Reader Questions - Manager Disclosures, Changing Presidents

Dear Kelly,

What penalty, if any, is imposed on a management company which does not disclose to the boards of their clients whether or not their manager is certified? I know of a company that does not do this.

D.L., Livermore

Dear D. L.,

The requirement that a manager annually disclose whether or not they are “certified” under the Business & Professions Code is found at Business & Professions Sections 11500-11506. Manager certification is important, because it is an indicator of how much time the person has invested in their career as a professional community manager. Several organizations, including the Community Associations Institute, offer credentials that qualify a manager to call themselves “certified”. [See past column #60].

Interestingly the Business & Professions Code section requiring disclosure does not specifically state the penalty for failing to make this disclosure. However such a practice could be considered an “unfair business practice” under Business & Professions Code 17200, and even be the basis of a lawsuit. Managers should be making this disclosure annually, as required, and association boards should insist upon it.

Certification is not a guarantee of good management expertise – but it can be an important indicator. If your manager has not taken the time to become a Certified Common Interest Development Manager, ask why.

Thanks,
Kelly 

Hello Kelly,

Your recent article (Why Board Seats Remain Open) really describes what our HOA has been like for many years.

How is a president removed from the board? Do the other board members do this? We don’t even know who is on the board other than the president. The same person has been the president since the inception of the HOA, and has never had any board members last very long. There is hardly any turnout for the annual meetings. Consequently the meetings have had very little turnout when electing board members. The board for many years is just one person, the president.

If The board members aren’t interested, then how does a person get removed as president??

Regards,

F.K., Menifee

Dear F.K.,

In most associations, the bylaws describe how the president is chosen. Usually, officers are chosen by a vote of the board, which means officers can be changed by board vote. If your president is not doing a good job and refuses to allow the association to be governed by the board, the other directors can remove the president from that office. One of the sad scenarios I see from time to time is the dysfunctional association, where a board of directors is abused and disrespected by their president, yet they are unwilling to take action and therefore continue to suffer unnecessarily.

The HOA president role is very different from that of the for-profit corporate president, but many presidents do not understand this. In HOAs, as non-profit corporations, decisions are made by the board. If the president is unable or unwilling to govern as a team, the team needs a new leader. If the other directors will not stand up, then elect directors who will.

Discussion and voting on changing officers is for open session – make sure it is on the agenda four days ahead. The board may remove an officer, but the person is still a director.

Hoping things at your HOA improve,
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®.