but everything is not so cut and dried as you want to make it seem. Perhaps FL has a process in effect that may prevent the h/o from having to file a lawsuit against the board in order for them to comply with the law. In AZ we have a process also, however, when the HOA loses a dispute they just file an appeal in superior court and the h/o is back to square one!! Most states do not have a govt agency to step up to the plate and slap the board members' hands when they break the law. In most instances the board knows this and will oftentimes just say, "so sue us!!" We here on this forum don't have to tell the homeowners to take their board to court; the board has probably already beat us to the punch. But, Claude, don't get me wrong. I'm not against HOA boards. I've been there, done that. I know there are a lot of good ones out there. Many of the members of those good boards are participating right here in this forum! I'm just talking about the ones who don't live up to their fiduciary resp. and thumb their noses at the laws that have been put into place to protect homeowners. I agree, education is a must; but that education isn't a guarantee you will win your issue. A much better indicator might be -- how deep are your pockets?

Virginia has a new law going into effect on July 1, 2008. For $25 a property owner may file a complaint against the HOA. Individual board members can be fined up to $1000 per offense. Attorney's who specialize in HOA law will be hear the cases.
$20,000 is the amount that several of us property owners have spent on current litigation..over what? Selective enforcement..and the finding that our community isn't a mandatory HOA..was never properly set up in the first place..and don't qualify under the VA State Statues for HOA's...so what did the BOD do? Without a meeting, because one wasn't required ..wrote totally new CCR's..signed by a simple majority..(asking some people as often as 8 times)..they voted some from the sub-division as mandatory members and some are not..those that are not don't even qualify as voluntary members..but they got to vote to change the covenants that apply to everyone in the subdiviion. When we questioned what was going on..we were told "sue us!" That's just the tip of the iceberg...It's been almost a year..we will hopefully be in Circuit Court in Sept.
I am in favor of HOA's..but..there are BOD's and BOD's..I have no idea what is going to happen to our community..the VA Supreme Court has ruled 2 times in a case like ours and ruled in our favor..not an HOA and without a 100% vote will not become one..
MaryN

Mary:

Even if you are not a mandatory HOA do your governing documents give indemnification to your board members? If so the D&O insurance would protect them from ever being sued individually for serving on a board.

Try this link:
http://www.chadwickwashington.com/jsp/content/resources/newsletters/0805_chadwick_newsletter.pdf
I think it explains the bill..should have interesting impact..I suspect it will take time to get it all up and running.
MaryN

We tried everything we could think of. A District Court Judge spent over an hour explaing to the BOD why they couldn't do what they had done..they walked out and laughed.."it's just his opinion and he's just a traffic court judge"..We made up packets with the controlling legal docs..several of us ran for the BOD, got elected. The BOD has 5 members, 2 of them were part of our group. After 2 weeks, 3 of the BOD met on the road, did a mailout..and never told the other 2. One of those 2 left out was the elected President. He knew nothing about the mailout until it arrived in his mailbox. He called the other 3 BOD members and was told..majority rules..it didn't make any difference if we had a meeting or not..we would have won..if you don't like it, Sue us! 2 BOD members resigned..and the BOD put their friends in the vacant seats. If this new law had been enacted prior to our problems we might not have had to go this route.
Believe me, we have tried everything we could think of..looking back..there is nothing else we could have done other than move..spending all that money makes us all sick..and we're not done yet.
MaryN

The BOD is in control of the checkbook. The money to pay the legal bills is being taken from the road fund..I guess the reserver fund..We just had our annual meeting. On the agenda..estimates for a massive road project..we had a lot to say about the estimates, the 2 estimates they got(never did a check to see if the companies were legit, ask for references, etc)..thank God didn't even get to a vote..another item..installation of a wireless internet tower on the only property that the HOA owns..which has houses our wells and generator ..the person who owns the property on 3 sides wasn't informed this was going to be on the agenda..several of us had contacted the county and found out that if we objected the special permit would most likely be denied..another issue was the free for life internet service that is generally provided to the owner of the property of the tower..we suspect someone was expecting to get that perk..there was nothing in it for the association..again it was voted down.
Minutes..the secretary read the outline of her minutes, but forgot all the attachments..the majority of the property owners voted to ok the minutes from 07 anyway..oh, one more item..they informed the owners, at the end of the meeting, Not on the agenda..they are about to pay for a "safety light" at the entrance of our community..the bill would run about $8 a month. It was not discussed at the last announced board meeting, never showed up anywhere else..except..as an "I almost forgot to mention, before I close the meeting..." Our attorney got on the phone and told their attorney..who didn't have any idea they were planning projects..I think we put a stop to them..we will go to court and file a stop motion if we have to..they are just getting themselves in deeper and deeper..and costing us more and more money..
MaryN

I think that challenging the BOD in court alone would be a major mistake. I would spend some money on fliers to hand deliver to every home in the organization letting them know where their money was going. Some may not care, but you only need a vocal few to effect change.

It is interesting to note that a HOA board in my area (Dallas-Ft Worth) spent a ton of money suing several members. Now, the original defendant is the president of the board. His two co-defendants are also on the board. In short, as the owners became aware of where their money was being spent, they joined a recall effort.

You are quite correct that you need a lot of resources to take on the HOA board in court. And those who fought the board successfully in Frisco TX fortunately had legal insurance to help pay for their fight. (So you may want to join a prepaid legal before embarking on trying to dislodge a board.)

I can say that before our transition meeting I went and collected some proxies mostly to ensure that the quorum was met. As it happened, I collected as many proxies as people sent in from the packet that went out to the members. And this was in the course of about 4 hours of work. If you have a beef, I would start with getting your neighbors upset with the board. Follow that with a proxy push and look to unseat the jerks. I would do as much of this under the weather as possible.