Condo Association Management Blog

Please refer to your NJ Condominium Act. You will find procedures you may follow to remove the board.

AZ has law that owners can call 
 
for a Recall. Owners who petition must be a percentage according to ByLaws of owners who are currently paid up on their assessments. In AZ of a 476 condo assoc we needed 109 signatures; we retained an attorney to enforce the ByLaws of the Assoc and the Board was removed with two owners in charge of appointing board members until the election at end of year came about. Our ByLaws read that an all out one time assessment of all owners to pay the bills owed. Then go for the removal of board members who are not balancing the finances if they are the Board that pays the bills. Sometimes COAs give that power to a management company. That is a real no no.

In FL we recalled the board. They refused to acknowledge receipt of the recall papers. They refused to call a meeting to tell us whether or not they accept or reject the recall. This created a default. We got an attorney paid for with our private funds. Letters were written which were ignored. The state of FL told us to call the police if they try to hold a board meeting. We called the police who broke up the meeting. They just took the meeting into the president's apartment and "voted" in two additional board members. They refuse to budge and are using the association funds (OUR MONEY) to pay THEIR legal fees. They assessed us a huge amount 11 months ago for a major repair - the repair has never been done. We received notification of another HUGE assessment for another repair. Nobody can pay, they dont do the work, legal fees are mounting. If you dont pay they place a lien on your unit. Vandalism reported to our property if we speak up, apartment break ins without forced entry - the list goes on and on. We as unit owners are completely powerless to these rogue boards. We've had 2 deaths by heart attack from the stress of all this. My advice? Call the TV station and a newspaper investigative report and expose them. That is our only option left. Either that or pay your own monthly maintenance and look the other way to save your life. It is not worth the fight or the money for the legal fees. It sucks, yes indeed it does....but not to worry, the FL law is going to change in 2012 so owners have more rights. Good luck to you, I feel your pain - and immensely.

To Art B: You in live in FL man! Our State laws are there for YOU and they are tough. Just remember, in Fl you and the other owners can SUE THE BOARD MEMBERS PERSONALLY if they do not uphold association docs or obey FL law. You and the other association owners need to talk with an attorney that specializes in Condo law. If you win, you get whatever award granted plus all attorney fees. Be sue to sue for ALL COSTS expended by the Board with Association fees. 
 
As far as the original complainant, I'd certainly have a competent condo attorney look into your situation. This is something that should be dealt with by attorneys. Be sure to cover all aspects of the associations cost as well as your own. You may also have a suit against the board members themselves.

If you have a petition and the required number of petitioners and their proxy votes to vote (in case they don't show up) you send the petition by certified mail to the property manager. MAKE COPIES OF EVERYTHING!!! 
 
Your bylaws should state the amount of time that the board has to react to your petition for special meeting. it is usually 7 days. 
If the board refuses to hold the meeting or refuses to cooperate at the meeting, they are setting themselves up for a contempt charge and your management is looking at jail time until they cooperate. 
 
You must have the required votes on the petition and enough proxy votes to win though. If there are 100 members and you have 51 signatures and 51 proxies, You most likely will own them in court.  
The majority wins unless you are dealing with changing the bylaws (like changing our constitution) it usually takes 2/3 of the total vote to make an ammendment, everything else is simple majority rule. 
 

Seems like a clear vioaltion of their fiduciary respnsibilities which require board members to stay objective, unselfish, responsible, honest, trustworthy, and efficient. Board members, as stewards of public trust, must always act for the good of the organization, rather than for the benefit of themselves. They need to exercise reasonable care in all decision making, without placing the organization under unnecessary risk. 
 
 
 
The consequences of a finding of breach of fiduciary duty can be severe. First, the offending board member(s) will be held personally liable in money damages for all pecuniary losses sustained as a result of his misconduct. Such judgments (and the attendant legal fees) are rarely, if ever, covered by directors and officer's liability insurance. In addition, courts are not shy about assessing punitive damages against those board members who breach this most exacting of moral obligations.

DON'T SEND THE PROXIES IN WITH THE PETITION. YOU NEED THEM AT THE MEETING.

WOW!! 
 
What event made the owners wake up? I am always shocked that owners, yes owners will delegate responsibility of ownership and their money to others/strangers. If you are not on the board, you still have responsibilities. You are not a renter. I live in a condo community where few people take part/interest in their community UNLESS their services are cut, rates increase or some huge event occurs. Owners should take an interest every day. A disinterested community is the hot bed of those that will steal or waste all your money. Sometimes we get back the effort we made to be informed. The Board and Management company must be MANAGED.  
 
Good luck.

We live in condo in Tennessee (over 30 units) There is a newly elected board including myself and a neighbor who I am in sync with. We are new at it and we walked into a mess with a management company who has not proven itself to be trustworthy and we now have no reserve. The management company continues to spend money without letting us know as they did with the last board in which all were in cahoots. We don't even have the support of the other board members who constantly argue and don't take responsibility for their offices. We don't know what to do or where to start to get rid of this company. The homeowners do not participate except complain. Any direction would be very helpful. We are very concerned over our financial intesests thanks

[NJSA 15A:6-6] provides the authority for the removal of board members.  
 
