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Subject: How do you Contest a HOA illegal Ruling?
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RobertaS2
(Michigan)

Posts:60


10/06/2019 12:31 PM  
I have had a LOT of help here on this Forum with other concerns. Thank you for that. I really appreciate this forum and its members.

My question, now, is how do you contest rulings by the HOA attorney that smell illegal? We either have an HOA lawyer who seemingly "works only for the benefit of the current president" or who is totally incompetent.

He acts –as a bully– to make it financially more expensive to go to court than to get paid over financial disputes or to even hold disputes, i.e. to get a determination over who is right or wrong within the by-laws and declaration articles. He disenfranchises people running against the current Board and declares that they cannot run.

We have sited the articles. We have paid out of pocket for outside attorney letters with multiple legal examples holding up their opinions. We have not yet paid out of pocket for an outside attorney to come in, nor do we know how to argue these things against our current bully attorney and bully president so they can be settled legally.

Any help or suggestions?

Thanks again!

JohnT38
(South Carolina)

Posts:117


10/06/2019 12:50 PM  
A little bit of background info on what you are talking about would be helpful.
AugustinD


Posts:1934


10/06/2019 1:45 PM  
Unfortunately this happens a lot. I think the first thing a HOA member has to understand is that, incredible as it may sound, the law requires a HOA attorney to do what the board wants (short of a criminal act). Also incredibly, this is regardless of what the covenants, bylaws, municipal code, state and federal law say. The reason for this is that, by law, the HOA attorney's client is the HOA //as represented by the board//. Individual members are not clients of the HOA attorney. The HOA attorney is technically legally obligated to explicitly inform individual members in a dispute that she or he does not represent them as individuals.

My experience and it seems many others' experience here is that the cheapest route to take to resolve a legal dispute is to get a like-minded majority to run for the board; campaign heavily (and this will cost time and money); and win election.

Now and then a member may take a HOA to court and win, after spending at least a few thousand dollars and giving the lawsuit much time. But the victory is just one battle and not the war.

Things are very much stacked in favor of incompetent boards. They can blithely run up the legal bill for the HOA, at no direct cost to themselves, billing instead the entire membership. To add salt to the wound, such boards often publicly blame an individual member for the costs, even when the board is in the wrong.

If one has to live in a HOA or condominium, I think it's important to pick one's fights. Losing a little face to a pack of liars is better than giving a great deal of energy trying to fight people who simply, sadly, and legally have nearly all the power.
RobertaS2
(Michigan)

Posts:60


10/06/2019 2:01 PM  
Thank you for taking the time to respond to my question.

Sadly, we HAVE been, with great amounts of effort, rallied a majority
and better people to run.
The attorney then throws out proxies and disqualifies people running.
It is very frustrating. This has been repeated every election for years.
Also, the Board then acts with extreme prejudice in the community against
anyone who challenges them. Also against anyone who is diverse.

They lock all of the community out of regular Board Meetings, withhold our rights to review any records, we have no agendas given, minutes are "altered," and our clubhouse remains unused by the community, locked, and only usable by the Board for both Board business and the President's private personal business.

In Colorado, this could not happen in an HOA. (They have better HOA laws.) In Michigan, it can and has and it hurts many of our communities. So, Michigan, beware of this.

We hold hope that someone on this forum can help us figure out a solution.

Thanks again for your reply.
AugustinD


Posts:1934


10/06/2019 2:04 PM  
In my experience, when a board is cheating in elections, one's options are to either take the board to court, or move.
MelissaP1
(Alabama)

Posts:8601


10/06/2019 2:12 PM  
I get the feeling that people think the President/Lawyer are "bullies" and anything they do is just that. Not saying they are "bullies" but taking that approach towards them isn't doing anyone any favors. Need to get out of that mindset. Take a step back and a different approach.

I would start a rally of members to request that any contractor is subject to a 3 bid system, licensed/insured, and reviewed yearly. This would include MC's, lawyers, and lawncare contractors. You can guise this as a way for them to change their contract by re-bid with others. This way you get 2 other lawyers to be available as a resource. Some other board may have a "friend" who is a lawyer yada yada they may want to use...

This approach isn't confrontational but a way to change business practices. It's the small things. May not get rid of the existing lawyer but maybe help in other areas.


Former HOA President
RobertaS2
(Michigan)

Posts:60


10/06/2019 2:21 PM  
John, the by-laws state that only an owner on "record" can run for office.

(In Michigan, anyone with an interest in the property, such as a spouse,when the property is acquired during the marriage, can claim an interest in the property.A family member can appoint a family member, or a full or temporary Attorney in Fact, etc. to represent their interests if they are out of the county or disabled or have Alzheimer's, or just chose to, etc.)

Our Articles state that when multiple family or other owners co-own a property that they ber of the HOA, and that they themselves can decide who to chose to represent them. Our Articles also state that when there is a conflict between the by-laws and the articles, that the articles will prevail.

