Get 1 year of free community web site hosting from Community123.com!
Sunday, August 09, 2020











HOATalk is a free service of Community123.com:

Easy to use website tools to help your board
Only members have access to all features.
Click here to join HOATalk for Free! Members click here to login and access all features.
Subject: could this be true, board doesn't have fiduciary duty
Prev Next
Please login to post a reply (click Member Login on the menu).
Author Messages
LaskaS
(Texas)

Posts:340


07/01/2020 3:09 PM  
hi,

I was having a conversation with our hoa attorney regarding my frustration with arbitrary application of rules and regulations..etc.

long story short.

our attorney told me point blank.

the board o f directors of the condominium association don't actually have a fiduciary duty to the hoa or owners.

I could not believe it. he told me that because our association was formed pre 1994.. we are still governed by texas property code 81..

I just can't believe this,, everything i've every read and understood about the responsibilities and obligations of being a board member mentions fiduciary duties..

now,, i'm basically told.. that actually, as long as the board thinks they are doing the right thing.. then that's all that's required.

, texas property code 82. for condominiums formed after 1994 does state that the board has a fidcuiary relationship to the hoa..

Does anyone have any information that would counter what our attorney said,, ?? i just can't believe the board isn't held to any standards...
AugustinD


Posts:3683


07/01/2020 3:24 PM  
Is your condominium incorporated as a nonprofit corporation? If so then Texas Business Organizations Code Section 22.221 "General Standards for Directors" applies:
=======
"(a)
A director shall discharge the director’s duties, including duties as a committee member, in good faith, with ordinary care, and in a manner the director reasonably believes to be in the best interest of the corporation.

(b)
A director is not liable to the corporation, a member, or another person for an action taken or not taken as a director if the director acted in compliance with this section. A person seeking to establish liability of a director must prove that the director did not act:

(1) in good faith;
(2) with ordinary care; and
(3) in a manner the director reasonably believed to be in the best interest of the corporation.
=========

See https://texas.public.law/statutes/tex._bus._org._code_title_2_chapter_22

The requirement to act "in the best interest of the corporation" happens to be the definition of "fiduciary duty."

If your condominium is a nonprofit corporation and your condo's attorney missed this, then he's an idiot.
GeorgeS21
(Florida)

Posts:2902


07/01/2020 3:37 PM  
Laska,

We’re you authorized by the Board to have said discussion with the CoA’s attorney?j
BillH10
(Texas)

Posts:527


07/01/2020 3:42 PM  
Laska

My sense is there is an underlying issue you have not identified. I cannot imagine you are just 'testing the water' regarding the definition of responsibilities and lack of explicit language regarding fiduciary duties of a Board in a Chapter 81 Association, especially if the Board is executing what appears to be fiduciary duties.

So, what is the real issue? You mentioned frustration with arbitrary application of rules and regulations, etc. Does the issue with your Board have something to do with that?
MelissaP1
(Alabama)

Posts:9446


07/01/2020 4:28 PM  
My HOA? We were ONLY responsible for Lawncare. That was it. Just had to make sure we collected enough money to pay our bills and enough to collect from those NOT paying. Not overly complicated.

Former HOA President
LaskaS
(Texas)

Posts:340


07/01/2020 4:35 PM  
calm down everyone,,

i was in a depostion,, regarding the harvey recovery,,


I'm one of the main witnesses to post harvey( i wasn't on the board then)

During one of the breaks,,he and i were just talking.. I mentioned how it was so frustrating that some members of an hoa board don't even bother to read the documents, he said they aren't actually required to..

and then he went on to tell me ,, in fact,, your condominium board, the board of directors doesn't have a fiduciary duty to the hoa,(as defined by law)

He said the only real requirement is that they think they are doing what is best for the hoa.
LaskaS
(Texas)

Posts:340


07/01/2020 4:36 PM  
.. I was in a deposition....
MarkW18


Posts:1290


07/01/2020 5:29 PM  
Posted By MelissaP1 on 07/01/2020 4:28 PM
My HOA? We were ONLY responsible for Lawncare. That was it. Just had to make sure we collected enough money to pay our bills and enough to collect from those NOT paying. Not overly complicated.



Must have been a AWESOME responsibility.
KerryL1
(California)

Posts:7397


07/01/2020 5:31 PM  
Augustin's citation is exactly right assuming you're a corporation. I think most states have this same or similar code which I believe is also known as the business judgement rule or BJR.

