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Is a Board President held to any standards

Started by NancyM2 • 27 replies • 1324 views

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NancyM2 (California)
Posts: 249
Posted:
At the last board meeting the question was asked "why are we paying our (in house) attorney so much, and why do we need her services" in spite off our present budget crunch.

This board President and myself were both on the board when we hired her. No one in that room knew the correct answer, except he and I.

He went into a COMPLETELY BOGAS story to justify why they pay her so much, and why they felt they needed her. I sat there with my mouth open ~ but didn't want to call him a liar in front of everyone. He had told this story once before (same story) and I didn't correct him then either ~ he would have shouted me down anyway.

I came home and found all my records which I have kept all these years. They clearly indicate a completely different story. I even contacted a past board member that was on the board at that time, she remembers it the same way I do. I's frustrating to think he can mislead the homeowners to justify his actions.

Since I was on the board when I recieved these records, are they still considered confidential?

Is a board Presdent held to any standards?
KirkW1 (Texas)
Posts: 1,665
Posted:
I would think that the only records that are confidential are the records involving either money or legal action pertaining to an individual owner. But make sure that you are willing to back up what you say. And if the reason for having a lawyer isn't justified anymore then it may be time to lay him/her off. That is the breaks of being an employee. (I feel bad for people losing their job, but if you can't afford them it is the only choice.)
MaryA1 (Arizona)
Posts: 7,043
Posted:
Quote:
Posted By NancyM2 on 09/05/2008 8:12 AM
At the last board meeting the question was asked "why are we paying our (in house) attorney so much, and why do we need her services" in spite off our present budget crunch.

This board President and myself were both on the board when we hired her. No one in that room knew the correct answer, except he and I.

He went into a COMPLETELY BOGAS story to justify why they pay her so much, and why they felt they needed her. I sat there with my mouth open ~ but didn't want to call him a liar in front of everyone. He had told this story once before (same story) and I didn't correct him then either ~ he would have shouted me down anyway.

I came home and found all my records which I have kept all these years. They clearly indicate a completely different story. I even contacted a past board member that was on the board at that time, she remembers it the same way I do. I's frustrating to think he can mislead the homeowners to justify his actions.

Since I was on the board when I recieved these records, are they still considered confidential?

Is a board Presdent held to any standards?

Nancy,

If particular records started out being confidential then they would remain that way unless the info contained in them is no longer confidential.

What, exactly, is your beef with the Pres? How is he misleading the h/o's? In reading your message I'm not sure what the problem is. A little more info would be great!
NancyM2 (California)
Posts: 249
Posted:
Mary ~
He stated that we arrived at our attorney's salary by compairing Attorneys costs for our HOA attorneys over a four or five year period. Then we took the lower average to arrive at her salary.

That would have been unreasonable, since we had just settled a "Class suit" that was going on during that perod of time with very heavy Attorneys cost's in order to handle the "Class Suit" Normal Attorneys cost's were much lower in other years. I would think as a board member back then it would have been insane to figure her salary that way as the class suit had just settled.

Started out she was asking the board for 85K a year, we were interisted ~ Then it went up to 100K a year ~ We sent her in to our Mgmt Co to work out the details of a possible contract. Her price went up while talking to the CEO of the Mgmt Co to $218,400 a year $18,200 a month. Apparently she had calculated the heavy "class year's" to arrive at her figure. The board was shocked, and of course rejected her request. I have that letter in my files along with the CEO's letter to the board informing us of what she was asking for. Are these still confidential items?

Also the board President told the homeowners we had over 20 lawssits on the books when we hired her. Fact is we only had 5 or 6, that were active. All have been settled to date.

Right after that the board President got her down to $12,500 a month, and the rest is history. She now makes $162K a year plus a Legal expenses line item of $3,860 a month

Nancy

TonyM3 (Arizona)
Posts: 170
Posted:
uhhh...all this money is recoverable?
NancyM2 (California)
Posts: 249
Posted:
Tony ~ What do you mean "recoverable" HOW?
Nancy
TonyM3 (Arizona)
Posts: 170
Posted:
The overwhelming majority of our legal fees are billed to the homeowners that create the need for the service. If you get sued and win I'd hope you'd look to recover those fees from the plaintiff.
JohnK3 (Pennsylvania)
Posts: 967
Posted:
Nancy,

This $162K/year + $3K/month expenses attorney. She only works for you and nobody else, right?
SusanW1 (Michigan)
Posts: 5,202
Posted:
Nancy

You saw our jaw drop in your previous posts about the attorney costs your HOA incurs. I am just amazed!!

So I have these questions:

What is your total annual operating budget?

How many units in your HOA?

Why so many lawsuits (over what?)

Why a lawyer on retainer, and not just when he/she is needed?