The current HOA attorney (this was NEVER done before this bad board and attorney and we have owned our home for 24 years), claims that the owner on "record" MUST now be ON the title. He consistently disqualifies spouses and family co-owner members. Before that, he required marriage certificates, and when they were produced, he went on to this new interpretation of "on record."

(In Michigan, property laws state that you do NOT need to be on the title to be on record as holding co-ownership.)

I hope this fleshes out one of our problems.

Thank you for your consideration of our dilemma here.
RobertaS2
(Michigan)

Posts:60


10/06/2019 2:25 PM  
Thank you for your reply.

I agree. Not all Board Presidents are bullies and thank you for the reminder.
We have had previous good presidents and descent boards.

You make some very good points.

Thank you again.
RobertaS2
(Michigan)

Posts:60


10/06/2019 2:25 PM  
How do you take a Board to court?
MelissaP1
(Alabama)

Posts:8601


10/06/2019 3:23 PM  
Well will say that most of the time a member is considered the name on the title. That isn't out of the "norm". Although we had a married couple switch out who was on the board every year. Think both their names were on the title as a married couple. So I can sort of agree that even though it sucks, I kind of agree that to be a member in a HOA it is the name on the title. That is my opinion not based on any state laws. (State laws vary).

If you are to sue, we all know my staple advice... Suing your HOA is suing yourself and your neighbors. Court can ONLY make you "whole". So it's NOT in any way a discouragement of filing a lawsuit. Just a CONSEQUENCE of doing so. Think too many people take that statement as discouragement but it's really just a reality check you have to choose to accept if you want to pursue.

Not sure what you want to sue your board for. Remember that "bully lawyer" is NOT YOUR lawyer. He is the HOA's lawyer. That lawyer is the one your lawyer will be facing in court. It's also best to get a group together who feel the same way to join you. However, if you have enough people to join you then you have enough to vote in a new board...

The issue is that people don't know how to properly vet out lawyers. They have this "fantasy" of what they do by watching TV. Perry Mason anyone? You do NOT need a "retainer" when hiring a lawyer. Lawyers will and can charge you for email, text, or phone calls. It's why I never leave a message. It's best to have 1 board member preferably the President to be the POC with the lawyer. However, with the caveat that it is agreed upon by the board to contact the lawyer. Understand the lawyer is the Boards/HOA's lawyer, not individual members. A HOA being a corporation is to have a lawyer or a trusted representative from the board to represent them in court.

Finally, a HUGE red flag is when a lawyer tells you "I will do whatever you tell me to do"... Where I believe is the fallacy your facing. An uneducated person who doesn't understand the law and the lawyer role in it, will just go with that statement. Not saying that every time it's a bad thing. It usually indicates there are other options you need to discuss or be aware of.

You also need to hire the right lawyer for the job. Which you do NOT hire a Real Estate lawyer for HOA issues. Your NOT dealing with Real Estate 95% of the time. A HOA is INCORPORATED. You are best to go with a lawyer with expertise in corporate or HOA laws.

The lawyer doesn't make the final decision. It's the board that does. If the person feels it's illegal, then the next step is for them to hire a lawyer and fight the issue. I wouldn't let a lawyer tell me what decision to make in my HOA. I'd take their advice and factor it into the final decision. Which may be getting sued.

Former HOA President
RobertaS2
(Michigan)

Posts:60


10/06/2019 4:55 PM  
Thanks for taking the time to respond and you've given me a lot to think about!

Personally,I would prefer NOT to sue anyone. I think it would be better to mediate or something???

I'll continue to moderate the suggestions all you helpful people are giving me and try to determine how or even if to proceed.

Again, Thank You. Thanks to ALL.
AugustinD


Posts:1934


10/06/2019 5:17 PM  
Posted By RobertaS2 on 10/06/2019 2:25 PM
How do you take a Board to court?


Either hire an attorney, or start by calling your county courthouse and asking if there are any free legal clinics offered. If you post the name of your county, I will see what I can come up with.

I suspect the only party who might have a "legal interest" (for HOA board candidate purposes) yet not be on the title would be a spouse. The position that "family co-owners" or any others 'designated' by the owner, none of whom are on the title, can be board members seems dubious.
PaulJ6
(New York)

Posts:319


10/07/2019 2:32 AM  
Posted By AugustinD on 10/06/2019 2:04 PM
In my experience, when a board is cheating in elections, one's options are to either take the board to court, or move.




Correct, although another option is to get so much evidence that the board can’t cheat. Such as by homeowners getting proxies from a majority of owners, sonthatbthe board can’t claim “it” won an election.

OP, the attorney works for the HOA. The board can ignore or fire the attorney. The attorney should be acting only if and when the board tells the attorney to act. The attorney doesn’t have to be involved with elections.

