Rogue board member...trying to unseat board!

Advice, Advice urgently needed! In May of '07 I resigned as treasurer of my Board after 14 months. What a learning experience! Older owners had been questioning pervious boards for several years because they were not following the By-Laws. And, one in particular had been keeping track of the money as best he could. He called me often because I would listen .. previous boards and even this board got tired of his costant questioning, but I realized he was a wealth of knowledge. I asked my board if I could send him the financial records received so he could help me learn. They VERY reluctantly agreed. As time went on many discrepancies were found in the records..late water bills with late fees..lying..constant excuses, etc.etc all by the management company. All board members liked her including me, but my eyes began to be opened with the help of this wise older owner. Theirs were never opened until too late! In Jan '07 an older owner was voted on to the board...a 75 yr old bookkeeper! She asked for everything..management contract,insurance, work orders, bank statements etc.etc. Together we tried to set controls as there were none...0! A wealthy owner sent 3 registered letters to bd prez .. I told the prez to insist that the manager answer his request with all records and bank statements (which I had never seen..I filled an open seat about mid term) If we have nothing to hide that will solve all questions of these older owners and they will stop bothering you! The manager said she would comply...but truly did not. Finally I was told by my older mentor, that a landscaper had not been paid properly & was filing a lien on our complex. The records given to me by the manager.. were confusing compared to landscaper records...and before I could resolve who was telling the truth, the manager "threw me under the bus" by asking the rest of the board...Who is runnong this place, the older owner OR the Board." After a scathing e-mail from a board member (there had been many)I could take their non-support no longer and resigned. Friends in property management had been telling me to get out or I could be in the midst of a legal battle! Shortly after the bookkeeper was treated so terribly that she resigned.
The older owner, who sent registered letters and ignored, decided no choice but to file a law suit aganst the board Aug '07 who carries the fiduicary responsibility for our money. He hired condo specialist attorney... board ignored lawsuit by allowing the management company and our crony attorney (reccomended by the manager) to default on the lawsuit in Aug '08..14 months after I resigned! Judge ordered board to pay the att fees of that owner...$7000! And still no records! Again no oversite by that board!
Finally after that they saw the light .. and let management company go,replaced attorney, hired new attorney who said they must file suit on that managemnt company. I think they would have let it go...seemed to feel no responsibility for lack of oversite. Then they promptly hired most expensive management co around. Some records were turned over to new management co. & older owner managered to piece together the fact that $35,000 was unaccounted for by fired mangmt co's own records!!

Forgot to mention we are 52 units built in '73 w/pool and 4 Acres of
old fishing lakes! We have a 500 ft private drive to clubhouse. Just before the board defaulted on the law suit, 150 feet of the road collapsed!! What a summer..the road and defaulted law suit!

Fast forward...new board Dec'08..one previous bd member who had been app., two new older owners and two young newer owners. A great board or so we thought! Younger "newer owner" bd member who was a law student waiting to take her bar was voted to be the Prez! As they began, trying to rectify previous board's bad decisions...the holdover bd member resigned. My husband was appointed to replace her. As this boardd set about to redo the budget, get bids for rebuilding road, re-negotiate vendor contracts etc. etc. they saved community over $80,000! And there was no need of $1000 assessment planned in first budget. Somewhere in the midst of all this, the new Prez got her nose out of joint and caused nothing but trouble! And one of the wisest board members, the other young, new owner was accepted at U. of Mich. to work on PHD. So we lost a great board member...at the wrong time!! The management company was difficult to work with...not a fit ..only a terrific hindrance with terrible advice & many mistakes!
Finally things got so dicey that the board demoted this rogue Prez to a manager & named my husband as Prez! Just before this, she apparently had gotten cozy with past board & groupie followers that DESPISED these older owners...the two on the board and especially my mentor. (The mentor's condo is in his children's name so he could not run for board position.) He became an advisor to the board! The board had discussed letting new management co go because of all the difficulties. Meeting with management co to point out their mistakes and how they really defaulted on the contract hoping to renegotiate their 3 month exit clause! The Prez, she had not been demoted as yet, sided with the management co. The board lost for the moment. She then sent the Management Co an email stating that unless her signature is on letter to dismiss, ignore the board! That is when the board decided to lower the boom and demote her to a manager and in spite of her letter they dismissed the mangmt company! This rogue manager then went to the community, gathering names against self management! (The board, even though they had saved community over $80,000, had had to deplete reserves to rebuild road so no good management co would look at them with lawsuits and no funds.) They decided to self manage this small community for awhile in order to build some reserve. This rogue bd member called a meeting with a flyer saying, "NO SELF MANAGEMENT". They actually brought in the sheriff for protection!! The board did not attend. 5 days later she was seen out and about with her clip board again. My husband was so mad he went out and asked her what she was doing! He had lost his cool with her in a previous board meeting too. She said, I am calling the sheriff on you with a smile and she did. The sheriff said, just stay away from her! We found out later that day, she was collecting signatures to unseat the entire board but herself!
What a mess. My husband wrote a letter to her, reviewing the past history here, stating the valid reasons for dismissing the management company and charging her with interviewing for a new management company. A few days later that letter was hand delivered to all owners. Two people removed their name from the list to unseat the board. They need 39 signatures so must not have them because so far nothing has happened but threats. The board has opened a bank account with a credit union where all owners can deposit online or however, free of any charges. They did this along with prior Prez. because they were having a problem getting vendors paid on time by managmt co. etc. Takes two signatures to withdraw any funds...safe and secure! (Where were all these people when we tried to tell them there were problems with the previous managmt co!!)

