Legal Mags - HOA question

[Below Zero]

Story:

The HOA was recently turned over to the home owners at my condo building.

The building owners could not turn over control to the HOA until 75% of the condos were sold.

Prior to the turnover, the building owners said to a home owner on the top floor that he could install skylights into his unit from the roof. The other home owners at the time were not notified of this, or even asked if this was acceptable.

Now these skylights are leaking, and I am afraid water may be getting into the roof trusses and insulation, which of course is HOA owned.

Question:

Did the building owners have the right to do this, without asking the other building owners if this was acceptable, even though there was not an HOA formed, and we were not paying any dues?

[truth]

You're going to have to sue them and let the courts sort this out. No way in hell will this be settled out of court.

[RootSkier]

If a reputable contractor did the work (probably not, since they are leaking), they should be on the hook for the repairs and any damage that has happened. In reality, unless it has been leaking for a long time, the damage might not be that bad. The trusses are almost certainly fine, it's probably only a matter of flashing them properly, patching in the roofing, and replacing some insulation.

[irul&ublo]

Your beef will be with the contractor and the owner of the condo.

[MakersTeleMark]

Question:

Did the building owners have the right to do this, without asking the other building owners if this was acceptable, even though there was not an HOA formed, and we were not paying any dues?

The "building owner" (called the Declarant) has this authority under the declaration (read your decs). If you live in a common interest community, I highly suggest you become familiar with CCIOA (pronounced Kiowa) (http://tinyurl.com/ho3f8) and the many changes that have been made to it, particularly by SB 100, and very recently SB89.

[Elkhound Odin]

Since the builder was running the HOA at the time of approval, he was in his right to allow the modification. The same could be said if the new board approved the change. Basically, anyone running the board can grant permission for building modifications that are permitted within your convenents. I wouldn't bother sueing the builder for allowing the mod, he probably has liability insurance and you'll end up fighting with an insurance company.

However, the cost for repair to the common elements and other private units should fall on the homeowner that made the modification. The HOA should put the homeowner on notice to fix the damage. If the homeowner can't or won't do this then the HOA has to pay for the repair and sue/ put a lien on the homeowner to recover the HOA costs.

[Below Zero]

Well, I am not talking about sueing anyone, yet. The problem with skylights is tricky because the HOA owns the roof, but the home owner owns the skylight.

It makes it even more sticky since the condo owner contracted directly with the roofer to install the skylight and the work is not complete and the condo owner has already indicated he has paid him in full.

The building is a condo conversion, not new construction.

I don't know, I guess I'm just bitching becasue I closed on this place at the time with no skylights on the roof. Now this fucking condo owner has five, count them FIVE skylights over a little 530 SF condo! I know more roof penetrations means more problems, which evidenced by them leaking, has already started. We had a nice clean EPDM roof, now we got leaks and ponding problems with these fucking skylights.

So basically in the "waiting peried" for more home owners to form an HOA, a condo owner has no right to speak their mind about modifications in the mean time. I don't think that is fair, but I guess life is not fair.

If it came up in the HOA now, I would vote NO for anyone wanting to add skylights.

Thanks for all the inputs guys.

[Elkhound Odin]

If you have not done so already, write a letter to the management company to lodge an official complaint. Push them to force a resolution. Don't settle for any bullshit from the homeowner abdicating his responsibility by claiming the fault falls on the roofer. True, the installer should fix the problem, but if the installer walks away with the homeowner's money, tough shit for him. The homeowner has to fix the problem one way or another.

The action of the owner with the skylights is putting the building and other units at risk. Don't play a waiting game. You don't want to find a couple feet of snow on the roof leaking into the building this winter.

[Art Shirk]

Generally you all will be bound by the builder's decision to allow the alteration prior to the HOA being turned over to the board. Despite people's premonitions that this problem is bourne upon the individual unit owner, I would bet that this would be now treated as a common element issue, the cots to be allocated to all owners because this is a building envelope issue. I would lokk closely at the definition of "unit" in the governing docs as well. Just as you have (unless you are in the smack dab middle of the building) a window that points laterally, which is most likely an envelope, this fellow has a window that points vertically.

