I’ve been contacted recently by a couple of concerned homeowners about their HOA boards. And while I hesitate to label every board complaint as a “rogue board”, these two situations are eerily similar and troublesome.
One of these properties is a typical smallish condominium community in the Phoenix, AZ metro area, and the other is an upscale luxury-home/club facility in Chapel Hill, NC.
The Arizona condo owner has been in contact with me for about 10 months, concerned about a number of things relating to his association’s board, including how a number of board members apparently don’t live in Arizona (though they own property in the condo), and how one board member’s spouse appears to own the management company that runs the place. His concern goes further into the lack of transparency of the board in meetings and financial reporting. Having received some guidance from a few sources, he has made requests for documents, but not without considerable back-and-forth between himself and the association officer/board member who seems to be running the show.
The Chapel Hill contact is recent, and came through the HOA Perspectives web site. In her discussion, I heard similar concerns of potential financial misconduct and possible collusion between board members and the management company. She has sent me a 3 page letter she intends to distribute to the community (see a copy here: A Crisis of Confidence).
What strikes me about both of these situations is the powerful position the board members take with regard to elections. Conversation from both of my contacts indicates some level of inappropriate election activities, from “control of votes” to canceling elections and simply appointing replacements. Both also suspect some level of financial shenanigans, with an inability to view bank statements that support one board’s claim to the assets on hand, to duplicate invoices and work paid more than once (information from paid invoices obtained from the vendor).
Both of these situations seem to rank Level 4 in my “HOA Levels of Hell” podcast.
In situations like these, I suggest that fighting the current HOA board is not worth the effort. In many such cases, you will simply be dragged through the mud and labelled as a troublemaker by those in power — including the board, the management company, and any complicit vendors, which could range from the landscaper to your association attorney.
My recommendation is a tough one, because it requires restraint and perseverance. There’s no quick fix or instant gratification here! In my opinion, your approach has to include the following:
- You absolutely must become an expert in your governing documents. If you do not become “the expert in the room”, you will be crushed by people who act like they know the governing documents, but don’t. You don’t have to be able to quote paragraphs, but you need to know what they say and what they mean.
- You have to gather facts, evidence, copies of financial reports, public records, meeting minutes, and anything else you can get your hands on. Don’t make accusations (this is the “restraint” part I mentioned above). Request, don’t demand. Thank people for their help.
- You must write convincing, fact-based, no-rhetoric communication which describes the situation and the negative impacts to your entire community, if the situation is not resolved. Facts! Not accusations. “Who did what and why” is not important, only “what was done, and what should have been done.”
- You must distribute this communication to your fellow association members — respectfully but regularly, in every possible venue you can. Expect this to cost some money, but it doesn’t have to be expensive. Web sites are cheap, but you’ll want to send postcards or hang flyers on door handles.
- You have to find people who have the skills and experience to run the association, who have the time and inclination to take on the existing power structure. This might be you, but you need to be honest with yourself about your own ability to run the association. Find leaders with business experience and a deep sense of community.
- Then — and only after all the above have been done — you have to launch an election campaign to take over the board.
- And your job isn’t done: You then have to work with (or on) the new board to investigate and document the current state of the association’s affairs, and consider which of the current slate of contracted vendors must be replaced. Then there are Requests for Proposals, evaluations of proposals, and vendor selection, followed immediately by transition management and oversight.
You thought it would be easy? No. But your home, your community, and your friends and neighbors are worth the long-term effort to transform your association into a well-run community-focused, neighbor-friendly business and corporation.
Or you can stay and be disgruntled. You could move, but you’d have already done that if you could easily do so. I hate moving… I’d rather take over the board and do it right.