Forget the discourse with the president justifying this lawyer's hiring. Apparetnly, that's how he choses to remember it. (You could have shouted out a point of order and given your recollection, based on the minutes from the past)

Unless your HOA is upset about these enormous fees and is willling to look at some other legal service arrangement, it's all for naught.
RW1 (Texas)
Posts: 149
Posted:
You should have turned over all BOD documents in your posession to the HOA when you left office.
SusanW1 (Michigan)
Posts: 5,202
Posted:
I am sure Nancy is talking about COPIES of minutes and financial reports that were handed out at all Board meetings to all members.
DwightT (Idaho)
Posts: 664
Posted:
Did I miss something? Where did you see that she has left office? Besides, even if she has left office she can still retain copies of the documents. I know that I would.

NancyM2 (California)
Posts: 249
Posted:
Susan (Your answers)
01.) 1,025.748 annualy for (FY2009)
02.) 575 single family homes
03.) mostly view issues, one land slippage and encrochments
04.) Good question

Last comment ~~ He would have shouted me down, and not let me talk

Nancy

NancyM2 (California)
Posts: 249
Posted:
RW1, Susan and Dwight

These were e-mails between board members and the Mgmt Co's CEO during my term on the board. (five years ago)I am presently on a budget committee.

All other documents have been turned over to the HOA ~ I kept the personal e-mails for my files.

Nancy
NancyM2 (California)
Posts: 249
Posted:
Wrong John ): She has her own practice she started when we hired her on. She takes other clients as well. However I would guess we are about 80 to 90% of her business. She has a young child and can easily handle us from home with a computer, and telephone. Where else could you work for a firm and get that kind of money without having to be in the office every day.

Nancy
SusanW1 (Michigan)
Posts: 5,202
Posted:
Well, how do you know for sure her retainer fee + court fees are out of whack?

I just wonder about the decision to have an attorney on retainer. That has to be decided first.

Do you have a Committee that "fields" all these complaints BEFORE they go to a lawyer?
NancyM2 (California)
Posts: 249
Posted:
Susan ~ I was one of the votes that put her on the payroll. Believe me I have reqreated that vote every since. We had just been through a "Class Action" that cost our HOA millions, and brought us to our knees financally .

Some sharp attorney convinced our homeowners that the "land creep" we had all been experienced was grounds for a "class action" He said we would get monies from the Insurance Company's. Everyone was looking for {mailbox money) so they signed up. After several years two large special assessments to cover the costs. The homeowners got upset and threw out the old board. I was one of the five board members that took over the old board. We were running scared and thought we needed permanent legal counsel.

We are a beach community with sand and adobe for soil ~ It moves around a lot, and sometimes slides thus "land creep"

PS. The Class Action attorney got all the chicken ~~WE got the feathers. The soil and conditions remain the same. I was one of the few that didn't join the Class, therefore eligable to be on the board.

Nancy

KirkW1 (Texas)
Posts: 1,665
Posted:
Of the records that you mention, the only information that qualifies for any kind of privacy is the actual salary of the lawyer.

It is time to lay the attorney off and let her go practice law elsewhere. I would treat her well in the process and give her severance and a good reference. If you have been happy with her work you could go so far as to tell her that you would like to retain her services as they are needed.

In my opinion you should come clean with the information you presented here minus the dollar amounts. The truth would appear that you had a new board that was dealing with massive amounts of legal expenses. You made what you believed to be a sensible decision at the time and hired a full time attorney at a much lower cost then you were spending before. But as time moved you are now realizing that this is actually costing much more then paying time as needed.

I see no shame unless you fail to admit that it is now time to shift course. Guess what, many a corporation has to change course. You make the best choice you can at the time not knowing the future. Now you seem to have another choice. Make the best one you can with the information at hand. Work to change the relationship with your attorney.
TonyM3 (Arizona)
Posts: 170
Posted:
Quote:
Posted By NancyM2 on 09/05/2008 3:14 PM
We had just been through a "Class Action" that cost our HOA millions,...

Why was the HOA found liable for "land creep"?
NancyM2 (California)
Posts: 249
Posted:
Tony ~ The Class Suit alleged we didn't monitor our well's ~ We have several wells we drain excess water from the area if needed. Board members were sued as well as the HOA. The only damages were cracks in garden wall's and patio's separating from the house by inches. Nothimg major (thank God)But the way it was presented the homeowners thought they could get all this money from insurance. They found out it came out of their pockets as well.(big time)

Nothing smarter than suing yourself.

Nancy
NancyM2 (California)
Posts: 249
Posted:
Kirk, Thank you for all your kind words and support. However I do blame myself for making that bad decision 5 years ago. I am currently off the board, so the decision to let her go is not mine to make. The present board feels they need her, I understand why (been there done that)She has a way of unduring herself to everyone. As well as making mountains out of mole hills. I can remember her statement once when we talked about a possible law suit over a tree issue ~~~ She said it was going to be a "500 pound gorilla" (her words exactly) This was right before we hired her, It scared us enough to put her on the payroll. She also told us she would only need to work for us for two years, It's been five years now.

