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Subject: Board members refusal to share information
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LaskaS
(Texas)

Posts:420


11/17/2020 3:06 PM  
Board member A (ANN) requests information in an email sent to board member B( Tom), (the rest of the board is cc'd on the information request)

Tom is the board member designated as the contact person for the HOA attorney.
Ann requested a breakdown of litigation expenses that have been spent on Case 1 vs Case 2 with corresponding time frames.

This information is easily available from the attorney''s bookkeeper. However. Tom refuses to get the information as requested.

Tom then tells ANN if she wants the information, she will have to make a motion at a board meeeting and the board will have to approve it.

I know this is wrong. Every board member individually has the right to review information regarding specific billing and allocations.

My contention is, ANN doesn't need a board vote or motion . Because the information is readily available at the attorney's office, Ann was following protocol and contacting the designated contact person (TOM) to request the info.


Can someone please provide me information that I can provide to Tom and cc the board, which clarifies that all board members have access to information up individual request.( except certain litigation matters if the board member in question is involved)
KerryL1
(California)

Posts:7660


11/17/2020 3:51 PM  
Won't your monthly financial statements available to all directors answer your questions?
KerryL1
(California)

Posts:7660


11/17/2020 3:51 PM  
Won't your monthly financial statements available to all directors answer your questions?
AugustinD


Posts:4421


11/17/2020 4:27 PM  
From LaskaS's prior posts, the above pertains to a Texas condominium subject to Texas Property Code Ch. 81 (the Texas Condo Act for pre-1994 condos); several specific but important sections of Ch. 82; and the Texas Nonprofit Corporation Act Ch. 22.
Posted By LaskaS on 11/17/2020 3:06 PM
Board member A (ANN) requests information in an email sent to board member B( Tom), (the rest of the board is cc'd on the information request). Tom is the board member designated as the contact person for the HOA attorney. Ann requested a breakdown of litigation expenses that have been spent on Case 1 vs Case 2 with corresponding time frames. This information is easily available from the attorney's bookkeeper.
Only records in the possession of the condominium association are available to condo Owners and condo Directors for inspection and copying. The records request should be made to the condominium's custodian of records. Specifically, ask for the invoices for the attorney's billed hours.

When other board members push back, ask them to quote from the following statutes to support their claim that a board vote must occur for a director to be permitted to view the attorney's invoices. Because they are wrong. Also quote what your covenants/bylaws say about records inspection, and point out that they too do not require a board vote.



From https://statutes.capitol.texas.gov/Docs/PR/htm/PR.81.htm:
==================
Sec. 81.209. CONDOMINIUM RECORDS. (a) The administrator or board of administration of a condominium regime or a person appointed by the bylaws of the regime shall keep a detailed written account of the receipts and expenditures related to the building and its administration that specifies the expenses incurred by the regime.

(b) The accounts and supporting vouchers of a condominium regime shall be made available to the apartment owners for examination on working days at convenient, established, and publicly announced hours.

(c) The books and records of a condominium regime must comply with good accounting procedures and must be audited at least once each year by an auditor who is not associated with the condominium regime.
===============

This section of Ch. 82 also applies:
===============
Sec. 82.114. ASSOCIATION RECORDS. (a) The association shall keep:

(1) detailed financial records that comply with generally accepted accounting principles and that are sufficiently detailed to enable the association to prepare a resale certificate under Section 82.157;

(2) the plans and specifications used to construct the condominium except for buildings originally constructed before January 1, 1994;

(3) the condominium information statement prepared under Section 82.152 and any amendments;

(4) the name and mailing address of each unit owner;

(5) voting records, proxies, and correspondence relating to amendments to the declaration; and

(6) minutes of meetings of the association and board.

(b) All financial and other records of the association shall be reasonably available at its registered office or its principal office in this state for examination by a unit owner and the owner's agents. An attorney's files and records relating to the association are not records of the association and are not subject to inspection by unit owners or production in a legal proceeding.

(c) The association shall, as a common expense, annually obtain an independent audit of the records. Copies of the audit must be made available to the unit owners. An audit required by this subsection shall be performed by a certified public accountant if required by the bylaws or a vote of the board of directors or a majority vote of the members of the association voting at a meeting of the association.

(d) A declarant shall furnish copies to the association of the information required by Subsection (a) on the date the first unit is sold.

