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Subject: Fiduciary Duties
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Author Messages
KimM8
(California)

Posts:75


07/24/2008 4:40 PM  
Can the President of our BOD allow a rule change that does not effect her? They are telling homeowners they will not issue letters approving washer and dryers anymore and anyone with our the city permit or letter from the BOD has to remove them. Reasons: 1. They claim the pipes can not support the water 2. The association does not want to pay for the excess water usage.

However, her, her best friend and one other person who got approval from the board and permits get to keep their washers and dryers and if there is an issue resulting in damage, the HOA has to pay.
RogerB
(Colorado)

Posts:3725


07/24/2008 4:49 PM  
Kim, Rules need to be reasonable. This one appears to not pass the smell test, particularly when it does not apply to everyone.

Roger Borcherding
Official HOATalk.com Sponsor
DARCO Property Management (Colorado)
(303) 925-0150 
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MicheleD
(Kentucky)

Posts:1866


07/24/2008 5:11 PM  
I know nothing about California laws and statutes, and, frankly, some are a little weird to me (that ALL pickup trucks are classified "commercial," for one), but a few observations:

1) It's likely their "reasons" are valid, given what little I do know about CA and it's issues with Water and energy usage, etc.

2) It's also likely that there are more than just THREE people (the Prez and 2 of her friends) who are "allowed" washers and dryers in the development.

3) There's probably more history about the rule than has been given to you or that you've been able to find.

Hope you're able to work it out.
NancyL4
(California)

Posts:19


07/24/2008 5:38 PM  
You should read Sections 1357.100 thru 1357.140 of the Civil Code (Davis-Stirling).
You can find it on the davis-stirling.com website or just do a search on California Civil Code.

What your president is doing is not acceptable. If you read those sections, you will understand why and it will also tell you what to do about it. Good luck.
MicheleD
(Kentucky)

Posts:1866


07/24/2008 5:46 PM  
NancyL:

What is her president "doing"?

I'm still not clear that we know.

What is it exactly that was done?

There might well be something going on that is contrary to the authorities you listed, but we only have a very small and one-sided version, and not very well fleshed out, at that.

In other words, not enough info the form an opinion yet, maybe. . .
NancyL4
(California)

Posts:19


07/24/2008 5:51 PM  
MicheleD
It sounds like her president is trying to make a rule change. In California, rule changes must be circulated to the homeowners for a 30 day comment period. The board must consider the comments from the homeowners before adopting changes to the rules.

It also sounds like she lives in a condo with severely underfunded reserves. I would be asking for the most recent reserve study. If the pipes in her building are bad, they better be included in the reserve study with an anticipated replacement date.
DwightT
(Idaho)

Posts:483


07/24/2008 5:58 PM  
Kim mentioned in another thread that this was a "conversion". I assume that means an apartment building that was "converted" to a condo. I was in one of those once (before the conversion), and the plumbing in that building would not have been able to handle everyone having their own washer (a community coin-op laundry room was available).

However, who decreed that the plumbing could only handle 3 washers? How many units are in the building? Frankly, I would think that if the plumbing is that inadequate, then there shouldn't be ANY washers, including the president's.
MicheleD
(Kentucky)

Posts:1866


07/24/2008 6:02 PM  
No, actually, it sounds like the "rule change" "may" have been made some time ago, possibly longer ago than this resident has lived there, though she said in another post that she lived there before the "rules," whatever that means.

Again, the sources you cited are great and I love reading things like that (very good outline for some issues we may want to address in our own HOA).

I'm just saying that we have no idea when or how long ago the rule change was made.

It's just a little murky right now.

I think on the surface, her initial question about whether the pres can "allow" a rule change that "doesn't affect her" is sort of a non-question.

For discussion's sake, I would say that of course the president can vote for a rule in general, she's bound to benefit (as the entire development should or could) from most any restriction or rule that would or could ever be voted on, so it's not quite a fair question.

If she were to be in a position of financial gain from a vote, she should abstain, but just voting for or against allowing future requests for washers/dryers, whether she currently has one or not, is not really one she should abstain from either voting on or enforcing.

Now, if the rule doesn't exist yet, that's another issue.

But, I have no idea if it does or doesn't.

MicheleD
(Kentucky)

Posts:1866


07/24/2008 6:06 PM  
Dwight? Do we KNOW that only THREE washers and dryers are approved? ONLY 3? Or are do AT LEAST 3 of them belong to the pres and 2 of her friends?

How many units are there?

How many other residents have washers and dryers?

How long ago was the rule actually made and/or approved?

Who was president when it was?

