HOA nominating committees

Started by FrankH1 • 7 replies • 1051 views

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FrankH1 (Florida)
Posts: 14

Posted:

I'm in a HOA (PUD). The developer turned over the HOA to us on May 19th this year.
We will have 164 homes when it is built out but at the time of the turnover the Developer, lets call them D, still had 22 properties and 3 models. A week or so before the election on May 19th they decided to cast their 25 votes in the election for the new board members.Hmm? The Property Management company, PM, knew that if I was elected to the Board I would work to replace the D's PM. 104 property owners voted, 25 from D. The vote was for 3 board members and quess what I came in 4th by a few votes. We elected complete novices to the board who had great resumes and one of them, as it turns out is best buds with the PM.
When the board received the first AR aging report in June after the take over it showed that 30 some odd properties were $35,000 in areas. WHAT? You would think that would have raised a flag. The PM said that D's don't like to go after people that don't pay and the D said he doesn't like to place leins on properties.
Question #1. How is it that the D can pass on this debt to the homeowners that they never tryed to collect? (most of these properties are now in foreclosure)
Question #2. Why in the world would the board keep the D's PM?
Question #3. 4 months into the Secretary/Treasurer's term she resigns. The President tells me I'll be appointed by the Board to fill her position and she says "no way in hell"
So, we have been operating with a 2 person board since then. It was decided by ? that we would have an early election, in mid Febrary. The nominating has been appointed by the 'board' and they told us that that committee will review the apllicants and will ASTERICK the 2 they feel are most qualified and recommend those 2 to the membership.
HELP!

MicheleD (Kentucky)
Posts: 4,491

Posted:

Question #1. How is it that the D can pass on this debt to the homeowners that they never tryed to collect? (most of these properties are now in foreclosure)

Answer #1: Happens all the time. Just part of doing business. We had some arrears when our transfer occurred.

Question #2. Why in the world would the board keep the D's PM?

Answer #2: Some boards don't like to change PMs the first year of a transfer simply because they are learning the ropes themselves. In your case, the previous relationship with a board member may (repeat: "may" since this is just speculation) have something to do with it as well.

Question #3. 4 months into the Secretary/Treasurer's term she resigns. The President tells me I'll be appointed by the Board to fill her position and she says "no way in hell"

Answer #3: Who is the "she" who said "no way in hell." If it's the secretary, since she is effectively "resigned," she gets no say in the matter. Unless your governing documents say something to the contrary.

Which means my question to the board would be: Who is running this board? The current board members or non-board members?

Plus, take whatever the PM says about the developer with a grain of salt.

The Developer may well have been quasi-aggressive collecting assessments. He may or may not really not like placing liens on homes, but it's more likely that is not his core business, and just didn't bother taking the time, figuring the HOA board would kick into gear to do that and be the "bad cop" . . .

That, too, also happens all the time.

Most first years of HOA takeover by residents involves cleaning up after sloppy management/leadership by the developer.

Again, running the HOA is not their core business. So they likely don't put a lot of energy or resources into it, if they aren't in some way forced to.

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Good answers Michelle,

Right on the money.

You have to decide if your Board will benefit or be harmed by a fight at this time. As the sailing master used to say, "I like the cut of your Jib", and feel you would be a welcomed addition to the Board and you have received significant support with votes. I would double, double check to see if this developer can actually vote all these votes as a single voter. Read the fine print. If so that leaves you out in the cold and that could be the best news for this year. By not being on the Board you will have wide lattitude to reseach, gaither support for next year, and step into a Board postion with both feet running.

I also suggest you identify "No way in Hell" and make double sure about the authority of that statement. Also check your documents and if they say the next highest vote getter is automatically selected to fill an empty space, "No way in hell" becomes the "Only way in hell.".

Then you can always call a Special Meeting for the puirpose of forcing the Board to make a selection to complete your Board. Just follow the directions but that is also energy expended that can be used in more productive ways.

SusanW1 (Michigan)
Posts: 5,202

Posted:

You said:

It was decided by ? that we would have an early election, in mid Febrary.

Why, when elections are in May? Is this a Special Election? The board should have filled those positions until the next annual meeting. The remaining time of the term would then be fulfilled by the elected persons.

The nominating has been appointed by the 'board' and they told us that that committee will review the apllicants and will ASTERICK the 2 they feel are most qualified and recommend those 2 to the membership.

