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Subject: Board Member discussing Member's letter from retained attorney and NOT the Board
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Author Messages
HaleyH
(Illinois)

Posts:22


08/30/2017 5:09 PM  
Only three Board Members - we have an issue with one homeowner member who has retained an attorney who sent letter with request for Decs and bylaws and stating his client's stance. One of the Board members has told anotherBoard member that he is in discussion regarding the above with another homeowner about this issue. I guess he is trying to get his counsel and another homeowners legal advice as he is an attorney. Isn't this out of bounds and he is non-compliant? The two of us Board members have been emailing this Board member trying to get him to communicate to schedule a Board meeting. No response. He admitted he is discussing this issue with homeowners. Can we vote him off the Board?

We gave him a due date to communicate or we would schedule the Board meeting to discuss the member's issue without his agreement.

Welcome all feedback..
MelissaP1
(Alabama)

Posts:6789


08/30/2017 5:15 PM  
Actually it's not out of line. The membership has a right to know this information. Believe it or not, if you are a shareholder in a corporation they must reveal such information if they are involved in a lawsuit or have losses. A HOA being incorporated means members can have the right to view records including if they are being part of a lawsuit.

Now if the HOA hires a lawyer, then I would want it to be kept confidential of what the HOA talks to that lawyer about. That does fall under some lawyer/client privilege to a point. That point being the conversation between the HOA rep to talk to the HOA lawyer but not the action/result. The owners should know how much money is being spent.


Former HOA President
HaleyH
(Illinois)

Posts:22


08/30/2017 5:18 PM  
THe retained attorney has not threatened legal action, just asking questions. What about scheduling the Board meeting without his input as he continues to be noncommunicative with the other Board members?

Thanks
KerryL1
(California)

Posts:4386


08/30/2017 5:27 PM  
Haley, please write your question again--maybe give "names" to the players--it's too hard to keep track--at least for me. Is the Homeowner & attorney threatening to sue your board or HOA? Or ARE they suing?
AugustinD


Posts:603


08/30/2017 6:07 PM  
This member (who also is an attorney) is not the HOA's attorney. The member-attorney's advice counts for nothing. Also the member-attorney's having this information is a breach of confidentiality. (I disagree with Melissa.) If I were on the board and had a majority, I would instruct the offending director to cease and desist sharing confidential information with others. If needed, have the HOA attorney write the C&D letter. If this repeats, cease giving the offending director confidential information on this matter.
JanetB2
(Colorado)

Posts:3642


08/30/2017 9:15 PM  
Posted By AugustinD on 08/30/2017 6:07 PM
This member (who also is an attorney) is not the HOA's attorney. The member-attorney's advice counts for nothing. Also the member-attorney's having this information is a breach of confidentiality. (I disagree with Melissa.) If I were on the board and had a majority, I would instruct the offending director to cease and desist sharing confidential information with others. If needed, have the HOA attorney write the C&D letter. If this repeats, cease giving the offending director confidential information on this matter.


Agree ... It appears one BOD member is trying to run the show on this issue (simply because he is an attorney). It is supposed to be MAJORITY vote and if two other Board Members disagree they need to take the bull by the horns.
KerryL1
(California)

Posts:4386


08/30/2017 9:50 PM  
I'm glad Augie & Janet understand this. Assuming that have it right. I agree with them entirely.

The only time other owners need to know is once a lawsuit is underway. Until then, it's potential legal action and should be in executive session. One option is that the two form an executive committee for this topic only and do not permit Mr. blabbermouth to participate.

No Haley, the Board may not vote him off UNLESS he was appointed by the Board.
HaleyH
(Illinois)

Posts:22


08/31/2017 4:52 AM  
Thanks All - it is confusing, the only correction is that the Board member who is sharing the member issues is doing so with two other homeowners; one happens to be the prior president and one other neighbor who is an attorney. I figured he is acting outside the bounds of HOA Board rules. We are moving forward with a Board meeting and will give notice to our members; but discuss the legal retention each by the two parties in a closed session.
Does an executive session require a shorter notice period to the members? This Board member insists we need 15 days notice (that is the notice period we give for annual member meetings or special member meetings.) We do not have a notice Board meeting time in our rules and regs/ decs, bylaws, etc.

My questions reveal how green I am in this position.
AugustinD


Posts:603


08/31/2017 5:34 AM  
Posted By KerryL1 on 08/30/2017 9:50 PM
The only time other owners need to know is once a lawsuit is underway.