If the attorney is violating rules that govern lawyers, called the Rules of Professional Conduct, file a bar complaint, although those usually have no effect.
MelissaP1
(Alabama)

Posts:8601


10/07/2019 4:48 AM  
I am not sure the OP has the right view on the law. HOA's operate a bit differently. So I would recommend talking to an attorney that specializes in HOA's for advice. Something just seems off on the perspective of property transference. Have to say it does seem very odd that someone not on the deed is allowed to be able to vote.

Is there someone specific that is having this trouble applying their right to vote or run for a position? Don't like hearing genearlities. Need more specifics. Each situation is different. Let's say someone wants their spouse on the board. That person isn't on the title. That spouse makes a bad decision. Will the HOA's liability insurance cover that spouse?

There are reasons for some decisions. Don't take it on the surface.

Former HOA President
RobertaS2
(Michigan)

Posts:60


10/07/2019 8:14 AM  
Continued Appreciation to all contributing and participating in this thread.

I think most people believe that the deed (and its names) say everything.
But in Michigan, this is NOT true.

Here is a paragraph from an Official Michigan Law Site:

"THE NAME ON THE DEED:

Sometimes people think if only one spouse's name is on a property deed, the other
spouse does not own the property or have any right to it. THIS IS NOT TRUE. Real estate
is marital property if it was purchased or paid for during your marriage.
It doesn't matter whose name is on the deed.

It also doesn't matter if only one spouse's name is on the mortgage.
The mortgage only shows who is legally responsible for paying the loan.
It doesn't show who owns the property. "

(Michigan Compiled Laws, Chapter 557, Sec. 557.21)

Our HOA is in Washtenaw County, Michigan.

I am not sure about how other family members or Power of Attorney applies at this time. One woman in our community is elderly with Alzheimer's and her daughter has Power of Attorney, but also was not allowed to vote.

Another family has an adult son who has been living in, improving, and paying his parents for the property, but even when his parents came to the election, the son was not recognized as an owner or co-owner by the HOA lawyer.

I might add, that such types of spouses and/or family members WERE previously allowed to both vote and be Board members for 20 out of the 24 years we have lived here. Only THIS Board and THIS HOA Attorney (at their orders) have implemented these NEW restrictions/interpretations since they have not wanted to share the power, the records, the clubhouse with any of the community who would unseat them (mostly in the interest of SERVING the community, not RULING them, in order to have a more involved and happy community). It is rather like, instead of being treated as homeowners, the community owners here are being treated as if renters.

It is unfortunate, because a healthy, involved community is a desirable one. Property values increase. People want to live in such communities.

A community HOA must "keep the lights on," but it could also serve to "involve the community in positive ways, and build and nurture community."

The present HOA Board does keep the lights on for the most part, but not cost-efficiently or kindly. So many of us are frustrated.

However, without a clear path for correcting this,it feels cost (and power) prohibiting. After three elections where proxies, votes, and new candidates were disqualified by the HOA Attorney, many very good neighbors are contemplating selling and moving.

Again, I appreciate all the advice here and am sharing it with concerned neighbors. Thank you.

If there were a way, it is my hope that it would be more desirable to turn these problems around.



AugustinD


Posts:1934


10/07/2019 8:37 AM  
Roberta, I think quoting exactly what your governing documents say about who is eligible to vote may be helpful.

I think the daughter with POA likely should have been allowed to vote. The son you claim is a co-owner does not so far appear to me to have a right to vote, unless the owners of the home give him a proxy.

I think it is irrelevant what previous boards did re voter eligibility. What matters is what the covenants and law say.

Try the University of Michigan Law School contact information at https://statelaws.findlaw.com/michigan-law/free-legal-aid-in-ann-arbor.html
https://www.law.umich.edu/clinical/generalclinic/Pages/communityresources.aspx

Also, call the court numbers at https://www.washtenaw.org/946/14A-District-Court and ask if there are any free legal clinics offered.

For any meeting you have with an attorney, bring in a list of covenant violations, possibly with particular attention to election violations.

If you have the money, you're probably better off hiring an attorney. Even one meeting may give you some clarity on how to proceed.
RobertaS2
(Michigan)

Posts:60


10/07/2019 9:12 AM  
Thank you.
SueW6
(Michigan)

Posts:586


10/07/2019 6:53 PM  
Roberta.

Usually one home gets one vote. One person casts the vote .

Are you saying that if a group of six people own a house, they would ALL get a vote?
ChristinaB2
(California)

Posts:20


10/07/2019 7:44 PM  
I feel your pain...ours wrote letters and then got paid agian to retract the letters and admit that they were wrong...makes the Board, MC and him look inept.
RobertaS2
(Michigan)

Posts:60


10/08/2019 9:31 AM  
Sue,

Even if two or more are co-owners, each house gets one vote only. The by-laws state that it must be the owner of record. The articles state if there are multiple owners, that the owners can decide amongst themselves who will have that vote or act for the house. The articles also say that whenever there is a conflict between the by-laws and the articles, that the articles prevail.
RobertaS2
(Michigan)

Posts:60


10/08/2019 9:33 AM  
Christina,
Thanks. Seeing how many HOAs have trouble, in certain states especially, makes us weary.
MelissaP1
(Alabama)

Posts:8601


10/08/2019 3:30 PM  
The Articles seem to be referencing a LLC situation rather than single homeownership. I always refer to LLC's chosen member to represent the one that will go to prison. Also find it unusual for this rule to allow to "pick" from the household whom vote or elected to board.

