Postmortem of a HOA Recall

Lessons Learned & Inspiration to Affect Homeowner Legislation

The following is an article written by a homeowner in a community sharing their experience of what can go wrong in a recall effort and the extent of how low a few board members in power supported by the declarant will stoop to retain power over a community. This is not an isolated case and I hear and directly experience similar circumstances in many other communities. We absolutely need better protection in laws that allow homeowners to decide the governance of their communities free from the interference, intimidation and abuse of the election process.
Dennis

Having experienced the first board recall in my HOA community, or ever, I felt it necessary to reflect on the process and share my experience, especially given the immense frustration with and dislike for HOAs.  I’m hard pressed to find anyone who likes theirs regardless of where they live.  Even the media is sensing this growing frustration and reporting more HOA issues throughout the Valley of late.  I was appalled at what was happening in my HOA community, the more I learned by joining committees and reading the official documents that govern HOAs.     

Along with many of its residents, I became more frustrated at the increasing lack of transparency and the mismanagement I witnessed by the board and the management team.   As I became more involved, and with the benefit of the AZ Homeowners Coalition’s knowledge, it was clear that real frustration ultimately was tied to the fact that major political lobbyists for Arizona HOA laws clearly favor attorneys, builders, developers, and management companies and limits the rights of homeowners who must hire these people and foot the bill.    

There will always be differences of opinion and perspectives; yet still I foolishly expected the recall itself to be a law abiding, procedural and relatively calm event where all owners could vote their position if the petition qualified to have a recall meeting.  All the Arizona HOA laws, regarding a recall petition that I signed, were followed to meet the requirements.  All that was needed was 100 owner verified signatures to require a special recall meeting adhering to the specifics in the law.  It was at this meeting owners could make their vote either through absentee ballot or in person at the meeting.   

It isn’t easy to get 100 owners in any community to agree on something, but it happened. I applaud the dedicated effort by owners who took the initiative to get petition signatures to force a vote [hold individuals accountable] with the full knowledge no matter how well organized, it could still fail.  They endured unrivaled ridicule, insults, lies and more; it didn’t stop them.  I think it made them more determined as they discovered how bad the situation was.  They were also encouraged to learn that so many owners did not like the way the community was being run during the signature process.  I have no doubt there are owners who did not understand that the petition was only to secure a recall meeting, not the vote itself.  Some seemed angry because they were not consulted before circulating the petition for signatures even though AZ HOA laws didn’t require it.   

It seemed that every attempt was made to stall, stop, sabotage and outright pervert the law which ultimately hijacks the whole process.  There were numerous executive sessions with the HOA attorney and the management company that far exceeded the budget for attorney advice.  I seriously doubt all these meetings qualified for an executive session as outlined in the AZ statutes given there are only five exceptions to open meeting law.   Already it was apparent to me that there is a huge imbalance in the recall process for homeowners to hear both sides of any issue they need to vote on.   The board oversaw its own recall.   How is that not wrong? 

There were owners, who when they learned of the petition, objected to having even having a recall and wrote all kinds of misleading and emotional comments on social media, which put their frustrations on full display.  Too much of what was said was false and very insulting; I’d like to think it resulted from speculating out loud and evolved from there.  Even when proved false, there was no retraction, much less an apology.  I have never seen or experienced anything more disgusting and disheartening.  To me it was all feeling and emotion with few facts, my way, or the highway mentality.   What happened to the notion that when all is said and done, doing what’s right for the community?  Maybe listen to another point of view and check the veracity? 

Securing more than the required number of signatures from the community illustrated to me the dysfunction of leadership and management; in addition to, far more than a few disgruntled owners, repeatedly referred to by the board president and management company as “chronic complainers.”  That alone, should be regarded as significant, because all owners are not full-time residents or as vocal as others to see and experience the things happening.    

