Denied Access to Inspect the Books and Records of the Non-Profit HOA Corporation
I am an owner/ investor in a planned community organized as a non-profit corporation for the purpose of securing the value of our real estate investment. Membership is mandatory. The Board has awarded vendor contracts to a landscaping business owned by two members of the Board. One of the landscape vendors holds the position of Treasurer. The Board has no internals controls in place to oversee the invoicing and payment to the landscape vendor- essentially the Treasurer of the HOA is writing checks to himself! I requested access to the books and records of the association and the Board’s delegate (a management company employee) has refused to allow me to inspect the invoices. The delegate issued copies of “documents” and “receipts” that are not certified and are not receipts. Board members including the Treasurer remain non-communicative leaving the matter to this uneducated management company employee. This has been going on since November 9, 2022 when I first requested access and stated my purpose. Is it worth paying the $500 to bring an action via the State real estate channel, or is it better to retain an attorney and pursue access to records via court order?
About Post Author
1 Response
Leave a Reply
You must be logged in to post a comment.
Lora,
I cannot tell you how many times I hear similar stories from homeowners from across this state. Existing law that for any contract that clearly represents a conflict of interest of any board member they must declare that conflict prior to the discussion and vote by the board. If they fail to declare the conflict of interest it nullifies any contract put in place without that declaration. Current law already requires the association to provide access to any association record within 10 days of that request. All invoices from contractors are association records. Get the minutes of the meeting where the board awarded the contract for landscaping to a company owned by board members. If no record of a declared conflict of interest by the affected board members exist in that official record of the meeting , you have a legitimate cause for action. I would definitely petition the ADRE in the dispute resolution process on the two separate and specific violation of law. ($1,000).
If you want to go in that direction, contact me separately at azhoatruth@gmail.com and I’ll help you frame the petition, the choice of which avenue you take is yours alone. You can pay $500 per issue with ADRE or $350 to $400 per hour for an attorney to file a claim in Justice or Superior Court.
I’ve introduced legislation this session SB-1387 to strengthen the conflict-of-interest laws and provide for the duties of the boards to their communities.
Dennis