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Subject: 4 1/2 questions about my HOA
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DaneE
(Texas)

Posts:12


01/20/2016 4:34 PM  
4 ½ Questions about my HOA:
1) The president of my HOA has actively sought for volunteers to serve on the Board of Directors as we have had one vacancy for quite some time now, however, I have volunteered for the past 5 months and she has refused the HOA Board of Directors to even vote on the matter. I’m not the only one that has come forth to volunteer, but with each of us she finds something she doesn’t like or agree with and so she won’t let our names be put before the board. If we don’t uphold her views 100% then she won’t allow us to volunteer. Is this legal? Leaving a vacancy on the board for so long just because she doesn’t like someone?

2) The board of directors is under the impression that only incumbents are to be on the ballot for annual elections and any other candidates must be written in. I would think this is illegal because it heavily favors only the incumbents. Are they allowed to do this?
a. Due to the above question, I’m led to believe that past elections have been held the same way. I know that more than half of the Board of Directors was appointed by the Board (they tend to appoint their friends, rather than have anyone actually elected, then once on the board they serve and then get elected when they are then an “incumbent”). This leads me to think that perhaps the previous elections are invalidated and perhaps we need to elect an entire new board of 9. Can this be done?

3) The Board of Directors indicated last night that if the city permits something they can’t have a rule against it (i.e. if the city permits someone to build a new driveway, or fence that they are allowed to do so regardless of the HOA by-laws and CC&R’s that specifically state otherwise – after all, isn’t that what an architectural committee is for?). Are they correct or do they need to be corrected?


5) Our HOA is beyond struggling. The Board is terrible at what they are supposed to do. The HOA By-Laws and CC&R’s haven’t been updated since the 70’s. Assessments haven’t been raised in over 10 years. The neighborhood is crumbling. Home values are only rising due to the surrounding market, and the homes in the HOA are no more valuable than the surrounding homes outside the HOA. My question is this: Is it possible for the HOA to “dissolve” and then have a period of time to “reform?” I want to basically, though not completely, shut down the HOA, redo the CC&R’s, By-Laws, close the books, etc. and then “re-open” and reincorporate the HOA. Will the city help with this transition to revitalize and reform the HOA? It’s a known HOA, but it’s in desperate need of revitalizing. Possibly even renaming the HOA or splitting the HOA into an East and a West (we have a main, 6 lane, thoroughfare that runs through the middle of the HOA. Pools and common areas are on both sides.)
NpS
(Pennsylvania)

Posts:3125


01/20/2016 4:53 PM  
TX statutes make a distinction between HOAs based on size. How many units?

Je publie un degagement de toutes responsabilite. Read all posts at your own risk.
LarryB13
(Arizona)

Posts:4099


01/20/2016 6:39 PM  
Posted By DaneE on 01/20/2016 4:34 PM
1) The president of my HOA has actively sought for volunteers to serve on the Board of Directors as we have had one vacancy for quite some time now, however, I have volunteered for the past 5 months and she has refused the HOA Board of Directors to even vote on the matter. I’m not the only one that has come forth to volunteer, but with each of us she finds something she doesn’t like or agree with and so she won’t let our names be put before the board. If we don’t uphold her views 100% then she won’t allow us to volunteer. Is this legal? Leaving a vacancy on the board for so long just because she doesn’t like someone?


The board may appoint people they like to fill vacancies or they may leave seats empty if the bylaws permit. It's not a good practice but it is legal and happens quite often.




2) The board of directors is under the impression that only incumbents are to be on the ballot for annual elections and any other candidates must be written in. I would think this is illegal because it heavily favors only the incumbents. Are they allowed to do this?
a. Due to the above question, I’m led to believe that past elections have been held the same way. I know that more than half of the Board of Directors was appointed by the Board (they tend to appoint their friends, rather than have anyone actually elected, then once on the board they serve and then get elected when they are then an “incumbent”). This leads me to think that perhaps the previous elections are invalidated and perhaps we need to elect an entire new board of 9. Can this be done?