What about putting in a combo unit in your kitchen? (these are great and don't use as much energy/water as big ones).

Anyway, I'm just still not clear on the timeline or the details.

NancyL4
(California)

Posts:19


07/24/2008 6:13 PM  
We don't vote on rules. They are adopted by the board to clarify certain language in our governing documents and to reflect changes in the law. New rules (except for rules changes required by law)are always sent out for comment. I am not sure if this is a new rule or a rule that existed before she moved in.
MicheleD
(Kentucky)

Posts:1866


07/24/2008 6:21 PM  
Yes, Nancy, they are "adopted" by the board, which consists of the directors and officers, and they do that "adoption" by "voting" for or against the rule, at some point.

So if the board president is voting on a rule change, unless it would benefit her financially, I don't see anything wrong with her either supporting or voting it.

SusanW1
(Michigan)

Posts:2316


07/24/2008 6:32 PM  
You said: "they will not issue letters approving washer and dryers anymore."

The key word here is ANYMORE. Apparently there ARE some, and there can NOT be ANY MORE (due to reasons we don't know for sure, but sound like the complex is not set up for the increase in pipe useage for waste water removal and water rates increase)

Please post the MOTION here that denies your AND ALL OTHER requests from the minutes of the meeting. If you don't have it in writing, then you need to get your denial into the record.

NancyL4
(California)

Posts:19


07/24/2008 6:34 PM  
Maybe, KimM8 will give us more of the facts.

Our HOA is very small (less than 10). We usually agree on issues by a consensus of the board.
SusanW1
(Michigan)

Posts:2316


07/24/2008 6:47 PM  
Nancy - how is a "consensus" process handled with controversial issues?

Do you ever do an outright vote?
NancyL4
(California)

Posts:19


07/24/2008 6:53 PM  
We have had a vote of the board on one occasion. It was a unanimous decision. We don't have any controversial issues. Being as small as we are, we all need to get along. If you alienate your neighbors in a small HOA, they won't watch your home or water your plants when you go on vacation.
GlenL
(Ohio)

Posts:1466


07/24/2008 9:21 PM  
Kim since you ignored my questions the first time you posted on this subject I'll try again.

Were the units built with washers and dryers in mind? Meaning is there a specific area set aside with water hookups and a drain for the washer / ductwork and sufficient electric or gas for the dryer? Does your CC&R's have any specific language requiring BOD approval before installation? Since your city requires a permit for the washer/dryer why have you waited for three and a half years to get it?

http://www.hoatalk.com/Forum/tabid/55/forumid/1/postid/50519/view/topic/Default.aspx
KimM8
(California)

Posts:75


07/25/2008 8:21 AM  
Wow, so there are a lot of responses, I will do my best to answer them. First let me clarify all the details, sorry if this will be long.

We closed escrow in Jan. 05, we were the 2nd family to move in and construction lasted for another year. At the time we moved in the developer, who was the majority shareholder of the complex, was the BOD. The developer and seller were owned by the same principals. A single real estate team was on site during the entire sale of the 161 unit complex, they representing the seller as well as the developer verbally told several homeowners that we could install washers and dryer. The unit we picked was because the layout would allow such. A week after moving in we had a licenses plumber come out and do the work, under the approval of the building supervisor for the project. He inspected the plumbing, even sent over one of his guys to drywall the space for us (for free) we used one of his electricians after hours. The building supervisor on the project even gave other homeowners the business card for the plumber we used.

Breaking it down, there are 15 buildings and only two bedroom 2 bath layouts can have washers and dryer because of the floor plan. So I would guess only 20 people can actually have them. We are one of those lucky 20 people that have the right layout.

Now we are being told that since the board did not approve our washer and dryer to be installed we may not keep it. And will be fined for not removing it. I had the city come out two weeks ago and they said they would give us the needed permit. The city building supervisor acknowledged that we have the layout which allows washers and dryers and that all of our work was done to spec. Now just two weeks later the same guy said his superiors received a letter from our current HOA company that all permits need approval from them first and they are not giving out that approval. So the city will not give us a permit. However, he did say, he felt it was not fair and to just leave everything as is.

Our President moved in about a year after us and got approval from the then BOD and the permit from the city.

These are the documents I have: A letter the current president sent the developer and real estates lawyers in which she says: Homeowners were told by the developer and real estate company they could put in washer and dryers and that this is an “orally binding agreement”. I have a letter from the real estates lawyer which acknowledges this fact.

Therefore, we were given verbal approval and this is acknowledged by the current pres. As orally binding. I am also waiting for a letter the city sent to the real estate company authorizing washer and dryers to be installed.