Your complaint seems to be a problem re: (b) (2). Directors must have some understanding of their corporation's documents and /or seek the advice of experts in areas that are beyond her expertise.
KerryL1
(California)

Posts:7397


07/01/2020 5:31 PM  
Augustin's citation is exactly right assuming you're a corporation. I think most states have this same or similar code which I believe is also known as the business judgement rule or BJR.

Your complaint seems to be a problem re: (b) (2). Directors must have some understanding of their corporation's documents and /or seek the advice of experts in areas that are beyond her expertise.
PaulJ6


Posts:0


07/02/2020 5:19 AM  
Posted By LaskaS on 07/01/2020 3:09 PM
hi,

I was having a conversation with our hoa attorney regarding my frustration with arbitrary application of rules and regulations..etc.

long story short.

our attorney told me point blank.

the board o f directors of the condominium association don't actually have a fiduciary duty to the hoa or owners.

I could not believe it. he told me that because our association was formed pre 1994.. we are still governed by texas property code 81..

I just can't believe this,, everything i've every read and understood about the responsibilities and obligations of being a board member mentions fiduciary duties..

now,, i'm basically told.. that actually, as long as the board thinks they are doing the right thing.. then that's all that's required.

, texas property code 82. for condominiums formed after 1994 does state that the board has a fidcuiary relationship to the hoa..

Does anyone have any information that would counter what our attorney said,, ?? i just can't believe the board isn't held to any standards...




HOA lawyers aren't usually the cream of the crop. This is yet another example.

Some states reduce the scope of fiduciary duties that HOAs owe to directors to be just some basic things, and Texas may have its own specific limitations, but caselaw will often impose some fiduciary duties anyway.
SheliaH
(Indiana)

Posts:3358


07/02/2020 6:24 AM  
It would be nice if HOA state statutes had something about fiduciary duty (I don't think there's anything specific in Indiana law either). However, I think people overthink HOA service - for me, it comes down to knowing your documents and applying careful thought to the issues, then making decisions that will benefit the ENTIRE community. Nothing an HOA board does should ever be a surprise to the community and you should be able to go to any board member, ask about an association issue, and get a complete and accurate answer.

You don't have to agree with all board decisions and it's true they will make mistakes (board members are human, like you and everyone else) but transparency is the key, along with knowledge. Sometimes our egos prompt us to make decisions out of anger or fear, which is never a good idea. Some rush the decision-making process and won't take the time to ask questions or do research, so they understand what's at stake. For others, ignorance is bliss - you don't always know what you don't know and make the wrong decision because of that. It's not enough to just read the documents - you have to MAKE time to learn something about budgeting, reserves, rule enforcement, etc. Someone said it best in a conversation on this board - the more you know about HOA issues and best practices, the more confident you will become in making decisions for your community. If you're not willing to learn or flat out ignore what you're told just because you don't like what's being said, take several seats and let someone else who's not as lazy as you take the wheel.

State statutes are a start, but it can't and shouldn't stop HOMEOWNERS from holding themselves and each other accountable. When you ask why board members go rouge, start by asking when was the last time YOU attended a meeting, read minutes and financial reports (and raise hell if people balk at giving them to you), or even took the time to get to know who was on the board. By only leaving it to the board members (who are homeowners like you) and not keeping tabs on them, why should you be shocked and dismayed when they (or even one or two) start thinking they can do what they damn well please because "we are the board and therefore we are?"

For me, my overall approach during my 10 years on the HOA board was - the decisions I make will ultimately affect my quality of life and/or my pocketbook, so if benefiting the entire community isn't motivation enough to do the right thing, the thought of being sued, a special assessment or seeing the community going into receivership and our property values drop to a minus number is enough motivation for me to do what responsible leaders are supposed to do. I don't need a state law or even the community documents to tell me how to behave - and most of the homeowners in my community are really apathetic,
PaulJ6


Posts:0


07/02/2020 11:11 AM  
SheilaH, Indiana law specifically provides for fiduciary duties for nonprofit boards (and boards of other organizations), by statute.
JohnC46
(South Carolina)

Posts:9678


07/02/2020 1:33 PM  
Some need to read this:

https://www.associatedasset.com/hoa-resources/hoa-tips-blog/2019/7/5/fiduciary-responsibility-of-hoa-board-members/#:~:text=Recognizing%20that%20a%20corporation's%20Board,best%20interests%20of%20the%20HOA.
GenoS
(Florida)

Posts:3925


07/02/2020 3:27 PM  
Or "Fiduciary Responsibility of HOA Board Members". Good article. No date but the topic isn't something subject to frequent change. I think it's valuable information regardless of when it was written.
BenA2
(Texas)

Posts:758


07/02/2020 9:08 PM  
My understanding is that the property code prevails over the corporation code in condo and property associations but I would defer to the attorney. Chapter 81 does clearly apply to your condo association if it was established pre 1994.

