HOA Watchers

Subtitled What You Need to Know, but Weren’t Told the book put forth a wealth of useful information for new members (like me) of a homeowners association board of directors and hit home with Chapter 11: Rogue Directors and Boards.

The state and federal laws are at the top of the hierarchy. Unless a law specifies that the HOA’s Declaration or Bylaws will apply, the law always trumps the HOA’s governing documents. If there is any article in the governing documents that conflicts with the law, the law takes precedence. (page 5)

Since the homeowners elect the directors, it stands to reason that only the homeowners can remove a director. (page 6)

The Ad Hoc Committee, therefore, is not subject to the Open Meeting Law. It can meet at any time without providing notice to anyone except the committee members. The Ad Hoc Committee will have a chairman whose responsibility is to report the committee progress to the board at monthly meetings. (page 17)

The ARC is a standing committee and must provide notice to the community of its meetings, which may be scheduled every month, depending on the volume of requests for ARC review. (page 18)

Member meetings are typically held once each year. This meeting is usually where new board members are elected….It is not a board meeting; no association business issues are to be discussed. (page 91)

Regular meetings of the board of directors are for discussion and action on association business. (page 93)

The President or two members of the board may call a Special Board Meeting for business that can’t wait until the next regular board meeting. (page 83)

If a quorum cannot be established, then the meeting must be adjourned due to lack of quorum. (page 94)

The president is responsible, after receiving agenda item requests from other directors, to draft the agenda. (page 94)

Every speaker has the right to use his or her time to speak without interruption. The chairman must control the meeting so that interruptions are not allowed. (page 97)

In Robert’s Rules of Order, at least two persons must want to discuss an issue before it can be placed on the table. (page 102)

After the motion is seconded, the chairman is to repeat the motion exactly as it is to be debated….The maker of the motion has the right to speak first, and the right to speak last…He is permitted to vote against his motion, but may not speak against it. (page 105)

Some would like to see more information in the minutes, such as what the directors said, but that is not what the minutes are for. The minutes are to maintain a record of the actions taken by the board.Therefore it is imperative that the minutes be accurate. In order to be accurate, the wording of any motion must be recorded exactly as it was stated. If a motion is paraphrased, then later on there can be a misunderstanding of exactly what action was taken by the board. (page 116)

Minutes of board meetings should be kept permanently (page 117)

To get approval for a special assessment, some communities may require a 2/3 affirmative vote of the members voting in person or by absentee ballot. The quorum may require 60% of the members be present in person or by absentee ballot. (page 123)

THE :”ROGUE” BOARD In fact, many directors on these so-called “rogue” boards are probably not familiar with their governing documents or applicable laws. Consequently, they probably don’t know if they’re doing things right or wrong. So, what constitutes a “rogue” board? Here are a few thoughts: A board that:

• has secret meetings with several board members in order to control an issue;
• allows the president or a couple of directors to make decisions without full board approval;
• discusses issues in closed executive session that should only be discussed in open meetings;
• will bully association members who disagree with its position;
• will bully individual directors who disagree with their opinions;
• will not manager the association employees properly, allowing a manager or management company to run wild;
• will not enforce the CC&R’s evenly; and
• will not disclose individual conflicts of interest when hiring their relatives, friends, or business associates. (pages 137-138)

Vendors generally see homeowner associations as “deep pockets” governed by a board of directors consisting of volunteers who are probably not educated in HOA operation, and managed by managers or management companies who are not dealing with their own personal money. This can lead to many vendors trying to make as much money as possible from the assoc