Our current HOA manager said, that I need to bring something in writing from the developer company who was our BOD at the time showing that they gave us approval, but they never put it in writing, however since the current Pres. States in a formal letter that it’s “orally binding” I think that should be enough for him. However, he still told me that when I bring this in to them in writing, they, the current BOD will need to make a decision on it.

Okay, now as to the rule. I don’t know if it’s a rule. My HOA manager is supposed to be getting back to me on this. He told me it was a new rule and we had 30 days to comment, then when I asked when homeowners would be notified of this he said, well, it already a rule we are just choosing to now enforce it. So I am not clear on this.

I was not given the CC&R’s before I closed escrow and did not get one until I requiested one months later (when I first heard about this document). I do have an e-mail from the current Vice Pres. in response to a homeowner who violated a rule and wrote to them he did not know about this rule because he did not have our CC&R’s, she replies that she too did not get her when she moved in. Just like me.

Roger, that is what I told the HOA manager, that they need to be fair and reasonable and followed by all homeowners, it says so it our rule book and he said, the descision was made and would discuss it further.

Michele, there are about 40 homeowners who have washer and dryer, but only three with approval.

Nancy, yes I read them, but how do I get my HOA manager to agree with them and uphold them?

Also, yes, the bigger issue here is fixing the pipes which they claim are faulty.

Susan,

All I have is a newsletter that the Pres puts on everyones doors. I requested something formal and was told nothing was going to be sent, then I was told something would be sent but they don’t know when. I think they themselves are trying to figure it out.

This is what the newsletter said:
"Please be aware that washers and dryers in units are not allowed without written approval of the Board of Directors and the City of Lemon Grove.
Permission has been granted to very few units for installation of washers and dryers. In fact the Board of Directors will no longer be granting permission for installation.
Washers and dryers pose a real problem when not installed properly. In some instances they pose a problem even when they are installed according to code.
Dryers that are not vented properly can lead to the accumulation of mold. While washers if not properly connected to a drainage system can damage drains and pipes.
Lastly, because the complex was not designed to house washers, the boiler system is not adequate to handle the demand for hot water. In addition all owners end up paying the cost for the water used.
If you currently have a washer and dryer in your unit that has not been approved, it should be removed. Please keep in mind that any damage done to a neighboring unit as a result of their usage shall be the responsibility of the owner of the washer and dryer."


This is the e-mail I got from the HOA management company that the Pres said to them:
“Every homeowner must go through the city if lemon grove for approval and the board is no longer letting washers & dryers in the complex. IF a homeowner already was approved prior & has the proper paperwork then we will let them keep them.”

So I was approved verbally by the developer run BOD, but I don’t think they will honor that.

Glen, I was not ignoring you. No, they were not built with washer and dryer hookups. But we were allowed to put in the plumbing and the city already said our installation is done properly for the permit. We did not know we needed a permit from the city, until recently. Obviously, since only three people for the permits, not many people did. And no our CC&R’s does not state that. Also, we got our CC&R’s months after moving in as did everyone else who moved in during Phase I and Phase II. Which I have in writing.

If anyone has any more questions please let me know. Thank you.
MicheleD
(Kentucky)

Posts:1866


07/25/2008 8:35 AM  
First, when you got the CC&Rs really isn't relevant. You were aware that CC&Rs existed before moving in, so I don't know that's really an issue.

The letter about the verbal agreement, to me, at least, IS confirmation "in writing."

One more thing, while I know it's difficult to write a long, coherent timeline that includes ALL relevant details, it's still really very helpful in trying to reply.

So, much appreciate the fill in. Great job.

My only question now, however, is, how do you KNOW that "about" 40 have washers and dryers and that ONLY 3 have "approvals"?

If it's something that was told to you by any of the people with whom you've spoken already, I would not rely very heavily on that detail and would certainly not try to go down that path unless and until you have solid evidence that out of 40+ people with washers and dryers, only 3 have valid approvals.

That bit of homework still needs to be done to go at that particular issue.

However, even WITHOUT that tidbit, the board has simply not followed the state requirements for "rules and regulations," it appears.

That is where I would put the pressure on them. That particular avenue looks fairly rock solid and one that they may well not want to go down!

KimM8
(California)

Posts:75


07/25/2008 9:36 AM  
Hi Michele,

I know it's not relevant, but being a first time homeowner, I was not aware of the CC&R document. I am sure it was in my paperwork somewhere that I was to get one, with out really know what it was.

Sorry I did not give enough information at the begining!! It was a doozie and I just got the majority of info yesterday.

