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Subject: HELP!: Issues with HOA Board of Directors

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NathanielC1
(Maryland)

Posts:6

08/07/2009 8:27 AM
It has recently come to light that there are some questionable practices occurring with my Resident's Association Board of Directors: 1. Our Board President has paid for community landscaping with her personal credit card, without the approval of these services by the Board. Additionally, she was reimbursed by our community management company without an approval by the Board or sign-off by the Treasurer for reimbursement. 2. The community members have never received an annual financial statement (balance sheet, etc.) and are not notified of Board and Committee meetings dates and times. 3. There are residents currently serving on the Board of Directors, and on committees, who are not current with their Resident's Association dues. 4. Our Resident's Association Covenant/By-laws state that Board members may not vote on agenda issues by proxy, but this is currently occurring. I am a Maryland (Baltimore City) resident and am trying to find out what steps I should take to resolve these issues. Any assistance that any of you can provide would be greatly appreciated.

MicheleD
(Kentucky)

Posts:4491

08/07/2009 8:34 AM
I'm just a little curious as to how you know that board members or committee members are not current in their assessments if there is no communication about financial matters. Also, in the interest of full disclosure, I just paid our association's annual insurance with my own private credit card. We didn't have enough money in the coffers. I will be reimbursed at the end of the year. Sometimes you just gotta do what you gotta do. Having said that, I'm not aware of regulations in Maryland regarding open meetings. In Kentucky and per our documents, board meetings are not required to be open. We do not have to send out any notifications. That may not be the case in your area, though.

TracieS
(Colorado)

Posts:460

08/07/2009 8:42 AM
My recommendation about what steps you should take... TALK TO THE BOD! A lot of times, there are "assumptions" made about the way business is handled, when in fact, those assumptions are grossly incorrect. If you know that people are behind on assessments, then how else would the insurance policy get paid???? Without having all the facts, I'm GLAD your person put it on the card...better that than having the insurance policy LAPSE. Please, please, please, don't always ASS-U-ME that things are not above board without accurate information. TALK TO THE BOD before you try and take any steps to remedy any situation you feel is being handled inappropriately.

NathanielC1
(Maryland)

Posts:6

08/07/2009 8:45 AM
At this point it is simply via unofficial claims by other members of the Board. I am in the process of requesting all pertinent information from our community management company. I have been copied of a few emails between members of our Board regarding these matters. When you made that payment with your private credit card, were you required to get approval to do so by your Board? Or at least, approval to be reimbursed at the end of the year? Below is part of Maryland State Law regarding association meetings. This outlines when a meeting may be closed: § 11B-111. Meetings of homeowners association or its governing body Except as provided in this title, and notwithstanding anything contained in any of the documents of the homeowners association: (1) Subject to the provisions of paragraph (4) of this section, all meetings of the homeowners association, including meetings of the board of directors or other governing body of the homeowners association or a committee of the homeowners association, shall be open to all members of the homeowners association or their agents; (2) All members of the homeowners association shall be given reasonable notice of all regularly scheduled open meetings of the homeowners association; (3) (i) This paragraph does not apply to any meeting of a governing body that occurs at any time before the lot owners, other than the developer, have a majority of votes in the homeowners association, as provided in the declaration; (ii) Subject to subparagraph (iii) of this paragraph and to reasonable rules adopted by a governing body, a governing body shall provide a designated period of time during a meeting to allow lot owners an opportunity to comment on any matter relating to the homeowners association; (iii) During a meeting at which the agenda is limited to specific topics or at a special meeting, the lot owners' comments may be limited to the topics listed on the meeting agenda; and (iv) The governing body shall convene at least one meeting each year at which the agenda is open to any matter relating to the homeowners association; (4) A meeting of the board of directors or other governing body of the homeowners association or a committee of the homeowners association may be held in closed session only for the following purposes: (i) Discussion of matters pertaining to employees and personnel; (ii) Protection of the privacy or reputation of individuals in matters not related to the homeowners association's business; (iii) Consultation with legal counsel; (iv) Consultation with staff personnel, consultants, attorneys, or other persons in connection with pending or potential litigation; (v) Investigative proceedings concerning possible or actual criminal misconduct; (vi) Consideration of the terms or conditions of a business transaction in the negotiation stage if the disclosure could adversely affect the economic interests of the homeowners association; (vii) Compliance with a specific constitutional, statutory, or judicially imposed requirement protecting particular proceedings or matters from public disclosure; or (viii) On an individually recorded affirmative vote of two-thirds of the board or committee members present, some other exceptional reason so compelling as to override the general public policy in favor of open meetings; and (5) If a meeting is held in closed session under paragraph (4) of this section: (i) An action may not be taken and a matter may not be discussed if it is not permitted by paragraph (4) of this section; and (ii) A statement of the time, place, and purpose of a closed meeting, the record of the vote of each board or committee member by which the meeting was closed, and the authority under this section for closing a meeting shall be included in the minutes of the next meeting of the board of directors or the committee of the homeowners association.