Why would her present salary be off limits when it is listed in our budget for everyone to see. Did you mean I could not disclose the 218K she was asking for?

Nancy

By the way that "500lb gorilla" turned out to be a "pussy cat"
NancyM2 (California)
Posts: 249
Posted:
Kirk ~ I forgot to add what I meant by "enduring herself" She invites board members over for dinner etc. We were invited several times when I was on the board ~ Not since!

Nancy
SusanW1 (Michigan)
Posts: 5,202
Posted:
Nancy - your organization is not the same as it was 5 years ago, so stop beating yourself up for a decision you thought was right at the time.

Your HOA should have a Finance Committee set up to constantly review revenues and expenditures. It is time to look at ALL contracts and get a financial plan in place. Work to bring that about. Inform the members what is going on.

. . .and stop worrying about who is entertaining whom.

NancyM2 (California)
Posts: 249
Posted:
Susan/all posters
After reading over my blogs I realized I had failed to mention I am presently off the board (sorry) I appreciate all the comment's and attention to my problem's. I am presently on the "budget committee" headed by a board member. He refuses to visit the possibility of revewing the attorney's salary/cutting her involvment ~ thus my frustration. Especally since we are so upsidedown on our budget. He believes what the board President tells him. He is fairly new and doesn't know the history. Since he is presently a board member he would be the one I would want to show my records to ~ hoping he would have a different prospective. I sincerely doubt it would make a difference. He seems to be very impressed with our attorney. Other than that he is a good board member willing to work hard to reduce costs (except hers) All these years we have had many many new board members most of which just seem to be puppets that just sit there. Presently we are shy one maybe two board members. The possibility of getting a new board members that can think for themselves is slim. When we get an application with someone interested in joining the board the "Ombudsman" visits them (quasi interview) If they are not part of the "click" they don't pass muster. He is the keeper of that gate.

Most homeowners don't know what is going on because at board meetings they only have homeowners forumn and committee reports. All other business is handled in executive session. Most homeowners find it boreing and don't attend meetings.

Nancy
Nancy

KirkW1 (Texas)
Posts: 1,665
Posted:
I totally agree with Susan here. You made what you thought was the right decision at the time and you should not beat yourself up. Keep it in mind as you make future decisions certainly. But you don't know what the future really holds.

Before bringing up any of the information I would redact any money amount involved. I realize that the final amounts are in your budget. But all the same I would not be the convenient source. In bringing up the history you will stir up enough trouble for yourself. Quietly point to where the final amounts are found (off record).

As for her actions, I think they are typical things for her profession to do. When you have a golden position you butter the bread of those keeping you there. And without layers to tell us how much we need them we would probably use them a lot less. But a lawyer is trained to look for all the pitfalls and guide you through them. So of course the first thing they will mention is how perilous it is going to be. It is the nature of the beast.

You may have to get enough membership momentum together to hold the Board to the fire until this is resolved. If memory serves me well you said there were a few more then 500 lots and paid the lawyer a bit more then $100K. At those figures you would save $200 per owner by discharging the lawyer. But you may need to turn over a good portion of the Board to get the job done.
JohnK3 (Pennsylvania)
Posts: 967
Posted:
Quote:
Posted By NancyM2 on 09/05/2008 1:40 PM
Wrong John ): She has her own practice she started when we hired her on. She takes other clients as well. However I would guess we are about 80 to 90% of her business. She has a young child and can easily handle us from home with a computer, and telephone. Where else could you work for a firm and get that kind of money without having to be in the office every day.

Nancy

Nancy,

So let's say for discussion that, like Tom Hagan in THE GODFATHER, she has a single client - your HOA. Works out of her house, so no regualrly accepted overhead. Probably no secretary. Let's be generous and say $300/hr would be a very tasty fee. $198K/year would equal 55 billable hours a month, or a tad over 12 a week. Is that patently outrageous? Tough call; I'd need more info. However, those hours are apparently guaranteed whether work is performed or not. I'd bet a different atty hired on an as-needed basis would be much less expensive. And wouldn't be incurring $3K a month in expenses.

Good luck in getting this mess straightened out.
NancyM2 (California)
Posts: 249
Posted:
John ~ I get your point ~ However in this case she does have a office, sec, partner etc. I'm sure the partner handles all other outside business (if any)

Nancy
SusanW1 (Michigan)
Posts: 5,202
Posted:
Nancy - you need to remove all subjective elements of this issue and deal with the numbers ONLY.

If your approved budget allows so much money for legal fees, then so be it.

Unless you can convince your committee, and then your board, that the legal fees are out of whack for your particular HOA, then so be it.

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