What would you do???

Started by ZachR • 5 replies • 1373 views

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ZachR (Indiana)
Posts: 34

Posted:

I will try to make this short a sweet, but please ask me questions if it will help.

We have an HOA board consisting of 3 elected directors and 4 appointed members. One of the appointed members is the former president of the HOA, but no longer lives in the community. It was discovered just before the last annual meeting that the board over the past 3 years had not set up a special assessment account for the repair and maintenance of our alley ways. The covenants charge them with doing so. What they did was not create a proper budget and instead of cutting the budget back or raising the dues, they just funded the short fall with the special assessment funds. Basically the alley way account should have aprox. $23,000 in in at this point. We have 0. The board has sent out a bill for a special assessment, but unless this is 100% collected the alley fund will still be short. The board has still done nothing to try to fix the problem.. There have been not cuts in the budget or any attempt and finding ways to get money in the fund. We have a management company. They say that they told the board to create the fund, the board says that the management company never told them to do so. The board blames the management company, and has never considered even investigating using a different company. Our annual elections were back in March. Since then the board has only meet twice, put out I believe 1 newsletter, never updated the web site, (still does not even list the new board members), has sent a bill for a special assessment with a VERY weak explanation of what the bill is for.

I'm seeking advice about overthrowing the current board. Our by-laws provide for us to do so, but I wanted to get some other opinions. In my private conversations with other community members, I have received tremendous support. Has anyone else done something like this? HELP?????

SusanW1 (Michigan)
Posts: 5,202

Posted:

Yes, you can "overthrow" a board,(i.e. replace, recall) Your bylaws should outline HOW that can be done.

You will have to prove that this board has deliberately mishandled things to make your case.

P.S. What is an alley fund? Why would your documents require a fund for this particular need/

ZachR (Indiana)
Posts: 34

Posted:

Susan,

Actually are by-laws state that the board can be removed with or with out cause. We have plenty of causes though.

The way our community is set up we have alley ways so that we can get to our driveways and garages on the backside of our homes. The alley ways belong to the association. The covenants charge the HOA board with the up-keep of the alley ways. To due so the covenants state that the board shall charge a special assessment each year for the up-keep. A little more than 2/3rds or our community access their homes via the alley way, so we pay $40.00 more a year for the alley way up-keep. We have needed no up-keep or at least none has been done to the alley was thus far. The $40.00 dollars that we have been paying has been going to fund the general fund and not going into the alley-way up-keep fund.

Just to give a background on our community. We have 332 homes, 2 play grounds, a pond, gazebo and a 3 large common areas. We pay $170.00 a year. Those that live on alley-ways pay and extra $40.00

Thanks

SusanW1 (Michigan)
Posts: 5,202

Posted:

Board can be removed by whom? Members? What is the vote threshold for this recall? this should not be done lightly and you will need to make sure you have support for this coup if you decide to go thru with it.

In short, a special meeting can be called for the purpose of recalling each board member and for electing a new board. That's quite an agenda for a meeting and must meet all notice requirements, etc.

Are you saying that the Board did not set aside this $40 into its own fund for the future upkeep of the alley? If not, what did it do with the $$.

A gang of you need to go to a board meeting and get on the agenda and ask for details.

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Zach and Susan,
As usual Susan and I come at things from a little different angle.
Zach I am glad that you picked up from your documents that the recall can be done with cause or no cause, and it probably was put in there because proving cause is often next to impossible by outside members of your association, especially if Indiana has an Executive session provision that disallows note taking and reporting of minutes. But all that aside for a moment, Susan is dead on about getting, building some support and going to Board meeting and using that process as a method to define the concerns of your group. A number of people at a board meeting is intimidating and probably will draw some fire. So, be cool, ask your questions and even record the meeting. Make all your questions written and clearly allow for an answer to be given, don't muddy the waters. Have all this planned and don't argue, just get the response recorded. Then your group should meet privately and discuss having a Town-Hall meeting. If you can get together a good presentation that raises questions then measure your support by the response of the folks attending the Town-Hall meeting. From there, start planning to do the recall and just as important get a slate together to take over the BOD. Of course only the Board can replace the M/C, but that is dependent on the contract and you may want to get a cop;y of that and see what the present board has agreed to.
It is a long process requiring countless hours and you might lose a friend or two, but really you have no choice as members if you want change and the present board is unresponsive.

Of course, the more desirable process is to replace by election the suspect members and little by little you achieve the same result.

You must follow your documents very closely and you can't act confrontational. Record everything and when you have a choice take the high road, and inform your members openly of your progress, don't hide stuff.

MarianneG (Indiana)
Posts: 170

Posted:

Quote:

Posted By ZachR on 07/26/2009 11:11 AM
I will try to make this short a sweet, but please ask me questions if it will help.

I'm seeking advice about overthrowing the current board. Our by-laws provide for us to do so, but I wanted to get some other opinions. In my private conversations with other community members, I have received tremendous support. Has anyone else done something like this? HELP?????

Zach, you asked whether anyone else has done something like this so I'm responding to that request.

When our BOD brought about a change, which directly violated several provisions of our Covenants, a group of us (6 or 7 residents) prepared a petition to circulate among our residents. In our petition, we challenged the board's action, and 58% of our residents signed the petition. Also in the petition, we cited the paragraph and line number of the violations. When this happened, there were about 10 months before our next election. You can imagine that the board was upset that 58% of the residents signed the petition so they hired an attorney.

Our group then asked to meet with the board and the attorney in an attempt to resolve the differences, but our request was denied. Actually, it was just ignored so we pressed for a meeting. Finally there was a joint meeting and the attorney mediated. He advised the board that they were in error in the judgment they had made. For several months after that, letters circulated within the development. We produced and distributed a letter to advise the residents of events as they unfolded. We always included the board members in anything we did, we were respectful in our letters or any interactions we had with the board.

The president of the board resigned, and by a fluke, the other four board members were up for re-election in the fall. Beginning in the summer and late summer, we began campaigning for four of our residents. All four submitted nomination applications, and at the annual meeting a fifth resident was nominated. All five were elected and there was a totally new board in place.

I'm not sure I would recommend this method of replacing a board because it has its drawbacks. First of all, people choose sides and there is unrest in the community. For the board members and for the group trying to bring change, there is a lot of stress.

When the new board took over, there were months of re-building community spirit. I'm glad to report that the new board reached out to some of the previous board members, and some reciprocated in kind. The community once again seems to be a pleasant place to live.

I guess after this experience, my advice would be to move slowly, be respectful to all, be aware that your actions affect the community, be prepared for a long process, and be prepared to fill the vacancies that you may be able to create. Good luck. Marianne

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