I know of no legal precedent for listing only incumbents on a ballot. I cannot imagine the practice being upheld in a legal challenge.

Your previous elections will likely stand because no one made a meaningful or timely challenge to the process. The time to challenge the next election is now, before it happens. Hire an attorney and sue for an injunction.




3) The Board of Directors indicated last night that if the city permits something they can’t have a rule against it (i.e. if the city permits someone to build a new driveway, or fence that they are allowed to do so regardless of the HOA by-laws and CC&R’s that specifically state otherwise – after all, isn’t that what an architectural committee is for?). Are they correct or do they need to be corrected?


The HOA can adopt rules more restrictive than the city's. They cannot overrule anything the city says must be allowed nor can they allow anything the city does not permit.




5) Our HOA is beyond struggling. The Board is terrible at what they are supposed to do. The HOA By-Laws and CC&R’s haven’t been updated since the 70’s. Assessments haven’t been raised in over 10 years. The neighborhood is crumbling. Home values are only rising due to the surrounding market, and the homes in the HOA are no more valuable than the surrounding homes outside the HOA. My question is this: Is it possible for the HOA to “dissolve” and then have a period of time to “reform?” I want to basically, though not completely, shut down the HOA, redo the CC&R’s, By-Laws, close the books, etc. and then “re-open” and reincorporate the HOA. Will the city help with this transition to revitalize and reform the HOA? It’s a known HOA, but it’s in desperate need of revitalizing. Possibly even renaming the HOA or splitting the HOA into an East and a West (we have a main, 6 lane, thoroughfare that runs through the middle of the HOA. Pools and common areas are on both sides.)


If you terminate the current CC&R's you have almost a zero chance of getting 100% of the owners to agree to a new set of CC&R's so your best course of action is to amend what you already have. I know of no benefits that would accrue from dissolving the current incorporated association and then incorporating a new one to take its place. If the owners can take back control from the entrenched regime there is little to stop you from simply closing the books on what they have done and starting over.


KerryL1
(California)

Posts:5852


01/20/2016 8:14 PM  
Read your bylaws, Dane. They often will say that if the board doesn't fill a board vacancy, the Owners may. What do yours say. If silent, what does TX corporations code say about the matter if it applies to your HOA?
SheliaH
(Indiana)

Posts:2302


01/21/2016 12:58 PM  
1 – What the blazes is wrong with the rest of your board???? The president can’t simply forbid the rest of the board from voting on something. He/she is supposed to ask for a motion to be made, someone makes it, another seconds it and then a vote is taken. Have you spoken to the other board members about this?

If this person is that much of a dictator, the rest of the board should seriously consider removing her from her position (check your documents – usually the homeowners vote for the board and the board elects officers from among themselves). If they’re unwilling to do anything and leave the spot vacant, it may be time for the rest of the homeowners who put them in their positions to vote them out. If no one does anything (and it looks like they haven’t if things have carried on this long), they only have themselves to blame when the horse dooky hits the fan (and it will)

2. Again, check your documents – they should have all the steps the association should follow for electing board members. Most ballots have incumbent and prospective candidates listed and the top vote getters win.
(Why DO some HOA boards insist on doing stuff the hard way and then wonder why people start talking about lawsuits, recalls, etc.????)

3. That’s more of a legal question – talk to your attorney. Generally, governing documents can’t override local, state or federal regulations, but the HOA can set rules regarding the common area it oversees. For example, the city may state that fences built in front of a home can’t exceed 4 feet. The HOA may not be able to allow a 6 foot fence, but can mandate a homeowner obtain authorization from the Board before building one and specify its style, color, materials etc. (e.g. shadowbox white or off white vinyl).

4 (don’t know where your half question comes from) You say you want to shut down the HOA and then reform it after updating/revising the governing documents and closing the books (whatever that means).