Honestly, call me old fashioned but I am for 1 vote via the name on the Title. Otherwise not so sure it would be a happy homelife….

Former HOA President
RobertaS2
(Michigan)

Posts:60


10/08/2019 4:14 PM  
Hi. Got a laugh out of that! Thanks!

I agree that the articles are in conflict with the bylaws. But, in a way, it makes sense:
one vote per home and if the home is owned by two or more members, let them decide among themselves who gets to represent the vote or membership.

In our community (sadly other HOAs too), another big problem is apathy.

It is very very obvious here, though, that the lawyer was brought in to obstruct anyone who was trying to change the board. I guess that's legal, possibly. For certain, no one here has thousands of dollars to take them to a judge to determine what is right or wrong, but the board has the power of an HOA attorney, without it coming out of their personal pockets, that follows their direction (and must).

PaulJ6
(New York)

Posts:319


10/08/2019 5:10 PM  
Posted By RobertaS2 on 10/08/2019 4:14 PM
the board has the power of an HOA attorney, without it coming out of their personal pockets, that follows their direction (and must).





A lawyer who blindly does what his/her client wants can end up in hot water. Lawyers aren't blind robots- lawyers are subject to ethical rules, the Fair Debt Collection Practices Act and other legal requirements. Hold the lawyer accountable if s/he runs afoul of any of those. Lawyers who work for HOAs can get nailed due to Fair Debt Collection Practices Act violations (and comparable state statutory violations) in particular. You can go to small claims court and sue both the HOA and the lawyer for those kinds of things.
RobertaS2
(Michigan)

Posts:60


10/08/2019 7:02 PM  
Thank You!!!! This is very valuable information! Thank you! We will look into it!
RobertaS2
(Michigan)

Posts:60


10/08/2019 7:05 PM  
One other question: I thought that the fair debt collection practices act protected debt "collectors"
How does it protect those owed debts or denied rights?
MelissaP1
(Alabama)

Posts:8601


10/08/2019 9:12 PM  
I don't think it does apply to HOA's. HOA's aren't allowed to have Social Security #'s.

Former HOA President
PaulJ6
(New York)

Posts:319


10/09/2019 2:42 AM  
Posted By RobertaS2 on 10/08/2019 7:05 PM
One other question: I thought that the fair debt collection practices act protected debt "collectors"
How does it protect those owed debts or denied rights?




The Fair Debt Collection Practices Act limits what debt collectors can do and it allows for alleged debtors to recover damages from debt collectors for debt collectors’ unlawful acts. Lawyers who work for HOAs may be considered debt collectors under the FDCPA and similar state statutes, meaning that those lawyers have limits in how they can deal with homeowners.
MelissaP1
(Alabama)

Posts:8601


10/09/2019 4:53 AM  
Exactly would the OP be suing for? It seems instead of a lawsuit, the rules need to be updated/changed. Which if get enough support should start that process instead of a lawsuit. If the rules aren't clear or aren't what the majority wants, then change them. The rules are what the owners choose to live under. They allow changes to be made. Guess what? It's not by the board but by the entire membership.

Read the rules to find out what it takes to change them. Get a group together to hire a lawyer to go over the proposed changes and writing them. If it takes a special meeting to make changes find out what options that allows. You may be able to skip that requirement if people willing to give up their "right" to a special meeting to cast their vote.

There are other options outside of a lawsuit. Read your documents to find out what they are....

Former HOA President
PaulJ6
(New York)

Posts:319


10/09/2019 5:18 AM  
Posted By MelissaP1 on 10/09/2019 4:53 AM
Exactly would the OP be suing for? It seems instead of a lawsuit, the rules need to be updated/changed. Which if get enough support should start that process instead of a lawsuit. If the rules aren't clear or aren't what the majority wants, then change them. The rules are what the owners choose to live under. They allow changes to be made. Guess what? It's not by the board but by the entire membership.

Read the rules to find out what it takes to change them. Get a group together to hire a lawyer to go over the proposed changes and writing them. If it takes a special meeting to make changes find out what options that allows. You may be able to skip that requirement if people willing to give up their "right" to a special meeting to cast their vote.

There are other options outside of a lawsuit. Read your documents to find out what they are....




For a lawsuit:

* Breach of fiduciary duty (against the directors)
* Fraud (against the directors and the lawyer)
* Tortious acts (against the directors and the lawyer)

But you're right: best bet is to just change the rules. Take over the board, fire the lawyer and get a better lawyer.
PaulJ6
(New York)

Posts:319


10/09/2019 8:51 AM  
Also, some people just need to be a defendant, to get a "whack" that gets them to shape up.