As for the # of units. I was told this by the HOA manager. He said there are "about" 40 homeowners who have washer and dryers and only 3-4 who have the approval. It tough becuase even though we have 161 units I would say no more then 10 people attend the meetings. Also this new HOA company just started a year ago. People slowly stoped going to the meetings because nothing we being done and people were just plain frustrated. The building supervisor for the city said I could come in and get copies of the permit info for the other homeowners, the three.

I still have a lot more work to do thought and you are all being very helpful. Thanks!!!!
KimM8
(California)

Posts:75


07/25/2008 11:06 AM  
This is the response I got from the HOA manager just 10 min. ago:

I have reviewed the rules and regulations of Village Walk and do not find that there has not been a change in the rules as a result of the Boards recent decision not to approve washer and dryers for individual units. The rule as written states;



Architecture

3. Spa’s, hot tubs, Jacuzzis, wading pools or other similar water facilities or features may not be installed in or on any “Exclusive Use” Common Area without the prior written approval from the Architectural Review Committee.



Also covered in



Structural Alterations

1. No structural alterations to the interior of any Unit or the Common Area surrounding such Unit shall be made and no plumbing, electrical or other work which would result in the penetration of the unfinished surfaces of the ceiling, walls or floors should be performed by any Owner without the written consent of the Architectural Review Committee.



Inside and Outside Installations

2. Noting should be done in any Unit or to the Common Area which will impair the structural integrity of any building in the Property or which would structurally alter any building

Drainage

Sewer disposal systems should be installed only after approval by the Architectural Committee and any governmental health authority having jurisdiction.



Summary of Architectural Guidelines

3. The Board may at any time appoint an Architectural Review Committee to act on its behalf in all matters concerning owner improvements, and from time to time, adopt, amend and repeal, by majority vote (Board), Rules and Regulations to be known as Architectural Review Guidelines.



Again based on the above referenced rules there has been no rule change to the already existing policy. You may at anytime submit an application to the Board for consideration. This has not changed, if you have not done so I would encourage you to do so.


My comments: There was no architecual committe at the time we moved in and not for over a year later. The developer was the BOD and gave us verbal approval. The city grants permits after an inpsection in which they review the requeted changes and determin if said changes will alter the strucural integrity, if it will they will not give out permits. They said ours does not and will give us a permit. The HOA said, they don't have our best interest in mind and therefore they need approval from the board to give out permits, which they will no LONGER do.
GlenL
(Ohio)

Posts:1466


07/25/2008 11:30 AM  
You can try contacting the developer and see if they will give you a letter stating that they approved the changes when they were in charge. This is why you should always get any thing like this in writing. How do you prove years later what someone told you?

Please understand I'm not trying to kick you while you're down but the whole thing could have probably have been avoided if you had simply gotten the required permit when it was installed. I would make an application citing the oral contract and see what happens. If they turn it down then you can either:
A. Remove the washer & dryer.
B. Keep using them and let them try to prove you have them.
C. File suit against the HOA
D. Work to change the CC&R's to either allow them or prohibit them for everyone.

P.S. Their excuse for disallowing them because it would overtax the boiler system is Bravo Sierra (BS). Since I'm assuming there is one source for hot water do they allow dishwashers? Ask them what would happen if the people being made to get rid of the washers "forgot" and left the hot water running in their showers every day while they were at work?
KimM8
(California)

Posts:75


07/25/2008 11:42 AM  
Hi Glen,

I will keep fighting this.

Here is the most recent response I got:

The rules are from pages 17, 18, 19. The Board is currently processing all requests, and serving as the Architectural Committee. As with many Associations, it is difficult if not impossible to get people to sign up for committees. At every meeting we encourage people to step forward and serve.

Unfortunately I am unable to address what was promised to owners verbally. The rules require that all approvals be in writing. Clearly the purpose of requiring approvals in writing is to avoid the problem owner are now facing. There Is no legal obligation of the Board to uphold any verbal authorization, they are required (by law) to uphold the governing documents including the rules and regulations .

X

I would ask the developer for this in writing, but they are disolved, imagine that...

Here is my response:


Then why is Jamie, our BOD President saying that it’s verbally binding? The board is trying to sue the developer for verbally binding agreement(s)…how is this any different?



How could I have submitted a request to the architectural committee when one did not exist when I moved in and not for over a year later? There was no form to complete, we got approval, verbally and Jamie acknowledges this as binding.



Can you please attach the form to and meeting minutes from 2007 (that I requested) so that I can submit my request to apply for the permit? If the board is required by law to uphold governing documents then why have then not been enforcing these rules for over three years? Why have they not been enforcing several rules for years?