This rogue board member answered my husbands letter in an email stating that she had spoken to everyone in the community and they would not be sending any fees to the new band...she could guarantee that!

The board went to the community and board attorney. He is studying the matter...told the rogue she was walking on this ice...and is going to write the community a letter. He has also written the management co who stated that at the end of 3 months they would withdraw their 3 month fees for broken contract and send us the balance of our money. He wrote stating that they have no right to pay themselves without our approval! We will see what their attorney says! We feel they have broken our contract by what they failed to do and we will pay them one month's fees!

It appears the past board and many, many other's want to continue the contract of the managemment company just dismissed, mainly because of their unfounded dislike of the advising mentor behind the scenes.

We honestly have come to know these older owners...and the prior prez and past boards are sadly mistaken in their assessment of these owners! How this past board and demoted Prez have managed to sell owners on the idea that the first law suit was frivolous, that we do not know for sure if the past management company has absconded with any funds and self management is dangerous, we cannot understand!

The other shoe will fall one of these days and we have no idea what to expect. I told my husband we are a group of people that have had a measure of success, always had the respect of people in our field of endeavor but now feel like criminals trying to defend ourselves of a crime we never committed!

If anyone out there has any suggestions, we welcome their thoughts!

Please forgive any typo's...not sure how to spell check on this site...am falling asleep and don't want to lose all this! Attached is letter mailed out to community today by ex- board member who had to resign because of a move to U of Michigan.

Hope you all can find the time for this long dissertation!

Ann

I have one piece of advice:

Button down the hatches for the incoming storm. You have a choice - face the storm now, or face it later. Sorry, but you really only have two choices:
1) Deal with the problems.
2) Sell your house.

Well I suppose you can drop out and pay the cost of not dealing with the issues. Could turn out as expensive as option 2 though.

Ann,

Firstly, I'm sorry to say that your situation seems to play out, in one way or another, across far too many communities.

I liked the letter that was sent by the ex board member except for:

"I could go on with other numerous examples but that should not be necessary at this point. If you need more examples of how Towne Properties has been inept please contact me. If you don’t want to believe me then I suggest you contact your association attorney, Mr. Getty. Mr. Getty has drafted a letter to Towne properties explaining how they have broken their contract with our association on numerous occasions and at varying levels. Mr. Getty represents the owners (you), not the Board and he too is concerned with your best interest."

As I feel that what is going on with the attorney and your previous/current management company might fall within executive session boundaries.

If you were to have a "good" management company they do much more then just sign checks. Managing an association has many duties involved; the fact alone that your board seems to have quite the transition of members in itself is a reason to have the long term denominator of a manager.

It definitely sounds like Towne was terrible, move on to a new one.

You have many issues going on, past and present, and I hope the majority of owners realize the problems and commit their support to working with the new board. Keep hitting owners with communications.

You need to know all the answers to "anything" this rogue board member can bring up. You need to be able to justify everything you've done and are going to do. I've found that many rogue's often have their "choice" issues that they rant about and in fact they totally miss many of the "bigger" issues that need to be addressed in an association.

At least you have your attorney involved, you have your finances accounted, and you already have a track record of saving people money. When you can prove that, under this rogue member, funds were wasted you've shut her down.

Stay calm.

Dana

Thank You to DanaB1, MicheleD, GlenL, KirkW1,and DonnaS,

I will respond more fully a bit later. Your advice is helpful and encouraging. I am a Realtor in the middle of a harrowing contract, the Grandmother of 14 ages 7-16 and in the midst of this mess! For the moment the Realtor & Grandmother have had to take precedence over the chaos at my complex!

It has been fairly quiet but we are going forward. I will pass your messages on to the board and the chief advisors. The information as to what happens when they elect to "not send us their Ass.fees" was very good. I have a feeling that they are going to do just that...hoping to force us to pick a management company. The board is supposed to be 5 but with the one who moved and wrote the letter having to withdraw we are down to 4.
The 4 tried to have a meeting but nothing much was acomplished. The rogue bd member did say that she had contacted 7 management companies but they all refused to talk to her. With my Real Estate contacts and friends in management I am fairly certain no self respecting company will want to be a part of all this. The board members and the residents are all very nieve when it comes to management companies. Good ones are few and far between! I think they think we can just pluck the perfect one out of the air.

Later with news! And probably more questions...

AnnW

Ann - what is the plan for filling the vacancy? You need a 5 member board, right now.