Small claims court is an effective and low-cost way to do this.

Suing your HOA can be a way to fix bad behavior and is often a sole remedy, since state laws provide such weak/effective oversight of HOAs. It's not "suing yourself": bad board members can be personally liable and HOAs generally have insurance. And even if it were "suing yourself", it's often worth it to fix bad behavior that impairs property values.
KerryL1
(California)

Posts:6632


10/09/2019 10:10 AM  
Often, when Melissa writes, "change the rules," she means amend the covenants, which does require owner voting, etc. "changing the rules," usually is much easier and often only requires board approval.
GenoS
(Florida)

Posts:3234


10/09/2019 11:28 AM  
Posted By PaulJ6 on 10/09/2019 8:51 AM
It's not "suing yourself": bad board members can be personally liable and HOAs generally have insurance. And even if it were "suing yourself", it's often worth it to fix bad behavior that impairs property values.

Uh, oh. Now you've done it...
PaulJ6
(New York)

Posts:319


10/09/2019 12:21 PM  
Posted By GenoS on 10/09/2019 11:28 AM
Posted By PaulJ6 on 10/09/2019 8:51 AM
It's not "suing yourself": bad board members can be personally liable and HOAs generally have insurance. And even if it were "suing yourself", it's often worth it to fix bad behavior that impairs property values.

Uh, oh. Now you've done it...




Well, if you sue the government, you cold sort of be seen to be "suing yourself" but hopefully we can all agree that doing so is warranted sometimes. Or in 1776 people could be seen to be harming themselves by taking on the government that claimed to be their own. But sometimes such things are necessary.
GenoS
(Florida)

Posts:3234


10/09/2019 12:43 PM  
I'm with you, Paul. I just hear the refrain of Sweet Home Alabama warming up in the distance.
PaulJ6
(New York)

Posts:319


10/09/2019 1:36 PM  
Posted By GenoS on 10/09/2019 12:43 PM
I'm with you, Paul. I just hear the refrain of Sweet Home Alabama warming up in the distance.




Thanks. It'll come. I totally see Melissa's perspective and think very highly of Melissa and her posts. If I were a board president, I would see lawsuits very differently. But I'm not; I've been shafted by bad boards.
PaulJ6
(New York)

Posts:319


10/09/2019 1:36 PM  
Posted By GenoS on 10/09/2019 12:43 PM
I'm with you, Paul. I just hear the refrain of Sweet Home Alabama warming up in the distance.




Thanks. It'll come. I totally see Melissa's perspective and think very highly of Melissa and her posts. If I were a board president, I would see lawsuits very differently. But I'm not; I've been shafted by bad boards.
AugustinD


Posts:1934


10/09/2019 2:09 PM  
Posted By PaulJ6 on 10/09/2019 1:36 PM
If I were a board president, I would see lawsuits very differently. But I'm not; I've been shafted by bad boards.


?

If you were president of the board, I expect lawsuits or threats of same at your condo or HOA would be happening at a significantly lower rate compared to the national average.
RobertaS2
(Michigan)

Posts:60


10/09/2019 4:33 PM  
You ALL are a very cool group! I am impressed. And amused. And enjoying and learning here.
Thank you. -Roberta
SueW6
(Michigan)

Posts:586


10/10/2019 4:27 AM  
At the next annual meeting, be sure there is a motion on the agenda to end the contract with this current legal counsel.

You will need all your reasons at the debate portion.

The board must follow the voted will of its members.

Good luck
MelissaP1
(Alabama)

Posts:8601


10/10/2019 4:58 AM  
That is a great idea Susan. Bring your issue to the floor. State why you don't believe the existing counsel is doing a proper job. You argued it here. Why not where it matters?

Don't expect it to change but atleast get your opinion heard. It may create a bit of doubt with what is happening. It also may educate you as well if the decisions aren't bad ones. They just may not be the ones you want to hear.

Good time to address the rules and get them changed as well.... Sweet Home Alabama! Roollll Tide!!!!

Former HOA President
JohnC46
(South Carolina)

Posts:8730


10/10/2019 7:11 AM  
Posted By SueW6 on 10/10/2019 4:27 AM
At the next annual meeting, be sure there is a motion on the agenda to end the contract with this current legal counsel.

You will need all your reasons at the debate portion.

The board must follow the voted will of its members.

Good luck




This is a good suggestion. Now Roberta has to find out she can get an item o the Agenda. Asl if here is a Q&A Session that might be a way to get the discussion going.
PaulJ6
(New York)

Posts:319


10/10/2019 8:19 AM  
I'd go further and send a demand letter to the board about this. Cite the state statute that allows "derivative demands" by owners. What this means is that if the board doesn't terminate the lawyer, then you, as an owner, can act on behalf of the HOA to pursue a claim against the lawyer, once you've sent the "derivative demand" letter and the board hasn't acted.
AugustinD


Posts:1934


10/10/2019 8:49 AM  
I doubt the membership, at an annual meeting or otherwise, has the legal right to either create or terminate contracts or other arrangements, such as representation by a certain attorney. I am betting that legally, only the HOA board has this power.

