Reader Questions - Bad Board Meetings, Settling the Debt

Mr. Richardson,

There are Board meetings taking place with little or no advance notice to anyone other than the Board Members. We never have a formal agenda published and minutes of these meetings are not properly documented for circulation to the homeowners. No open forum time is allowed for homeowners to voice their concerns.

My question is, what course of action may we take as individual homeowners to insure our Board is following the protocols required by the laws applied to homeowners associations in the State of California?

Any input or direction from you is appreciated. Cordially,

J.E., Blyth

Dear J.E.,

Boards ignoring the Open Meeting Act (Civil Code 1363.05) are at peril in many respects. Perhaps most important is the failure to respect neighbors, and to lose their trust. Such associations are fraught with conflict, and prone to a poor relationship between board and community. If proper corporate process, including that required by the Open Meeting Act, is ignored, then the decisions of the association might even be set aside by a court.

Some would advocate legal action, but frankly, in poorly run associations this rarely accomplishes permanent change. Instead, consider mobilizing your neighbors and elect a new group of volunteers who will respect the process and the community. Perhaps also join CAI.

Failures of transparency can take many forms: Failing to publish agendas in advance, abusing closed session, not keeping minutes, or deliberating outside of board meetings. Such failures are all bad for the HOA, and bad for the board.

Good luck,
Kelly

Hello Kelly,

I have a question regarding past HOA dues. I have successfully modified my mortgage and am now in trial period. The last tenant moved out 3 years ago, so there is a substantial amount ($15,000) in back HOA dues.

The attorney firm hired by the HOA has suggested that I make an offer for a one time discounted payment. Can you offer advice on what percentage of the $15,000 should that offer be?

Thank you very much,

J.E., San Clemente

Dear J.E.,

One surprising thing is that apparently your HOA did not record a lien on your residence, did the HOA not? Otherwise I wonder how you were able to modify your mortgage. In a short sale situation, I often recommend the HOA consider taking the same discount as the first mortgage lender is taking, but you are not in that situation.

Do all you can to settle the matter as soon as possible. All too often, homeowners find the passage of time just makes their problems much worse, as attorney fees and late charges pile up.

Of course, not knowing you or your association’s financial condition, I cannot say what you should offer, but I can tell you that you should make sure you settle.

Your HOA is vastly different than a large mortgage lender. When a lender takes a loss, it is spread among shareholder investors, but when HOA losses are spread among the neighbors, which includes you. Furthermore, such losses harm the ability to keep up the property and accumulate reserves, which in turn can harm the value of the property.

Glad that things are getting better,
Kelly

Written by Kelly G. Richardson

Kelly G. Richardson Esq., CCAL, is a Fellow of the College of Community Association Lawyers and a Partner of Richardson | Ober | DeNichilo LLP, a California law firm known for community association advice. Submit questions to [email protected]. Past columns at www.hoahomefront.com. All rights reserved®.