When a board member breaks Arizona HOA State Law
This is long but it’s in the original timeline to the most recent at the bottom. Can I tell you how much I appreciate all of this?! It’s so nice to have someone else listen to us as our HOA Management company is useless. How do we, the community handle the following situation when our HOA company refuses?
During our HOA Open Meeting on 4/19 at the community portion of the meeting I brought up the fact that our VP of the board had a Board Meeting 4/13. When I questioned the VP about this board meeting, she stated that the meeting was “a fact finding, workshop meeting” of the board. She then stated that “minutes would be provided” but then retracted it and re-stated “notes would be shared.”
The VP initially wanted to have an informal meeting with a few community members to meet with a new HOA company to see what they had to offer services-wise/pricing. I was asked to attend. She wanted to limit it to 8 people total as that’s all the space the Queen Creek Library Study Room permits at one time. She then switched the meeting to only board members. I am not privy to what was discussed but only know that she called for a Board Meeting with an established quorum without any notification to the community members. It was no longer a community member meeting.
It is my understanding of Arizona state law 33-1804 with regards to HOAs and open meetings that the ONLY time a board can meet as a quorum without notification to the community members is for an Emergency Meeting/Session.
Furthermore in ARS 33-431.02, Section D, “ in the case of an actual emergency, a meeting, including an executive session, may be held on such notice as is appropriate to the circumstances. If this subsection is utilized for the conduct of an emergency session or the consideration of an emergency measure at a previously scheduled meeting the public body must post a public notice within twenty-four hours declaring that an emergency session has been held and setting forth the information required in subsections H and I of this section.”
From reading the above laws, it appears she violated Arizona HOA Law 33-1804 Section E4 “Any quorum of the board of directors that meets informally to discuss association business, including workshops, shall comply with the open meeting and notice provisions of this section without regard to whether the board votes or takes any action on any matter at that informal meeting.”
Per the law, the community is required to be notified far enough in advance so we can choose to attend as this would be deemed an Open Meeting since it fails to meet the criteria of an Emergency Meeting.
Please treat this as a formal complaint.
My HOA company said that she would send it to the board. I heard nothing after that. So I sent the following email yesterday:
“I wanted to follow up with this to find out if you shared this with the board. If you have, thank you. What is their next step or process? I did not see anything in our bylaws other than the mention of removing a board member. A good start is removing this person on the board but that does not fix the issue; it merely prevents her from breaking the law again and violating homeowner rights. However, legally it does not correct the fact that this person denied the community our rights to information and a discussion. I demand action be taken. I’ve been in discussion with multiple members here and they want to know how this will be handled by AAM and the board.
As a community member, the HOA procures your services. One of these services include such things as legal services. Since a board member violated Arizona State law, violated our homeowner rights, I want to know how this will be addressed legally. AAM has a responsibility to the community as a whole. In the contract it states that legal is part of our contracted services.
What are the next steps to be taken by AAM on behalf of the community? Will you contact Legal about this matter as this person is not following our CC&Rs, Arizona State Law, and my (our) rights as a community member.”
My HOA rep replied with the following: “I have reviewed this matter with the Association’s legal counsel and brought your concerns as to the alleged violation of the open meeting law to the attention of the Board of Directors. With that, and unless the Board instructs me otherwise, I/AAM will be taking no further action in regard to this matter. You can speak with your own legal counsel regarding this issue if you have further questions.”
Now this HOA rep was in the meeting and sat 3 chairs away from the VP when the VP admited this to the public yet now she’s treated it as an allegation.
So I issued the following response to my HOA rep:
Since the board has not issued their email address to the public website, please forward my entire email thread to them. This is a formal request that is to be issued to the full board by the end of day 5/5/2023.
From X’s email, I can assume she has done her job and sent you each my formal complaint.
I am requesting the board take action and remove BOARD VP from the board for the following reasons:
1. She violated Arizona State Law 33-1804 by holding an illegal “fact-finding workshop” meeting without notification to the community knowledge.
2. In the HOA open meeting on 4/19 she admitted that it was in fact a “fact-finding workshop meeting”. I expect you will have this documented in our meeting minutes as when she asked me what the ARS number was you both wrote this down.
a. Note, the VP did admit to having a meeting not only in front of the following board members Mike, John, Steve, Kim, and Dean (Ron since you were on Zoom, therefore, I am unaware if you were still on the call at that point however it is my understanding you were not). VP also admitted to this in front of Morgan, those people on the Zoom call as well as the community members present in the meeting. Also, know that as community members we have the right to video record all open meetings unless otherwise per 33-1804 A.