Paul suggests a derivative action. Maybe this is a nice idea in theory. But for one, in a derivative action, all or nearly all states require the plaintiff to use a licensed attorney. The legal cost to Roberta's side would be extraordinary. Barring more information, I think Roberta group's claim is extremely weak. I think no attorney would agree to represent her and her group. If an attorney would agree to represent Roberta and her group, I think this would either be a long drawn out court battle, or the lawsuit would be dismissed very quickly.

A derivative action would ask a judge to turn over the power to terminate the attorney's representation to the membership. The membership would be said to be acting 'derivatively' on behalf of the corporation). I am not seeing it.
RobertaS2
(Michigan)

Posts:60


10/10/2019 1:12 PM  
Thank you all for this animated discussion.

I have a question: Our By-Laws state that on the first meeting after the election, the Board must, at that time, appoint a nominating committee to consist of one board member and two (non board member) residents for the next election.

They do NOT do this. They assume that they are the nominating committee themselves and only just before the election, in the annual meeting letter –where the election is announced and the proxies are enclosed– do they nominate themselves only. They have only allowed nominations from homeowners present at the annual meeting on the floor a few minutes ahead of the election.

Is this a breach of their fiduciary Duty?

If so, is there a recourse for that.

For years, many of us have been asking and questioning: Where and Who are the Nominating Committee?

They also are charged with forming a 3 member (homeowners, not needing a board member) Architectural Committee. This community has many qualified for such a committee: builders, architects,etc. The Board -with few architectural qualification, if any...one electric engineer)– considers itself the Architectural Committee and bases its decisions of approval or disapproval on their own personal tastes.

Is this also a breach of their fiduciary duty?

Can they be removed from the Board for that?
PaulJ6
(New York)

Posts:319


10/10/2019 2:59 PM  
Posted By RobertaS2 on 10/10/2019 1:12 PM
Thank you all for this animated discussion.

I have a question: Our By-Laws state that on the first meeting after the election, the Board must, at that time, appoint a nominating committee to consist of one board member and two (non board member) residents for the next election.

They do NOT do this. They assume that they are the nominating committee themselves and only just before the election, in the annual meeting letter –where the election is announced and the proxies are enclosed– do they nominate themselves only. They have only allowed nominations from homeowners present at the annual meeting on the floor a few minutes ahead of the election.

Is this a breach of their fiduciary Duty?

If so, is there a recourse for that.

For years, many of us have been asking and questioning: Where and Who are the Nominating Committee?

They also are charged with forming a 3 member (homeowners, not needing a board member) Architectural Committee. This community has many qualified for such a committee: builders, architects,etc. The Board -with few architectural qualification, if any...one electric engineer)– considers itself the Architectural Committee and bases its decisions of approval or disapproval on their own personal tastes.

Is this also a breach of their fiduciary duty?

Can they be removed from the Board for that?




It's a breach of contract and maybe a breach of fiduciary duty. You can sue for this, but it's tough to show damages, so the most viable lawsuit would be for an injunction, which a small claims court won't handle. This could also be handled in a derivative demand letter: demand that the board pursue all claims against people who engage in this conduct. The board will get very upset if you send a derivative demand letter.
RobertaS2
(Michigan)

Posts:60


10/10/2019 3:28 PM  
What does a derivative demand letter look like? Is there a template for that? Would I/we need an attorney? How does it work?

Also, Thank you, again for your advice and input!!!
PaulJ6
(New York)

Posts:319


10/10/2019 4:11 PM  
A derivative demand letter would just state, "Pursuant to Section __ of Michigan Statutes, I, as an owner in the ___ HOA, hereby demand that the Board pursue the following claims:" and then the claims would be described. The relevant section would be whatever Michigan law allows derivative demands by HOA members (or by stockholders in a corporation generally). It's best to get a lawyer to do it because the derivative demand is invalid unless it clearly covers the demands that you want to pursue and complies with the statute, but a lawyer is not legally obligated to be the one to write the letter- you can do it if you don't have one.

Expect the board to get livid if it gets a derivative demand letter, though.
MelissaP1
(Alabama)

Posts:8601


10/10/2019 4:16 PM  
Our elections one gets elected to the board by the membership. Once elected the new board members vote amongst themselves for the office positions. It is not done by a nominating committee. I would suggest your HOA form a nominating committee so they can be responsible for vetting out those running for office besides the attorney.

Ultimately the ACC answers to the board. The board has the final say. Our ACC just basically became the board members as no one was interested on being on the ACC. So we approved/denied everything. Which usually made the decisions after the meeting so we could go and check it first hand.