They are not even enforcing the rule of their Fiduciary duty to homeowners. Rules need to be enforced equally and fairly and you are not doing that. I mean at the last meeting you announced that we just got the permit for the pool, three and a half years later, now that is a huge liability and you want to discuss the boiler system (and usage of hot water being the reason behind this). We wash our clothes in cold water, how can we be using the hot water and affecting the boiler system?



Please answer me how this rule is fair and how the BOD responsibilities to follow the fiduciary rules is being done?



Best regards,

KimM8
(California)

Posts:75


07/25/2008 11:53 AM  
So I got the arch form, which was created in January of this year, when they took over and it says:

"I agree I will do no work that will change the existing drainage patterns." Can I use this against the descision to let the president keep her washer and dryer...?
GlenL
(Ohio)

Posts:1466


07/25/2008 11:55 AM  
Structural Alterations

1. No structural alterations to the interior of any Unit or the Common Area surrounding such Unit shall be made and no plumbing, electrical or other work which would result in the penetration of the unfinished surfaces of the ceiling, walls or floors should be performed by any Owner without the written consent of the Architectural Review Committee.

This is a classic example of a poorly written rule and you may have some wiggle room. Were the walls unfinished when the work was done and if they were can they prove it? Since you hired the work and didn't perform it yourself technically you didn't violate the covenant. I know its semantics but as they say the devil is in the details, also the word should is problematic.

If it had said something like: No Owner or their agent shall cause the work to be preformed without the written consent of the Architectural Review Committee.

2. Noting should be done in any Unit or to the Common Area which will impair the structural integrity of any building in the Property or which would structurally alter any building

Drainage

Sewer disposal systems should be installed only after approval by the Architectural Committee and any governmental health authority having jurisdiction.

Again the word should which is not a definitive prohibition. i.e. You should eat your vegetables. You should brush your teeth. You should drink eight glasses of water a day. While you should do these things nowhere does it say you MUST do these things.

Not a legal opinion but I have seen a few poorly written rules over the years and seen how people got around them.
KimM8
(California)

Posts:75


07/25/2008 12:06 PM  
Hi Glen, you will love his most recent response:

You are asking me to defend or justify things that took place before I began working with the property. I don’t have the time or willingness to do that. It would be a huge waste of my time as I can’t change the past. Every Board acts on the information they have available to them at the time. Had the Board known that the Developer did not transfer or that the previous management company had not requested a permit for the pool I have no doubt they would have acted accordingly.



It is my understanding that your husband use to be President of the Board. If this is true then he can attest to the fact that each Board acts based on the information they have at that time. We can spend hours., days or even years rehashing the past decisions or lack of. I intend to move forward and deal with current matters. Finger pointing does nothing to move us forward.
KimM8
(California)

Posts:75


07/25/2008 12:07 PM  
BTW, you're awesome. I will defintly use the word "should" in my argument.
KimM8
(California)

Posts:75


07/28/2008 1:11 PM  
What do I do now? My HOA manager (manager in charge from HOA management company) in his last e-mail said he was not willing nor did he have the time to dicuss certain issues with me. Who do I esclate my questions to and are they required to respond to me? Thanks!
MaryA1
(Arizona)

Posts:2498


07/28/2008 2:50 PM  
Kim,

Go directly to the board! If there is a board meeting coming up soon, ask the questions there. Or, send the board Pres. an email. Also let them know the PM was unwilling to hear your questions and obtain an answer.
KimM8
(California)

Posts:75


07/28/2008 2:54 PM  
The problem with that is the president is the one "breaking" the rule. She is the one allowed the exception that the manager will not respond to me about. They are one team working against everyone else.

There are two other women on the board but I feel the presidents infulence is far reaching. One of them is a major push over (at the last meeting the pres. stuck her had in her face cut her off while she was talking and told her to stop talking, repeatly until she did and this girl apologized to the pres).

I did leave a message for the managements office manager, but I don't think they really handle disputes.
GlenL
(Ohio)

Posts:1466


07/28/2008 3:35 PM  
You might just end up having to file suit against the BOD. I would gather together as many people who are affected by this "rule" and take them on.

One other matter; you said that the inspector would not approve it unless the BOD gave you a letter OK'ing it. I would ask the inspector (politely) what gives the BOD veto power over a city dept. If they cannot or will not answer that I would contact a city councilman. But tread very lightly here because ultimately you are in the wrong here. By your own admission you should have gotten the city permit when it was installed three years ago. Since the developer was in charge then and evidently approved the modification to your unit, I'm sure he would have signed off for the permit.
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