If you want a quick resolution that ensures the integrity of your building, the association should commonly incur the costs to repair and move on. After all, this fellow will probably (a) not have the money to repair himself or (b) cause a stink and delay repairs, in either case, your costs will continue to rise if your fears come to fruition.

[riderspro]

Alright holmes, you want me to fix this for you? I'll come over there and slam a couple cinder blocks through the skylights and we'll just let him figure if he wants to fix it or not.

Then we'll call zoning to see if he did it right.

[TBS]

Bumping this ancient thread with a new question

My HOA is comprised of about 120 single family and 30 triplex dwellings. Annual assessments of $250K.
It was turned over to the owners in 2019.

The HOA Bylaws state clearly that if annual assessments exceed $75K following Turnover, the HOA's Board must cause audited financial statements to be prepared and distributed within 180 days of fiscal year end (12/31).

The only out is if 60% of the owners vote to suspend or modify this provision. That has not happened

Having been the corporate officer responsible for preparation of financials for public and venture-backed companies, I have some idea of what audited statements look like.

Audited financials have never been distributed, so guessing they've never been prepared either.

The HOA's Board are not sophisticated - I'm convinced a couple of them are subjects of long-term Dunning-Kruger experiments. The first board after Turnover fucked things up then resigned en masse about nine months into their term due to infighting. The second Board did an OK job given the Pandemic. Hence my patience in demanding statements..

Now a faction of the original Board is back in charge. Hence my desire for transparency & accountability. Especially since reserves assessments quadrupled this year...

I started pushing for statements around September 2021, and couldn't anywhere with the management company. Then in January we changed management companies so I waited until this month (180 days after FYE) to inquire about complying with their obligation to provide audited financials.

I've since had two responses that were both bullshit. I've been quite polite. Will see what the third response brings.

So the question is - Beyond suing the HOA Board for specific enforcement, do I have a civil claim against the Board? Can I claim their failure resulted in a reduction in the value of my home - that seems like a stretch but I haven't talked to a realtor.

Any other ideas?

And I've already thought about flaming bags of dogshit on their doorsteps - they all have security cameras...

Thanks in advance

[I Skied Bandini Mountain]

If they can't catch the asshole who left the bombs around DC on January 6, you can certainly leave flaming bags of dogshit on their doorsteps.

[Core Shot]

You could stop paying.
Then they have to sue you. Or lien your house.
The lien would suck if you have to sell.

You have a valid counterclaim.
Write a letter, send it certified mail, indicating you refuse to pay until they comply.

[TBS]

This is a very small town, no doubt I would be discovered or at least number one on suspect list.

@coreshot - HOA defaulting on their obligation doesn’t excuse non-performance of mine. Now there’s two matters to resolve. Easier to sue the Board for specific performance and get judgement for my legal fees to pursue.

[Bunion 2020]

HOAs suck. Period.

[neufox47]

This is a very small town, no doubt I would be discovered or at least number one on suspect list.

@coreshot - HOA defaulting on their obligation doesn’t excuse non-performance of mine. Now there’s two matters to resolve. Easier to sue the Board for specific performance and get judgement for my legal fees to pursue.

You could potentially put the funds in escrow until they respond but that would be costly and a PITA.

Are they giving you any financial statements? If they are you could then question the items you don’t trust.

I get why they don’t want to provide audited financials. I’m guessing that will run $10-15k for the first set produced if not more.

[Wapow]

Start by reading the HOA's articles and bylaws as they likely include a right for owners/members to review the HOA's books. Unless you think there is malfeasance, you should be able to figure out spending from that review, without needing to see audited financials. Those financials likely won't reveal mismanagement the way a simple review of spending would. An audit will confirm that a selected sample of vendor payments are genuine, but won't show whether the initiative was a good idea, or that the HOA did not overpay, etc.

[Not DJSapp]

Playing by the rules is stupid. Go nuclear and make it personal. Sue each member of the HOA board individually for embezzlement of HOA funds and demand they produce audited financials. Once you get the financials, drop the suit.