Still think need to make a better procedure for legal expenses. We always had the board agree prior to ever contacting an attorney. The President (me) would be the one to be the POC for it. I rarely ever contacted an attorney outside of the procedural needs of liens/foreclosures, and rule changes. Other than that, I'd tell people to bring me the lawsuit when your ready. Have a nice day!

Former HOA President
JohnC46
(South Carolina)

Posts:8730


10/11/2019 8:20 AM  
Posted By RobertaS2 on 10/10/2019 1:12 PM
Thank you all for this animated discussion.

I have a question: Our By-Laws state that on the first meeting after the election, the Board must, at that time, appoint a nominating committee to consist of one board member and two (non board member) residents for the next election.

They do NOT do this. They assume that they are the nominating committee themselves and only just before the election, in the annual meeting letter –where the election is announced and the proxies are enclosed– do they nominate themselves only. They have only allowed nominations from homeowners present at the annual meeting on the floor a few minutes ahead of the election.

Is this a breach of their fiduciary Duty?

If so, is there a recourse for that.

For years, many of us have been asking and questioning: Where and Who are the Nominating Committee?

They also are charged with forming a 3 member (homeowners, not needing a board member) Architectural Committee. This community has many qualified for such a committee: builders, architects,etc. The Board -with few architectural qualification, if any...one electric engineer)– considers itself the Architectural Committee and bases its decisions of approval or disapproval on their own personal tastes.

Is this also a breach of their fiduciary duty?

Can they be removed from the Board for that?




Most associations have done away with nominating committees and do allow nominations from the floor. If not for nominations form the floor, we would not have a full BOD.

RobertaS2
(Michigan)

Posts:60


10/11/2019 11:11 AM  
Our Association requires a nominating committee. It is supposed to be put together right after each annual election for the next year. They would talk to homeowners way ahead who would be willing to run for the board. This also gives people head's up on who they are and time to talk to them.

By not following this, the current board just promotes and nominates themselves.

The nominations from the floor are last minute short opportunities for other people to be nominated. Often, they are given short 2-3 minutes to introduce their ideas and backgrounds.

A nominating committee could be gathering and introducing the nominees all year.

Homeowners here have questioned the Board. Why is there no nominating committee? Who are the nominating committee? The Board used to say they all were. Then they took the stance to just not answer.

If someone challenges them on a decision, they don't answer. If someone runs against them for a seat on the board or challenges a decision (for example the pools were replaced with a faulty design by the board president and are failing; they painted fences last summer, then this summer, had the same fences rebuilt and then repainted again, i.e. out of logical order and more expensive), then those people are often denied services or penalized (examples: telling the lawn service to throw sticks in their yards, going into their yards and hacking down tree limbs in the middle of the night and throwing them in their gardens, not fixing broken common area drain lines by their homes for months while heavy rains continued, not repairing water damage or repaying homeowners for water damage clean-up due to unmaintained, failed drain lines in the common areas, etc. We have a wonderful diverse neighborhood. The Board treats foreigners like second class citizens, has been known to mimic their accents at board meetings. They have made some people –grown men– actually cry. The HOA Attorney has sent letters threatening libel suits to numerous neighbors who questioned the president's conflict of interest in awarding himself contracts. And legal letters denying access to records to those who have requested seeing them (as we are allowed to in the By-Laws, Etc.)

(I guess this isn't such a wonderful place to live at the moment. Trying to change things for the better. We do have many wonderful neighbors.)
NpS
(Pennsylvania)

Posts:3758


10/11/2019 8:37 PM  
Posted By RobertaS2 on 10/07/2019 8:14 AM
I think most people believe that the deed (and its names) say everything. But in Michigan, this is NOT true.

Here is a paragraph from an Official Michigan Law Site:

"THE NAME ON THE DEED:

Sometimes people think if only one spouse's name is on a property deed, the other
spouse does not own the property or have any right to it. THIS IS NOT TRUE. Real estate
is marital property if it was purchased or paid for during your marriage.
It doesn't matter whose name is on the deed.

It also doesn't matter if only one spouse's name is on the mortgage.
The mortgage only shows who is legally responsible for paying the loan.
It doesn't show who owns the property. "

(Michigan Compiled Laws, Chapter 557, Sec. 557.21)



I could use some help understanding how you think the above info relates to your bylaws.

In every state I've lived in, the name on the title is not the end-all and be-all in determining actual ownership. Marital property rights do not need to be established in the deed anywhere I know of in the US. So in this regard, Michigan is not unique.

BUT, being an owner is not the same thing as being of title (or as you put it "on title".) "Of title" means specifically that the name is on the deed.

Now if your bylaws state that you must be "of title" or "on title", then that's an administrative limitation. And while I might not agree with it personally, it is probably enforceable if it's in your bylaws. I don't see a conflict of documents.

I do agree that an owner may not be able to vote under this administrative restriction, and i do see where that restriction could lead to an unfair result, but technically, I don't see anything more than a potentially enforceable restriction.

