Quarum
Our HOA has not had a quorum at meetings for many years. We overhead a board officer say they have never had a quorum. Recently two people wanted to be elected to the board but no quorum. After several attempts to be elected, the board president appointed them to the board, and they are now holding chairman status on committees, such as Architectual Design and Landscaping. Since their appointment, the board hired a new management company. When the new company came on board, many homeowners started getting violation letters and fines from the landscaping and Architectual committees. Several homeowners are not receiving invoices for dues payment and if you are not on auto pay, your account goes delinquent. I was sent a letter that said a lien has been put on my property and was forwarded to the county. After several attempts to contact the new management company by phone the, I found out the lien was not filed but in fact still sitting on a supervisor’s desk. I was being charged hundreds of dollars in fines, all due to a clerical error on their part concerning our contact information. One homeowner received a violation letter for a patio table umbrella that can be seen over her wall and ended up paying $600 to the association to get the matter solved. Many homeowners are questioning the validity of the HOA making decisions that have disrupted our quiet community. Is there an avenue for it to be dissolved since there has not been a quorum for many years. Several homeowners have said they are in favor of dissolving the HOA. Thank you for any help you can give us.
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Dena,
This question has a lot, and I’ll try to get to all of it. Current Arizona law requires that an annual meeting of the members of an association must be “held” each year. While not explicitly mentioned, the intent is to elect board members. The association often controls the quorum requirement. If the requirement is too high and cannot be achieved, they violate the law and appoint or retain existing board members for additional terms. You are not alone in this situation; it happens extensively across the state. If a quorum is not achieved, the meeting is not held, so technically, the board is forced to reconvene the meeting until a quorum is achieved or to reduce the quorum requirement until a quorum is satisfied and the meeting and election are held.
I’ve been trying to address this issue in statute for many years. I will try again this session by establishing a maximum quorum requirement to elect or recall board members as 25% or any lower value specified in the community documents.
The association is also required by law to provide all homeowner’s account transaction histories for their accounts every billing period, irrespective of any direct payment arrangement. You must get a bill and be able to pay that bill within 15 days of the due date without any late fees being applied. The association has a statutory lien on your homes for common expense assessments from the time the payment is due and does not have to record that lien to be effective. Fines and penalties are a totally different situation. To record a lien on a home for fines, penalties, or any other charges placed on your account other than common expense assessment-related charges, the association must first sue you in court and get a court-ordered lien that then must be recorded to be effective. The association cannot record a lien for fines and penalties without a court order. In fact, if they do so, they directly violate the law, and the lien is invalid and unenforceable.
The association’s ability to create rules outside of a specific restriction in the CC&Rs is very limited and must be based on preventing nuisance activity or directly impacting the property values of adjacent properties. Any association that applied a rule relative to umbrellas extending above the party wall would be very hard-pressed to establish that they actually had the authority to establish such a rule in court. This concept has been upheld in multiple State Supreme Court Cases nationwide.
Your CC&Rs hold the key to terminating the planned community in a clause that typically is at the end of the document that allows the community to be terminated by a vote of 80% of the community. While a very difficult task, even if successful, neither the law nor the CC&Rs address what happens after a community is terminated. How is the common property title transferred, and the property maintained from that point forward, and many other issues that would apply to your community. This is one reason why no planned community has ever been terminated nationwide. Condominiums have but not planned communities.
You would all be better off working with my coalition and me to change laws to better protect homeowners from abuses in these communities.
I will say that I’ve prepared a legislation proposal that will address all of your stated issues; how many of them I can get introduced and passed is partly up to the support of the members of this coalition. I will do my part, but if the rest of the coalition sits back and hopes for the best, then you will all not be successful in getting any reform passed and find yourselves at the mercy of your community managers, attorneys, and board, with no recourse other than expensive litigation.
Dennis