Something to remember is that your attorney is referring to the law, not your moral responsibility. It would make it more difficult to sue a board member for not acting in the best interest of the community but, in most cases, will make no difference. There is still an ethical duty to act in the best interest of the community and there are other ways to hold you accountable if you misuse your office.
AugustinD


Posts:3683


07/02/2020 10:43 PM  
Posted By BenA2 on 07/02/2020 9:08 PM
My understanding is that the property code prevails over the corporation code in condo and property associations but I would defer to the attorney.
Only when there is a conflict between the property code and the corporation code. Here, there is no conflict. If LaskaS's condo is a nonprofit corporation, then the corporate code's fiduciary duty section applies.
JenniferB14
(Colorado)

Posts:108


07/03/2020 6:54 AM  
Our attorney has told me the same thing, though in Colorado to me as a layperson the laws seem clear regarding the fiduciary duty of the board member. In fact the regulating agency for the HOAs describes this in detail on their website and lists the specific expectations of the board members indicating deviation from these things could lead to breech of fiduciary duty. The way my attorney has clarified it is that the courts have come down to "willful and wanton" behavior. If the actions are willful and wanton then there is a breech of duty. The challenge he states is that there is no definition of willful or wanton, so it needs to be pretty clear that actions were willful.
LouH1
(Michigan)

Posts:30


07/12/2020 6:12 AM  
What is the definition of willful and wanton behavior?
LaskaS
(Texas)

Posts:340


07/17/2020 1:02 AM  
I sent the attorney a question regarding our conversation,and here was his reply,i've redacted identifying information.


mr. lawyer,

I've been trying to reconcile what you told me last week regarding the the lack of fiduciary duty of our condo board..
when you said the board of our condominium don't have a fiduciary duty to the owners..
.. the board doesn't have a fiduciary duty to the owners/members of the condominium association. under the texas condominium act. (fiduciary duty does apply to condominiums covered under TEXAS UNIFORM condominium act though)

as directors of a non profit corp in the state of texas..doesnt the board does have fiduciary duty to the corporation(hoa )itself...


here is his response..

Lask**

There is no automatic fiduciary duty created or existing between an HOA board and its members except when section 82.103 applies – and 82.103 does not apply to The Pines. It does not change when the HOA is a Texas Non-profit Corporation. Most HOAs are Texas non-profit corporations. The only other exception that I know of is when an HOA board receives insurance funds as a trustee for an owner to do repairs under insurance, like a fire or hurricane damage. The day to day operation of an HOA and board decisions do not create a fiduciary duty. There are many Texas cases that so hold.

I hope this is helpful. Take care.

Sincerely Yours,

LaskaS
(Texas)

Posts:340


07/17/2020 1:42 AM  
I also found this article which i think is saying the same thing as the attorney was saying..

https://www.texasbar.com/AM/Template.cfm?Section=articles&Template=/CM/HTMLDisplay.cfm&ContentID=42888

this is the relevant section from the article..



Fiduciary Duty
Fiduciaries are held to high standards of loyalty, honesty, and accountability. Are HOA leaders fiduciaries? Depends. The role of fiduciary typically arises by contract (the HOA documents) or by statute, but may also arise from the relationship of the parties. This paragraph focuses only on statutory authority. No fiduciary duty for HOA leaders in the corporation laws. Nor in the laws specific to subdivision HOAs. Nor in the law specific to condo HOAs created before 1994. Only condos created since 1994 (and certain older ones) are subject to a statute that holds condo HOA directors and officers to the standards of a fiduciary.




