Ask the Expert

Marjorie Jean Meyer, CMCA®, PCAM®
Vice President and National Director of Education and Certification
ASSOCIA

The annual meeting for the Cooperative took place last week. During the annual meeting it was noted that a particular existing director and an employee had pre-arranged for several local folk to attend to stack the votes on who would be elected onto the board. (3 positions were open) Unfortunately most of the local folks brought in to stack the vote were not legal voters as they were not share holders as stated in the By-Laws. Also there were husbands and wives in attendance at the meeting that were both voting and according to the By-Laws were only entitled to one vote. The question that we have as the remaining directors is how to re-do the whole illegal vote and how to eliminate this particular director for purposely violating the by-laws and not acting in the best interest of the cooperative?

- Coop

If the board has formally declared the initial voting invalid, the next step is to call a new meeting as provided in the governing documents (probably the bylaws). Your governing documents as well as state statutes may specifically address approved wording for proxies and whether or not the board may require them to be notarized to avoid fraud. Parliamentary procedure also addresses voting irregularities and how to correct them as well as appropriate meeting conduct.

To ensure that your next election is valid, I urge your board to retain the services of a knowledgeable attorney or parliamentarian who can conduct the meeting on behalf of the president. Your board certainly doesn't want to lose all credibility with the owners, so take advantage of the expertise of a meeting professional to ensure that the new meeting runs smoothly and is legitimate.

Sincerely,

Margey

Top | Board of Directors | Communications | Finances | General
Insurance | Legal | Maintenance | Management | Rules

My husband and I purchased land and we put in the required home in what we were told was a retirement community, 55+. We were told by the developer and association, but finally learned that this community had children and young adults living in the community. My question: how can we get the association to find out this information........We plus other retired homeowners are very upset this, we thought as told this is a retirement for 55+

- Pat

You developer should have provided you with an Information/Disclosure Statement (which can total several hundred pages) that contained all the information about your community, including whether or not it is age-restricted. Regardless of what you were told verbally, only that disclosure material is legally-binding on the developer. However, if you have sales or promotional material that advertised the community as age-restricted, you and your neighbors may have a legal cause of action against the developer. I urge you to consult with a competent community association attorney to determine if any laws were broken in selling your home to you.

Regards,

Margey

One neighbor has two vehicles (mini van) that are covered with anti-abortion stickers and Christian value stickers.

What is an appropriate process to use to have the neighbor remove the the stickers?

- Susan

The First Amendment of the U.S. Constitution Bill of Rights provides for freedom of speech. Whether or not you agree with the philosophy expressed in stickers, your neighbor has the right to display them.

Sincerely,

Margey

We just got an EIN and opened a bank account in the name of a small condo association (4 units)and the question is if it is mandatory that we must file a form 1120-H. Since applying for an EIN to open a bank account the association also received a 8109-B form to send with our taxes. I thought that it isn't mandatory to file an informational return, am I correct? Thanks for your help.

- Carolyn

Community associations are nonprofit but typically not tax exempt. Consult with a competent CPA to determine if your association can obtain tax-exempt status because of its size and lack of common area and facilities. It may still be required to file annual tax returns even if no tax is due.

Sincerely,

Margey

Top | Board of Directors | Communications | Finances | General
Insurance | Legal | Maintenance | Management | Rules

I live in a townhome subdivision in Houston, Texas. Our Board of Directors continually passes bylaw resolutions that actually pertain to matters that are a part of the CC&Rs. For instance:

• A resolution prohibiting renting out your home.
• A resolution requiring the Association be named as an additional insured under individual homeowner insurance policies.

We are a fee simple property, and the Association has no ownership interest in the individual homes.

I have tried my best to explain to the Board that there are deficiencies in our CC&Rs, but these can't be fixed with a simple resolution to the Association's bylaws.

What is a good source for information that I could give to the Board to help them understand the differences between bylaws and CC&Rs, including there duties and authority as respects each?

- Dan

You can find excellent documentation to support your contention in past Association Times articles and archived articles (use the search function), parliamentary procedure, and the Community Associations Institute ("CAI"). CAI offers several publications that specifically address the hierarchy of governing documents that establish precedence in the event of a conflict, and the impropriety of using the resolution process to modify documents farther up in the hierarchy.

Sincerely,

Margey

The management company recently transferred ownership to us, the homeowners. While reviewing the books we realized that there are about 30 homeowners (out of 160) that have never paid their monthly dues, totalling to more than $50,000. Our new management company suggested that we switch to a POA because right now we can only place liens on an homeowners property. As a POA, we can possibly start foreclosing procedures. I have read some information regarding the Georgia's Property Owners' Association Act and it seems too good to be true. What is the difference between an HOA and a POA and what are the voting procedures. We had a meeting last monday and only 2 people showed up. Would we have to go door to door?

- Iman

According to the President of Today Management, an Associa member company based near Atlanta, Georgia, property owners associations (POAs) in Georgia provide more protection both for the members and the board than other types of volunteer or limited homeowner associations. Additionally, property owners associations typically are legally permitted to pursue collection of maintenance fees and enforce restrictive covenants created to protect property values of homes in the community.

To impose a POA on an existing HOA, the owners must approve an amendment to the current governing documents in accordance with each relevant document provision detailing the amendment process. Georgia state statutes may also contain requirements for converting to a POA. Yes, that might entail going door to door soliciting proxies and encouraging attendance at the special meeting at which the official vote will be taken. However, all that hard work may result in a more financially viable community with authority to ensure that every owner pays his or her fair share of the association's common area maintenance and administrative responsibilities.

One more caveat: if there is a dearth of volunteers now in your HOA, a POA won't operate any more effectively. Volunteers are the lifeblood of successful community associations, so in addition to gathering proxies it may be necessary to encourage more participation in the operations of your community to ensure a responsive and efficient leadership structure.

Sincerely,

Margey

Top | Board of Directors | Communications | Finances | General
Insurance | Legal | Maintenance | Management | Rules

I own a townhome on the coast in Texas. We received quite a bit of damage from Hurricane Rita. My townhome shares a common wall with another unit. We are personally responsible for our own roofs. Three days before Rita hit I received a letter from the association making me aware of a leak in the adjoining townhome that they felt my roof was responsible for. At that time I also had a leak in my kitchen. I made the h/o association aware on the same day that I received the letter that I was hiring a roofer to take care of the situation. Hurricane Rita came ashore 2 days later. Needless to say all of the townhomes had to have new roofs. Even after the new roofs there is still a leak in this common wall. The roofer is saying this is a pre-existing problem. The h/o that shares the common wall is still blaming it on me. In this situation are we both responsible for this common wall problem and if the roofing company replaced both entire roofs can they claim pre-existing? Thanks so much for your answer.

- S.

Your association's governing document should detail maintenance responsibilities of both the owners and the association. With particular respect to your pre-existing roof leak, if your documents clearly state that each owner is responsible to repair and replace the roof over the unit and any subsequent damage, it does not matter if the leak occurred before or during Hurricane Rita. It seems reasonable for your neighbor to expect you or your insurance company to restore the damaged area to its condition prior to the leak.

It's quite possible that there are more relevant facts surrounding the situation you described, so I would encourage you to consult with a competent attorney and your personal insurance agent to ensure that all issues are addressed.

Sincerely,

Margey

© Association Times
Permission to reprint any of the information contained in this article is granted provided Association Times is credited as the source.