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RobertZ1 (Michigan)
Posts: 66
Posted:
Voluntary HOA dilemma:

This story begins with a few homeowners in our HOA believing they could take control of the HOA by ordering the BoD to resign by petition(2/2008), then without that happening, declaring a special meeting of the members to remove and elect a new BoD.

We followed our Charter and BoD secretary sent USPS response letters (on our attorneys advice) that they were wrong in their actions and operating outside their scope and authority (cc to all BoD), that our Charter does not require the BoD to resign and their request was not received properly and was not in the possesion of BoD secretary (secretary received a copy, it was not at all legible. Attorney said request original, never sent to BoD). They responded by noticing meeting of members anyway without BoD secretary and Treasurer validating signatures and noticing meeting (violation of Charter).

In the midst of these actions the President and Asst Treasurer resigned. Both not wanting to be in the middle of a neighborhood battle and no matter what, no win situation was their belief.

After sending letters to these specific individuals telling them of their improper actions, we (BoD) received a letter from an attorney representing these individuals telling the BoD it had three days to turn over all possesions under threat of further action (4/2008). Our (BoD) first action was to seek advice of an attorney, who sent a response letter on behalf of the BoD. Their response was to continue to hold a meeting of NOW non-members (April 1, 2008 required dues to be current year member)and some of their HOA member supporters (remember we are voluntary).

After(BoD)hired attorney sent a response, then we were advised to file motion in court to stop action on part of the this group by same attorney if we want to maintain our right as the BoD. Our small HOA BoD members were told the best action to stop this was to ask for County Court to grant temporary restraining order/injunction/show cause order, against individuals that tried to take control of the BoD, we did that. (The BoD is the plantiff in the action after these individuals attorney sent notice telling the BoD to turn over all possesions to his clients). We(BoD) were given show cause order and preliminary injunction. They in turn gave an affirmative defense.

After all this we are now broke, the BoD had a special meeting and voted to drop the actions against these individuals due to NO funds to continue and in the red for the remaining legal costs.

We (BoD)now await action by them, because as we have been told by our insurer, if they sue us for our actions we are protected by our policy (as defendents in any futher action)) and we are still rightful governing body of the Association (by state, financial institution, and Association insurer.

Why did this have to go this far and cost this for our small voluntary HOA? What should we have done differently looking back? We have been told we did all we should have, but it stillseems so futile!

Thanks for any advice or comments.
MaryN (Virginia)
Posts: 125
Posted:
I believe that communication is the key. I have heard that some attorney's that specialize in HOA law will look at the controlling legal docs and attend meetings for a few hundred dollars. At our annual meeting 2 years ago a motion was made to consult an attorney who dealt with association law and ask him to review the docs and give us a legal opinion. It was voted down by one vote(and the BOD had 6 proxy votes). A group of property owners hired that lawyer and have paid out of our own pockets. The BOD is using road money to pay for their defense. Had there been better communication at the start and good legal council I believe we would be on a far different path.
MaryN
RogerB (Colorado)
Posts: 5,067
Posted:
Quote:
Posted By RobertZ1 on 06/27/2008 7:37 AM
Voluntary HOA dilemma:
Why did this have to go this far and cost this for our small voluntary HOA? What should we have done differently looking back? We have been told we did all we should have, but it stillseems so futile!
Thanks for any advice or comments.

It went that far because of egos - people want to think they are right and have to prove it.

You should not have hired an attorney. You did not have the funds to follow up through trail and appeal courts. Once attornies become involved I believe it becomes a lose lose situation.

Whomever said "we did all we should have" was wrong as you should now realize from the perspective of hindsight.
KirkW1 (Texas)
Posts: 1,665
Posted:
Quote:
... In the midst of these actions the President and Asst Treasurer resigned. Both not wanting to be in the middle of a neighborhood battle and no matter what, no win situation was their belief. ...

I hate to say this, but there was a lot of truth to their belief.

In my opinion, the best defense is outside the realm of lawyers. It is meeting with your neighbors and explaining your actions. And if the majority can't accept your position, then perhaps it is best to step down.

If faced with a recall, I don't know if I would step down. But if not, I don't think I would avoid the vote. If I felt that I was in the right, I would do as I have done in the past. I would start knocking on my neighbor's doors and telling them what I was about. Then I would ask them to sign over a proxy if they weren't going to be at the meeting.
GlenL (Ohio)
Posts: 5,491
Posted:
Kirk if it's an invalid vote you would still allow it or abide by it? The OP stated the group did not follow the proper procedures for holding the special meeting.

Studies show that 5 out of 4 people have problems with fractions
KirkW1 (Texas)
Posts: 1,665
Posted:
If there were enough people at the meeting to make quorum, I probably would abide by it. I don't see where there were winners here. The association is now broke. The old BOD is out regardless of the opinion of their lawyer.

