HOA Board Member Conflict of Interest?
I am a member of the HOA board in the community where I live. I have owned a home there for 16 years. It was recently discovered that there is extensive damage to my sewer line and foundation from a common element tree that was planted by the association shallowly (less than two feet) and inches from my structure. I filed an insurance claim for with my Walls In insurance company and the blanket insurance policy managed by the Board of Directors and Property Management company. The day after I filed the claim with the general association policy, the Board President called an Emergency Executive Board meeting and recused me from attending due to alleged “conflict of interest.”
1. Can the HOA Board President recuse a Member from an Emergency Executive Board meeting for any reason without a vote of the board members?
2. Can the Board vote to remove me as a member for filing an insurance claim on damages to my home?
3. Are minutes required for an Emergency Executive Board Meeting?
3. If a Board member is recused or absent from an Emergency Executive Board Meeting can that member have access to the minutes?
Thank you for your help and support!
About Post Author
8 Responses
Leave a Reply
You must be logged in to post a comment.
Marianne,
Here is some information that may or may not be helpful.
To respond to your questions in order:
1. The President of the Board is the only Board member permitted to call an Emergency Executive Session and if the subject of the meeting is in regards to another Board members behavior, they are permitted to request the meeting without that particular Board member.
2. The Board does not have the power to remove a Board member, this must go to a vote of the homeowner’s in the Association.
3. Minutes of the meeting should have been taken.
4. Again, if the subject of the meeting was in regards to another Board members actions, the Board can vote to not release these notes.
I have a few questions for you. You mentioned that you reported your tree issue to the homeowner’s insurance company. Had you filed a complaint with your Board or Property Manager prior to filing a claim with the insurance company? Was the Board negligent in taking action regarding your tree?
As a Board member, you’re probably aware that anytime a homeowner reports an issue to the HOA’s insurance company it is due to the Board or Property Manager ignoring the homeowner’s complaint. It is a last resort when a homeowner cannot get the Board to take action on a serious issue. You’re also probably aware that reporting to the insurance company can create huge financial challenges for the Association. I’m sure you must have a paper trail and communication with your property management company or the Board that will show you exhausted all possible avenues prior to reporting the issue to the insurance company.
I hope this was helpful.
Cathy,
While i thank you for taking the time to respond to Marianne’s questions two of your responses are absolutely incorrect. The board members are elected to those positions by the members or unit owners of the association to represent them. as such no other board member president or otherwise or by vote of the board itself has the power to exclude any other board member from the conduct of business of the board. From your perspective, you are saying that the board can discuss a concern about another board member and exclude him/her from that discussion without giving the board member an opportunity to defend himself or herself or give their own perspective on the issue. What country do you live in you must have gotten your information from AACM’s or CAI’s community manager training programs. You sound like a community manager. Relative to the minutes of the executive session once again your response as a board member you are entitled to any and all community records including executive session minutes whether they involved discussions about you or not. Those minutes would provide evidence against the board for violating the law and would only be excluded from a member of the board to hide that fact and suppress their wrongdoing. To protect the board or the community manager.
Your comments and concerns relative to the reporting to the insurance are valid and real, and i would always recommend that homeowner address their claims to the board or community manager first , but I’ve seen far to many cases where all their notices and request go unanswered and as such the ability of any homeowner to makes claims against the associations insurance company is absolutely necessary. For the most part once a claim is submitted by a homeowner the insurance company will contact the association and ask them if they want to pursue this claim. This gives the association the opportunity to do the right thing and live up to their responsibilities and address the common property issue with their own funds. Besides the deductable issue any claim submitted by an association will most likely result in a premium increase in the future.
Dennis
Marianne,
An emergency meeting of the board (executive or open) can be called to address an issue that cannot wait the 48 hours required to notice the meeting. The board must record in the minutes the reason the emergency meeting was called and include provide the minutes of that meeting at the next session of the board.
To your specific questions,
1. A member of the board is a member of the board and cannot be excluded from any meeting of the board. If there is a financial conflict of interest to be decided then it is the responsibility of the individual board member to declare the conflict before the issue is decided but under Arizona Law (as stupid as it is) the board member is allowed to participate in the discussion and vote on the issue. This clearly shows that no board member can exclude another board member from a meeting because the fist board member wants to talk about the other board member.
2. Under Arizona Law a board member can only be removed by resignation or by recall vote from the members that put him or her there. So no the board cannot vote to remove any other board member.
3. Yes minutes are required for every emergency meeting executive or otherwise.
4. As a board member you are entitled to access to all meeting minutes including executive session minutes.
Dennis
Dennis,
I am a Board member not a property manager. I always thought that if someone was the subject of a conversation, the President had the right to exclude them from the conversation. I will verify your information and stand corrected if indeed I find your information accurate.
Cathy,
I apologize for insult of assuming that you were a community manager. You cannot believe anything that a community manager says about HOA law of basic good practices in running a community. If the board is to discuss any issue relative to an individual member for privacy purposes they are allowed to hold that discussion in executive session and not in a open meeting but as a fundamental issue of fairness you must allow the individual whether that individual in a board member or an association member the opportunity to defend themselves and provide the board with both sides of an issue. Otherwise only one side is presented to the board and it is nothing but railroading that individual. You can discuss a personal issue in executive session but you can also invite the individual into that discuss as fundamental common sense and fairness. They can be excluded from any other legitimate business the board has in the executive session but they must be given an opportunity to face their accusers and defend themselves. This is still America even in the HOA world. Please also remember that only five types of issues can be discussed in executive session of the board and you must identify precisely which of those 5 issue pertain to each and every executive session emergency or otherwise. Discussion of any business that is not identified in the 5 exceptions in executive session is a violation of the Arizona Open meeting law for HOA’s ARS-33-1804. The law also requires both board members and community manager if any doubt exist to always default to open meetings and not closed sessions. You will never hear that from a community manager or even an attorney but that is exactly what the law requires, I know because i put it into the law in 2016.
