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Subject: Proper relationship between property manager and board member?
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TeresaM4
(Texas)

Posts:6


08/31/2017 12:10 PM  
I'm a member of a three member HOA condominium board in Texas. Our board has a rogue member who believes she is president and has been making unilateral decisions for months. I say she believes she is president; we don't really know who serves what position on the board, since we've not had an executive meeting to vote for which of us is going to serve which position. I am acting as secretary, keeping the minutes for meetings and updating owner records. To try to make this long story short as possible, the person acting as president and the property manager for our association allowed a non-member to be voted onto the board last April. The homeowners and I didn't know this person is not an owner of her unit, but merely voting the proxy of the owner at the annual meeting. She seemed eager to serve, and neither the property manager nor the acting president told anyone she doesn't own her unit (though they both, admittedly, knew). While updating the owner contact records three weeks ago, I discovered that the newly appointed board member does not own her unit and is ineligible to be on our board. We've in the middle of a siding / renovation project for which we collected a special assessment of $275k over the past two years. This non-eligible board member has been a part of making decisions about bids etc for the project, which means major decisions have been made while an ineligible member was on our board (leaving us open to liability). When I contacted the property manager and the person who believes she's president of the board about this matter and said we had to remove the ineligible member immediately, neither wanted to remove her (this ineligible member was voting lockstep with the other member and constituted a voting block against me). I pointed out the by-laws clearly state only an owner a unit in our complex can a member of the HOA, and only a member can serve on the board, so the property manager was forced to comply even though the acting president didn't want to. This property manager and the acting president often have discussions that don't include me (and many didn't include the ineligible board member before she was forced off the board). The property manager and the acting president keep trying to act in ways contrary to our CC&Rs / by-laws, to the point where twice I've insisted the property manager go to legal about an issue, and each time legal told the property manager that I was right. I often don't know what's going on, because I'm not included in emails or phone calls between the two, even in matters that concern expenses the HOA incurs as part of our responsibility for common area problems. We just now appointed a new board member to replace the ineligible member but so far matters don't look to improve. Isn't a property manager supposed to be neutral in carrying out her responsibility for an HOA? As an aside, I've been trying to have an executive meeting in which we can actually vote for who serves in what capacity, and have minutes to record the vote. Apparently no board for years has formerly elected anyone to any position. Mainly my concern is that the acting president is allowed to make unilateral decisions because of her friendship / relationship with the property manager.

I appreciate any guidance I can get to rectify this situation.

Thank you,
Teresa
KerryL1
(California)

Posts:4162


08/31/2017 12:43 PM  
Does TX require officers to be voted on in executive session??? In CA and other states, board officers must be voted on at a board meeting that's open to homeowners. What do your bylaws say about this? If silent, what does TX law say.

Most bylaws permit any two members of the Board to call a meeting. Why don't you & the new member call a special meeting of the Board for the purpose of electing officers?? To hold th meeting, you need to abide by any notice requirements that're in your bylaws or state laws. For example, how must you notify Owners of meetings?

Then the three of you vote on officers, or even just the two of you if the rogue refuses to attend. Next, what do your bylaws say about the duties of the officers. Doesn't he Board (v. the prez) govern the HOA? See your declaration (convents, CC&Rs) on this point too.

Also red your contract with the management co. (MC) to learn what kinds of power the PM has.

Btw, how many units are in your HOA?

Sorry if I missed any of your points, Teresa--please make your next postings shorter. Really long ones can deter some fine people here from replying at all.

MelissaP1
(Alabama)

Posts:6650


08/31/2017 3:27 PM  
Does this non-member sign any checks? Then what does it matter? They can be part of the decision process similar to a committee member. As long as they aren't spending the money or using the HOA funds to do so. Don't see the problem much.

Former HOA President
GenoS
(Florida)

Posts:1446


08/31/2017 5:01 PM  
The property manager did not allow a non-member to be voted onto the board. The rest of the board did and, by extension, the owners.

Many states require corporations to file annual reports with the state. These reports are often single-page formalities that list the directors and officers of the corporation. Failing to file those, in many states, will result in a fine and maybe even a suspension or revocation of the corporate charter. Check your state's corporate registry - often maintained by the Secretary of State - and see when your last annual report was filed and who's listed on it as officers.
JanetB2
(Colorado)

Posts:3355


08/31/2017 9:23 PM  
Two Board members out of three can call a meeting as noted by Kerry. Also, keep in mind that the majority of a Board can remove an officer from their position unless governing documents state otherwise (generally they do not and allow State Law to supercede). You cannot remove a director (only membership can remove); however, you can remove a director from an officer position or not vote a director to any officer position. They then would simply have a vote as a director, but not have any authority as an officer.
TeresaM4
(Texas)

