BOD violates own bylaws

Our current BOD of the HOA have not held a general meeting in over a year. The developers have been charged with tax evasion and fraud. How can we, the home owners, regain control of the HOA? All members of the BOD have exhausted their current terms, but we don't have contact information for all the other home owners. As you can see, this is a mess and our balance sheet had over $200,000 at the last report....almost 20 months ago. We want control of the money as the developer installed puppets on the BOD.
Help!!!!!

Jen since you are apparently still under Declarant control, I would suggest you get as many H/O’s as possible to pony up a little money and hire an attorney to accomplish the things you want. Holding a meeting and electing your own Board would be a symbolic victory at best, this is something the courts will have to sort out I’m afraid.

The suggestions you have made are excellent. Unfortunately, we are a large development of single family homes and most are used seasonally for recreational activities. Most owners live out of the area, even out of state. There are very few full-time residents, of whom, I am one with a few others. We have over 300 owners, so searching the property information with the county is possible, if I can get some of the other full-timers to help me. But I will forward your suggestions and see what type of support I can drum up. The current HOA president is about 3 hours away and the treasurer as well. Neither live in the development and the treasurer has listed her home for sale. The developer is on the board, along with her daughter and another appointee who works for the developer. I don't want the treasurer to turn records over to the developer who is on the BOD. Too many people fear that the developer will appropriate the funds. But we can no longer sit back and wait. Failing to act will result in failure!

You're correct...we never had it but the HOA has been in existence since 2002 so I don't believe we are still under the declarant's control. We have no common areas and our only obligation is for snow removal. The dues collection has been an issue, stemming from the fact that since the developer is also a homeowner, she did not pay dues until 2008. So owners felt if she wasn't paying, they weren't going to pay either. Snow removal has not been consistent so others haven't paid. The issue is now, not losing the money that is in the HOA account. With the current legal problems that face the developer, many fear they will try to obtain the HOA money for themselves.

jeng You can get all the property owners names from the tax assessor's(property appraiser's) website. In Floride the developer has to turn over control to the owners after it is 90% sold out. Do you know how many lots are still vacant? this will give you a good idea of how close it is to being sold out. You can check the date of sales of all your deeds to verify the percentages of sale out. You need to keep a close watch on this because the developer or property manager may delay the turnover if its near the end of the year just to get another year of dues in their coffers. This is what happened in our HOA. We never got a financial statement or audit from a CPA to verify our financial condition.

JenG. My reveiw of the CC&Rs for your development did not find any clause pertaining to a gradual transfer of common area resposibility from the declarant to the HOA. Instead, it is clear that The HOA was created by the declarant and intended to permit to enforce the CC&Rs starting from its recording date. The CC&Rs state that membership is limited to property owners. Since the declarant owns property they can be members but this does not mean that they have the right to run the HOA. The Bylaws do not give any special rights to the Declarants and, in fact, are not mentioned in this document. Thus, it seems that if Directors are elected that are not the Declarants (or represent them) the HOA is free to goven itself with two exceptions.

The first exception appears in CC&R Section 5.2, Architectural/Technical Committee, where the Declarant will initially appoint the five committee members. However, Section 5.2 also states that "On the seventh anniversary of the recording of the original Plat, all five members of the Architectural/Technical committee will be elected by the Parcel Owners." That is, the declarant will not longer be able to appoint persons to this committee. Since the CC&Rs were first recorded in 2001, I believe this committee should consist of persons elected by the membership and the Declarant has no more right to influence this committee than any other property owner.

Section 11.7 also states that the CC&Rs can be modified by 80% of the owners of parcels but the consent of any amendment must have the declarant's approval if they own or control an interest in all or a portion of the "Additional Land." This clause is confusing since it would appear that the Declarant can overrule any proposed amendment of the CC&Rs if they retain ownership to at least on lot in perpetuity. This is were a lawyer is going to be needed to help interpret this condition. It seems that using the "reasonable person" guideline, the Declarant should have stated a measurable condition when they would divest themselves of any interest in the Association. In other words, it would not be fair to have one lot owner be able to outrule the remaining majority of lot owners after the Declarant has sold substantially all the parcels.

I should also point out that removal of a Director by other than a majority vote of the membership is not permitted by the Bylaws. Thus, the Board cannot unilaterally vote a member from his/her position. This process is described in Section 7 of the Bylaws. If this was done, then the Board has acted in violation of its own Bylaws.

Charles, That was a great review of a part of this complicated problem. You are to be commended for your time, effort and caring. How did you find a copy of the CC&r's and share if there were other documents involved. I could be in left field but this all seems very strange to me. Is this just a case of a developer gone rogue or something and he just started making up rules as he goes along or what. It leaves the owners out at sea, it appears. How long has this been going on and is there any recourse for the owners in the courts? Does this kind of thing happen often in that state? Give us a little background if you can. You seem very knowledgeable, maybe you could give them some direction as far as choice of lawyers are concerned. I wish more homeowners would read some of this stuff.

Charles,

You posted the following regarding the CCRs of Jen's assn:

"Section 11.7 also states that the CC&Rs can be modified by 80% of the owners of parcels but the consent of any amendment must have the declarant's approval if they own or control an interest in all or a portion of the "Additional Land." This clause is confusing since it would appear that the Declarant can overrule any proposed amendment of the CC&Rs if they retain ownership to at least on lot in perpetuity. This is were a lawyer is going to be needed to help interpret this condition. It seems that using the "reasonable person" guideline, the Declarant should have stated a measurable condition when they would divest themselves of any interest in the Association. In other words, it would not be fair to have one lot owner be able to outrule the remaining majority of lot owners after the Declarant has sold substantially all the parcels."

IMO, this article pertains to the developer owning or controlling an interest in all or a portion of the "additional land". That would mean owning or controlling in the name of the corp that built the s/d, NOT owning or controlling if he only owns property personally. Everything in the CCRs that mentions the declarant, means the declarant as the developer of the s/d. Whereas it's true the declarant can purchase property in his name, if that happens he only has the rights that any other "member" of the assn has. On the other hand, it would not be unusual for the declarant (the corp) to still own undeveloped lots after transition to the members has taken place. Those lots would be subject to this section of the CCRs if those lots qualify as "additional land".