AugustinD


Posts:3683


07/17/2020 8:11 AM  
Posted By LaskaS on 07/17/2020 1:02 AM

as directors of a non profit corp in the state of texas..doesnt the board does have fiduciary duty to the corporation(hoa )itself...

here is [Laskas's condo attorney's] response..
...
There is no automatic fiduciary duty created or existing between an HOA board and its members except when section 82.103 applies – and 82.103 does not apply to The Pines. It does not change when the HOA is a Texas Non-profit Corporation. Most HOAs are Texas non-profit corporations. The only other exception that I know of is when an HOA board receives insurance funds as a trustee for an owner to do repairs under insurance, like a fire or hurricane damage. The day to day operation of an HOA and board decisions do not create a fiduciary duty. There are many Texas cases that so hold.


Uh huh. You could quote him back Texas Business Organizations Code Section 22.221 "General Standards for Directors." But unless your board authorizes you asking the HOA attorney questions, he does not have to respond. (If I were in his shoes, I would not respond.) I am pretty sure he will be unhappy with you debating him as well. Write him with any of the case law citations below, and you will incur his wrath. You are involved in a lawsuit as a witness. During the lawsuit, this attorney is obliged to aggressively advocate for the condominium and its board. To me, this would include denying that the condo board has any "fiduciary duty." This denial by the HOA attorney is based in his own fiduciary duty to aggressively advocate for his client.

If the issue of fiduciary duty goes to trial or a motion hearing, the two attorneys in front of the judge will debate the definition of "fiduciary duty"; what is in the nonprofit corporation statute; and so on. Anything can be argued in court, including, "The sky is red!" What the judge will rule is the question.

With regard to your condo attorney's claim that case law supports his position. He is making a legal argument. I would consider that a Texas Appeals Court in 2019 filed the following decision in a dispute between a condo owner and the condo's board. The decision references at length how Texas Business Organizations Code Section 22.221 is about fiduciary duty and does apply to condominium boards:

http://www.yettercoleman.com/wp-content/uploads/2019/05/2019-14-18-00128-cv.pdf (Texas Fourteenth Court of Appeals, O'Hern, Dooley, Green and Perryman vs. Mughrabi)

Also, Texas appeals courts have commented on how there is not an exact definition of "fiduciary duty." For example, from the Texas Supreme Court, decided in 2015:

"We have acknowledged that a precise, all-encompassing definition of “fiduciary duty” has proven elusive:

Fiduciary duties are imposed by courts on some relationships because of their special nature. We recounted in Kinzbach Tool Co. v. Corbett-Wallace Corp. that the “term ‘fiduciary’ is derived from the civil law. We recognized that it “is impossible to give a definition of the term that is comprehensive enough to cover all cases.” We said, “[g]enerally speaking, it applies to any person who occupies a position of peculiar confidence towards another. It refers to integrity and fidelity. It contemplates fair dealing and good faith, rather than legal obligation, as the basis of the transaction.” -- From https://cases.justia.com/texas/supreme-court/2015-13-0199.pdf?ts=1428332490

Numerous web sites state the following or similar about every single state in the U. S.:

"Because the state recognizes that this nonprofit corporation’s board members serve in a position of trust, every state’s law imposes a fiduciary duty on the board of directors. This law requires each member to act in the best interest of the corporation." https://www.ikocommunitymanagement.com/blog/legal-duties-of-hoa-board-members

"Under Corporate Law, the fiduciary duties of Community Association Board members are outlined by individual state corporate law. Most HOAs are nonprofit corporations, typically formed by filing Articles of Incorporation in the state in which the community is located. Recognizing that a corporation’s Board members serve in a position of trust, every state’s corporation law imposes a fiduciary duty on the Association (a.k.a. corporation’s) Board of Directors, requiring them to act in the best interests of the HOA." https://www.associatedasset.com/hoa-resources/hoa-tips-blog/2019/7/5/fiduciary-responsibility-of-hoa-board-members/#:~:text=This%20fiduciary%20duty%20applies%20to,within%20the%20scope%20of%20authority.

Posted By LaskaS on 07/01/2020 4:35 PM
and then [the condo attorney] went on to tell me ,, in fact,, your condominium board, the board of directors doesn't have a fiduciary duty to the hoa,(as defined by law). He said the only real requirement is that they think they are doing what is best for the hoa.


In my opinion, this attorney is either jerking LaskaS around or is aggressively advocating for his client in his chatter with LaskaS. LaskaS could ask him for his definition of "fiduciary duty." But for the reasons I gave above, I advise leaving it be.


LaskaS
(Texas)

Posts:340


07/18/2020 1:46 AM  
augustin,, I think i love you!.. lol..just kidding..

but thank you for that explanation.