Posts:6


09/01/2017 2:37 PM  
Thank you for your response! I didn't realize how long that post was when I wrote it in the box. I apologize for the length. We have 56 units. Our governing documents were written in 1986 and haven't been updated. They are to be updated soon, as I have gotten the other board member to agree to the legal fees updating will require. The board president in our by-laws doesn't have anymore authority than other officers. The duties of the prez are to call meetings, run the meetings, and sign contracts. But the prez has to have the majority of the board approve the contract signing, and the president can be removed from office (but not, of course, from the board) by majority votes of the other members. Texas has passed a home-owner's protection law that supersedes our by-laws, so we do have to notify owners of meetings (by mail or email, according to the property owner's choice). I actually emailed the pm's supervisor to find out the scope of authority the pm has; the supervisor merely sent me what I had already read in the management company's material. I'll ask for a copy of the contract and see what I can find out there. I'll see if I can get the new board member to agree to call a meeting. I'm having to read the state documents (homeowner's protection legislation and the Texas Condominium Act) to find out what is required now, that was not required by the state when our governing documents were written. Thanks again for your help!

TeresaM4
(Texas)

Posts:6


09/01/2017 2:41 PM  
Thank you for your response! The non-member was part of a majority vote on a contract with the siding company we hired, and the HOA attorney said we have to review that contract with the new, legitimate member, and some other decisions made while she was on the board. Apparently some unhappy owner could bring litigation against the board if he's unhappy with the siding work or some such thing, and then our HOA insurance company won't cover the legal fees of the board members since we had a non-eligible member on the board (against the by-laws).
TeresaM4
(Texas)

Posts:6


09/01/2017 2:42 PM  
Thank you for your suggestion. I didn't even know we are supposed to have anything on file with the state (I supposed this must be one of the pm's responsibilities). I'll see what I can find.
Thanks so much!
DouglasK1
(Florida)

Posts:839


09/01/2017 4:41 PM  
Hopefully you know this already, but the ultimate authority and responsibility for running the association is with the board (that is probably written in your governing docs). The MC (if used), works for the association, at the direction of the board, primarily to handle the nuts and bolts and lessen the workload on the board. They can and should advise the board on the requirements that have to be met under state and local laws, and probably also handle clerical duties such as filing the corporate paperwork. The board is still responsible for making sure laws are followed and everything that needs to be done is done.

Your MC contract should specify what you are paying them to do but it will not absolve the board from their responsibilities.
GenoS
(Florida)

Posts:1446


09/01/2017 5:15 PM  
What DouglasK1 said is spot on. What seems to happen in some associations, unfortunately, is that over time boards who want to do as little work as possible are only too happy to dump the whole shebang into the lap of the management company. Then, in time, the perception develops among homeowners who don't know any better that, "the management company runs the show and tells the board what to do". Ignorant owners come to accept as gospel the reasons they're given for why things are done the way they are. Far too often those explanations are way off base when it comes to who's responsible for making decisions and who, at the end of the day, is responsible for those decisions. The correct answer in almost every instance is: the Board of Directors.
TeresaM4
(Texas)

Posts:6


09/03/2017 2:57 PM  
Yes, thank you. You answered my question. The reason I posted my question is that I believe our board (specifically the board member who acts as president) overly-relies on the property manager. When I said in my original post that our property manager allowed a non-owner to be elected to the HOA board is that in addition to handling the daily needs of the community (plumbing issues, etc), the PM attends the annual meeting and sees that it's run correctly (its in our contract with the company). The proxies of owners who don't attend a meeting go directly to our property manager. She knows who is voting by proxy. Most owners give their proxies to other owners, but in this case owner gives his proxy to his daughter (the person who lives in his unit). She attended the past three annual meetings and voted for an assessment for the siding two years ago, but she never told anyone she was voting a proxy. The PM and the other board member knew this information. This other board member, the one who is acting as president wanted her on the board (they are friends), and the PM should have said something since she knows this person votes by proxy and not as an owner. I only found out that she's not an owner when I recently updated the owner contact information. I contacted the supervisor of our PM, who agreed that the PM had a responsibility during our spring annual meeting to point out, when this non-owner was nominated for the board and then voted onto the board, that our by-laws don't allow a non-owner to be on the board and said she will review with the PM the procedure of aiding HOA boards in their annual meetings. Hopefully the new board member will work with me to restore the board's responsibility for itself.
TeresaM4
(Texas)

Posts:6


09/03/2017 3:04 PM  
Thank you for your response. I believe you're right and this situation is what I'm dealing with right now. I think, also, that currently the rogue board member is using the PM to help put into action the decisions she's making unilaterally, and I've had to fight to hold both the board member and the PM to the by-laws and state laws (that supersede the by-laws, since our by-laws are over thirty years old). Our owners are mostly disengaged, but do seem to believe the property management company is in charge. The rogue board member cites our PM's authority to do the things she does, and most of the owners don't know any better.
KerryL1
(California)

Posts:4162


09/03/2017 5:19 PM  
Teresa, please forget about the non-member director and move on. You've received advice to call a meeting and select officers. The rogue so-called prez will no longer be prez. The Board will govern, not the PM.

Do read your contract with the MC. Do pay attention to Douglas & Geno's comments.

Do read your bylaws. If they are hard to understand, get your HOA attorney to help you understand them.
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