Sikubali jukumu. Read all posts at your own risk.
RobertaS2
(Michigan)

Posts:60


10/11/2019 10:32 PM  
The by laws do not state that the owner is "on title" but "of record." The articles/declarations state that if multiple owners, the owners decide who is the voter/board eligible person and that the articles/declaration prevails over the by-laws in cases of conflict between the two. "Of record" can be "interpreted."

Thanks for joining into this discussion. All replies are very much appreciated and I am learning much here.
NpS
(Pennsylvania)

Posts:3758


10/12/2019 8:19 AM  
Posted By RobertaS2 on 10/11/2019 10:32 PM
The by laws do not state that the owner is "on title" but "of record." The articles/declarations state that if multiple owners, the owners decide who is the voter/board eligible person and that the articles/declaration prevails over the by-laws in cases of conflict between the two. "Of record" can be "interpreted."

Thanks for joining into this discussion. All replies are very much appreciated and I am learning much here.


Considering the current situation, I would suggest that the titled owner sign a notarized affidavit stating who the owners of record are.

I can think of 2 things that can be done with the affidavit:

1. Provide a copy to the HOA.

2. File a copy at the local Recorder of Deeds as a Miscellaneous Document.

The first approach is easier to do.

The first in combination with the second is harder for the HOA to challenge.

Either way, formal notice has been given to the HOA. It should put the non-title owner in stronger position to challenge the HOA's interpretation.





Sikubali jukumu. Read all posts at your own risk.
RobertaS2
(Michigan)

Posts:60


10/12/2019 8:45 AM  
Good ideas here. (I did bring a letter from my family lawyer that stated my husband WAS an owner since we acquired the property during our marriage. HOA Lawyer didn't like that. Still disqualified him, others with POWs, and letters from other co-owners where both were not on the deed. They all were opponents of the current board. Haha. Like that wasn't obvious why they were all disqualified.)

Interesting discussions here. I am learning a LOT. I believe in common sense, but the Articles and Declarations and By-Laws can be very fuzzy or specific in how they are written and also in how they can be interpreted or misconstrued, etc.

I've been part of HOAs in Colorado that ran really well. I've heard that Colorado has better laws for HOAs. Is there a list of states with better regulations for HOAs?
NpS
(Pennsylvania)

Posts:3758


10/12/2019 10:29 AM  
Posted By RobertaS2 on 10/12/2019 8:45 AM
Good ideas here. (I did bring a letter from my family lawyer that stated my husband WAS an owner since we acquired the property during our marriage. HOA Lawyer didn't like that.



1. Letter from your lawyer does not have any legal significance.

2. Notarized affidavit signed by the title holder has legal significance.

3. Filing the notarized affidavit at the Recorder of Deeds has even more significance.
,
You are at level one. I can see where the HOA Board and its lawyer might reject what you offered.

At level 2 or 3 it is much harder for the HOA Board and its lawyer to reject it, and easier for you to prove their incompetence.

Sikubali jukumu. Read all posts at your own risk.
RobertaS2
(Michigan)

Posts:60


10/12/2019 11:44 AM  
Thank you all.

A question, for the homeowner who has POA for her Alzheimer's mom.
What recourse does she have when the current board denied her the right to act or vote?
AugustinD


Posts:1934


10/12/2019 12:13 PM  
Posted By RobertaS2 on 10/12/2019 11:44 AM
A question, for the homeowner who has POA for her Alzheimer's mom. What recourse does she have when the current board denied her the right to act or vote?


If the POA papers are in proper order, lots. I think the cheapest route to go would be to insist the ballot or proxy be accepted. Then if the vote would have made a difference in the outcome, lawyer up or take this to court pro se.
AugustinD


Posts:1934


10/12/2019 12:22 PM  
Posted By AugustinD on 10/12/2019 12:13 PM
Posted By RobertaS2 on 10/12/2019 11:44 AM
A question, for the homeowner who has POA for her Alzheimer's mom. What recourse does she have when the current board denied her the right to act or vote?


If the POA papers are in proper order, lots. I think the cheapest route to go would be to insist the ballot or proxy be accepted. Then if the vote would have made a difference in the outcome, lawyer up or take this to court pro se.
Also, if possible have someone document with their cell phone any oral exchange where the HOA attorney; board member; or manager rejects the ballot. At a minimum, have all witnesses prepare affidavits of what was said.
NpS
(Pennsylvania)

Posts:3758


10/12/2019 12:46 PM  
Posted By AugustinD on 10/12/2019 12:13 PM
Posted By RobertaS2 on 10/12/2019 11:44 AM
A question, for the homeowner who has POA for her Alzheimer's mom. What recourse does she have when the current board denied her the right to act or vote?


If the POA papers are in proper order, lots. I think the cheapest route to go would be to insist the ballot or proxy be accepted. Then if the vote would have made a difference in the outcome, lawyer up or take this to court pro se.


Agreed.

Sikubali jukumu. Read all posts at your own risk.
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