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Subject: HOA Exec Mgr interference in Board Directors election
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JosephC12
(Virginia)

Posts:1


04/08/2019 1:40 PM  
Executive Manager (EM), paid staff, emailed members of the community encouraging them to vote for three particular candidates in the coming election thus inserting himself in the coming election and attempt to directly influence its outcome. Interference has affect of picking his future supervisors. Email stated we have nine candidates running for office, six highly qualified. Then, in the email, recommended three candidates as having "...the best interest of the [community} ahead of any agenda."

EM resides in community. May not have used Association resources in electioneering. Certainly at the least poor judgement and unprofessional conduct on the part of the EM. But, is there any legal action to be taken? Can the election be challenged if the three candidates the EM recommended are elected? Did he break the law?

RichardP13
(California)

Posts:3424


04/08/2019 1:46 PM  
I am sure the three board members that benefited never knew a thing.
SheilaJ1
(South Carolina)

Posts:55


04/08/2019 3:06 PM  
As you stated unprofessional. Did you mention this email to voters before the election? or found out later?

If they are a licensed manager, you could report them to the licensing institute. But before, make a list of all your grievances.
JohnC46
(South Carolina)

Posts:8195


04/08/2019 5:37 PM  
Tricky one, as the EM is a resident/owner. Does an EM, who is also an owner, lose his rights as an owner to express his opinion an the candidates? I say no.
GeorgeS21
(Florida)

Posts:1179


04/08/2019 5:46 PM  
Agree with John ... as long as the member did not use the title, the employees, or material owned by the HOA.
NpS
(Pennsylvania)

Posts:3148


04/08/2019 8:32 PM  
Disagree with George and John.

Perception is everything.

If I lived in that community, and I knew that A was the EM, it wouldn't matter to me what materials A used. I would think that A was acting in an official capacity unless he clearly stated that he was speaking for himself only and not as the EM. And even then, I might miss it, especially if the communication was similar to ones I usually get from the Association.

When A became EM, he became a fiduciary, and in doing so, he forfeited the right to take any action that would attempt to influence the outcome of the election without full prior disclosure.

In the OP's shoes, I would attempt to delay the vote until the situation is better understood.



Je publie un degagement de toutes responsabilite. Read all posts at your own risk.
GeorgeS21
(Florida)

Posts:1179


04/08/2019 8:43 PM  
Interesting point, and agree with Nps stipulation relative to him stating it was his personal position as a member ... if so, I still believe no harm no foul.

Getting stuck means falling prey to hosts of attorneys.
AugustinD


Posts:1498


04/08/2019 9:00 PM  
I agree with JohnC46 and GeorgeS21.

But even if this member of the HOA made clear that he was writing in his capacity as a member and not manager, and even if this member used his own resources to do the emailing, I would not think much of him.
NpS
(Pennsylvania)

Posts:3148


04/08/2019 9:12 PM  
Posted By AugustinD on 04/08/2019 9:00 PM
I agree with JohnC46 and GeorgeS21.

But even if this member of the HOA made clear that he was writing in his capacity as a member and not manager, and even if this member used his own resources to do the emailing, I would not think much of him.




EM's email to the community said 9 candidates, 6 highly qualified, and 3 preferred. Would you change your mind Augustin if you were one of the 3 highly qualified that the EM didn't pick? And what if you were one of the other 3 that the EM decided weren't qualified based on some unknown criteria?

Maybe you have an abundance of candidates. We don't. I would do whatever I could to prevent those 6 who threw their hats in the ring from feeling betrayed. Are they going to run next time, or are they going to say, why bother? It's fixed.

Je publie un degagement de toutes responsabilite. Read all posts at your own risk.
AugustinD


Posts:1498


04/08/2019 9:20 PM  
Posted By NpS on 04/08/2019 9:12 PM
EM's email to the community said 9 candidates, 6 highly qualified, and 3 preferred. Would you change your mind Augustin if you were one of the 3 highly qualified that the EM didn't pick? And what if you were one of the other 3 that the EM decided weren't qualified based on some unknown criteria?