(e) Not later than the 30th day after the date of acquiring an interest in a unit, the unit owner shall provide the association with:

(1) the unit owner's mailing address, telephone number, and driver's license number, if any;

(2) the name and address of the holder of any lien against the unit, and any loan number;

(3) the name and telephone number of any person occupying the unit other than the unit owner; and

(4) the name, address, and telephone number of any person managing the unit as agent of the unit owner.

(f) A unit owner shall notify the association not later than the 30th day after the date the owner has notice of a change in any information required by Subsection (e), and shall provide the information on request by the association from time to time.
===========

From the Texas Nonprofit Corporation Act:
==========

Sec. 22.351. MEMBER'S RIGHT TO INSPECT BOOKS AND RECORDS. A member of a corporation, on written demand stating the purpose of the demand, is entitled to examine and copy at the member's expense, in person or by agent, accountant, or attorney, at any reasonable time and for a proper purpose, the books and records of the corporation relevant to that purpose.
======
KerryL1
(California)

Posts:7660


11/17/2020 4:50 PM  
Augustin covers it well. But, I still ask, Laska, don't directors get copies of the monthly financials every month? Or they're posted on your web site?
BillH10
(Texas)

Posts:582


11/17/2020 7:04 PM  
Laska

In the financial reports we prepare for clients, we have one, perhaps two, line items which depict legal expenses.

It may be the regular financial reports do not contain the granular detail requested by Director A (AKA ANN).

I do not understand why the property manager is not being asked for the information. I certainly can produce that level of detail for our client board members as an ad hoc report without bothering the staff of the association attorney for information I already have.

I really do not understand the push-back regarding the request of a member of the Board.
LaskaS
(Texas)

Posts:420


11/17/2020 9:07 PM  
Augustine, thank you so much.

In response to the other questions. Yes, I can see the expenses on the financials . However, there is no breakdown.
Only totals.
LaskaS
(Texas)

Posts:420


11/17/2020 9:16 PM  
I forgot to answer the other question regarding whether we are given attorney invoices.

I have asked repeatedly and sometimes I am sent invoices that are months old.
I want to know how much money we've spent on a particular legal case. This information is important because we are heading into pretrial mediation.
Obviously, before any consideration can be made regarding a settlement, the board should know how much we've already spent on the case.

The information I'm seeking is only available through the attorney. The board member who is designated as the contact person is refusing to get the info. He is absolutely doing this just to spite me. He's obstructing every attempt I make to ask for information. The rest of the board just stays silent.


Augustine. do you know of any other relevant statutes that specify the a board members increased access to records.
MelissaP1
(Alabama)

Posts:9714


11/17/2020 9:41 PM  
Frankly I don't see the "need to know" this information. Why need such a breakdown except to be more nosy than you need to be. It's not even a finished case. You can't do a thing about it. It is up to the COURT once the time comes to decide about how that expense is taken. Meaning whatever is being spent on the case is considered "damages" in the court's eyes. So once the court case is decided that is when a "break down" of expenses will be presented to the court of which the judge will decide if legal costs are covered or not.

So I can see why this information is not being provided in a breakdown format. Totals are good enough if they are reported and recorded.

Former HOA President
AugustinD


Posts:4421


11/17/2020 10:21 PM  
Posted By LaskaS on 11/17/2020 9:16 PM
I have asked repeatedly and sometimes I am sent invoices that are months old.
So they do exist. This is what you should pursue. If the Board is refusing to turn over the invoices in a timely fashion, then your only option is to hire an attorney.
Posted By LaskaS on 11/17/2020 9:16 PM
I want to know how much money we've spent on a particular legal case. This information is important because we are heading into pretrial mediation. Obviously, before any consideration can be made regarding a settlement, the board should know how much we've already spent on the case.
I agree this information is important and it is critical that you be allowed to view the invoices in possession of the association. Your only option is to hire an attorney.
Posted By LaskaS on 11/17/2020 9:16 PM
The information I'm seeking is only available through the attorney. The board member who is designated as the contact person is refusing to get the info. He is absolutely doing this just to spite me.
I disagree. As I posted above, he's doing this because there is no statute or covenant that requires either him or the attorney to produce anything in the attorney's possession.

You have a right to view the attorney's invoices that are within the possession of the association. The courts will say within a reasonable timeframe.

None of the Texas statutes give the directors' special viewing rights. Your covenants might.

You indicated a few weeks ago that there was a massive change-up in the Board. It appears this is not going well.

Worse, this rogue board is making it impossible for you, as a director, to make informed decisions pertaining to mediation.

