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ReneeD
(Illinois)

Posts:134

09/05/2006 5:52 PM
NOTE: we are an Illinois HOA, so if anyone has specific ideas or can reference our state's statutes on how to get information I welcome your advice....i apologize for my rambling on several subjects and for its length but I am beginning to believe that because I ask so many questions they must know I am on to something so they ignore me. I feel I am the only one who truly cares about this community and its finances........twice now I have tried to get on the Board and twice defeated. Below is my continuing saga and our PM's response follows--directly below my e-mail inquiry...(1) need to question why would a homeowner have to send a request to the Property Manager? (2) somewhere in the millions of articles I've read in the past, I read if a homeowner requests this type of information it requires BOD approval; yet, our PM is the bottleneck! I've gone door to door asking for homeowner support and there is none--the most common response, the BOD NEVER listens especially when that homeowner gets elected. IMO, they all are "in bed" with each other. So, my feeling is and I've also been told unless it is felt in the pocketbook, they don't care and then I can then say 'I told you so'. If you can identify with this, how did you deal with the situation? How do you avert negativism especially when it is propagated by certain board members? Especially at this last meeting--which by the way was a HOMEOWNERS MEETING to elect new board members--that was the only business conducted and yet no homeowners were allowed to discuss anything else per our attorney. As a matter of fact, several Board Members blurted right out that one (other) homeowner who has also been trying for several years to get on the Board as being the "town drunk" --and they all laughed about it. Is this not slander???? Can I and other homeowners who heard them say this do anything about this? ALSO, our governing documents(Declarations) specifically state that one of the many powers and duties of the Board are: (k)To keep detailed, accurate records of the receipts and expenditures affecting the use and operation of the Community Area. <<BOD gets these monthly reports for their meetings and that this particular Treasurer (since August 2004) may have inherited prior year's reports but, I know for a fact he now maintains his own binder of previous month's reports as a reference. and, in another section of our Declarations, the description of duties/powers of officers goes on to say... (d) The Treasurer shall be responsible for Association funds and securities and for keeping full and accurate accounts of all receipts and disbursements in the Association books of accounts kept for such purpose. The Treasurer shall be responsible for the deposit of all moneys and other valuable effects in the name, and to the credit, of the Association in such depositories as may from time to time be designated by the Board. So, even though this Association may have procurred a property management firm, they assigned one of its employees obviously as agent and gave the title of 'Property Manager' who, in my opinion, is a glorified administrative assistant; they oversee the day-to-day operation of our association and, by all appearances, this PM is running our Association and not the other way around. This BOD appears to be performing the obligatory BOD meeting, maybe signing checks here and then and, when the Treasurer reports our finances only states 'total cash assets'. When I do ask how much we collected and what expenses we incurred for that particular month, I have been told that is information the BOD need not disclose. So, to most homeowners, I have to believe they are unaware what Total Cash Assets truly represent. Also, towards the end of the year, a proposed budget is mailed out to homeowners, the PM--not the Board--lists the previous year's (already) approved budget amounts but does not list actual expenditures and then in the column to the right they list the proposed but not yet adopted budget for the ensuing year. ALSO, never have I seen an itemized accounting of what actually was spent, put into our Reserves or, any surplus funds YET, I found in our By-Laws stating that within a reasonable time after the close of each fiscal year the Board shall furnish each Owner with an itemized accounting of the Community Expenses for such fiscal year actually incurred and paid, together with a tabulation of the amounts collected pursuant to the Annual Assessment budget, and showing the net excess or deficit of income over expenditures plus reserves. Would this be considered a breach of contract between the PM and BOD or a breach of fiduciary duties on the part of the BOD, or are both guilty? ALSO, our governing documents specifically refer the Association shall have and continuously maintain in this state a registered office and a registered agent whose office is identical with such registered office, and may have other offices within or without the State of Illinois as the Board may from time to time determine. NOTE: since when does the attorney's office become a "registered" office?? I have never heard of an HOA signing a contract with a lawfirm or, that a lawfirm now "holds" the association's files. Besides, I CORRECTLY UNDERSTOOD THE LAWYER ANNOUNCING AND NAMING OUR PROPERTY MANAGER (her name)to have these proxys/ballots and, if anyone wanted to see them to send a written request(below). SO, IF YOU WERE ME, WHAT WOULD YOU DO? I AM OPEN TO ANY SUGGESTIONS. THANKS! -ReneeD From: RDodson [mailto:Rmail2030@sbcglobal.net] Sent: Tuesday, September 05, 2006 3:18 PM To: PM Cc: lawfirm Subject: Homeowner Request At our recent Annual Homeowner Election meeting on August 31, the attorney announced that you would have the ballots/proxy(s)/envelopes and, that any homeowner submitting a request can view this information. I am now exercising that right. Would you please let me know what day and time this week, if possible, I can come in to accomplish this request? In addition to the above request, I also want to take the opportunity as a member of this Association and as a homeowner in good standing to inspect our financial records (no copying/retrieval involved) this, according to Article X of our ByLaws states, ...'The Association shall keep correct and complete books and records of account (and), ...all books and records of the Association may be inspected by any Owner (and), ...for any proper purpose at any reasonable time' which I have provided to you within this e-mail. Thanks. -ReneeD From: PM Sent: Tuesday, September 05, 2006 To: ReneeD Cc: lawfirm Subject: Homeowner Request In regards to your requests, as for the Annual proxy/ballots, they are all at the attorney's office being stored and will be held at the office for one year, you would have to confirm with the attorney's office any scheduling to review with them. As for the rest of your request, in discussing this with my boss* again, I have been informed to notify you again that you will need to submit specific information that you are requesting to review with date ranges etc.. As you have been informed before, charges will apply to you even if no copying is done, the charges will be applied based on the gathering of the information and any time involved with any personnel that may have to answer any questions. The law also allows us 30 days to comply, just as an FYI. I know that being a short week this week, it would be extremely hard to handle any of this, this week. Thank You, Property Manager (name/company name withheld) * (married to spouse who owns PM)found the need to interject some serious but true humor

