Abusive HOA President
Our HOA has a verbally abusive President. Since she became president 2 1/2 years ago, we have had 3 management companies. The last one resigned due to her abuse and name calling. 2 previous Board members had to resign due to her verbal abuse and name calling. This management company also refused to give her her own check book so she can write checks against the bank homeowners’ account. She also buys things for the association that we don’t need and demands reimbursement from the management company. The board does not vote on the things she buys. She has spent over $30,000.00 from our reserves, some of which was needed in repairs.
The Board consists of people who let her do what ever she wants. She has many of the homeowners believing she is great.
What can we do to get rid of her and see to it that she is never on the board again.
1. Have a recall petition signed by majority of homeowners. We will be doing that but that just is temporary as she will run again
2. Do we have legal means to remove her from the board for the following reasons:
A. Buying things for association without Board approval.
B. Demanding checkbook to write checks against HOA account.
C. Abusive behavior/name calling against management company and former Board members.
D. Breach of fiduciary responsibility to homeowners
E. Spending more money each month than was taken it. Depleting accounts for 2 years.
F. Any other ways we can legally remove her?
Please let me know any legal way we are able to remove her. Also, how we would go about it without costing the association any money? I would not like to see the association paying for her legal defense.
Thank you so much for any help you can give us.
Betty Shapiro
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Betty,
The only true power that you have as homeowners is the power to vote. A recall vote can be called by 25% of the community. You can then keep that removed board member by being elected again by not voting for her and getting the message out to the rest of the community to do the same. The reason I drafted HB-2158 last session was for just this issue. The ability of the homeowner to communicate issues about the community and to actively campaign for or against any candidate by the use of signs on their property. That bill is now law for Arizona as of Sept 24 of this year. While you are always free to sue the association for breach of duty by this board member you are only suing yourselves, as your money will be used to defend this individual, and she cannot currently be held accountable for the cost of litigation, or fines or penalties applied by the court. I hope to change that with my proposed legislation for this year.
Dennis
Thank you so much for your help. This HOA president has hired a new management company. I have some questions about hiring a management company.
1. Do Property Management companies have to be licensed?
2. Can anyone claim to be a property manager?
3. If a bookkeeper is hired by HOA, is she an employee of the association or an independent contractor?
4. If an employee, do we have to pay taxes?
5. Does she have to carry liability insurance like other management companies we have hired?
6. Our HOA president wanted her own check book so she can write checks on HOA accounts. She would be able to write a check for anything she wants. Past Management company refused to give her blank checks.
Thank you again for all of your help.
Betty Shapiro
bettyshapiro1@yahoo.com
Betty,
1. No, in fact no licensing criteria exist for these community managers in Arizona you hairdresser has to be licensed by your community manager does not. Go figure.
2. Yes
3. Depends on how the contract is written both are possible.
4. If hired as an employee, yes, the association is required to pay their portion of the employee taxes.
5. Again depends on the contract, some require the community manager to carry independent liability insurance and some require having the management company covered by the association’s liability insurance. Management companies will always try and include the latter in their boiler plate contracts but i would never recommend any board to accept such a clause.
6. Most community management companies have signature authority on the associations bank accounts. It is the duty of the board to oversee this very carefully and protect the money of the association from being used improperly. This means that most community manager or accountants from the firm can write checks on the association bank accounts. I refer you back to item one above. Community managers handle billions of dollars statewide annually but have absolutely no licensing requirements.
Dennis
Dennis