I agree with this, and I think it is not trivial. Melissa said as much as well. I understand it is a corporate legal duty to disclose to member-shareholders lawsuits and final dollar figures for settlements. I think the only details of such a lawsuit that have to be provided are what is filed in court. Even then, arguably a HOA board can respectfully inform members that the court filings are public record; members may go to the courthouse to read the filings. Else I understand that much is attorney-client privileged in these matters. I believe board members have an obligation to not disclose the exact legal advice the board is receiving. As I understand it, this is because it would be akin to showing the board's legal strategy to the opposition, and so would potentially hurt the corporation.
AugustinD


Posts:603


08/31/2017 5:50 AM  
Posted By HaleyH on 08/31/2017 4:52 AM
Thanks All - it is confusing, the only correction is that the Board member who is sharing the member issues is doing so with two other homeowners; one happens to be the prior president and one other neighbor who is an attorney. I figured he is acting outside the bounds of HOA Board rules. We are moving forward with a Board meeting and will give notice to our members; but discuss the legal retention each by the two parties in a closed session.
Does an executive session require a shorter notice period to the members? This Board member insists we need 15 days notice (that is the notice period we give for annual member meetings or special member meetings.) We do not have a notice Board meeting time in our rules and regs/ decs, bylaws, etc.

My questions reveal how green I am in this position.





My understanding is that this non-compliant (on this issue) board member is violating legal privacy rules and also rules of "due process." The courts have said even HOAs have an obligation to try to give "due process" when it comes to disputes with members. As a favorite HOA attorney of mine put it in an interview, 'Bottom line: Boards need to try to be fair and reasonable.' To me this often boils down to common sense-based respect for strangers.

Check your Bylaws for the rules of notice on board meetings. These rules of notice pertain to all board meetings both open and executive session. It sounds like this minority board member is going to be a stickler for announcing even exec sessions to members. Of course, this is even though members may not attend. I suppose the point of informing members of a meeting they cannot attend is to let them know the board is meeting behind closed doors.

If digesting the Bylaws on this point is too difficult, pass the question onto the HOA's attorney. Then ask the attorney to set a time to explain what the rules for exec sessions are. Preferably the HOA attorney will do this via a conference call, or possibly a short email, with the entire board present.

Hang in there. Slowly how to interpret the governing documents and integarate their meaning with precedent set by the courts and state statutes will become easier. Thank you for serving, and don't ever hesitate to say "Enough. I want my life back."
AugustinD


Posts:603


08/31/2017 5:57 AM  
Haley, state statute may also have something to say about the legally required notice for meetings. Hence the need to consult the attorney and maybe get a searchable copy of the main statutes pertaining to nonprofit corporations and HOAs in your states.
SueW6
(Michigan)

Posts:205


08/31/2017 7:40 AM  
If this is a Special Meeting called, then notice is needed.

If this is going to be a regular board meeting and the board goes into Closed Session to discuss legal matters, that needs to be on the agenda.

Usually board meetings are held regularly, so notice is given at the beginning of the year ie. First Thursday of the month - and that is notice enough to the members.


KerryL1
(California)

Posts:4386


08/31/2017 8:47 AM  
Look up IL statutes Haley. Required notices vary from state to state a lot; i.e., Sue's Michigan may be very difference from IL!!! In CA, for instance, we must post a notice & agenda 2 days in advance of executive session and 72 hours in advance of a regular or special meeting of the board.

(Meetings of the members require a loner notice period.

I recall from a previous poster that IL has fairly homeowner-friendly notice & agenda requirements.
JeffT2
(Iowa)

Posts:346


08/31/2017 1:11 PM  
Why don't you just give the owner the decs and bylaws that were requested? Why do you need to have a board meeting for this?
KerryL1
(California)

Posts:4386


09/01/2017 7:15 AM  
I sort of missed Jeff's point by concentrating on something else. But....if the Owner requested those governing cos, shy NOT just give of email them to him?
JohnC46
(South Carolina)

Posts:7010


09/01/2017 11:08 AM  
Posted By JeffT2 on 08/31/2017 1:11 PM
Why don't you just give the owner the decs and bylaws that were requested? Why do you need to have a board meeting for this?