I knew i wasn't wrong... and i did challenge him and that's when he sent me his response.lol

I think attorneys and hoa members in the majority are experts at gaslighting anyone who disagrees with their position.

but i have no power. The president does what he wants. it's completely toxic and abusive. I'm finally ready to get out.

I really want to go scorched earth , i'm one of the main witnesses in a big lawsuit coming up. It would only be hurt the hoa though. But i'm so fricking sick of having dedicated so much time and energy to try and correct some of the wrongs done after harvey.
LaskaS
(Texas)

Posts:340


07/18/2020 1:58 AM  
augustine,

the trial coming up doesn't have anything to do with the boards fiduciary duty. It's a case regarding a contractor after harvey charging us for work that wasn't done and claiming they did more work then they did..

the conversation with the attorney came up because i'm constantly frustrated that board members take actions that are in clear violation of their fiduciary duty to the hoa.. and that's when he told me the board didn't owe the owners or the hoa a fiduciary duty.
AugustinD


Posts:3683


07/18/2020 3:02 AM  
Posted By LaskaS on 07/18/2020 1:58 AM
augustine, the trial coming up doesn't have anything to do with the boards fiduciary duty. It's a case regarding a contractor after harvey charging us for work that wasn't done and claiming they did more work then they did.. the conversation with the attorney came up because i'm constantly frustrated that board members take actions that are in clear violation of their fiduciary duty to the hoa.. and that's when he told me the board didn't owe the owners or the hoa a fiduciary duty.
Hi LaskaS, thanks for elaborating. From the safety of non-HOA, non-condo life right now, I like a good legal tale. I wanted to know more about this lawsuit. I think I found your condo on the net but no substantive information about the lawsuit. Which is okay. Reading about the tales of folks whose homes were devastated by Harvey (and many of whom are now stuck in what seems like unavoidable litigation) is a dose of harsh reality. I am sorry for what all of you with flooded downstairs condos from Harvey have had to endure. (If I had to choose between suffering through a Hurricane Harvey and a COVID pandemic, I think I would choose the COVID pandemic.)

I confess the citation you provided from texasbar.org ("No fiduciary duty for HOA leaders in the corporation laws") has me baffled. I did just see an article that emphasizes a HOA director's fiduciary duty is to the corporation (and I believe the membership as a whole), and emphatically not individual members. As interested, see https://www.sandiegouniontribune.com/business/story/2020-02-29/hoa-homefront-fiduciary-duty-what-it-is-and-is-not. Maybe this is what your condo's attorney and the texas bar article means?

According to your posts, your condo's attorney first said the board had no fiduciary duty to the HOA nor the members. But subsequently in an email from him, he spoke only of no duty owed to members. He did not speak of whether a duty was owed to the corporation. This would be consistent with the San Diego Tribune article I linked above.

I expect the Texas case law likely does have many appeals court (and higher) decisions emphasizing the difference between directors having a fiduciary duty to a corporation vs. the directors having a fiduciary duty to an individual shareholder/member. E.g. Shareholder Jane Doe takes corporation X to court, claiming the directors have a fiduciary duty to her of not running the corporation into the ground through mis-management. She wants the corporation to pay her, as an individual, damages for the board's incompetence. The judge dismisses her suit, because the board does not owe her a fiduciary duty as an individual. This might be what your condo's attorney means, particularly in the situation condo owners find themselves with Harvey, whose insurer pays for what, and so on.

I think a close reading of Texas Business Organizations Code Section 22.221 "General Standards for Directors" does indicate that directors have a fiduciary duty to the corporation but not any individual member. In other words, a condo's board could be successfully sued for harming the condominium as a corporation, via a breach of the board's fiduciary duties. But the Board could not be successfully sued for harming any individual condominium member, because the Board has no fiduciary duty to any one member (or even sub-group of members).

