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TomW (Utah)
Posts: 31
Posted:
A new 4 year contract was signed between our HOA and our MC on the same day as our Annual HOA Meeting, but this was not disclosed to the membership at the meeting. This contract was implemented without competetive bids, and I along with other concerned owners are outraged. Do we have any legal recourse to void this contract?
RogerB (Colorado)
Posts: 5,067
Posted:
Tom, your legal recourse depends. Does the contract have a termination clause which gives the HOA the option to terminate without cause? It should, but I bet it doesn't if written by the MC since the author of a contract ofter drafts it in their favor. Your HOA may be at the mercy of the MC.

Does your Declaration limit the length of a contract? In some Declarations there is a clause that contracts are limited to a one year term. If so, your Board is legally liable and you can demand they renegotiate the term of the contract within the allowed term. If not, you can ask them to try to renegotiate with the MC. It is their choice when bylaws provide your Board with the authority to sign contracts.

If you don't like the actions of your Board go to a meeting or send them a letter giving them constructive criticism. Unless they are ignorant of good business practices they did not act in good faith by not seeking bids. This and/or violation of controlling documents could be justification for legal action against the Board but one would have to seriously look at the cost if you lose.

Good Luck,
RogerB

TomW (Utah)
Posts: 31
Posted:
RogerB,
Thanks for your response. I did check our HOA/MC contract and there is no mention of a 1 year limit on contracts. Our Board and MC are very tight and are very reluctant to share any information with the membership.
One item in the contract states that the financial records will be available to the HOA Board of Directors, but no mention is made in the contract about the availability of these records to the members. Do we, as members, have the right to inspect all the financial records of our HOA?
TomW in Utah
EdR (Texas)
Posts: 170
Posted:
TomW:
I'll answer that for you from TX. You absolutely have a right to see the records, everyone of them--because you are paying for everything they are doing. You are a member of the assn., and no matter what state you are in, you ARE the membership. Now, be prepared that you will not be allowed willingly to view anything--that's the newest and biggest racket in the U.S. -- collusion between MCs and HOAs (some if not all on the boards). Our MC recently used the excuse, to force the president to sign an 18-month contract (which wasn't really forcing because she's in bed with them) that the board DIDN'T tell them they were going out for bids! Even though they should have told them, and the president was warned to include them in bidding and didn't, they are now saying that because they weren't included, that they would either sue or had to have an 18-month contract, and she signed it, but she told the other directors that it had to be done or they would all be sued! Crock of ____, isn't it?! I asked over a year ago to see the list of who voted in the election from their print out (because our check for dues was held from beginning of the election month which was due date until two weeks after election and we do not think our vote was counted)--not how anyone voted, just WHO VOTED, so we could compare numbers and totals, and we asked for a financial accounting. To date, we've received neither. Further, we were told we could come to their office and find all of these things on our own--oh yeah, I'm sure that will work. I was on the board for five years and watched these crazy events unfold, so I'm not an outsider looking in. I got off the board so I won't be sued along with them for misconduct and malfeasance. Sorry you are going thru this--I wish there was something that could be done about these MCs taking HOAs away from the members!
EdR
RogerB (Colorado)
Posts: 5,067
Posted:
Tom, Ed is correct, you have the right to view your association's records. If you are incorporated and the contract names someone at the MC as the corporation's Agent, then these records should be stored and available at their office. There may be a charge to you to inspect which would include the cost for their time and any copies made during your inspection. This has nothing to do with the MC contract. The financials are provided to the Board so they can monitor financial activities.

The 1 year contract term limit would not be in a 4 year contract; it would be in the Declaration. You should have been provided a copy or can get a copy of the Declaration at the County Clerk's office (call ahead for info on how to get a copy and cost). The purpose would be to determine if the Board violated the CC&Rs and if so demand they correct their violation.

Roger
LisaM (California)
Posts: 2
Posted:
If you are in California, the Davis-Stirling Act [part of the Civil Code] and Corporations Code 8330 both guarantee your right to see all financial records and the membership list. Your governing documents may also.
Unfortunately, the only way to enforce these rights may be to sue the association.
JaimeW (North Carolina)
Posts: 24
Posted:
A place you could check is your governing documents for your Association. In North Carolina I have seen it written in there that the Board of Directors can not sign over a year contract with a company.

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