Good question. We await an answer.
JanetB2
(Colorado)

Posts:3642


09/01/2017 7:57 PM  
Posted By JohnC46 on 09/01/2017 11:08 AM
Posted By JeffT2 on 08/31/2017 1:11 PM
Why don't you just give the owner the decs and bylaws that were requested? Why do you need to have a board meeting for this?




Good question. We await an answer.

Yep ... Seems like a lot of headache could have been avoided by potentially following both the governing documents and State Law. Potentially sounds like they have a pack of "control freaks". You know those individuals who believe they are above the contract and laws.
KerryL1
(California)

Posts:4386


09/02/2017 9:05 AM  
My a error above.

A notice must be posted 96 hours in advance of special or regular board meetings in CA.
JohnC46
(South Carolina)

Posts:7010


09/02/2017 9:36 AM  
Posted By JanetB2 on 09/01/2017 7:57 PM
Posted By JohnC46 on 09/01/2017 11:08 AM
Posted By JeffT2 on 08/31/2017 1:11 PM
Why don't you just give the owner the decs and bylaws that were requested? Why do you need to have a board meeting for this?




Good question. We await an answer.

Yep ... Seems like a lot of headache could have been avoided by potentially following both the governing documents and State Law. Potentially sounds like they have a pack of "control freaks". You know those individuals who believe they are above the contract and laws.




Janet

While we see control freaks posting, I believe we have more of inept and/or running scared BOD's.

I believe we have a lot of elderly folks with very little real business/management experience who do not understand legalize, budgeting, negotiations, etc. Before someone gets on me about the elderly remark, I am 75.

Three of the worst BOD Members I have encountered were:

1 Stay at home housewives.
2 School teachers who wanted to treat owners like 4th graders.
3 Real estate agents who tried to play real estate lawyer.

The best were:

1 Sales/marketing people. They got the big picture and knew how to deal.
2 Project Managers. They could get their arms around projects.
3 Accountants that know and can explain budgeting.

The above are most certainly generalities but the are based on experience in 6 HOA's.

My last BOD operated in the caretaker mode. Granted we make it easy for them to do such as our PM pretty well handles all the money (except the Reserves) and the day to day business. The BOD did not want to take anything on like violations, dues increases, etc. The President was a school teacher who was afraid of her own shadow. She had no subjective thinking ability. Thankfully she is off the BOD.

AugustinD


Posts:603


09/02/2017 10:41 AM  
Posted By JanetB2 on 09/01/2017 7:57 PM
Posted By JohnC46 on 09/01/2017 11:08 AM
Posted By JeffT2 on 08/31/2017 1:11 PM
Why don't you just give the owner the decs and bylaws that were requested? Why do you need to have a board meeting for this?




Good question. We await an answer.

Yep ... Seems like a lot of headache could have been avoided by potentially following both the governing documents and State Law. Potentially sounds like they have a pack of "control freaks". You know those individuals who believe they are above the contract and laws.




The OP wrote that the member's attorney requested copies of the governing documents and also stated his client's stance. On what topic this 'stance' is is not clear. It sounds like the 'stance' may have been significant enough that the board members are wondering where this is going. At least one board member wanted an opinion from an attorney. I do not think it's fair to conclude that this is only about a member wanting a copy of the governing documents.
KerryL1
(California)

Posts:4386


09/02/2017 11:13 AM  
Augie maks a good point. Seems we have incomplete info.
TimB4
(Virginia)

Posts:14861


09/02/2017 11:51 AM  
We had/have an issue where legal action was threatened along with a demand for specific documents. Some of the requested documents were beyond the scope authorized by Statute. One Board member, who was an attorney, said that to maintain the legal rights of the Association (if the legal threat actually became a legal action) we should only release those documents required by Statute.

That is what we did.
JanetB2
(Colorado)

Posts:3642


09/03/2017 6:30 PM  
Posted By TimB4 on 09/02/2017 11:51 AM
We had/have an issue where legal action was threatened along with a demand for specific documents. Some of the requested documents were beyond the scope authorized by Statute. One Board member, who was an attorney, said that to maintain the legal rights of the Association (if the legal threat actually became a legal action) we should only release those documents required by Statute.

That is what we did.

Agree ... And Declaration and Bylaws are part of those documents. There is zero reason they should not have been released, unless the individual asking was not willing to pay for the copying of the info and because was a homeowner's attorney I doubt that was an issue. Plus one BOD member is discussing with other homeowner outside of the BOD ... sorry that is wrong.
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