You don’t need to shut down – what you and your fellow homeowners need to do is stand up, come together and demand your board straighten up and fly right. If things are bad as you say and your board isn’t doing what you feel should be done, vote them out, get in people who will do what you want.

Whatever takes over (you perhaps?) will need to be willing and able to take a look at everything and set priorities on what needs to be done. I’d start with finances – no one likes to pay “high assessments”, but if they haven’t been raised in 10 years, they haven’t kept up with inflation and all of you may be in for a nasty surprise when parts of the common areas (e.g. your streets) need to be repaved and you find you don’t have the money because you haven’t funded reserves properly. That leads to special assessments and/or loans that can jack up your assessments. Folks won’t be happy, but that’s what they get when they don’t stop to consider if the assessments are keeping up with inflation. Small increases over the years are a lot better than being hit with major ones and a special assessment all at once.

Good luck – you’ll need it!
NigelB
(Texas)

Posts:247


01/21/2016 4:32 PM  
Posted By DaneE on 01/20/2016 4:34 PM
4 ½ Questions about my HOA:
1) The president of my HOA has actively sought for volunteers to serve on the Board of Directors as we have had one vacancy for quite some time now, however, I have volunteered for the past 5 months and she has refused the HOA Board of Directors to even vote on the matter. I’m not the only one that has come forth to volunteer, but with each of us she finds something she doesn’t like or agree with and so she won’t let our names be put before the board. If we don’t uphold her views 100% then she won’t allow us to volunteer. Is this legal? Leaving a vacancy on the board for so long just because she doesn’t like someone?

2) The board of directors is under the impression that only incumbents are to be on the ballot for annual elections and any other candidates must be written in. I would think this is illegal because it heavily favors only the incumbents. Are they allowed to do this?
a. Due to the above question, I’m led to believe that past elections have been held the same way. I know that more than half of the Board of Directors was appointed by the Board (they tend to appoint their friends, rather than have anyone actually elected, then once on the board they serve and then get elected when they are then an “incumbent”). This leads me to think that perhaps the previous elections are invalidated and perhaps we need to elect an entire new board of 9. Can this be done?

3) The Board of Directors indicated last night that if the city permits something they can’t have a rule against it (i.e. if the city permits someone to build a new driveway, or fence that they are allowed to do so regardless of the HOA by-laws and CC&R’s that specifically state otherwise – after all, isn’t that what an architectural committee is for?). Are they correct or do they need to be corrected?


5) Our HOA is beyond struggling. The Board is terrible at what they are supposed to do. The HOA By-Laws and CC&R’s haven’t been updated since the 70’s. Assessments haven’t been raised in over 10 years. The neighborhood is crumbling. Home values are only rising due to the surrounding market, and the homes in the HOA are no more valuable than the surrounding homes outside the HOA. My question is this: Is it possible for the HOA to “dissolve” and then have a period of time to “reform?” I want to basically, though not completely, shut down the HOA, redo the CC&R’s, By-Laws, close the books, etc. and then “re-open” and reincorporate the HOA. Will the city help with this transition to revitalize and reform the HOA? It’s a known HOA, but it’s in desperate need of revitalizing. Possibly even renaming the HOA or splitting the HOA into an East and a West (we have a main, 6 lane, thoroughfare that runs through the middle of the HOA. Pools and common areas are on both sides.)




Our governing documents require that the board fill a vacancy by appointment to serve out the remainder of the term. Failure to fill a vacancy is probably a violation of the governing docs. Go to the next board meeting and raise the issue.

The board of directors is wrong about only incumbents being allowed on the ballot and anyone else write ins. Last year the Texas Legislature amended section 209 of the property code to require an HOA to advise its members of an election and to provide them the opportunity to have their names placed on the ballot.

Sec. 209.00593 (a-1) At least 10 days before the date a property owners' association composed of more than 100 lots disseminates absentee ballots or other ballots to association members for purposes of voting in a board member election, the association must provide notice to the association members soliciting candidates interested in running for a position on the board. The notice must contain instructions for an eligible candidate to notify the association of the candidate's request to be placed on the ballot and the deadline to submit the candidate's request. The deadline may not be earlier than the 10th day after the date the association provides the notice required by this subsection.