MicheleD
(Kentucky)

Posts:4491

08/07/2009 8:49 AM
Tracie, I'm the one who paid for the HOA insurance on my own card. The original poster indicated that one of the board members paid for landscaping on her/his own card. I was just making the point that sometimes, if things need to be paid, you do what you have to do. Now, the bigger question is not that the board member paid for the landscaping on her personal credit card, it is the allegation that she/he did so without the board approving of the expenditure. I'm not sure that this poster may have all the appropriate details. For example, our board doesn't individually "approve" each expenditure once the budget is approved. In other words, we approved the budget, including $XXX amount for landscaping and/or insurance, so when the time comes for the bill to be paid, it gets paid. It doesn't need a meeting and a board "approval" for the bill. But, Tracie, I do agree with you that the poster should first try to communicate with the board. Perhaps a group of concerned residents can ask for a meeting with the President and Vice President to get clarification on some things.

TracieS
(Colorado)

Posts:460

08/07/2009 8:53 AM
Oh, one other thing...make sure you're not confusing in the documents how the BOD handles meeting notices for THEIR meetings and for the ANNUAL MEMBER'S Meeting. The lack of financial information is a cause for concern...but with a properly worded request to the BOD, you should have that information within 10-14 working days (a reasonable time period to comply with a valid request for association records). Have you asked for any of this information? A few other questions... Why would committees need to notify the entire membership of their committee meetings? If you're on the committee...you attend the meeting. If you're not, why would you care when they meet? You, as an owner, elected the BOD to act in the best interests of the association, so they have meetings from time to time. Do your documents/statutes/laws REQUIRE that the BOD notify the entire membership every time they meet? With just a bit more info, a proper course of action can be charted.

MicheleD
(Kentucky)

Posts:4491

08/07/2009 8:54 AM
Nathanial: No, the board does not need to "approve" my reimbursement, nor does it need to "approve" the expenditure, since it was already approved when the budget was built. It would be an incredible hamstring to have to have each and every "bill" approved by the entire board prior to payment. It just doesn't work that way. I'm also not too thrilled that board members are sharing emails with non-members. There is a serious danger of things being taken out of context, among other things. I would hit the roof if I discovered one of our board members was sharing emails with residents. But this is just another reason why board and HOA BUSINESS should NOT be conducted by email. We do, however, often communicate through email for INFORMATIONAL purposes. I would suggest that you tread very lightly, especially if there are bogus activities going on. However, you must also be careful that you are not being used in a board member v. board member infighting of some kind.

NathanielC1
(Maryland)

Posts:6

08/07/2009 8:56 AM
I appreciate your input. To give you a little background, I am a first time homeowner, and have been living in my community for a short time. The information you are giving me is exactly what I need to know. I am looking for a basic list of things that I should be doing. 1. What documentation I should be receiving or requesting on a regular basis as it pertains to our Resident's Association? 2. A typical procedure for discussing grievances with the Board. 3. Any other general advice that you may have.

NathanielC1
(Maryland)

Posts:6

08/07/2009 8:58 AM
I care when committees and the board are having their meetings because I would like to attend them if they are not closed. If I were receiving minutes from these meeting or at least being kept abreast of decisions that were being made even if by some informal communication, I would have no desire to attend them.

TracieS
(Colorado)

Posts:460

08/07/2009 8:59 AM
Well, there is a TREASURE TROVE of information here! Read through back posts, and try not to get too overwhelmed! There's a LOT of info out there. There's some AWESOME people here! Bite off baby bites...you'll get there!