[Art Shirk]

DO NOT stop paying anything. I say this as a previously practicing HOA attorney (not your attorney - blah blah blah). They can and will nail you with the principle and exorbitant penalties and potentially attorney’s fees at conclusion or during any conflict. That’s not a leverage point.

What you can do is send a certified letter and put in words like “fiduciary duty” and “personal liability.” Once a Board knows that the law can reach them personally (and it can though maybe not here but you can threaten it), they start to perk up. Most people think it’s just some volunteering on the side, but it can get dicey as that role comes with certain obligations. Give them a deadline and ask them to consult with the HOAs Counsel.

I’d take that step before you get to the next one.


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[fastfred]

Jesus fucking christ the guy who shows up outta no where with a stick in his ass

Why are you not on the board so fucking easy to not be on the board and be an ass wipe you guys are a dime a dozen.

Get on the board volunteer and see how much fun it is to waste your time working for free

Just here to rant 20 years of hoa fun im the fucking president a shitty thankless job

But yes we can produce financials in less than 24hrs and i can sit down and explain them in detail and respond quickly w requests for more info

Now get the fuck on the board and be the treasurer or fuck off

[TBS]

Can always count on TGR for a broad range of advice, from subject matter professionals to, well, Fred.

HOAs suck. Period.

Agreed, but around here you form an HOA to get roads plowed or you go all Green Acres, buy a bunch of acreage and plow out to the highway yourself. That’s not the way I want to spend my first couple of hours on a pow day.

Figure out the HOA regulating agency in OR and file a complaint.

Thanks - I looked into this, and other than discrimination claims, disputes are settled in civil court.

Playing by the rules is stupid. Go nuclear and make it personal. Sue each member of the HOA board individually for embezzlement of HOA funds and demand they produce audited financials. Once you get the financials, drop the suit.

Good idea. And once I do that I can scorch the Earth even more by taking this to the Court of Public Opinion. Ms TBS works for our town newspaper, as does a neighbor. They could write a scathing article about the Board’s malfeasance, without the word “alleged”. Most of the full time residents are Faux News types so evidence is unnecessary.

Oh yea - thanks again for the advice about FinCEN and giant cash deposits.

DO NOT stop paying anything. I say this as a previously practicing HOA attorney (not your attorney - blah blah blah). They can and will nail you with the principle and exorbitant penalties and potentially attorney’s fees at conclusion or during any conflict. That’s not a leverage point.

What you can do is send a certified letter and put in words like “fiduciary duty” and “personal liability.” Once a Board knows that the law can reach them personally (and it can though maybe not here but you can threaten it), they start to perk up. Most people think it’s just some volunteering on the side, but it can get dicey as that role comes with certain obligations. Give them a deadline and ask them to consult with the HOAs Counsel.

I’d take that step before you get to the next one.

Thanks for this. I was thinking along the same lines before getting a lawyer involved, but thanks for the ideas for Magic Words. Need to re-read the indemnification provisions - I remember “fullest extent allowed by law” but don’t remember if there’s limits for negligence.

And did you think I would take Core Shot’s advice? Tres disappoint

Jesus fucking christ the guy who shows up outta no where with a stick in his ass

Why are you not on the board so fucking easy to not be on the board and be an ass wipe you guys are a dime a dozen.

Get on the board volunteer and see how much fun it is to waste your time working for free

Just here to rant 20 years of hoa fun im the fucking president a shitty thankless job

But yes we can produce financials in less than 24hrs and i can sit down and explain them in detail and respond quickly w requests for more info

Now get the fuck on the board and be the treasurer or fuck off

Now that right there is a ringing endorsement for HOA board service. Were you like my dad - didn’t show up to an Owners meeting and my stepmother nominated him to be Prez, where he elected on the spot in absentia.

His reward was to spend months untangling all the prior self-dealing and incompetence, then informing the owners their assessments were doubling, resulting in everyone pissed off with him.

I’ve been both the Prez and the Treasurer of an HOA. I was Declarant’s rep for the turnover of an HOA to its owners. So I have some clue about governance.

When we had our first pre-turnover meeting of the Owners, nobody wanted to listen to what I and the other two Owners with HOA Board experience had to say.

