Right of First Refusal and other "meetings"

Joe,

The answer to your question would depend upon whether or not your state has an HOA open meeting law. AZ does have such a law and any time a quorum of the board meets to discuss assn business it's considered a meeting and must be noticed to the members. It doesn't matter if any action is taken or anything is voted on, the key is a quorum of the board is meeting to discuss assn business. If the board does not want to notice these meetings then all the members should not be present.

Thanks Mary and Brian,

Illinois is an open meeting state. The Condo Act states:
(765 ILCS 605/18) (9) that meetings of the board of managers shall be open to any unit owner, except for the portion of any meeting held (i)to discuss litigation when an action against or on behalf of the particular association has been filed and is pending in a court or administrative tribunal, or when the board of managers finds that such an action is probable or imminent, (ii) to consider information regarding appointment, employment or dismissal of an employee, or (iii) to discuss violations of rules and regulations of the association or a unit owner's unpaid share of common expenses;

But what constitutes a meeting? That is what is unclear. From what I have read on this website, if a quorum is present and business is discussed, then it is a meeting. But is going over the rules with a soon to be owner/tenant really discussing board business? Or showing a contractor what work we would like them to bid on really board business? We certainly are not voting or making any decisions. It's all very confusing. Also, seems like it is difficult to accomplish stuff without constantly calling for meetings.

Don't get me wrong... I have no problem with not having a quorum of the board present for these situations, as well as other situations. In fact I would prefer it. It's just that other board members do have a problem with it.

Mary, then perhaps a way that Joe can go that can be a compromise for the board who feel a board quorum MUST be present would look something like this:

Create "committees" that would conduct the interviews, the sizes of the "committees" being less than a full board quorum. The committee would then report the details of the interviews back to the board at a later date.

Thanks for the replies...

Trying to get people to volunteer for committees will be like pulling teeth in this complex. Not much interest out of most...

Do you all have right of first refusal? I can't see any reason for applying it other than if a condo was being sold grossly under priced, then maybe the board could buy it and flip it for a profit. Not much flipping happening in this market, lol. Other than that, why would a board exercise it? Not many boards have the funds to pay for it anyway.

I believe most new developments do not have it. And FHA won't approve a unit in a complex that has ROFR due to being considered discrimination.
Your thoughts would be appreciated.

Tracie,
I could not agree more. Furthermore, my opinion is that a ROFR seems to be nothing more than discrimination.

Our rules state the board needs to interview all potential new owners/lessees in order to comply with ROFR. We do have a right to wave it with signatures of two BOD members, which I am going to start exercising.

If a board interviews a future owner/lessee in order to comply with ROFR, wouldn't that mean that a vote would need to take place. Our bylaws/rules are unclear. I can tell you that there has never been a documented vote from the past boards, although they did conduct the "interviews".

For the life of me I don't understand what good can come of Boards taking action such as yours. I hope you understand the liability that you open the HOA up to. (You could end up buying a house for negotiated price without the inspection, or possibly paying huge fines to the government for housing discrimination.)

Now if I was looking to buy a house I would probably pass on an HOA with the right. But I will assure you that I would refuse the meeting. This would force you into a very awkward position. Do you purchase the house for offer on the table or back down? I would consider this a lose -lose situation. You can either make your first impression on a new owner that you are spineless or purchase a house.

But also consider what happens if someone accuses a Board member of racial bias in the meeting. The Department of Justice will use your Right of First Refusal as prima facia evidence of discrimination. Now you have to justify that you really do let families just like the one you offended buy. And what happens if one of them was offended but didn't bother to complain?

And all money issues aside, do you really want to get into either mess? I know I would start a recall effort just for starting such a mess. I would make my platform that perhaps such a move would pacify the people seeking HOA hide.

Well, that's a BIG question. YIKES. My own highly personal opinion is that a registered sex offender has just as much right to live there as the white collar criminal, the rapist, the murderer, the shoplifter, etc.

If you're against discrimination, then my personal opinion is that you're against discrimination, no matter what form it takes. Would you discriminate against a Hispanic family? A white family with 8 children? (My zoning laws allow 10 people to reside in a 700 sqft dwelling). A family who has a Down's Syndrome afflicted child? A family of little people? A gay couple with adopted children?

So, my OPINION is that you open your association up to legal challenges, just as you would if you discriminated against any other group. Some groups are federally protected, some aren't...but do you want to start sliding down that slippery slope?

The point of registering sex offenders, is so they can be discriminated against. People can protect their kids by watching carefully, because they know where the offenders live, or by keeping them out of the neighborhood. The same is true to a lesser degree of known fellons. They aren't required to publish that information, but is is a public record and they can be required to put it on applications.

I am not certain of the legalities, but this is my understanding. You cannot discriminate against people for who they are (race, features and orientation are considered such), but you can discriminate for what they do (in particular for major crimes.

You are asking me? I would say that depends on the rules and focus of the BoD and the Members.

I was just responding to the other poster's suggestion that discrimination against and among criminals is unethical or the same as discriminating by race or other things that are protected and which we may consider unethical discrimination.

Actually, it's not a principal about which I feel strongly; but I see a difference, and I wanted to see what others thought.

The corollary would be that the BoD may discriminate so (while avoiding any actual or apparent discrimination against other classes) -- no that it must discriminate thus.

If we were forbidden to discriminate against sex offenders, then there would be no public registry. If it were illegal to discriminate against felons, than that would not be a question on job applications.

I can see the argument that if they have paid their debt and have not recidivated, then it's no longer our business and they should be left alone. I can also see the argument that this has meandered too far off-topic.

I wonder if the primary reason for ROFR is to give current members first shot if they want another unit or want a family Member or close friend to move in. I suspect that could create potential for appearance of discrimination if invoked after seeking applications. This would not be a problem if the BoD only considered ROFR before inviting applications.

If there is a valid problem with an applicant, BoD has to balance that against appearance that there real problem is discriminatory in nature.

Several things come to mind regarding the use of ROFR to prevent sexual predators from coming into the neighborhood.

1) It will be very expensive and most HOAs don't have those kind of funds available.

2) There is no need to meet with a resident for this.

3) It will only work if the person buying/leasing the house is the registered offender. (The purchase/lease will likely be in a relative's name because on top of this they probably don't have wonderful credit.)

4) Keep in mind that if the registered offender is desperate they will have bid higher then normal. And the HOA will have to take the loss (assuming they can afford the purchase).

In the meantime keep in mind also that should a meeting scare off a buyer the seller could file a suit to force the HOA to make good on the contract. And again, will this be worth it??

Safety first and children first.
If a sex offender needs a place to live, then he should have to find a place where a parent does not fear for a child's safety. Perhaps that means adult-only communities.
An HOA's legitimate business is quality of life and property values. A registered sex offender in the community can hurt both, based on their past offenses, even without committing any further. That may be worth the expense of exercising ROFR, and it seems like a good reason to require ROFR (which should be reserved in a manner that prevents lawsuits by sellers).
Our society has decided that is fair.

Hello all,
For those of you who do have ROFR, does your board "vote" to approve/disapprove the board's right to exercise ROFR for a sale or lease?

Joe, nice attempt to keep the thread focused on your question. We don't have the RTFR in our docs nor would I want it. Too easy to have someone scream discrimination even when it isn't. This is one of those things I would get an opinion from the HOA attorney on whether or not you have to meet with all potential buyers and just what you can say or ask. I did however find an article dealing with this for you:
http://www.nytimes.com/2002/08/11/realestate/your-home-the-right-of-refusal-in-condos.html?sec=&spon=&pagewanted=1