3. She denied the community of knowledge and any discussion that impacts the community. She violated our rights!
4. She violated her Fiduciary Responsibilities and acted outside the scope of her authority
a. “This component details the obligation that HOA board members have to adhere to the CC&Rs, HOA governing documents, and relevant state laws while serving on the board. It means they must act when necessary but do not have unlimited authority and, therefore, sometimes cannot act at all.”
The board has a legal and ethical responsibility to uphold our CC&Rs, Arizona State Law, and ensure that Fiduciary Responsibilities are upheld. In discussions with community members, they are all aware of this illegal activity and are demanding action be taken immediately.
So Dennis – as you can see, our HOA board itself is corrupt (we have 41 lots and 7 board members). 3 board members are trying to do the right thing but since the President/VP, Secretary, and one director are friends, they vote for each other and not for the community.
If the board refuses to do any action – what else do you suggest? We are persuing a lawyer but can the board simply do nothing? Can the HOA Management lie and do nothing? They were there in person to hear it all. I should say I was the only community member able to speak during the community time as they didn’t want to allow anyone for that either.
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You are absolutely correct the Board violated the open meeting law by calling a meeting of the board to discuss community business without 48 hours’ notice to all members and the opportunity of any member to attend. This fact in undisputable, but it is not a sign of a corrupt board. It reflect at the very least an uninformed board or at the worst a board that is trying to hide something that they are doing. There is a reason for the open meeting law and that is the need for transparency in the conduct of the business of the community based on the fact that all homeowners are unconditionally obliged to pay for any action of the board. The open meeting laws are the most violated provision of the law relative to these communities. You have a right to know what your board is doing, and the board has an obligation to all homeowners to conduct their business and discussion with transparency. Like I always say transparency builds trust, trust builds respect and respect builds a content community. You are however incorrect in your assumptions relative to the management company, they have absolutely no obligation to anyone in the community. They work for the board under the terms of their contract with the board. While you pay for their services, they do not work for you. To assume that the management company will comply with the law and make sure that the board does the same is incorrect and while logical is not in any way a reflection of reality. Only the board has a duty and obligation to the community to comply with the law.
Using terms like corrupt board to describe this situation is inflammatory and not in any way helpful. You have provided the board with the detail of the law, inform them that if they do this again you will file a petition to ADRE to force them to comply with the law and they will then be under a court order to comply with the law enforceable by contempt of court and will have to pay your application fee and any fine applied by the court.
Hopefully this gets their attention, and they start doing business in compliance with the law.
Lastly to have seven board members to govern a community of 48 homes is total overkill and excessive. Five would be a more appropriate number.
Thank you again, Dennis! When we first moved here, it was stated by the then-HOA manager to my husband and I that the HOA works for the community members, not just the board. I appreciate your clarifying this.
ADRE? Arizona Department of Real Estate? Sorry, I’m unfamiliar with that acronym. I say corrupt as this isn’t the only instance of their wrongdoing. However, I appreciate your gentle nudge.
It’s not just myself but many of the community members that want this board member removed. We want to live in a peaceful community where we are informed and can be neighbors first and then ‘official’ next (with regards to board members vs community members). However, it’s become so political and full of hate that it’s cost friendships among the community and threats of legal action.
This is my first experience with an HOA but honestly, I don’t think I’ll ever live in another place with one.
I completely agree that they do have value and purpose WHEN the laws are adhered to by all and it’s not so pitted.
Have an amazing weekend!
Since you added additional text to the original post, I’m compelled to provide guidance and comment. The facts are clear the board acted in violation of the open meeting laws 33-1804. You have three choices enforce the law by either filing a petition to ADRE under the dispute resolution process authorized by statute, or file suit against the association in superior court for this violation of law. The third action and my preferred course is to circulate a petition for a special meeting of the members for the purpose of recalling the 4 board members by name. If successful, this would also require that a second special meeting of the members would be necessary to fill the vacancies created. You could then reduce the number of board members to only 5 and elect only two new board members to fill the longest terms remaining.
You do need to be careful about what you say on any post and the use of inflammatory words like “corrupt” may set you up for defamation action by the board members.
Boards and community managers violate the law every day but that does not make them ” corrupt”.
I appreciate the follow-up, Dennis. The necessary legal steps are proceeding.