How should this be handled

Our docs say this about action taken without a meeting...

“BY-LAWS OF XXXXX Homeowners’ Association, Inc., a not-for-profit Florida corporation”
ARTICLE V, Section 5 “Action Taken Without A Meeting”
“The directors shall have the right to take any action in the absence of a meeting which they could take at a meeting by obtaining the written approval of all of the directors. Any actions so approved shall have the same effect as though taken at a meeting of the directors”.

ARTICLE IX, Section 8 “Duties” The duties of the officers are as follows:
(a) President- "The president shall preside at all meetings of the Board of Directors; shall see tha orders and resolutions of the Board are carried out; shall sign all leases, mortgages, deeds and other written instruments and shall co-sign all checks and promisary notes".

Given the above ByLaws and the experience of the members here how should this be/have been handled:

The association contracts a General Contractor to make cosmetic repairs to the front entrance sign of our community for $1100. (Repaint, patch cracked stucco... again cosmetic NOT structural.)
Upon commencement the contractor finds the stucco covered styrofoam which makes up the sign's design is water logged and had ants in it.

The contractor calls the Pres. and PM. to the sign site.
The Pres. authorizes the removal of the styrofoam and the addition of stucco in its place without written agreement as to the extent of the new work or the exact cost other than "not to exceed $500".

My wife is a director (Secretary) and feels the Pres. exceeded her authority and violated the Bylaws.

Please give me you opinions on this situation.

Thank You in Advance.

RW

The budget was set and then there was an additional $500 added cost, due to unforeseen circumstances.

The President could have called board members and taken a phone poll vote to get authorization. That would have been the decision without a meeting, to be ratified at the next meeting.

She did not take the Board thru that process. She probably thought that no one would vote NO on this particular issue, and made a judgment call on it AND that there were funds to cover the additional costs.

Wrong process? Probably. Is this a pattern for this president?

If your wife is upset, then at the next meeting have her make a Point of Order and let the record (minutes) show that unauthorized expenditures were made without board approval, and that no one should do that. Then review how expenditures like that one could be approved outside a meeting.

RW,

I, too, see nothing wrong with the action taken by the Pres. She was called to the job site and had to make a quick decision. The contractor was there; there was damage which needed to be repaired. If the Pres. had decided to wait until the next board meeting it may have resulted in an additional expense -- it's always cheaper to have additional work done when the contractor is already onsite! The Pres. OK'd the repair and wisely made the the stipulation that it not exceed $500, leading me to believe she was concerned about the cost and perhaps not wanting to solely approve a large expenditure. Even though you stress the fact that the contracted work was to make "cosmetic" repairs; it really turned out to be much more than cosmetic. Water damage with ant infestation I would hardly consider cosmetic and certainly not something that should be waited to repair, especially with a contractor there to do the job now!!

In reading the rules you posted, I can so no violation made. The pres. can still go through the process of the "action w/o a meeting" so there is an official record of what transpired.

Usually it's an assn. member who is trying to second-guess the actions of the board. In this instance it's a fellow board member who should be able to fully understand the reason why the Pres. acted as she did. We respond to messages all the time about board members (especially the Pres.) who acts as a "board of one" and I certainly do not condone that. But, in this instance, IMO, the board Pres. acted as she should have.

Thanks Donna, others,

Yes a similar situation has been experienced in the past by this Pres. Details not worth typing now. But decisions made. plans modified after project/contract approval.

Association is 8 yrs old, an HOA subject to 720.

I don't want to digress from the original subject but... I believe if you review the statutes 617 regarding "Corporations Not For Profit" (which I BELIEVE we as an HOA are also subject to) there are legal provisions for action to be taken without a meeting there as well. Specifically 617.0821. The difference I see, as a non-legal professional, is the burden of/that all directors must agree in writing as opposed to just a quorum.

Or... am I wrong in not being subject to 617 in this (or any)case?

On the original subject again... this kind of activity is ripe for fraud. Agree to a job & price, get paid in advance (very poor practice I admit, PM is to blame IMO), find something [else] after work is started, jack up the price 50% more, pay difference (or I leave and your stuck for full amount with incomplete work), contractor splits or shares the increase with PM or Pres. or whoever. I'm not paranoid, cynical, etc. It is easy to do. And I'm sure is happening right now somewhere.

Why not just do as article V, section 5 states at a minimum? It can still be fraudulent but atleast the BOD is engaged and more questions are asked and maybe more specifics are spelled out.

RW

This is a few day project, the contractor will be back again and again.

RW,

I don't understand how you can call a sign that is water-logged and infested with ants a "cosmetic" problem. Would you rather wait until the sign is totally destroyed and have to replace the whole thing? Frankly I think it's to the merit of your Pres. that she didn't consider it a mere cosmetic problem!

Well, here I go again. IMHO - this should have been handled by a Sign Committee. That Comittee should have done a thorough investigation of the condition of the sign, gotten bids and then approached the board for a budget - and requested a "buffer" amount in case the unforeseen happens.

Under NO circumstances should ANY job be paid for in advance. (RW - is this what you are saying?)

Re: comment that this is a common practice of the Prez. I don't like it that the Prez is making tweaks and additions to contracts and projects. That's not his/her job. "Diffuse" the power by giving some of these projects to a committee (she/he can still be on it) and take this kind of decision-making power away from her/him. Someone else should have been there with the contractor when required extra steps were revealed. That Committee could have decided the next steps at their own emergency meeting. But, THIS kind of situation was NOT a Board "Emergency," warrenting a decision by the President on the spot.

John,

You certainly describe how a "healthy" board operates. Sadly, not all fit the mold of you and your board. :-(

Although this may not have been an "emergency" situation, the fact that the contractor was there made sense to approve the additional work on the spot. Perhaps the Pres. knew she wouldn't be able to reach any of the other board members. Not everyone is retired!! I think there's more going here than meets the eye. Perhaps we have a board Pres. who has a habit of making decisions on her own. On the other hand, the other board members may be the type who are afraid to make decisions and would rather drag things out. Frankly, I don't believe we're getting the true picture.