Unethical Board?

Started by WoodyB • 4 replies • 3033 views

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WoodyB (Colorado)
Posts: 9

Posted:

We had our annual meeting and election two weeks ago in Colorado. There were two board members up for re-election and three others challenging these positions. The board had sent out a campaign flyer urging the owners to retain the current board because of a recent lawsuit settlement with the developer. At the meeting, close associates of the board stood up and started a character assasination of one of the candidates. The board's attorney was present and finally had to put a stop to this display. Then as one of the current board members gave his speech someone asked him if he was still living in the project. He hedged and then reluctantly admitted he bought a home but was going to rent his unit. The attorney present confirmed that this action was legal and could remain on the board if elected. In the end, the current board members were re-elected.

However, it was later discovered that this particular board member misled the voters and placed his unit on the market for sale the day after the election. The unit was also placed in the MLS at the same time. This has obviously been planned for some time. Several owners are putting together a petition to force a special meeting to have the board explain their involvement. It is widely believed that the president schemed to keep the board position under his control so his chronies can appoint another member without a fair election. Other questionable behavior is also involved.

Aren't there any specific code of ethics which deals with out-of-control board members? Further, besides forcing a special meeting is there any recourse to through out the previous election or recall the current members without having to go through with soliciting 67% of the owners?

Thanks,
Woody B

RogerB (Colorado)
Posts: 5,067

Posted:

I think it may only require 20%, not 67% to call a special meeting of the Members. Bylaws in Colorado usually read something like this:

Special meetings of the Association may be called at any time by the President, or by the Board of Directors, or upon written request of Members having at least twenty percent (20%) of the votes in the Association. The notice of such meeting shall specify the purpose and no other business shall be conducted.

I stated the procedure to follow to remove and replace Board members in a previous reply on another topic.

Just wondering, why was an attorney present? Were they helpful or just being used as a pawn?

Roger

RandyS (Colorado)
Posts: 29

Posted:

Ours read (Colorado as well), that a special meeting can be called by the President, or by any 2 Directors, and goes onto say that the other BOD's must be notified via email, registered mail, or by hand delivery of a 3 day notice of said meeting.

Check the Bylaws, that will reveal what is required for a Special Meeting to be called.

Sounds like it really falls back onto the bylaws here...

Randy

WoodyB (Colorado)
Posts: 9

Posted:

Thanks for your responses. We are aware that a special meeting may be held if we obtain a minimum of 20% of the owners' signatures. What we are trying to ascertain is some concrete code of ethics or guidelines that we feel the board has crossed by knowingly allowing the board member to run for office when they obviously knew he was planning to sell his unit anyway. Furthermore, they sent out in their campaign flyer that we need to maintain the current board in order to enhance our property values in the future. Many of us feel that the attorney was present only to keep the board from completely jumping off a cliff. They may have already done that which is what we are trying to find out without spending a fortune in attorney's fees.

Thanks and keep your responses coming!

WoodyB

RogerB (Colorado)
Posts: 5,067

Posted:

Woody, I would not spend a fortune on legal fees. A law suit is a lose-lose situation no matter who wins the case.

It is obvious that the Board did things which were unethical and upset some members. Why not ask those Board members involved to consider resigning for (1)being biased - if they recommended specific members over others in a communication paid for by the HOA; and (2) if they knew about the plan to sell rather than rent. Ask them to justify their actions in writting to the members (if they have reasonable explanations for their actions). If you feel they need to be removed, your best option is to have a special meeting, vote to remove them, and elect good Board members to anyone removed. Attorneys are not needed, just concerned members.

Good Luck,
Roger

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