Hypothetical shareholder Jane Doe, under certain conditions, could instead file what is called a "derivative lawsuit." In a derivative lawsuit, and once certain conditions are met, shareholder Jane Doe can legally claim to represent the corporation's interests. In the lawsuit, Jane would be speaking not for herself but instead, on behalf of the corporation. Shareholder Jane can claim the directors' actions breached their fiduciary duty to the corporation, and that these actions hurt the corporation. Shareholder Jane can then ask the court to order the directors to do xyz to rectify the harm to the corporation. But Shareholder Jane is stuck with any harm she suffered as an individual. Jane Doe with her derivative lawsuit (brought legally on behalf of the corporation but in Jane's name and maybe the names of a number of other shareholders) has a better chance of winning than Jane Doe with her lawsuit brought solely on her own behalf.
AugustinD


Posts:3683


07/18/2020 3:12 AM  
LaskaS's condo is pre-1994, so it is not subject to the Texas Uniform Condominium Act. But for condos established in 1994 and later, the Act states:

==== Start Excerpt from Texas Uniform Condominium Act ===
Sec. 82.103. BOARD MEMBERS AND OFFICERS.
(a) ... Each officer or member of the board is liable as a fiduciary of the unit owners for the officer's or member's acts or omissions. ...
...
(f) An officer or director of the association is not liable to the association or any unit owner for monetary damages for an act or omission occurring in the person's capacity as an officer or director unless:

(1) the officer or director breached a fiduciary duty to the association or a unit owner;
...
=== End Excerpt ===

For condos established in 1994 and later, it appears to me that an individual condo member could successfully sue when a director breaches her or his fiduciary duty and other conditions are met, with the member winning damages (money) just for her- or himself. This is not so for pre-1994 Texas condos.

Maybe this is what your condo's attorney and the Texas Bar article mean.
LaskaS
(Texas)

Posts:340


07/18/2020 12:43 PM  
augustine,

yes, I think the way you explained it ,regarding the hoa board not having fiduciary duty to owner of the hoa.. regarding the lawsuit, it's super convoluted. If you like talking lawsuits, maybe we could chat sometime. if the community you are looking at starts starts with a P ,,then i'm sure you found the right one.

because we are pre-1994.


My entire point about the entire thing is that I continue to object to the board making biased arbitrary decisions involving rules and regulations of the association. The board members also are pretty much universally planted pot members. They continuously try and vote to give the president all power over operations and decisions and oversight of the hoa. I continue to tell them, what's the point of a board if you all are just going to give the president unilateral authority.

for example. I was fined without the required due notice requirements in texas state law. I was never sent a certified letter.

the president of the association has tenants that live next door to me. When they first moved in , they complained that i had a recycle box in front of my door.
The president called me as an owner and asked me to move it because his new tenants were complaining. I said no. He then had the property manager fine me.
When I complained at a board meeting, I presented the state law requirements for fining to the board . They did nothing.

As you may recall, myself and the treasurer last year discovered that the property manger had not charged the president for work done insider his unit that was clearly owner resposiblity.
I presented the info to the board, none of the board seemed to care. They wouldn't insist Mr president pay it back. they just assumed he would. The charge does not appear on his account. It's been 6 months since i discovered it. When i confront him, He says" if i owe it i will pay it" however he never does. I could care less when he pays it, I just want the ammount properly charged to his account.

I have since found another invoice for 665 dollars that was supposed to be paid by the owner(president). he never paid it and it has not appeared on his account. so again, he knows he ownes he, he knows his account wasn't charged as required. yet he does nothing.
GeorgeS21
(Florida)

Posts:2902


07/18/2020 1:36 PM  
Laska,

Options ...

1. Resign
2. Fight
3. Fight with attorney assistance
4. Move

Not sure anyone here can directly help you.
CathyA3
(Ohio)

Posts:1120


07/18/2020 2:56 PM  
Echoing what George said, and what I've mentioned before:

There are situations in life where the price you have to pay to straighten them out may be worse than the original harm you suffered. And when you're in the middle of the fight, it's easy to lose sight of this.

Is this right or fair? No, it isn't. But that doesn't change the facts as they stand.

Whenever a COA or HOA member is getting ready to fight something, I suggest they first ask:

* How much do you love your home/neighborhood? Is it worth fighting for, or could you replace it with something comparable?

* Will you love it just as much when this is all over with? Will your experience sour your opinion or change something else, such as a lawsuit that antagonizes your neighbors?**

* Are there circumstances that override this calculation or remove some of the options that George mentioned?

* What happens if you're not successful, and would the possibility of failure change any of this?

To repeat what I said before: the unfairness of the situation does not change any of this calculation. It may make a person more likely to react emotionally rather than logically, though. And when money is involved, it's best to keep emotions out of your decisions as much as possible, lest you do something that is not actually in your best interest.

As with anything else, there is no one-size-fits-all answer to this stuff, because people's values and circumstances differ. And frankly, in some cases the fight is the point - the situation is just the excuse.