MicheleD
(Kentucky)

Posts:4491

08/07/2009 9:15 AM
Nathaniel: Congrats on your first homeownership! It's a huge investment and we are all interested in keeping our investment from tanking! I think it's great that you want to know what's going on, and I would encourage you to attend whatever meetings you can. To begin with, do you have a copy of your association's governing documents? Including any amendments that have been made over the years? That would be a good place to start to learn what information you are supposed to receive and what types of meetings you are expected to attend.

NathanielC1
(Maryland)

Posts:6

08/07/2009 9:19 AM
I do have a copy of our governing documents, however I do not have any of the amendments that have been made. I know that they have been made, and some were discussed at our annual meeting, but no documentation of them was every provided.

MicheleD
(Kentucky)

Posts:4491

08/07/2009 9:34 AM
If the amendments were properly filed, you might be able to get them from your county deed room.

JeanneK3
(Maryland)

Posts:348

08/07/2009 1:52 PM
Maryland has enacted laws this year to make condo and HOA governance more transparent. These laws will be in effect October 1. Until then, go to www.marylandhomeownersassociation.info for a summary of these laws as well as best practices for association governance. However, I agree with others that are saying talk to your board with your concerns. Some boards are just doing the best they can and don't know what Maryland law is. Help them by explaining Maryland law and best practices to them. Jeanne

RobertR1
(South Carolina)

Posts:5164

08/07/2009 6:24 PM
JenneK, Way to go. I think your post will awaken in the OP the desire to find out about his documents. To the OP> So far, all you have done is try to find out information and I don't see where you are contemplating any overt actions. All good. Keep in mind also you are in this for the long haul and you have to live in the community and interact with the Board. On the face of it I think the Board is posturing around like pompous royalty. There is no reason any one of the Board members should not sit down and spent some time with an interested home owner and offer some directions, such as you are receiving here. I don't believe , in view of you just moving into the association, has suggested you volunteer to be on some committees, always a good move. But I have a feeling, as you find out more about your association and you find out more about your documents and as you find out more about state statutes and all kinds of resources that will allow you to end run the MC or the Board and look for information on county web sites or state offices and representatives, you may end up pretty much where you are now as applies to how you credit the management of the association. You, personally, will not be able to move mountains so start making records of who you talk to, what they say, etc, etc. If things stay sour, you will need support of your community, proving to your community that things are not right will require background and evidence. I would agree you should start taking baby steps and building your knowledge base. As you travel this road you will meet some folk that approve of what you are doing, even some Board members, just hold up you association as the Holy Grail and do nothing that will harm it but do all you can to make it better.

DonnaS
(Tennessee)

Posts:5671

08/11/2009 2:30 PM
Nathaniel, Anytime that the governing documents are amended, copy must be sent to all HOA members. This is the duty of the Board to provide all of them. That includes the lower form of documents such as Rules & Regs. Because these are filed along with the original docs, they must be attached to them and that includes each and every copy that is in the hands of the owners. But yes, your County register of deeds should have the amended copy for you to have.

CathyO
(Utah)

Posts:4

08/11/2009 8:16 PM
In regards to using proxy votes at board meeting, this is not legal. It is in Roberts Rules of Order along with a HOA Association Booklet. Our association tried one year to use proxy votes, so I reached it, and gave the board president the information stating the they could not use proxy votes at the board meeting. He did not believe me so he contacted the attorney for the HOA in Utah, and fould out that I was correct. Your finance officer is responsible to have available for any board member or association member a finance sheet for them to see. If he is not producing this, your board needs to call for an audit of your books as soon as possible. If your president is spending money that she is not authorized to spend, and is using her own credit card, the board should inform her that she can not spend money with out a motion giving her permission to purchase things. Your treasurer can be held responsible also for writing her a check to reimburse her. Your president needs to be warned at a meeting that this spending without a motion will not be excepted and if she uses her own credit card, then she can pay the bill, that your association will not pay any more bills that have no been approved by the board. There are general maintenance bills that are paid ever month, but these extra items are not.