 
 
Check your bylaws. There is probably a provision that will give you insight with regard to the board. I'm surprised that your attorney or manager hasn't identified this for you. 
 
 
 
Section 8:5.05 of the condominium act seems to indicate board members may be removed at any duly held special or regular meeting. Board members may be reoved with or without cause, provided that removal is done by a majority of members present at a meeting called for this purpose. You may have to vote off each board member individually, rather than try and do it all at once.  
 
 
 
I assume that there are a majority of unit owners that feel the same way as you. If the other owners do not, or are lazy, or apathetic, then you will not be able to remove anyone. 
 
 
 
 
 
The board member proposed to be ousted, should be given the opportunity to be heard at the meeting. 
 
 
 
Note that Section 8:4.05 does not apply to sponsor appointees to the board, (if applicable). 
 
 
 
 
 
Where is your manangement company in all this? They should be able to help you sort through the bylaws etc. Why haven't they paid the water bills? 
 
 
 
Are you sure there is a bonafide mechanics lien? It is my understanding that contractors cannot lien an association, as the common elements are usually not owned by the association, but rather the owners have an undevided interest therein. The contractor would then have to lien the individual unit(s), requiring NUB's to filed, mediation etc. Of course the contrcator could sue the association in civil court, but that is not a lien that is attached to property per se. 
 
 
 
You memntion that you have an attorney. You only need one, and should not be intimidated if they have several of them. Just make sure your attorney specializes in condominium law. If you feel that board members have breached their fiduciary obligations, ask your attorney if they can be sued as individuals. They may intimidate them enough to step down voluntarily. Consider criminal charges if there is evidence of malfeasance. 
 
 
 
Your association is obviously strapped for cash. This may be due to foreclosures etc. Please fill us in as to how your association got this way.  
 
 
 
Regardless of who is on the board, action must be taken to get things straightened out before things get worse. Your fellow owners should probably be prepared for a special assessment. 
 
 
 
 
 
Our management company has assissted other associations in distress so I can tell you that you are not alone.  
 
 
 
Best of luck, and please do keep us posted on how things are working out. 
 

Calling an attorney who is experienced in Condo matters is essential.  
 
You are in florida. Call the DPBR. Division of Professional and Business Relations--  
 
But understand: they are not going to do your work for you. You must get an attorney--and you must have a group of owners behind you.  
 

I am on my associations board and I am filing a lawsuit against my Association. My advice just don't get any lawyer. Do some research and find someone who specilizes on Condo Law and well respected.

Wow, none of you obviously live in the Woodlands in NJ. I signed the petition to call a special meeting to recall members of the board. They would not call a special meeting so we took them to court. Yes we had an attorney who made sure all of our documents were in order. The judge ruled in favor of the board stating that there wasn't a reason given to remove them. No where in our by-laws does it say we have to give a reason, although we have mandy. Lack of fiduciary responsibility is the main one, letting our former property manager steal possibly in the millions. Nope, the judge told up we would have to come back with petitions signed showing cause to remove the. We have 766 units, do you have any idea the work that was put into getting these petitions signed in the first place. Jenna

Indeed you must take this issue to court. Hopefully you are current with your fees. That will go well for you.  
The huge water bill amazes me. You are in New Jersey and it rains a lot there. Why is the water bill so high? Of course some watering has to be done but in NJ God finishes off the watering job.I think too much has been spent with no thought as to how to repay. All you can do is take them to court and the attorney will take care of getting them there.I would take care of this without delay.They may have 3 attorneys but that does not mean they will win. It does mean that large amounts of money have been spent without means of repaying and a lesson to be learned. Mari

My complex in Houston Texas is next to do this and I appreciate all the information given. We have stopped the quorum at the annual meeting by not signing in to stop elections becasue the By-laws are not being followed on elections. Maintenance is not being done and accounting is not forthcoming as required by the By-laws unless you are on the board. New rules and regulations have been signed by the board members that violate the rights of landlords, while not applicable to owners. A meeting not called or a vote given by the membership of the complex, again in direct violation to the By-laws and Texas law.  
 
 
 
Our problem is there is not an attorney that will take the case. There is no money to be gained by suing as the complex is almost bankrupt due to the actions of the board. The management company has the worst reputation in Houston and on the police "black list" due to allowing for crime in all their complexes. 
 
 
 
Keep the info coming on this, it is helpful because we will have to do this on our own--their team of lawers provided by the management company (paid by our money) against none on our side.

I don't read any mention of how these problems arose, nor is there any mention of a property management company. Before running to an attorney, check out the underlying records yourself so that you understand clearly what led to these problems. 
 
Remember the costs involved in suing your board: the plaintiff homeowners will have to come out-of-pocket for attorneys' fees. The defendant board will fall back on the HOA's D&O insurance policy. If the insurance company starts paying large claims, your premiums will increase dramatically. So, if everything unfolds exactly as you hope, it will cost you a great deal of money. 
 