(** A while back I read an article about a homeowner who filed a Fair Housing complaint against her HOA. From the details in the article, it appears that she was completely justified in her complaint. However, she's now unhappy because she has lost all of her friends in her community as a result of the lawsuit, which is costing everyone money.)

AugustinD


Posts:3683


07/18/2020 6:30 PM  
I am sorry, LaskaS. The aggravation of Hurricane Harvey's flooding your condominium complex; the incompetence of the board; the apathy of the membership; and the burden of a lawsuit where you do not get to call the shots, but you do get to pay the costs; would add up to one miserable living situation to me.
LaskaS
(Texas)

Posts:340


07/18/2020 8:12 PM  
yep... pretty miserable.

so most people just stick their heads in the sand and let someone else handle it..

I'm pretty close to resigning. I would resign as soon as we get a competent property manager in place.

I'm just surprised that so many other resident owners are perfectly fine with letting people that don't even live in the community decide what repairs get done. what upgrades get done. what is important vs not so much. But like you all said it's not worth it. It's a no win situation. .. Basically all the things wise people have told me during this ordeal turned out to be true.

people generally can't be bothered to get involved unless it directly , immediately affects their pocketbook.

GeorgeS21
(Florida)

Posts:2902


07/19/2020 9:32 AM  
Laska,

You have posted several times on your situation - each seems to end with you musing about resigning.

Are you going to fix the problems?

Are you and your neighbors willing to commit the time and effort and money to do so?
LaskaS
(Texas)

Posts:340


07/20/2020 1:06 AM  
george,

i've post about different challenges that have come up..

lots of progress has been made, however. there are still issues regarding how the board itself operates that need improvement.;IMHO

the internal working of the board and the infighting and biased decision making is an ongoing issue. I as an individual board member have no unilateral authority. I can only bring up issues, and continue to bring them up with i feel that the board is not operating according to our bylaws.
LaskaS
(Texas)

Posts:340


07/20/2020 1:44 AM  
regarding musing about resigning.

I have given so much time and effort and energy.. and a lot of progress has been made. However, it's become very toxic within the board itself. Mostly towards me. The kangaroo court decisions that are made are often made ,not because it was the right decision, but because it was the opposite of what i proposed.

I just don't need that crap. However. I've been told by many owners to never resign, because i'm the only one who will stand up for what's right.(their words, not mine)

If I resign, I am basically allowing the hoa to be run by board members who don't live in the community. They don't have the same concerns that residents have. Non resident owners and resident owners do share a lot of the same goals. But there are different priorities.

As a resident, I want the common areas to be maintained and a preventive maintenance schedule to be implemented.
Non residents are more concerned with keeping spending to a minimum , even if it means some ares don't get the attention they should.

There really is no way to "win". I just want to know what is going on. If i resign. There will be little to no way of getting information from the board . they will just ignore information requests.
TimB4
(Virginia)

Posts:16850


07/20/2020 2:49 AM  
Laska,

I can relate to your last post.

Posted By LaskaS on 07/20/2020 1:44 AM
;
decisions that are made are often made ,not because it was the right decision, but because it was the opposite of what i proposed.




I ran into this a lot during my last term.


Posted By LaskaS on 07/20/2020 1:44 AM
;
However. I've been told by many owners to never resign, because i'm the only one who will stand up for what's right.(their words, not mine)




My response was: "I can't continue to do this alone and since others aren't stepping up, I need to look at how the continued fighting for whats right and best for the development affects me and my family."


Posted By LaskaS on 07/20/2020 1:44 AM
;
If I resign, I am basically allowing the hoa to be run by board members who don't live in the community.




Realistically, that is what's happening anyway.
Since they control the vote, you can influence some decisions but the actual decision is the majority.

Posted By LaskaS on 07/20/2020 1:44 AM
;
I just want to know what is going on. If i resign. There will be little to no way of getting information from the board . they will just ignore information requests.




I can relate to that as well.

I had to request financials, since the board chose to no longer post them on the web site (reducing transparency). When I received them, I noticed several thousand dollars worth of errors (human errors, not anything funny happening). When I pointed these things out, along with the fact that the errors show that nobody on the board is actually reviewing the finances, the request for additional info was met with delays and denials. Had to actually start the process of lining things up for potential legal action to get what I requested.