Maybe you have an abundance of candidates. We don't. I would do whatever I could to prevent those 6 who threw their hats in the ring from feeling betrayed. Are they going to run next time, or are they going to say, why bother? It's fixed.


NpS, tell me what law or CC&R might permit the Board to take away this HOA member's rights to campaign for whomever, using his own resources (not the HOA's), and stating that he is speaking in his capacity as a member.

Any fiduciary duty this HOA staff member has competes with his rights as a HOA member. As I wrote, I would think a person who did this is scum. I would be less inclined to vote for those people he foolishly endorsed. But legally, I think this person does not forfeit his rights to campaign as a HOA member.
NpS
(Pennsylvania)

Posts:3148


04/08/2019 10:54 PM  
Posted By AugustinD on 04/08/2019 9:20 PM
Posted By NpS on 04/08/2019 9:12 PM
EM's email to the community said 9 candidates, 6 highly qualified, and 3 preferred. Would you change your mind Augustin if you were one of the 3 highly qualified that the EM didn't pick? And what if you were one of the other 3 that the EM decided weren't qualified based on some unknown criteria?

Maybe you have an abundance of candidates. We don't. I would do whatever I could to prevent those 6 who threw their hats in the ring from feeling betrayed. Are they going to run next time, or are they going to say, why bother? It's fixed.


NpS, tell me what law or CC&R might permit the Board to take away this HOA member's rights to campaign for whomever, using his own resources (not the HOA's), and stating that he is speaking in his capacity as a member.

Any fiduciary duty this HOA staff member has competes with his rights as a HOA member. As I wrote, I would think a person who did this is scum. I would be less inclined to vote for those people he foolishly endorsed. But legally, I think this person does not forfeit his rights to campaign as a HOA member.



You raise a good point. What happens when a personal right competes with a fiduciary obligation?

The fiduciary obligation requires full prior disclosure, which obviously didn't happen here.

Now, EM might say: My personal rights are superior to my fiduciary obligation. And I would say: No, it's the other way around. You can assert your personal rights only if those personal rights don't interfere with your obligations as a fiduciary. Otherwise, people would be able to end-run fiduciary laws all the time.

I go back to my original comment about perception. If I lived in that community and the EM said I should vote for X, I would naturally assume that EM has better information than I do because he is the EM, and so I would tend to go along with EM. And that's exactly why there are laws that restrict fiduciaries from acting to better their own personal position.

Let's say EM knows that Charlie wants EM to get more money but Fred wants EM to get less. Whose interest is EM going to protect, his own or the community's when he makes his recommendation. Obviously, we don't know enough about what's actually going on here, but it sure does stink to me.

If the OP is in doubt, there's a reasonably inexpensive way to find out for sure. Call the HOA lawyer and ask if personal rights must give way to fiduciary obligations, or the other way round.




Je publie un degagement de toutes responsabilite. Read all posts at your own risk.
CathyA3
(Ohio)

Posts:219


04/09/2019 4:59 AM  
I agree with Np. If you are a professional, your fiduciary duties trump your personal rights. This is why judges (and board members) recuse themselves when dealing with an issue where they have a personal stake in the outcome. At the very least the EM should have stated that he was speaking as a homeowner and not as the manager.

As an aside, sometimes a professional actually has fewer rights than the average person simply because of his position. When I worked in the financial services industry, I was not allowed to take part in IPOs (initial public offerings of stock) because it could appear that I was acting on insider info. And I could be fired, fined, and lose my licenses for the mere appearance of wrong doing, even if it turned out that I hadn't actually done anything wrong. Reputation counts for a lot, and a smart professional protects his.

SueW6
(Michigan)

Posts:470


04/09/2019 6:49 AM  
Joseph never answered if HOA resources were used for the mailing, or if this person was doing personal campaigning - his right as a member.