I suggest either spending the money on an attorney or moving.
SheliaH
(Indiana)

Posts:3577


11/18/2020 5:00 AM  
Have you emailed Tom (copy everyone) and asked him specifically why he won't give the information? Especially if board members have always received this information - what makes this case different? Could it be Tom has had some conversations with the HOA attorney that have run up the fees and he doesn't want the rest of you to know?

I also agree that this information should be included in the monthly financial report - that's what our association did.
SueW6
(Michigan)

Posts:781


11/18/2020 5:20 AM  
The president of the board should order Tom to provide an itemized statement of year to date costs for the attorney services so far this year. That’s not an unreasonable request or unattainable information to provide to the board.

If Tom refuses to do this then he needs to be removed as the liaison between the board and the lawyer.
AugustinD


Posts:4421


11/18/2020 6:37 AM  
Posted By SueW6 on 11/18/2020 5:20 AM
The president of the board should order Tom
HOA Board Presidents have no such power. For that matter neither do HOA Boards.
BillH10
(Texas)

Posts:582


11/18/2020 11:57 AM  
Laska, I repeat my previous question: I do not understand why the property manager is not being asked to produce this information? If the PM pays the bills, he or she must have the invoices.

The President certainly has the power to ask the PM to produce the requested data if it comes to that.
AugustinD


Posts:4421


11/18/2020 1:18 PM  
Posted By BillH10 on 11/18/2020 11:57 AM
Laska, I repeat my previous question: I do not understand why the property manager is not being asked to produce this information? If the PM pays the bills, he or she must have the invoices.

The President certainly has the power to ask the PM to produce the requested data if it comes to that.
A director (President or otherwise) can ask anything. Without risking liability to the Association and him- or herself, can a Director-President lawfully demand that the PM to provide information that the PM believes the Association is not legally obliged to provide? For example, suppose the Director-President demands that the PM provide a certain email exchange to an Owner (who is not on the Board and is not an officer). The email exchange is between the Board and the HOA attorney and concerns litigation. It is attorney-client privileged. Can the President-Director order the PM to provide this email exchange without risking liability on a few levels? No.

By law, the Board, and not just one director, is the voice of the Association on the larger decisions. Contrary to what many believe, the President's lawful duties are quite limited. He or she presides at meetings. He or she may be the voice that transmits Board decisions.

BillH10, have you never known a Board to refuse to comply with records requests? If it weren't a problem, it would not come up so often at this forum. This is what LaskaS is up against.
BillH10
(Texas)

Posts:582


11/18/2020 2:07 PM  
Augustin

I have not personally experienced a Board refusing to produce a document; of course it happens.

I understand your hypothetical. The data request for comparative expenditures to date is information the Board should have access to. To me it is not up to the PM to make any decision regarding access to information regarding expenditures for which the Board is responsible and presumably has approved. Engaging in a discussion to reduce the overhead involved in producing the data requested is perfectly acceptable.

I question the need for the level of granular detail requested, to me a summary figure is all that is necessary. Someone will have to explain the need for detail to me.

To be blunt, someone is playing games with the Director who made the request, for what reason I do not know. I do know refusal to provide the information requested raises questions.
LaskaS
(Texas)

Posts:420


11/18/2020 11:04 PM  
Augustine,

The changes that occurred several weeks ago actually are fine.

The board now consists of 9 people.. as required in our bylaws.
We fired the property manager who had been making false accusations of harassment in an effort to cover up for the work she was not doing.

Augustine. Having access to all the invoices I do have. But I have no way of delineating out which charges are for hoa business, which charges are for litigation expenses regarding a lawsuit.

Without knowing how much we have already spent in litigation on this particular lawsuit.
I can't use that information when I consider what I would be willing to settle .
I know that before we started the defense of the case.. we offered 75,000.
Now that our case is so strong and all of the evidence we have presented supports are defense. My stance is we should offer way less than the initial offer..
But I think part of the consideration has to be how much we have spent so far vs how much more it would cost to go to trial. I can't get a straight answer on either one of those questions.

MelissaP1
(Alabama)

Posts:9714


11/19/2020 4:21 AM  
Use the word I much? In a HOA it's a "WE". Also you do NOT need to know this information. It will be settled in a court of law when the time comes. All you need to know is your HOA is in litigation and this is the bill. DONE.

Former HOA President
AugustinD


Posts:4421


11/19/2020 7:25 AM  
Posted By LaskaS on 11/18/2020 11:04 PM
Having access to all the invoices I do have. But I have no way of delineating out which charges are for hoa business, which charges are for litigation expenses regarding a lawsuit.
Meaning the Board does not know for what it is being billed. This is unacceptable practice by the HOA attorney. Motion to the Board to have the attorney break down the invoices in greater detail.