The nominating committee can submit recommendations for board positions, if this is what you mean by astericking them, but the board cannot "screen" them or any other nominees unless there is a procedure in your documents that allows that.

KirkW1 (Texas)
Posts: 1,665

Posted:

Quote:

Question #1. How is it that the D can pass on this debt to the homeowners that they never tryed to collect? (most of these properties are now in foreclosure)

Quite honestly, it is a risky business. The simple fact is that the developer might well be held to a higher standard in taking care of the association. You can sue them for a breach of their fiduciary duty. The insurance company will take up their defense. It will also affect the rates of all other properties the the developer has control of.

Our developer was the opposite and slapped liens on and thought nothing of racking up collection fees.

Quote:

Question #2. Why in the world would the board keep the D's PM?

Having just took over after transition I can say that changing property managemnt the first year is very ambitious. It took us several months just to come to terms with what was happening. Also, in our case there is at least some concern that the next one could be worse.

Quote:

Question #3. 4 months into the Secretary/Treasurer's term she resigns. The President tells me I'll be appointed by the Board to fill her position and she says "no way in hell"
So, we have been operating with a 2 person board since then. It was decided by ? that we would have an early election, in mid Febrary. The nominating has been appointed by the 'board' and they told us that that committee will review the apllicants and will ASTERICK the 2 they feel are most qualified and recommend those 2 to the membership.

Operating with a two person Board could be very problematic. Chances are very high that this is a direct violation of the bylaws and articles of incorporation. If someone took legal action every decision outside who to appoint to the missing position could be called into question. Having said that, the only enforcement is a private lawsuit. And you should go in with the full knowledge that while a judge might well order them to do their duty in replacing the person, damages could be hard to come by.

As for the nominating committee, your documents probably specify this as well. I know in our case it states it will have one Board member and that we appoint all members to the committee.

If you want to make a change, then your best bet would be to start now to campaign. Also, get out and get proxy votes. In most associations most people don't bother with the meetings. And my experience is that your showing up on the door step will have most people signing over their proxy vote to you gladly. The fact you care to come talk to them counts as much as anything else. Not every one will sign their proxy over. And half who swear they will be there won't. But I was able to get 50% of those who answered their doors to sign a proxy to me.

FrankH1 (Florida)
Posts: 14

Posted:

Re:
Q#1. We are going to have a new election in February. The president 'says' he's not going to run & that's a good thing. The VP will run but in a recent recall attempt the owners of 56 properties voted to recall her. The recall committee is going to wait for the election because we think we have enough votes to put 2 new people on the BOD.

Q#3. Sorry about the confusion. The "she" is the VP. To answer your question about who's running the BOD, it is the PM. Any question directed to the BOD is answered after consulting with the PM.

FrankH1 (Florida)
Posts: 14

Posted:

I'm not sure what you mean by "Just follow the directions ..." HELP
We couldn't find anything in the Sate statutes that covers forcing a BOD to fill a vacant position as long as there is a quorum.

RobertR1 (South Carolina)
Posts: 5,164

Posted:

FrankH1
Don't know how much of what I assume is correct, but maybe this will open a door or two.
You should have a three member board.
You really have a two member Board.
Your recall did or don't work or has not been called yet but you think you have the votes to elect 2 members.
Does this mean 1 member's term is up?
The VP is going to run again or is her term up?

Then you post that the recall committee is going to wait for annual meeting and try and elect two new members.

I am not sure any of this makes sense or is correct, although, you might keep in mind that the annual meeting is an Owners Meeting, it is not a Board Meeting. If I am correct (Donna, check me) an owner can get up at beginning of meeting and call a point of order, and motion that the meeting be chaired by him or another member. If he makes this motion and discussion is held, then this motion must be voted on. If you have the votes to do it/per your documents to pass a motion, the meeting then becomes a meeting chaired by the owners and not the Board.

Consider this and maybe you can gain a legal advantage. I have no idea who is right here, but the way I see it, anytime the Council (Owners) get a chance to speak, some good will come of it.

You do realize you can't do this at a Board Meeting or at a Special Meeting. Although a special; meeting can be called by your group and elect at the meeting, if they have the votes, for a member of the recall group chair the meeting and the board would have to allow this. But, don't mess with this unless you are sure your at ate would allow it, and you can gain something that benefits the association.

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