Dennis
Dennis,
I’ve been searching this site relative to closed executive board meeting sessions and this old post “hit the spot.”
I’d like to know if I’m correctly understanding the application of ARS 33-1248 for my community (I’m in a Condominium Association):
1. When our Prop Mgmt Company emails meeting notifications the emails typically explain the time, date and location of both the Executive and Open portions of the board meetings. Concerning the Executive portion, the email reads: “This meeting is closed to homeowners. Pursuant to ARS 33-1248 A (Condo) & ARS 33-1804 (Planned Communities) (1 through 5). So, the “1 through 5” sufficiently identifies the precise reason(s) for the closed session – in a blanketed approach. Legit?
2. Now I realize that there are always closed executive board sessions for our regular monthly meetings. Always. Is it fairly common that any combo of or all of ARS 33-1248 A “1-5” needs discussing monthly? (I understand a lot occurs behind the scenes for board members as they manage our association, so I’m not complaining, just curious).
3. Homeowners just received an email notice for the regular monthly meeting, but the explanation identifying which paragraph of ARS 33-1248 A “1-5” is missing entirely. If a closed executive portion actually occurs, then the statute was not followed?
4. We have a BOD of five. If three board members informally discuss association business at a board member’s driveway, in ear-shot of other non-board homeowners, does this need to be noticed? I’m trying to wrap my brain around clause E 4 for informal meets of the board.
5. Some homeowners audio record open board meetings. Personally, my reason is b/c for 4 years now the approved meeting minutes (and draft minutes) are not accurate. Rather they contain things that weren’t said at all and sometimes written to make the homeowner look stupid. I thought meeting minutes are supposed to be a record of what was decided or acted upon, not what “she said and he said”? I’ve tried to get the President to understand that meeting minutes are a record of the corporation and while mistakes sometimes happen, these records need to be accurate. When or if mistakes/”mistakes” are caught, the board can always provide a “revision” correct? At one meeting a portion of the President’s “speech” was recorded by the property manager (ok, fine). But the approved meeting minutes are still inaccurate – they cannot even get the recorded bits down on paper correctly, then they approve them! We have one new board member that is a jewel – so I’m hoping the minutes improve. If not, what do we homeowners do?
Pamela,
Well stated. Let me start on the closed session notice where exactly the same question was just answered to another homeowner. This blanket approach absolutely violates the law I know because I wrote it and put it into law. The intent of the law is to identify the specific issue that is authorized to be discussed in closed session. The problem is that community managers are fundamentally lazy and have generated the blanket approach so that it can be used from meeting to meeting, but it is not just left there, those community managers have been advised by the association attorneys that the approach complies with the law. Every single attorney knows full well that this blanket approach does not comply with the law but they believe that they will get away with it because no-one will challenge their actions in court at their expense for such a trivial issue. The open meeting law is the most violated section in statute and I would venture to guess that it is violated somewhere in this state on a daily basis. Why, because they can and get away with it, there are no accountability provisions in the law. My open meeting law bill would have corrected all of that this past session but it was never heard in committee because AACM convinced the committee chairman to hold it. The community managers do not care about association board or any community managers they only care about making the most money for doing the least amount of work.
As for the second issue under the current law the driveway discussion of the board quorum clearly also violated the law. Depending on what was being said and why it was happening on a driveway is however important to understand. I believe that the current law in this area is too restrictive, board members are people and just like any other homeowner they should be able to talk about community issues in a non-official capacity. My bill would also have provided more flexibility to this specific provision. We need to make sure that decisions are not deliberated behind closed doors so that the open meeting becomes a sham where the vote and discussion is token for show only and everything has already been decided before the meeting. How to balance that need with the need for the board to also be community members is where the drafting of this provision needs to focus on. The statute was modified based on an attorney general opinion from 1997 well before I was active in this arena and i believe went too far. My bill this session would have corrected this issue and provided clear flexibility and boundaries.
MY proposed legislation will come back next year and hopefully we can all work together to get clarity and accountability in the open meeting law such that transparency becomes can rule these communities. Boards based on the guidance from their advisors work very hard to avoid transparency instead of simply embracing it. Transparency is the one key component of all successful and harmonious communities.
Dennis
Pamela,
As for the minutes, you are again absolutely correct. Minutes must reflect the actions taken at the meeting. Motions, seconds, final vote and not what was said in the deliberation of that meeting. If meeting minutes focus on who said what they will always get it wrong and that is the official record of the meeting. While including topics that were discussed in general terms is appropriate it must be limited to only the general topic. Any board member that knowingly approves a materially false record of the association could be subject to criminal prosecution. That constitutes falsifying a business record. Your board would be well advised to keep the minutes simple and to the point, and most importantly accurate.
As for what can a homeowner do to address these issues, there are few options, but some do exist. You can respectfully ask the board to change their approach to compliance and transparency. You can file a petition to ADRE for a hearing before an Administrative law judge to force the board to comply with the law. This course will cost you $500 and you bear the burden of proof that the association violated the law. If you win the association will be forced to pay for your application fee, but if you lose that money is lost. I’ll just say this that in the years since the pandemic the quality of judges in this forum has vastly diminished, and far too many cases simply defer to whatever the associations attorney argues, irrespective of the actual law. Finally if you and enough of your neighbors get sick and tired of the actions of the board you can start a recall process to hold a meeting to vote to recall the board.
Dennis