I suppose at some point I would have to decide if the fight is worth it. And in a voluntary organization the bar just got higher. I can always drop membership if I don't like the direction it is going.
RobertR1 (South Carolina)
Posts: 5,164
Posted:
Kirk and all,
As usual Roger nails the problem. See his post, read carefully and if you find yourselve starting down that path, change course.
I have enough faith in people to think the way out of this is the same as it was at the begining. Sit down at a table and each make a promise they are not leaving until all can live with the results. Swallow that beast pride and ego, and put one thing on the blackboard at the Meeting.

All for the good of the Association. That's it, sit down get serious and talk your way through it, you may even end up making a friend or two.
RobertZ1 (Michigan)
Posts: 66
Posted:

As the person to post this originally I would like to print some thoughts for all with the hope of more discussion:

It seems that all agree, some mutual discussion should have occurred, it did, but to no avail, I do not disagree with that being the first problem. The Board of the Association is responsible to our Charter and through that document, derives its responsibilities as is the same for ALL members, not just the Board.

What seems most, to be lost in these posts, are the realities that the contractual agreements with the BoD to the businesses outside of this Association (banks, credit unions, insurance company, lawn services, lawyer and government entities)with this Association are predicated and based on the printed words in the documents that stipulate what responsibilities and duties of ALL members to OUR Charter Documents. Our Privileges also mandate responsible actions.

Yes, it was tried by the BoD to sit down with the principles of this movement, that was futile, and failed due to the continued misinformation of discussions outside of these meetings. The printed words on the pages of our Charter are what we all have to live by. The background to this drama was that these same individuals have been trying for three years since THEY lost CONTROL of the BoD to create dissension and division within our small community (less than 107 possible member/lotowners). Trying to keep improvements and enforcement of our documents to a minimum, if not impossible, by continueing to dissuade ALL. Their interest were always to keep the use of the commons areas to themselves and their control (they believed and still do, that they KNOW BEST!). Rules for all, but to the exclusion of them and their wants.

As with all disagreements, there reachs a threshhold, where talking just goes in circles and nothing gets accomplished. The BoD could not ignore the problem, hoping it would go away any longer, and never attempted to argue the values to the members, believing they would see the ridiculousness of these disgruntled now ex-members argument. That may have been the biggest mistake, believing that members understood their own documents. The Charter Documents proved the BoD right at every discussion, and with all that read them and had questions. We were always apprised of this by any outside body and member, who read and then discussed, or explained to us, our responsibilities as the BoD.

So here we are: Trying to come to terms with the real issues, with these individuals who are spreading lies predicated on lies. Maybe some of you see the same story with some in your Associations, we have been told it is very common place for the disgruntled to push the limits of common sense. The BoD has taken the high road, to no or little effect on stopping this folks. Speaking terms are what you make them, when you attempt logic and it is bantered about with threats and harrasment (BoD members are now receving unsigned letters of harrasment), members look on all of it as nonsense. The BoD has discussed all this with any member who would question them, but it has not stopped the few who continue their attack.

But, now members are tired of the continued harrasment (canvassing the neighborhood with so called petitions and flyers, telling anything folks want to hear to get support) by this upset group and want this to stop, no matter the cost, and the cost was what has now stopped the BoD. Our insurer has said they will step in when these individuals sue our BoD, because our filing has made them a party to ALL issues stemming from our Charter and the policy that covers the BoD under it.

Why so much work for what was to be JUST a volunteering for the good of all within? It really begs the question, that if ALL our lotowners knew of their individual liabilities, for violating the Charter, and the cost to them individually for any mishap on common properties, would they be so willing to listen to anyone whom would violate it? We have tried to explain and some do understand but others act as if they care not to be bothered. That truly is the diemma, when and if an accident happens, then ALL will care.

I will hust sign this posting with this phrase:

Taking the high road, a responsible board member.

RobertR1 (South Carolina)
Posts: 5,164
Posted:
RobertZ,
Iam not sure I can add anything after reading your last. Not citing truth but my impressions, it seems your side may be the good guys and the other side the bad guys. But I don't KNOW that anymore than if I lived there and were on your side. I know what side I would take to support because I made a value judgement about the facts as I saw them. You sound old enough to have experienced some of the bad trouble betwwen the AFLCIO, United mine workers and the Unionization of the auto industry. Now that was big bad shoot'em down dead trouble on both sides. But what saved the day? People sitting down at a table. Sure I can see your frustration and pain about it all and hopelessness. And I have no fuss with your moral values that control each of us.
I think this has been discussed before, and it may be too late and you are locked into a river of no return. Have you looked into professional arbitration? If this is at thje court level, petition a judge to order Binding Arbitration between the two parties, if you can get the names of you antagnonists on the record. If not the judge might appoint an arbitrator and order him to sort it out. It will end at the table and it will be resolved by people.

Hope I don't sound too mealy mouthed about this, but if you can see the train comming at you down the track, best to try to be prepared, and if nothing else try and slow it down a little.