Regarding your other issues - Generally the governing documents specify how board members can be removed. Ours state that board members can be removed by a majority vote of the association members eligible to vote.
DaneE
(Texas)

Posts:12


01/22/2016 2:33 PM  
The 4 1/2 came from there being 4 questions and on question two I had a second part to the question.

1 - There's a lot wrong with the rest of the board. Primarily the fact that just over a year ago there were only 2 board members, they then appointed the remaining board members. The newer board members fall in two categories a) they don't want to vote out their friend that appointed them, and/or b) they are afraid of some sort of retaliation if they vote against the president. Of the current 8 members, I've spoken with 6 who all would like to remove the president, but they are afraid to act. Three of them are more than willing to act, but only if they are sure the others are as well and they simply aren't that coordinated and none of them trust each other. It's a total crap shoot. The elections are next month and myself and two other neighbors are heavily campaigning in the hopes that we will be elected, then have enough votes and enough confidence in the board to remove any of the cancer on the board and appoint people willing to serve and do what it takes to fix the HOA.

2 - I've read and re-read every line of our CC&R's as well as the By-Laws (although I don't think the by-laws are enforceable because they've not been recorded at the courthouse which is required by law in Texas). Regardless, neither document includes the steps to elect new board members. They both basically say there is just supposed to be a vote. Nothing about how that vote is supposed to happen or how candidates are supposed to be nominated or file for candidacy or anything like that.

3 - I figured this was more of a legal question, however I think one of the other responses gave me the info I need on this one.

4 - It's hard to get all the fellow homeowners to stand up and come together to make things right. It's a community of 600 single family homes, half the homeowners live in other states and simply rent their property to unconcerned renters. No rules are enforced so often times the out of state investors are okay with that; it means they don't have to hassle with issues regarding their renters or their property.

I'm definitely a candidate for the upcoming election, I'm just frustrated that I've been told only incumbents will be listed on the ballot (that's heavy favoritism), and there have been so many wrong doings by the board that it's crossed the line of absurdity.

Thanks for your feedback and help!
NpS
(Pennsylvania)

Posts:3125


01/22/2016 3:40 PM  
2) The board of directors is under the impression that only incumbents are to be on the ballot for annual elections and any other candidates must be written in. I would think this is illegal because it heavily favors only the incumbents. Are they allowed to do this?

No.

Per Sec. 209.00593 (a-1), at least 10 days before they disseminate ballots, they must solicit you to be a candidate, provide you with instructions on getting your name on the ballot, and give you a deadline to respond.

IMO, if they send anything out with the names of the incumbents on it as candidates and they don't comply with 209.00693, you have a slam dunk to either (a) get an injunction forcing them to comply (which probably means rescheduling the election); or (b) invalidate the election after the fact.

The question you have to consider is whether the absentee owners will see you in a positive light when you take either of these actions.

Je publie un degagement de toutes responsabilite. Read all posts at your own risk.
ThomasT5
(California)

Posts:1


10/31/2018 11:07 AM  
If it's true that delinquent HOA receivables are still classified as a current asset in a classified balance sheet, what other considerations should be discussed, perhaps in the footnotes to the financial statements? Case in point, Total cash $475K, accounts receivable $11K, total assets $486K. Liabilities $10K, equity $476K. Two far past due receivables included in a/r total $10K. Board has filed legal action, and net equity in the two properties will eventually mean full payment, but it could be years away. Net income for the year is nil. At what point should disclosure of these two freeloaders be made in the notes to the financial statements? If I were an owner, I would be interested in knowing there are two not carrying their weight for which I am paying a portion currently?
MelissaP1
(Alabama)

Posts:7716


10/31/2018 4:08 PM  
Thomas. This is an old post about 2 years old. It's best to make your issue a new topic. Thank you.

Former HOA President
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