It is extremely rare that litigation is the answer in these matters. Do your own legwork before you go down this path.

Post defect lawsuit, buildings being reworked -- 176 units in livermore ca. 1/3 of these units are stucco-only, 1/3 are combo stucco and siding, 1/3 are siding only. Most of the trim on the stucco-only version is being removed and not being replaced. This is material alteration. Owners/Members were not informed of these trim changes, only that some of the wood on the stucco would need to be replaced. Very few trim details are being replaced with foam, but most are only being filled in with flat stucco. Is this legal? Does Davis Sterling ACT apply?

I suspect that your situation might not be all that uncommon. There is an old saying do not let the fox be in charge of the chicken coop. All owners have to be alert and hold those managing their funds accountable. You have receive some good advice. it seems to me you are looking at criminal activity. Report fraud, and notify the IRS if you think they have pocketed owner dollars by fraud. You may want to report financial theft to your local police, and state law enforcement. You seem to have a whole lot of money unaccounted for-it did not walk away of itself. Sorry you owners have to go through this. Until their is a mandatory law that bank statements in total must be delivered to owners monthly little will change.

i have just been through this. the bod did everything they could to get out of the special meeting. here the state condo law and our bylaws state that once you submit the petition they have 14 days to call the meeting and it must be held within 30 days. If they don't do that YOU CAN CALL THE MEETING. They are supposed to send proxies so you can have a quorum. If they don't YOU CAN SEND PROXIES. It is most likely the case in your state too. You have to jump through these step because if you do this and the BOD doesn't turn up, when you do go to court, this looks VERY BAD for the BOD and furthers your case. GOOD LUCK!

I can't emphasize strongly enough the importance of staying out of court and away from lawyers except as a desperate, last ditch effort. This is your home, which means that to you, this is a highly personal and emotional issue, not to mention extremely important. If you go to court, you will be amazed at how bored the judge will be with your problem. If you go to arbitration, the retired judge that hears your case will be even more bored! If your HOA truly owes the money you have stated, the owners are much better served paying what it necessary to get the water turned back on than going to court. If you win everything you hope to win financially, what will you have left after attorneys' fees? If the board is guilty as charged, do they have the financial capacity to pay your legal fees and the fine not covered by D&O insurance? I doubt it. It will take you two years to win a hollow victory.

Larry Davis is 100% on the mark. The worst settlement is better than best verdict. No one ever wins in court--except the lawyers on both sides. The best lawyers will find a way to keep you out of court, not get you in court.

In my experience it doesn't matter what is in your by-laws unless you have enough mon ey to hire a better attorney you are spinning your wheels. I am in an 8 unit condo bldg. I have different people under me renting for almost two years don't work they are destroying the unit. I am afraid everytime I have to leave home. I have contacted state agency's & the city. They have the condo system set up that way on purpose so you can't do anything without an attorney. None of the other owners care. I can't afford $300.00 an hour for a condo attorney.Can you imagine they pass a state condo law for only more than 10 units! So the poor schmucks in a small condo bldg that don't have the money so what. You can be included if your owners vote to be included but none of the owners want to follow any rules anyway so thats not going to happen. So I live in fear everyday that I will come home & be cleaned out. I even installed an alarm but all they have to do is come up a few stairs & rob me & get back in their unit before the police get here. I stepped down as President we don't even have a president now. I am told there is nothing I can do un less it effects my unit. They just tell me hire an Attorney. Any advice? Police will do nothing unless they catch them. I have already called the drug hotline because some were dealing in back of bldg. They moved now I had to call for domestic violence. This is not a bad area of the city but the economy is bad & gangs are I am afraid tryng to take hold of control. If it could of been stopped when the first ones moved in. Unless you have people who care or are over 10 units condo's are all about money for the attorneys. 
 

I'm in shock reading stories above. Now I'm sure that the whole so called Home Owners Associations are nothing else, but legalized scams. We have the same issues right now with our small (50 units) condo in NJ. We saw the last audit of finances 12 years ago (no typo). Request for special meeting (73% owners signed) has been ignored/manipulated ("we didn't know what we signed"). President of the board is "glued" to his throne for 6 terms (12 years) out of 14 years of condo existence. The same people on board for years fight like wild cats to "serve our community". I'm sure board members don't pay monthly fees. We have no clue what's on our bank accounts, Everything smells really bad. People are scared and know they are against mafia. Do you think any County, State authorities would help us (New Jersey)?. What about Dept. of Community Affiars ?

Rob, 
 
You are much better served handling your issues yourself than relying upon a government agency ("we're overworked and understaffed!") to solve them for you. If you have 73% of the other owners behind you, you have the power to change your legal documents! Do it, and include such language as having the monthly bank statements sent to an owner who is not a board member and other such terms that you need to protect your interests. 
 
An audit is of almost no value because audit procedures are not designed to detect the problems you are facing: possible fraud, overpayment of select vendors, self-dealing, etc. You are much better served doing your own digging into the records once you can obtain them.