HaroldS
(Arizona)

Posts:904

09/05/2006 6:15 PM
Renee - Arizona has outlawed management companies charging a "babysitting" fee to the homeowner while the homeowner is lawfully reviewing the association's books or records. They can still charge the association for the time, but not the homeowner. You might want to check the Illinois statues to see if that is covered there too. So they want a specific reason and timeframe. Give it to them - as broadly as needed - from inception to today for instance. Arizona also allows them to charge only 15 cents a copy for any copies wanted. Check your Illinois statues for the allowable copy charges. Good luck. Harold

JosephW
(Michigan)

Posts:787

09/05/2006 8:14 PM
Let me see if I can help with a few of the issues. It's obvious you've been pegged as a "problem" owner, and therefore will find repeated roadblocks put in your way. The association, through its board of directors, can name anyone as its "registered agent". It is very often the management company, attorney, accountant or even a company that specializes in being someone else's reistered agent. The purpose of the registered agent is to have an individual (or company), with an in-state address, who will be responsible for receiving any communications from the state relating to the business entity, in your case, the HOA. It is proper, and probably in their contract, for the management company, as a contracted agent of the association, to hold, and store the association's records Yes, the board is ultimately responsible for all actions and the Treasurer is "responsible" for all of the financial duties you listed. However, the board can delegate those actual activities to other parties, in this case, the management company. When the board accepts the financial report, at each board meeting, they are carrying our their responsiblity. If they accept a report that is in error, it is their responsiblity. In other words, the board can delegate the administration, but not the final responsibility. Illinois has no HOA act, so your documents and the state coporations act (assuming you are incorporated) will govern. Link: http://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=2280&ChapAct=805%26nbsp%3BILCS%26nbsp%3B105%2F&ChapterID=65&ChapterName=BUSINESS+ORGANIZATIONS&ActName=General+Not+For+Profit+Corporation+Act+of+1986%2E. I would start with a letter to the board of directors, copying the management company, and the assocaition's attorney requesting your copy of the annual financial report, as required under (quote the bylaw word for word). Remind them that they have a fiduciary responsibility to carry out the requirements of the bylaws, and that nowhere in that bylaw does it state that they can charge an owner for the cost of that report. It is the boards responsibility to see that this report is sent to each owner. They can delegate this to the management company if they remembered to put it into the contract or if they are willing to pay to have it done. Any additional information you want will have to be requested in writing, as the management company stated, however, (again you will need to quote exactly from the bylaws) the the "books and records of the Association may be inspected by any Owner (and), ...for any proper purpose at any reasonable time", that since the bylaws do not specify any charges for compliance with this bylaw, that as long as you don't request copies, any charges would be between the management firm and the association. Your "proper reason" to see the documents would be the board's failure to provide the annual financial report to the owners, and to see if there has been any inependent review of the books by a qualified auditor. Last, the management company is probably caught between a rock and hard place. Even though their contract is with the "association", the decision to renew the contract is with the board, and they are required, as an agent, to take their direction from the board. They wouldn't be doing what they're doing without the board's OK (or at least their acceptance)- that's the quickest way to lose the contract. Your problem is with the board and its failure to follow the bylaws. Joe

Joseph West Official HOATalk.com Sponsor Community Associations Network, LLC www.CommunityAssociations.net *See legal notice below (end of page) or go to www.hoatalk.com/legal

ReneeD
(Illinois)

Posts:134

09/06/2006 2:29 PM
Thank you, Joseph, for your insight and will take you up on your suggestions listed above. In the meantime, if I do direct my inquiry to the lawyer for this information, I'm afraid that I will get "hit" with their hourly rate--another reuse I guess to avoid having homeowners such as myself requesting this information. I do have another question that is indirectly involved in this subject matter having to do with their fiduciary duties. Another homeowner brought this question up and I honestly never thought of it let alone know the answer. If the Board is found negligent or the Property Management, would a homeowner or homeowners sign a petition or have the right to request the name of the insurance carrier for them to investigate these abuses? If substantiated, can the BOD or PM be held liable and our insurance terminated? Thanks. -Renee

JosephW
(Michigan)

Posts:787

09/06/2006 5:50 PM
First, just copy the attorney. Direct all correspondence to the board. There shouldn't be any charge. Any direct requests to the attorney would incur a charge, and rightfully, since they get paid for their time. You're just providing background info to the attorney in case the board requests an opinion regarding your request. The insurance company won't investigate anything. They're not set up for that. And any costs incurred will be passed along to the owners. Short of any criminal act, the only way is for someone to drag them into civil court, recall them or get elected in their place. Civil litigation is expensive for the suer and the board gets the insurance to pay for their defense (if they have directors & officers laibility insurance) or they are indemnified under one fo the bylaws, or under corporate law, so the association covers their costs (in most instances). You really don't want your insurance terminated, because most losses or claims would then be passed onto the owners, and you could end up paying even more. Joe

Joseph West Official HOATalk.com Sponsor Community Associations Network, LLC www.CommunityAssociations.net *See legal notice below (end of page) or go to www.hoatalk.com/legal

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