Take Action Against Suspect President

by Richard L. Thompson

Q I suspect our president of embezzlement. He is also acting as the secretary and treasurer and claims he has over half the owners’ proxies so no one can stop him. Help!

A You have legitimate concerns and have the right to reasonable answers to those concerns. Make a written request for access to financial information (checking accounts, financial reports, etc.). If you are ignored or don't receive reasonable answers, you have the right to call a special owners meeting usually with a small percentage of owners requesting it to discuss the concerns. Also, convince the other owners to vote for you in the next election and ask them to give you their proxy if they aren't attending the annual meeting. Ask other concerned owners to run as well. Only if you displace this individual will you have a chance for change.

Q Can a HOA offer its members the option to pay higher fees in lieu of participating in maintenance activities? We have always tried to keep our fees low by sharing many of those tasks. And is there a way to ensure that prospective buyers understand that our HOA involves a commitment to make regular contributions of time and effort?

A An underlying principle of owning property in a HOA is that the members get discounts through group buying power. But there is no obligation that any member has to do the work themselves. So, members cannot be surcharged for lack of participation. While it's nice that there are those that want to cut costs by doing the work, getting sustained cooperation and consistent results from all members is next to impossible. Encourage volunteers by asking each member to complete a small but meaningful task rather than volunteering for long-term commitment. By year end, many small projects can be completed and, when combined, represent an impressive accomplishment. Recognize those that participate in the newsletter and board and annual meetings. Give awards and certificates. This will encourage others to step forward.

Q Our board has been missing a secretary for months. I serve on the Architectural Control Committee and the board wants me to take the secretary's job. I don't want it since it is a lot of work if done properly. Can the president force me to take the job?

A It sounds like your HOA is overdue for professional management, which can provide this service and many others. Barring that, the board could appoint or hire anyone to do the secretary's job. The board can't force anyone to do anything.

Q I’ve just completed my first year managing the largest condominium association in the area. The property spent much of the last ten years under maintained and what work was done was substandard at best. Until recently, the majority of board members represented investors, and many board decisions were made in the best interest of those investors rather than the HOA. For example, insurance claims were paid through the HOA’s policy that should not have been. Those investor board members have since been replaced by owner occupant directors, but the investors are posturing to retake the board. They have been engaged in door-to-door campaigns and other aggressive tactics. Many of the current board members are so frustrated with the barrage of communication and additional work this group is causing that they are ready to throw in the towel. I’m at a loss as to what I can or should do in this situation. My gut reaction is to suggest that all directors be required to sign a conflict of interest agreement. This would help rein in some of the self-serving behavior. Thoughts?

A Investor owners have the right to serve on the board if they can get elected. The current board members need to understand if they don't encourage conscientious and non-conflicted candidates and general members to vote for them, candidates with not-so-hidden agendas will get elected and do things that will negatively impact the value of the units. Signing a conflict of interest statement may be appropriate since it can be used to intercede when self-serving board actions are being contemplated. You, as manager, need to be candid about what the board should and shouldn't be doing and the consequences. For example, filing inappropriate insurance claims against the HOA's policy could result in higher premiums or loss of the insurance altogether. If a board member proposes something at a board meeting that conflicts with the governing documents, good business practice or common sense, say so in no uncertain terms. If the board votes in favor of it anyway, insist that the minutes reflect that the manager advised otherwise. This tactic may cause the board to recant its foolish ways. The manager walks a fine line with changing boards. If the hidden agenda folks take over again, you will have a choice to make: quit or try to make it work.

Neighbor Knowledge

One of any homeowner association’s challenges is helping neighbors “make nice.” The board is frequently called on to mediate disputes and fine neighbors for doing bad things. Actually, it’s not the board’s job, and in most cases, these “opportunities” should be bounced back to the complainer to handle.

What exactly is a good neighbor? To be one, you don’t need to be friends or hang out together. Being a good neighbor is an attitude. A good neighbor attitude allows you to live as privately or as sociably as you wish. Here’s how to cultivate and nurture it:

Meet Them. While marching up to their door with hand extended is great, the chance encounter works well too. Introduce yourself at the mailbox, while walking the dog or when you take out the trash. Learn their names and offer a cordial "Hello" or "Good Morning" when you see them.

Keep Them Informed. Contact them before undertaking something that might affect them, such as hosting a big party, building a fence, or cutting down a tree.

Be Aware of Differences. Age, faith, ethnic background, and marital status can drastically affect lifestyles. Be aware of the differences between you, but hone in on what you have in common.

Point of View. From your neighbor’s viewpoint, how does your compost pile, swing set, or junk car look? Would you like that view? (If you do, refer to your neighbor’s viewpoint).

Be Appreciative. If a neighbor does something you like, tell them! They’ll be pleased that you noticed the new awning, patio furniture, plants, etc.

Assume the Best. Most people don't intentionally create problems. Assume the neighbor doesn’t know about the annoyance when you speak to them. Your delivery will be dramatically kinder. And assume they will be cooperative.

Be Candid. If your neighbors do something that bothers you, let them know as soon as possible.

Be Calm. When discussing a point of contention, speak calmly, listen carefully, and thank them for telling you how they feel. You don’t have to agree or justify your behavior. If you don’t react defensively, anger usually subsides, lines of communication remain open, and resolution is possible.

Take Your Time. If caught in angry confrontation, take a break to reflect and finish the discussion when cooler heads prevail. Don’t leave it hanging. Time and lack of resolution will intensify hostilities.

Best Advice of All. Treat others as you would like to be treated. This attitude will pave the way for good neighborliness. Love your neighbor as yourself.

Richard L. Thompson, PRA is the Owner of Regenesis, Inc. For more information, visit www.regenesis.net.