Newly elected President

RobertS22 (Alabama)
Posts: 5

Posted:

Hello all,
I'd like to introduce myself as a new member of this forum, thank god I found this forum because I'm lost! I am the newly elected President (who never signed up for it) in a new development. Although I never actually signed up to be the President, we are a small mostly military family community and the other board members voted me in when I was absent one meeting, go figure. Most of us have never been part of an HoA so we don't know what the heck we're doing. But, I really don't mind because if I don't do it, no one will. I want to do the right thing for our community and we have had many issues with our management company who is based in another state. Do I as a President have a right to request all receipts for expenses from the management company? They gave us an Excel spreadsheet with a "budget" but it just doesn't look right to me and the rest of the community. Again, we are a newly formed HoA and there are only about 6 of us who stood up to take a role in the community, but with a change in attitude, the community is starting to see that there are people other than the management company will actually care and are wanting to take action. The only problem is I'm at the mercy of the management company who is very inefficient and does not respond to emails often but they tell us we can't do this or that, and we don't know all the HoA laws in our state. I am contemplating on finding our own lawyer as well who actually practices in our state, but I'm not sure what the rules are really for how long we need to keep the management company's lawyer. any suggestions is most welcomed and I will be searching this board for my other issues. thanks in advance to anyone who responds.
-Rob Strawley

AnnJ2 (Colorado)
Posts: 120

Posted:

Robert welcome to the happy happy world of HOA! I am in management so will ahve a slightly different take on your issues and maybe can help with the management side of things. I do not know the laws in your state and they be very particular. but first things first read your documents and "know" your documents. Understanding these will give you the first step. Second always remember that the board is the authority not the management company. Get a copy of any and all contracts including management's contract. Review the contract's to understand what is expected. Unless the management contract requires the association to use a particular attorney, you are under no obligation to continue with the same one unless you have a specific retainer agreement with this attorney.

There are others here from your state that can help guide you through the state specific laws and where to easily find them.

the only thing I would caution on is if you just turned over from the developer do not necessarily assume that your current management company is bad. We get caught in this situation frequently, the developer who was previously in charge was the one giving instruction to management and maybe not with management's agreement. Find out first if the current manager has the best interests of the association in mind or only to satisfy the minimum they are required to do. management can sometimes be hampered in their duties by develoeprs running things with only their bottom line dollar as the influence for decision making. Or you could jsut have a very bad managmeent company. I would also check that they are licensed to do business in your state since you said they are in another state entirely. this may be the ultimate problem with their being interested or effective in managing your association, distance.

I hope this gives you some things to think about and a starting point. If I can be of assistance please ask.

SusanW1 (Michigan)
Posts: 5,202

Posted:

Robert - the board need to be meeting VERY frequently to get organized and to fully understand its role. The board needs to study the CCRs and bylaws and know them backwards and forwards.

Your secretary should have a binder with all legal paperwork (CCRs, bylaws, etc, minutes of meetings, legal paperwork (state and IRS), approved minutes with attached financial reports, board members and contact numbers, management company contract with contact numbers, etc.)

The treasurer should gather all financial paperwork, original contracts, etc.

You may need to use a consultant to help you get ready to this new role. Be sure to find a lawyer who is versed in real estate law. He/she will know of local property managers. Ask for help!!

Good luck

SusanW1 (Michigan)
Posts: 5,202

Posted:

Robert - the board need to be meeting VERY frequently to get organized and to fully understand its role. The board needs to study the CCRs and bylaws and know them backwards and forwards.

Your secretary should have a binder with all legal paperwork (CCRs, bylaws, etc, minutes of meetings, legal paperwork (state and IRS), approved minutes with attached financial reports, board members and contact numbers, management company contract with contact numbers, etc.)

The treasurer should gather all financial paperwork, original contracts, etc.

You may need to use a consultant to help you get ready to this new role. Be sure to find a lawyer who is versed in real estate law. He/she will know of local property managers. Ask for help!!

Good luck

SusanW1 (Michigan)
Posts: 5,202

Posted:

Robert - the board need to be meeting VERY frequently to get organized and to fully understand its role. The board needs to study the CCRs and bylaws and know them backwards and forwards.

Your secretary should have a binder with all legal paperwork (CCRs, bylaws, etc, minutes of meetings, legal paperwork (state and IRS), approved minutes with attached financial reports, board members and contact numbers, management company contract with contact numbers, etc.)

The treasurer should gather all financial paperwork, original contracts, etc.

You may need to use a consultant to help you get ready to this new role. Be sure to find a lawyer who is versed in real estate law. He/she will know of local property managers. Ask for help!!

Good luck

SusanW1 (Michigan)
Posts: 5,202

Posted:

Robert - the board need to be meeting VERY frequently to get organized and to fully understand its role. The board needs to study the CCRs and bylaws and know them backwards and forwards.

Your secretary should have a binder with all legal paperwork (CCRs, bylaws, etc, minutes of meetings, legal paperwork (state and IRS), approved minutes with attached financial reports, board members and contact numbers, management company contract with contact numbers, etc.)

The treasurer should gather all financial paperwork, original contracts, etc.

You may need to use a consultant to help you get ready to this new role. Be sure to find a lawyer who is versed in real estate law. He/she will know of local property managers. Ask for help!!

Good luck

MicheleD (Kentucky)
Posts: 4,491

Posted:

A lawyer versed in contract law would help too.

But, as others have stated, remember that the management company works for the board, not the other way around.

And while email is a good "paper trail," seriously, nothing beats live action interaction. Call the management company and start at the top. Find out who your property manager's manager is and introduce yourself. Let him/her know that you are working to get up to speed and look forward to a cooperative relationship with the management company.