RobertR1
(South Carolina)

Posts:5164

08/12/2009 5:20 AM
Cathy0, I have pasted you response here. See ((((( ))))) for my comments. In regards to using proxy votes at board meeting, this is not legal. It is in Roberts Rules of Order along with a HOA Association Booklet. (((((There is nothing legal about Roberts R of . Unless your documents specify it MUST be followed to the letter, it serves as a guideline only) Our association tried one year to use proxy votes, so I reached it, and gave the board president the information stating the they could not use proxy votes at the board meeting. He did not believe me so he contacted the attorney for the HOA in Utah, and fould out that I was correct.((((((((((Proxies are usually State specific, and some states have no such laws dealing with proxies. To be safe I would suggest you amend the documents to specify the proxie rules. According to what the state mandates.))))))))))))) Your finance officer is responsible to have available for any board member or association member a finance sheet for them to see. If he is not producing this, your board needs to call for an audit of your books as soon as possible. (((((((((Most state allow and most association have covenant demands that the Records of the association be available for review by any member so requesting. It is not just a financial sheet. Your covenants should require a financial report as often as monthly, it's no trouble to do. You need to replace your finance office if he/she is not abiding by the Boards desires. An audit should be required as specified by your documents and detailed how to get an Audit under unusual circumstances))))) If your president is spending money that she is not authorized to spend, and is using her own credit card, the board should inform her that she can not spend money with out a motion giving her permission to purchase things. (((((((((((Again, this can be handled with a Board direction. I would strongly suggest no personal credit cards (except small re-reimbursable be used by your association. Get your own association credit card.))))Your treasurer can be held responsible also for writing her a check to reimburse her. Your president needs to be warned at a meeting that this spending without a motion will not be excepted and if she uses her own credit card, then she can pay the bill, that your association will not pay any more bills that have no been approved by the board. There are general maintenance bills that are paid ever month, but these extra items are not. (((((There should be a limit set by your board on how much money can be spent by any single individual)))))) CathyO, Don't get the idea I am preaching Gospel. I am just giving an opinion. It is sometimes difficult to believe that what we post here on this site can be taken as the Law of the Land. Most of what we post here has to be weighed and valued as individual assessments. Few can be all thing to all people and fewer have "Right answers" that apply across the board. I commend you for your obvious interest, the knowledge who must have obtained through hard work and you desire to help your community. Don't stop posting because you think I am critical, I try to be constructive.

NathanielC1
(Maryland)

Posts:6

08/12/2009 6:18 AM
My Resident's Association Covenant states that the board members may not vote by proxy. Additionally, it says that they may vote on agenda items outside of regular meetings, only if all board members approve of voting on issues outside of a meeting. (I'm paraphrasing of course, but I assure you this is spelled out quite clearly). The issue is that the board president attempted to conduct a vote via email. One of our board members does not even have email, and another opposed to voting via email. Yet in the email that the President sent with the Board Members voting results, the lady w/o email had somehow voted. Whether the issue is the lady without email somehow voting via email, or the other Board member opposing voting via email, this directly violates our covenant and bylaws. To be blunt, our association President is quite unprofessional. She conducts business that has never been an agenda item or a motion to be approved by the board. When I attempt to ask questions about issues like this in meetings or via email, she either does not respond (in the case of email) or starts talking/yelling over me, changes the subject and continues the meeting. For whatever reason, there are very few residents who speak up (and very few that are actively involved with the association in any way). I am trying to find out steps I should take to communicate my issues to a higher authority than our Board (as they have not responded to any questions I have posed, save one or two). Additionally, with the personal credit card issue, these expenses never went through an approval process through the Board. The treasurer did not sign any check to reimburse the president. We have a management company that collects our dues and manages our funds. That company cut her a check directly. No checks and balances (other than the president submitting a receipt), and the expenditure was not ever vetted through the Board.

RobertR1
(South Carolina)

Posts:5164

08/12/2009 6:40 AM
Nathaniel, Please copy and paste your question (statement) onto a new thread. I will give a short answer here. This site is full of situations just like you are describing. Use the search feature upper right. In a nutshell, you care, most don't. But you can't effect change very well by yourselve, you have found that out. It is reasonable to conclude that this person holds more power than you do. He/she don't. You have to make a interest group stronger than this out of control whatever. It will take time it will take patience, it will take dedication but once you build your support you can move the mountain. Simple as that. Little by little you will gain ground. You go to a meeting or talk to your board individually and they rebluff you, or the manager or M/C. Next time you talk, take five people with you........notice the difference it makes. You do not need the majority of your owners, you need enough to get the majority supporting what you want to do. Be nice to yourselve and your neighbors, dedicate your cause to the association not to personal agendas.

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