Did he sign the endorsement letter using his title? Or just his name?

How was the mailing paid for?

Be careful of squelching free speech. On the other hand, he should be fired asap for over- reaching his paid position role and should reimburse the HOA —- if he used HOA monies/time in any way to campaign.
AugustinD


Posts:1498


04/09/2019 8:32 AM  
Posted By NpS on 04/08/2019 10:54 PM

What happens when a personal right competes with a fiduciary obligation?

The fiduciary obligation requires full prior disclosure, which obviously didn't happen here.

Now, EM might say: My personal rights are superior to my fiduciary obligation. And I would say: No, it's the other way around. You can assert your personal rights only if those personal rights don't interfere with your obligations as a fiduciary. Otherwise, people would be able to end-run fiduciary laws all the time.

I go back to my original comment about perception. If I lived in that community and the EM said I should vote for X, I would naturally assume that EM has better information than I do because he is the EM, and so I would tend to go along with EM. And that's exactly why there are laws that restrict fiduciaries from acting to better their own personal position.


You keep using the term, 'fiduciary obligation.' I know this applies to directors. I know when it does apply to directors, there is law that interprets when a director has violated his or her fiduciary obligation. I am not so sure it applies to a HOA employee or contracted HOA manager. I'd call the situation more of a conflict of interest. Those are not currently regulated very well at many HOAs. But this conflict of interest applies to virtually everything a HOA manager, who is also a HOA member, does. I think it's a bad choice to have a paid HOA manager who is also a member.

Like SueW6 wrote, it's still unknown as to whether the HOA manager said he was writing members with his own member hat on or whether he indicated he was the manager. Also it is not clear whether this member used HOA resources to do the emailing (e.g. mass email capability of HOA software and records).

You and I agree this member/manager is scum. But I also think almost as many members would scrutinize more closely, in a negative way, anyone the EM endorsed. Precisely because the EM's endorsement suggests a tit-for-tat would be in place. Some managers and directors are under-educated enough not to understand this.
KerryL1
(California)

Posts:6308


04/09/2019 9:26 AM  
Is this EM certified by some sort of HOA property manager org.? If so, doesn't that agency have a Code of Ethics? Does CAI have a Code of Ethics for property mangers?

Curious to know, Joseph, what size your HOA is. Do you happen to know how/why the Board elected this person as PM? Does i he work for a Management co.? Or is he "independent" and an employee of the HOA?

I think it's maybe not a bad idea to read your board's contract with this jerk.
NpS
(Pennsylvania)

Posts:3148


04/09/2019 9:33 AM  
Some good points Augustin. Let's dig a little deeper.

Board members are fiduciaries.

In my HOA, we have 3 Officers (homeowners) who are not Board members. Are they fiduciaries too?

Some HOAs have committees. Is the head of one of those committees a fiduciary?

Sone HOAs use a management company. The MC has access to personal data about every homeowner. Does the MC have a fiduciary responsibility to secure that data, or can the MC sell it to some marketing company?

A property manager works for the MC. Does the MC's fiduciary responsibilities pass on to the PM?

The question of whether someone is a fiduciary or not depends on the nature of the particular relationship, not the job title.

You mention conflict of interest. That's not something different. In fact, protecting homeowners from those conflicts of interest is one of the reasons that fiduciary laws apply.

As Cathy said, she risked losing her license and being fined for the appearance of improper action, even if she did nothing wrong. Sure, she was working in a highly regulated industry. But that's not the issue.

The central question is - Was EM in a position to snooker everyone because he withheld information that he should have disclosed in advance?

Personally, I think that most homeowners don't want to get involved and are relieved when someone steps up. That makes them vulnerable to people who would put their own interests above those of the community, and no one would be the wiser. Is that limited to Board members only? I don't think so.

So yes, you are right about conflict of interest. But that's not something different. Conflict of interest and fiduciary responsibility are both part of the same package.







Je publie un degagement de toutes responsabilite. Read all posts at your own risk.
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