Your convictions about owners responsibilities is always an issue in HOA's. Has to be dealt with. What you have going for your side is you are attempting to hold the association together, your record show that, you all created your past.
DJ1 (Ontario)
Posts: 798
Posted:
RobertR1 said "It really begs the question, that if ALL our lotowners knew of their individual liabilities, for violating the Charter, and the cost to them individually for any mishap on common properties, would they be so willing to listen to anyone whom would violate it?"

I had a similar concern in the early days of the HOA. Would I be individually liable for something the HOA does. or doesn't do, and I was told the CCR's are written so there is NO individual liability. Sure someone could sue the HOA and possibly cause any HOA assets to be sold to cover an settlement above the insurance limit but they cannot go after the individuals' assets (homes etc). I suppose if you lost a suit the HOA could impose a special assessment but they could equally decide to dissolve and the liability ends with a HOA with no members or assets.

Do your CCR's not have something to protect you?
RobertR1 (South Carolina)
Posts: 5,164
Posted:
DJ1,
In a word, "Yes".
For one thing we do carry liibility polices on anything that lights, moves or has a handle on it in most common areas. It gets tricky and complicated and specific after that.

BUt the best thing we have going for us to protect the whole is to run the operation in a responsibile manner. Good enough to please the court. If an owner gets out of line and faults the whole to the point of liability, the whole has to show they did their job and this personal was at fault and liable.

This is hard for me to word but in my experience (limited) with the courts of any kind, "intent" carries a great weight. If you can show your intent was true, honest and as directed by your documents you then have credence with the judge or jury. If your operation is and has been rife with trouble, problems and court cases, you are in trouble.
So, "yes" the association has a strong voice if they can show they have been doing thire job right.

It a current post here we have too group of owners pitted against each other, the whole has been forgotten or dismissed, and now everyone is out of money and it appears the courts will step in, I guess. We must not allow this to happen over the long run. Associations are just like people, at some point you may be asked to stand on your record. I wish my record personally was better than it is, I could have done a lot better.
RobertR1 (South Carolina)
Posts: 5,164
Posted:
RobertR1,
This it to RobertR1,
via Dj1,
with riuting to RobertZ.

No DJ1, I didn't write your quote, that was RobertZ,

I know this clears up everything.

Seriously, the problems being faced by RobertZ is repeated all to often in many many associations, and the best way to avoid this kind of quandry is to keep it from starting to happen. Of course life is not perfect and people don't operate on their own. We enter each day much like a pinball coming out of gate and start banging around. It is hard to stop going somewhere when efforts are being made to push you this way or that and maybe that explains how we can as a group of people fail to see the end of the road and fail to stop the train. In robertZ situation, I think much can be salvaged if a different tract is taken. Who said the true sign of insanity is for you to keep doing the same thing wrong time after time and expect different results?
RobertR1 (South Carolina)
Posts: 5,164
Posted:
RobertZ,
Just to be clear of how I view your situation. I do believe I am right that the trouble will be solved at the table, etc.

I also wish to mention that my beliefs does not negate the fact that there are some folks that just plaim seem impossible. I mention them as the exception and to prove the rule that it can be talked out.
RobertZ1 (Michigan)
Posts: 66
Posted:
To all who have read this far:

It would seem that the words of "due dilligence" and " fuduciary responsibility" as well as "prudent actions" on the part of the BoD in our HOA, are lost on those who oppose that type of behavior because of their own "self-serving" interest (this includes the attorneys of both sides).

Our situation has been brought about by strong willed and strong minded individuals on both sides, that can not be disputed. It also can not be disputed that the rules that govern ALL are written for the whole of the HOA, not just for those that care to follow them, when it's useful, convenient or purposeful.

We (BoD) do not feel we have been misguided, by our thoughts and actions, to follow the real words of our Charter documents, not the intentions or interpretations, that the opposition continues to argue(but the BoD believes and has believed the printed words of the document are very clear). Seems most ALL who sit and read them agree, but only if they READ them and try not to twist or misplace the sections of an articles directions, within the Charter.

Discussions are now between attorneys, that is also proving more useless than the two parties talking. Cost (dollars) of their action is not their concern, billable hours seem to be their most pressing resolve, so yes, filing and then discussing seems ridicoulous NOW! The BoD has to find some way, we on the board still want to resolve this.

We are trying to take back our (BoD) ability to control this situation legally and within our HOA, but once the legal community starts, it becomes a never ending battle to control and resolve. So yes, we (BoD) proved our commitment to the HOA Charter and the members, but at what cost to all?

It feels like what has been stated in a posting earlier: your on the tracks, you see the train coming and no matter what, you can't get off the tracks or stop the train, but every person who could help, is waiting and watching for the wreck. Not wanting to be involved, for fear of retribution, instead of thinking of it as a way to a resolution.

We (BoD) are trying, but now our own counsel seems set on negotiating without concern or consideration for our belief and direction on the original reasons for filing the court action.

Any comments or questions for our benefit, and others, would be greatly appreciated.

Thanks for the continued posts and interest.

Still a believer in my BoD and its action to prevent liability to ALL.

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