Laska,

Things will change if you get off the board, as you have been able to accomplish some items.
You can't control the actions of others.
You can only control how you react to those actions.

At this point, in my opinion, you need to do what is best for you and your family.


Tim




CathyA3
(Ohio)

Posts:1120


07/20/2020 5:27 AM  
I was in the same position as Tim was, one (experienced) board member up against two who wanted to do what they wanted to do. To make it worse, it was actually counterproductive to try to explain why things were done they way they were (those pesky CC&Rs, for example). I felt there was a higher chance of them stumbling across the right answer, rather than doing the opposite of what I said all the time. So I resigned, and I keep my nose completely out of whatever they're up to.

I feel that communities mostly get the boards they deserve. If owners aren't paying attention and the more skilled folks won't volunteer their time, one person can't do much to change that. I think that non-professional volunteer boards are the biggest flaw in the condo and HOA structure. Some states such as Florida have passed laws that maybe partially address the ignorance and incompetence of board members, but I suspect these laws only change things a bit around the margins.
KerryL1
(California)

Posts:7397


07/20/2020 6:48 PM  
I, too experienced what both Tim & Cathy experienced. So I didn't seek reelection for, basically 2019. Although my spouse & I travelled aboard for almost 2 months in '19, we found others who were unhappy with the Board I left. Sitting with the Ones during board meetings, I could see that their attitude was even worse than I thought. We met; we strategized; we wrote letters to the entire membership. Truthful, clear, concise with ides for improvement.

I wasn't going to run agin in late '19 but was persuaded otherwise. A talented new Owner also decided to run pushed by a new director, who with a reasonable director who'd served previously were both being trampled by the arrogant, ignorant board majority. And the majority was leading us to very bad policy many of us feared.

Election time, 10/9: 3 openings; 3 bad-guy incumbents; 3 competitors; the new guy; me and a fellow with previous HOA board experience. The three incumbents lost. A Month later the 4th of their little cabal resigned from the Board. All and an active spouse resigned immediately from committees they served on (dominated) leaving our ARC in the lurch.

It's a pleasure to be back. We've restored many aspects of transparancy that they had smashed, including monthly posting of the financials. It's been difficult as we lost our previous PM in 12/19, had subs form our MC for several weeks and got a new PM just when Covid hit. Our engineer of 8 years is leaving (twin tower high rise) at the end of this month. As the G. Washington character in Hamilton declared about elections: Winning is easy; governing is hard."

I've written the story before and my point always is. Both times that we've had lousy boards here over the past 13 year, the way to get rid of them is to find like-minded folks among your neighbors & friends in your HOA. Then meet with them formulate a plan, and be prepared to campaign & win the next annual election. Joint action is the best & cheapest way to take back your HOA!
Please login to post a reply (click Member Login on the menu).
Forums > Homeowner Association > HOA Discussions > could this be true, board doesn't have fiduciary duty



Only members have access to all features.
Click here to join HOATalk for Free! Members click here to login and access all features.







General Legal Notice:  The content of forum messages are from the posting member and have not been reviewed nor endorsed by HOATalk.com.  Messages posted by HOATalk or other members are for informational purposes only, are not legal or professional advice and do not constitute an attorney-client relationship.  Readers should not act upon this information without seeking professional counsel.  HOATalk is not a licensed attorney, CPA, tax advisor, financial advisor or any other licensed professional.  HOATalk accepts ads from sponsors but does not verify sponsor qualifications nor endorse/guarantee any sponsor's product or service.
Legal Notice For Messages Posted by Sponsoring Attorneys: This message has been prepared by the sponsoring attorney for informational purposes only and does not constitute legal advice. This information is not intended to create, and receipt of it does not constitute an attorney-client relationship. Readers of HOATalk.com should not act on this information without seeking professional counsel. Please do not send any sponsoring attorney confidential information unless you speak with the sponsoring attorney or an attorney from the sponsoring attorney’s firm and get authorization to send that information to them. If you wish to initiate possible representation, please contact an attorney in the firm of the sponsoring attorney. Sponsoring attorneys that post messages here are licensed to practice law in a specific state or states as indicated in their message signature or sponsor’s profile page. (NOTE: A ‘sponsoring attorney’ is an attorney that is a HOATalk.com official sponsor and is identified as such in the posted message or on our sponsor page.)

Copyright HOA Talk.com, A Service of Community123 LLC ( Homeowners Association Discussions )   Terms Of Use  Privacy Statement