You do not have to explain to me why you need to know how much was spent on each lawsuit to date. Of course all directors should have this information.
BillH10
(Texas)

Posts:582


11/19/2020 8:07 AM  
Laska

I agree with Augustin's latest post. If your attorney is not providing a detailed breakdown of charges on the invoice, that information should be requested on all invoices or a new attorney found.

I now understand why the information requested by the Board member cannot be obtained from the property manager or whomever pays the bills.

The invoices we receive from the attorney, (or the accountant, or pest control contractor, or whomever) for our clients depict very specifically the allocation of the expense to the 'cost cause'; in the case of the attorney the invoice entry looks like this

Date Hours Subject Amount Billed

In the Subject column there is an entry which states:

Telephone call with So and So to discuss/review issues submitted by email by client regarding installation of (new whatever) by (contractor name).

or

Review by (attorney, paralegal, whomever) of Declaration of the (Named) Association to determine responsibility for maintenance of (named element).
AugustinD


Posts:4421


11/19/2020 8:52 AM  
Posted By BillH10 on 11/19/2020 8:07 AM
If your attorney is not providing a detailed breakdown of charges on the invoice, that information should be requested on all invoices or a new attorney found.
I too was thinking that a new attorney should be considered. In other words, this practice of billing the client for who-really-knows-what is unacceptable. Let me toss in that it gives the attorney a lot of leeway for ripping off a client. I think any competent attorney would know this and would never even have to be asked to break down the invoices as BillH10 describes.

Where I am, I too have recently seen a HOA attorney's invoices (provided at an Owner's lawful records request, after some tooth pulling, grrr). The invoices were broken down, yes, exactly the same as what BillH10 described. Just a bit was redacted here and there on account of attorney-client privilege.
NigelB
(Texas)

Posts:254


11/21/2020 11:02 AM  
You're joking right?

A member of the HOA board does not have a right or need to know billing information from the association attorney?

HOA board members have a fiduciary duty and that includes monitoring of expenses to ensure that the billing is accurate and warranted. In the case of litigation generally the association attorney will bill the association on a monthly basis for work done, the bills included detailed information concerning the work performed and the amount billed.

The management company will then pay the bill once all of the approvals are made and those bills are subject to oversight and approval by the board or a designated board member.

In your scenario, once an account is turned over to an attorney for collection or legal action the board loses any oversight. You're wrong - the board has an obligation to maintain oversight of the legal process.
NigelB
(Texas)

Posts:254


11/21/2020 11:05 AM  
Posted By MelissaP1 on 11/19/2020 4:21 AM
Use the word I much? In a HOA it's a "WE". Also you do NOT need to know this information. It will be settled in a court of law when the time comes. All you need to know is your HOA is in litigation and this is the bill. DONE.



You're joking right?

A member of the HOA board does not have a right or need to know billing information from the association attorney?

HOA board members have a fiduciary duty and that includes monitoring of expenses to ensure that the billing is accurate and warranted. In the case of litigation generally the association attorney will bill the association on a monthly basis for work done, the bills included detailed information concerning the work performed and the amount billed.

The management company will then pay the bill once all of the approvals are made and those bills are subject to oversight and approval by the board or a designated board member.

In your scenario, once an account is turned over to an attorney for collection or legal action the board loses any oversight. You're wrong - the board has an obligation to maintain oversight of the legal process.

(Duplicate post cause I did it wrong the first time and didn't quote who I was responding to)
GeorgeS21
(Florida)

Posts:3411


11/21/2020 11:52 AM  
Perhaps Melissa was talking about the membership, and not board members?

In some cases, court action by a Board should be shared - in others, like foreclosures, probably not.

To your point, though, Nigel, our board voted to automatically hand over accounts in arrears to our attorney for collection at a date certain. We have one account that is three years in arrears and we recently voted to foreclose on this property. We follow the status of all of these monthly, and announce at Board meetings which properties are in arrears, and the status.
KerryL1
(California)

Posts:7660


11/21/2020 2:43 PM  
Agree with Bill and Augustin. Among he financials that we directors have access too are Vouchers, Invoices, etc. So it's usually r pretty easy to review the fine trails if need be.

I think that Melissa didn't read the OP and believes the OP isn't a director.
JohnC46
(South Carolina)

Posts:10130


11/21/2020 2:55 PM  
I believe Laska, while a PIA, is a BOD Member and is entitled to see anything her little heart desires to see.
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