I agreed with the merit of the recall petition of three board members, following two [plus] years of trying to effect change and enhancements that proved unsuccessful and, in some ways, made things worse.  These three board members failed to manage the work performance of the management company despite owners’ legitimate complaints to the board which were ignored and/or dismissed.  Open meeting laws were violated frequently, even after using the “point of order” in open meetings and actions were taken after an executive session before bringing the issue to an open meeting for vote as required by Arizona law.  I attended many the open meetings and heard some board members say they were uninformed about one issue or another.  Either they were not provided the information other board members possessed or it was so last minute; there was no time to review. The board president, without the knowledge of the entire board, made a motion to terminate the management company and presented no plan for another company to take over. In response to allegations made by the board president of being left in the dark regarding finances, the management company terminated the contract with the community stating it was clear they could not work under the current regime led by this board president.  Transparency and communication had diminished months before; and [now] it’s all but vanished.  End result, the community was openly divided.  

Our HOA legal advocate took two weeks to verify the petition signatures [at community’s expense] using public records rather than the voting rolls. Had the management company kept accurate owner records and voting rosters as required, it probably would not have taken so long.  It made one wonder if this was a calculated strategy to stall the process, create additional billable hours, all the while benefiting the [initial] targeted board members.  It also provided time for another recall petition that included the developer’s votes.  The developer’s involvement was in conflict of the promise to remove herself from the day-to-day activities before the HOA turnover; otherwise, it would have been a spectacular failure.  One could call the second petition a retaliatory recall petition that had nowhere near the same scrutiny.  Perhaps the retaliatory petition was easier, having verified owners once; yet there is no denying the optics were very bad. 

The written goal on an email I saw of starting a retaliatory recall petition was to stop the original recall petition “in its tracks.”  This tactic was designed to intimidate homeowners and discourage support for either petition by recalling three more board members; if successful, would require a special election. Those in favor wanted the first petition withdrawn and were apparently willing to do anything to make that happen.  Interestingly, two of the three board members on the retaliatory board recall petition, were up for election in a few months; so, removing them now wouldn’t accomplish much; they would be eligible to run again in the new election since, by law, board members are only removed for the remainder of their term.  That smacked of desperation and payback to this author.  If that isn’t retaliatory, then what was it? It certainly didn’t seem to be in the best interest of the community to me. 

The strategy also increased anxiety of a recall in the community by focusing on the management company terminating the contract despite the fact the management company stated they couldn’t work with this board president.  An email blast to the community from the board, likely by the board president, cautioned that removal of most of the board would have disastrous implications: current business would grind to a halt, including ongoing projects.  It failed to tell owners that by law a special election would be held within 30 days if that happened and obfuscated the fact that the board failed to manage the performance of management since the HOA turnover two years prior.  That was a desperate self-serving communication by anyone involved and a disservice to the entire community.   

The board president also sent a personal email to homeowners who supported him touting his achievements, yet there was no mention of the contributions of his colleagues or support for his fellow members on the initial recall petition.  There were negative comments denigrating two board members encouraging their removal.  The same communication tools were not afforded to all homeowners to counter the claims of the board president.  How can this be considered the right way to run a recall when it is so one-sided?  This is likely a major factor in the success or failure of any recall effort and should be addressed in the HOA laws to level the playing field of conducting recalls. 

Flyers with inflammatory verbiage were posted throughout the community by owners on both sides, in addition to social media, one urging removal of three board members, then others accusing those in favor of a recall of causing chaos.  It was an obvious effort to reinforce and discourage owners from signing either petition maintaining status quo.  Of course, the flyers were repeatedly removed.  Anyone who was intimately involved in this process, could figure out who was creating the chaos.    

The HOA attorney approved both petition ballots on the same day and with board approval set the special recall meeting for both on the same date.  This would presumably continue to double down on the strategy to stop the recall and cause it failure of the recall with the six board members at the same time.  Otherwise, it would have been two recall meetings which would not have the same impact.  Is there any wonder the owners wanted to vote them off the board?  Where are the checks and balances in the recall process for all homeowners?  Why are the people on the recall petition determining when and how the meeting will occur?  It doesn’t make sense to me and should be by anyone’s standards, wrong.  