Then let him/her know that there are some foundational pieces of information you require and ask him/her when you can expect to see those. Note: not can you but when can you.

As much as possible refrain from asking "permission" and refrain from asking "yes or no" questions.

Give the person some background, make it a personal connection. You might not get far on the first call, but make it a point to follow up a few days later and ask how things are going and have a few more questions ready at that time. Things you might not have asked in the first call, since you were pretty much introducing yourself to them. Things like, how many HOAs do they manage in your area. What sort of bench strength do they have (for example, if you discover that your current PM is not a good "fit," what sort of opportunity exists for calling in another representative, that sort of thing.

But there is also no substitute for know your governing documents, as others have also said. And part of knowing those documents is understanding the files and history of the HOA. And part of that is having access to many files and reports that the management company has.

And they work for you.

Best of luck!

RobertS22 (Alabama)
Posts: 5

Posted:

Wow! What great responses to all of you and thank you much. You all have given me some great advice. As MicheleD mentioned, I contacted the Management company and informed them of the homeowners decision to vote me as the President. This did open up a line of communication and as someone else suggested there are two sides to a story. I found out that I'm not really the "official" President since the developer won't turn over the HoA to us for 2 years (is this normal?). So, in essence, the developer is the President of the HoA, I'm just the point of contact for the HoA, the Management team simply tries to help us set it all up. I requested a meeting with the dveeloper which wasn't a problem with the management, so hopefully I can create some sort of relationship with him. So, I guess I need to figure out if I'm not really the official President what capacity do I have? I guess I'll have to discuss this with the developer. Is this a normal situation or am I being kept out of the dark on something? But as far as the rest of the HoA, the want me to be the head guy and so they consider me as the President. Any thoughts on this situation?
I will be looking into retaining a lawyer though to help us through this stuff. The good thing is that the management team does appear to share the same desires as we the homeowners do, they just do not do a very good job at communicting with us and I told them so, they agreed to increase communicaiton through me from now on. Thanks again.

MaryA1 (Arizona)
Posts: 7,043

Posted:

Robert,

I think a little insight would be very helpful to all of us who are trying to answer some of your questions. FIrst you stated you are the newly elect Pres of the BOD and now you say the developer is really the Pres as he is still in control of the assn. Can you tell us how this election for board members came about and who is on the new board? There can only be one BOD for the assn. Either the developer is on the board or he is not. If he is not, then he cannot be the Pres; however he still may have the majority of votes.

I did a little research and found some AL statutes but they are only for condos, except for the nonprofit statutes which would apply to condos and planned communities that are inc as a nonprofit, I could not find any statutes pertaining to planned communities (single family homes). Here are the Statute numbers:

1) AL Uniform Condo Act of 1991 -- Title 35-8A, which only applies to condo created after 1991 but I think (but am not sure!)older condo can opt to use these statutes
2) Condo Ownership Act - Title 35-8-1
3) Nonprofit corporations - Title 3B

I would advise checking out these statutes. In fact I would even copy them for my files. I have a 3" 3-ring binder that contains all my gov docs and all the state statutes. I live in a planned community but I also have copies of the condo statutes. Then I have another 3" 3-ring binder that contains a host of info pertaining to HOAs.

RobertS22 (Alabama)
Posts: 5

Posted:

Well, see that's why I'm asking because now I'm confused even more. OK, about 6 of us were set up as a Mock board a few months ago by the management team. We were the only 6 who volunteered to do something, anything- anyway during one meeting we had, I had to leave early and that's when the vote took place to elect me as the "President". After talking to the Management company today, she told me that she wasn't aware that there was an election (even though I know her co-manager was informed)and that we had no voting rights. The actual President would have to be approved through the Developer, maybe saying he was the President was the wrong verbage, but either way, he basically has the overall say on the HoA until he turns it completely over to us. So, I don't know, does this make any sense?
Basically, I guess I'm just the Point of Contact for the homeowners and Management company. I did request a meeting with the developer which is going to happen, so as I stated earlier, from that meeting I guess I'll find out what my actual role is. How do these things usually work and at what point does a President actually become a President, are developers normally Presidents for a while.

MaryA1 (Arizona)
Posts: 7,043

Posted:

Robert,

Here is the normal progression -- at least in AZ, that is.

The developer incorporates the HOA generally right before or at the time building of the development starts. In AZ the streets must be put in first and the amenities must be finished before the development is complete. The first BOD is made up of the developer (the Pres) and his appointees, who are usually officers of his corp, friends or associates. The CCRs will state when transition occurs. Generally it's when a certain % of the lots have been sold. At this time the BOD will solicit the membership for candidates to run for positions on the board. Then notification will be sent to all the members of the first annual meeting at which time elections will take place to elect the first BOD. The developer will be resp. for turning over all the financial and other records of the assn and transferring title of the common areas to the HOA. Now the BOD made of up members is resp. for running the assn and the developer is out of the picture. Any lots that remain unsold will now revert from Class B membership (developer -- usually more than 1 vote per lot) to Class A membership (members - 1 vote per lot). The developer will have more than one vote depending upon how many lots are still unsold but he will no longer have the majority of votes.

Regarding your "mock BOD" set up by the mgmt co, I get the impression this was done to orient these members to the workings of the BOD. The mindset most likely is that this group of members will be the ones who will volunteer to run for the BOD when transition occurs and they will have some working knowledge of the operations of the HOA. It would be a good idea to have this clarified when you meet with the developer. He may be able to give you a tentative date for transition, also.

RobertS22 (Alabama)
Posts: 5

Posted:

Ah-ha, see you have clarified this much better for me than the Management did. I think this is what they were trying to tell us, but as I stated, their communication skills are not the best. This now all makes sense. Now at least I understand enough to know what questions I need to ask. I appreciate this very much!