So now we get to pay for a bunch of defects that should have been fixed by Declarant before turnover. And our capital reserve assessments quadrupled due to prior reliance on a 15YO reserve study.

This HOA is comprised of 40% snowbirds, 30% retired Trumptards and the remainder normal people. No fucking way I’m stepping in to fix a bunch of prior fuckups, particularly when the existing and all prior Boards are too dumb to know how dumb they are.

Sorry you had a bad day. Did one of your subs fuck up and now the 2nd homeowner cougar with bolt-on tits you thought you could bang is royally pissed at you?

[EWG]

DO NOT stop paying anything. I say this as a previously practicing HOA attorney (not your attorney - blah blah blah). They can and will nail you with the principle and exorbitant penalties and potentially attorney’s fees at conclusion or during any conflict. That’s not a leverage point.

What you can do is send a certified letter and put in words like “fiduciary duty” and “personal liability.” Once a Board knows that the law can reach them personally (and it can though maybe not here but you can threaten it), they start to perk up. Most people think it’s just some volunteering on the side, but it can get dicey as that role comes with certain obligations. Give them a deadline and ask them to consult with the HOAs Counsel.

I’d take that step before you get to the next one.


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This is the answer. I am also not your rep or counsel but “fiduciary responsibility” is the magic term. That’s how lawyers get class actions lawsuits started with HOAs against builders.

And depending on the state you may be able to get to them with that claim. Even if you can’t, having to defend themselves is neither cheap nor comfortable, and they will likely stop treating the HOA as their playground real quick.

Letter from an attorney.

Also fun to claim gross negligence.

[Danno]

Letter from an attorney.

For better or for worse, this can get you traction with all sorts of problems.

[Crusty]

Bumping this ancient thread with a new question

My HOA is comprised of about 120 single family and 30 triplex dwellings. Annual assessments of $250K.
It was turned over to the owners in 2019.

The HOA Bylaws state clearly that if annual assessments exceed $75K following Turnover, the HOA's Board must cause audited financial statements to be prepared and distributed within 180 days of fiscal year end (12/31).

The only out is if 60% of the owners vote to suspend or modify this provision. That has not happened

Having been the corporate officer responsible for preparation of financials for public and venture-backed companies, I have some idea of what audited statements look like.

Audited financials have never been distributed, so guessing they've never been prepared either.

The HOA's Board are not sophisticated - I'm convinced a couple of them are subjects of long-term Dunning-Kruger experiments. The first board after Turnover fucked things up then resigned en masse about nine months into their term due to infighting. The second Board did an OK job given the Pandemic. Hence my patience in demanding statements..

Now a faction of the original Board is back in charge. Hence my desire for transparency & accountability. Especially since reserves assessments quadrupled this year...

I started pushing for statements around September 2021, and couldn't anywhere with the management company. Then in January we changed management companies so I waited until this month (180 days after FYE) to inquire about complying with their obligation to provide audited financials.

I've since had two responses that were both bullshit. I've been quite polite. Will see what the third response brings.

So the question is - Beyond suing the HOA Board for specific enforcement, do I have a civil claim against the Board? Can I claim their failure resulted in a reduction in the value of my home - that seems like a stretch but I haven't talked to a realtor.

Any other ideas?

And I've already thought about flaming bags of dogshit on their doorsteps - they all have security cameras...

Thanks in advance

As has been noted above audited financials will cost the HOA like 20K and is not appropriate for this size entity and won't really tell you anything anyway. Whoever put that language in the condo docs was fucktarded.

Why not just ask them for the general ledger for whatever time frame you are interested in? You'll get to see everything that's been done in the accounting system and it will take like five minutes to produce.

[DBdude]

Start by reading the HOA's articles and bylaws as they likely include a right for owners/members to review the HOA's books. Unless you think there is malfeasance, you should be able to figure out spending from that review, without needing to see audited financials. Those financials likely won't reveal mismanagement the way a simple review of spending would. An audit will confirm that a selected sample of vendor payments are genuine, but won't show whether the initiative was a good idea, or that the HOA did not overpay, etc.

+1


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