Instead of using the HOA budget money for mailing services, ballots were mailed by a professional mailing company spending more money unnecessarily.  The requirement by law allowed 30 days to prepare and do this correctly, yet instead those involved chose to delay the process until it was almost too late.  In short, the ballots could have been mailed together in one envelope without duplication or exception had the management company kept current membership records that accompanied the voter roster.   

By contrast, “Volunteers” sent the ballots with the help of the [so-called impartial] management company, who insisted they had no part in it except to provide labels. Sure sounds like part of the process.  When the Community Manager, was asked [repeatedly] the identities of the so-called volunteers — she replied, “…What does it matter?”  It mattered because if it was not in compliance with the law; it would rightfully be contested or invalid; the law is not optional or a suggestion!  Only through email, did one of the over 20 volunteers state that owners had indeed stuffed blank ballots to get them out by deadline. Even if that were legal, I regard it as highly unethical, dishonest, and deceptive; particularly when the board president, who was on the recall was allegedly helping this effort.  Again, the optics raised questions its legitimacy and the genuine impartial oversight. 

Not everyone received both ballots; some got duplicates of one and not the other.  To invalidate the ballots, one would have to have postmark dates and/or some way to technologically memorialize it.  Was it by design or just incompetence? It was my understanding the management company would have no part of this process.  The attorney stated he did not either.  This was confusing. 

The last dirty trick I am aware of was to forego the special recall meeting on zoom the day before, knowing that our community has a large part-time population, many of whom are Canadian “snowbirds” and cannot stay full time by law; others are “snowbirds” from other cold climates in the Continental United States. 

Prior to the recall, zoom was preferred by the board as they said they were afraid of residents.  Really?  Owners interested in their community want to be part of the process both using zoom and in-person. The problem: those board members on the recall petition stopped that.  An email from the Community Manager stated it was a board decision, which was interesting because three board members told me personally that no motion was made, nor was a vote taken for this decision. The attorney cited legal concerns having it on zoom since voting was involved.   What kind of nonsense was this?  

I wish I could end the HOA postmortem with great news that all the hard work paid off and right prevailed despite the many emerging concerns regarding the recall process.   It didn’t.  The only reality evident [once again] is no one really wins, apart from those outside entities who stand to financially benefit from the chaos they facilitate.  I was disappointed; yet, not surprised that the attorney stated that if owners disagreed, that was what courts were for; so much for mediation.  I came away from this experience knowing, in my head and heart, it was a profoundly biased and improperly conducted recall.  And sadly, the retained board members are protected for the remainder of their term and any true accountability.    

A final note.  It’s one thing to secure the required signatures for a petition; yet another to get needed votes for a recall and the message out to owners.  Therefore, it was not unexpected that only one board member will be replaced, who, by the way, only had a couple of months left in office before the next election.      

It took strong conviction and strength of character to even try to make changes with so much stacked against homeowners, with no impartial oversight and/or “enforceable statutes” to benefit the homeowners, who reside in communities, under these circumstances.  The only power the homeowners possess, is the vote and that personal sacrifice to facilitate a recall; the rest is in the hands of the board.  How one-sided is that when homeowners are the investors and foot the bills? 

One would hope all parties would accept the results humbly and try to “right the ship” together for the benefit of our community.  I freely confess I am not optimistic! No doubt some with insecure traits will gloat, some may quit or sell, thinking this was the last straw, and there are those who will “press on.”   I choose to “press on,” staying involved to express my views and participate in my community to the extent I am interested and able, using my acquired [in the trenches] education and experience.   

My real interest and future efforts go back to what I wrote in the beginning about HOA law not favoring homeowners.  I’ll be keeping up with the AZ Homeowners Coalition legislative efforts next term and offering to testify to this recall experience for changes to the law that will affect my community and, hopefully, others in the Valley.  Through this Postmortem of a Recall, I urge more homeowners to do the same to effect real change. It is also my aspiration that our lawmakers take notice and do what’s right for their constituents: listen to their legitimate issues and act on their behalf!  From a homeowner’s perspective, it is an illusion that we have a voice with the current HOA laws.  It’s time for change!   

~One of Many Concerned Homeowners