Thank you this is great help. We have nearly the amount of people to petition to recall.

Rick,

Unfortunately the only course of action that you can take is to file a petition with the AZ Dept. of Real Estate and take your concern to an Administrative law judge. You bear the burden of proof to establish that a violation of the conflict of interest law and your bylaws took place. you say that no vote took place prior to the hire. How do you know that without a doubt? you state that no declaration of conflict of interest took place prior to the vote, how do you know that if no vote took place. You state that your bylaw prohibit board members from compensation, and most do exact that but only for duties as a board member, for services of any other fashion they can be compensated.
Clearly you are concerned about the actions and on first blush they are certainly questionable at best, but to win a case against the board and nullify their actions you must be able to provide evidence that the law and the bylaws were violated. This is quite different from presumptions and implications and the appearance of impropriety.

Another course of action can be to attempt to recall that board member and circulate a petition to homeowners to call for a special meeting of the members to remove that board member. You will need 25% of the homeowners or 100 signatures whichever is smaller if you community is smaller than 1000 homes.

Dennis

Than you Dennis. Our bored hired him prior to a vote apparently and the position was not open to any other person to apply. It’s prohibited by our bylaws as well and the conflict was not disclosed. What does one do next?

The board hired him prior to the vote and continued the vote to approve our HOA president to be hired on to our payroll. There was no discussion of the conflict of interest. There was no input from the community, no opportunity to allow a more qualified individual to apply, and no word about how it is strictly prohibited in our bylaws. What is the best course of action at this point.

You mentioned the decision is void and unenforceable how does one act on that.

Thank you,

Rick

Rick,

While clearly a dangerous situation ripe for abuse this is not illegal and often allowed in these community documents. While there are conflict of interest laws in this state they are weak at best. If the affected board member voted for this proposal without stating the direct and obvious conflict of interest prior to that vote, the decision is void and unenforceable.

Is there no-one else that could act as an office manager. Would the board member be willing to resign from the board to take the office manager position. The opportunities for this individual to abuse the power he has on the board with the duties he will have as an office manager and primary point of contact for the community. The community needs to get outraged and demand that either an new office manager is hired or the board member resign from the board. A recall of that board member may be necessary.

Dennis

Carol,

Let me first answer your direct question. Arizona Laws are weak at best relative to any assessment requirements and do not have any provision relative to level of funding for reserve accounts.

I would like to take this opportunity to now discuss your particular situation and the issue this brings up for all Condo owners.

You association’s past boards have grossly failed in their fiduciary duty to their community owners. Any Condo no matter how big should never have a reserve fund as low as $80,000 simply because so much of the structure is common property. The facts are that long term building maintenance and upgrades are real and unavoidable and it is always a situation of pay me now or pay me latter but if you pay me latter it will cost you twice as much. Buildings age and hiding your heads in the sand and hoping that nothing happens is totally irresponsible. Yes no-one likes increased assessments but the responsibility of the board is to ensure that the association has the money available to deal with inevitable long term maintenance when you need it. Banking on a special assessment at the time of the need without planning is equally irresponsible. What would you prefer $20 per month assessment increase for 10 years or a $25,000 special assessment. How many people would be able to come up with an unexpected $20,000 special assessment? How many lawsuits will result from a sudden $20,000 assessment, who will pay for addressing those law suits?

While it is not well understood by most Condo owners, the association owns no part of the condominium property. The unit owners own it all either individually or collectively. And when you buy a condo unit you are also buying a share of all the property and buildings of the Condo complex. With that ownership comes the responsibility to maintain that property over time. The Boards responsibility is to establish annual budgets that address the annual operating cost of the association including routine maintenance and a long term reserve fund that will meet the reasonably anticipated long term maintenance and upgrade needs for all the common property. Association boards that fail to do so fail in their responsibilities to the unit owners. Reserve studies are meant as a guide for boards and are based on recommendations from a vendor. Boards are not bound in any way to comply with the recommendations documents in a reserve study but they must establish a reasonable long term maintenance plan that establishes the projected cost and projected timing of long term maintenance needs and then funds that plan in a manner that ensures that when every need identified in the plan comes up that sufficient money is available to pay for that expense. The HOA industry likes to use terms like percent funded relative to reserve funds but that is a totally meaningless term, because it simply states that if all the maintenance cost were to happen today how must money do you have in the reserve as a percentage of that all in cost. It is meaningless because the real world does not happen like that.

What your association should do is establish what you want for your long term maintenance plan and develop a funding plan today to ensure that you have the necessary money that will be needed for your identified issues. Because of the hole that your past boards created you have a lot of catching up to do, and you will have to decide how best to accomplish that either by increased monthly assessments or by a special assessment now to get a catch up contribution from which to build your reserve fund. Look carefully at your CC&R’s and see what limitations are placed on assessment increases and work within those limitations. If you would like more specific guidance let me know.

Final thoughts, events like Florida will bring to light neglected maintenance on these condo’s across the country. You can expect insurance companies to get much more demanding on getting some kind of assessment on the general health and ongoing maintenance that has been performed on Condo’s before the underwrite any policy. Policy cost will go up significantly if adequate maintenance has not been performed even if they decide to write a policy at all. The end result is the cost of not doing maintenance will double in the future or more for Condo association but not HOA’s.

Developing a long term plan and a funding strategy that meet the needs of that long term plan is only the first step the association must then implement that plan and actually get the maintenance done.

Dennis

Carol,

The board is free to establish expenditure controls in any way that they see fit but whatever they do it must be initiated at an open meeting and voted on by the entire board. For example the board can authorize the president and treasurer to expend anything under $2,000 for emergency repairs or actions that cannot wait for a board meeting to be held. It may also authorize any specific individual board member to approve the expenditure of any item that was included in the approved budget. Non budgeted expenditures should be moved and approved by the entire board. All of this is not specified anywhere but reflect a common sense approach to the board fiduciary duty to the community.

Transparency and formality in board actions is always best. If you decided as a board that for a time period you would waive late fees that is fine and i assume you communicated that to your community in some fashion. If now you believe that you as a board would like to reverse that decision going forward that again is within your power and authority but it will be essential that your insure that all members are made aware of this change so that they are not caught in a situation that they were not aware of.

Dennis

This arrived in a mailer containing two other community updates in May, 2021, and was sent to several homes, though apparently not all. Strangely, my neighbor two doors to the south didn’t receive this communique. It came from the property management company, to be sure. To my knowledge, there’s been no towers erected here yet, nor has there been any request to do so. I’d be the first to sign up if there was such an ongoing program.

My concern is that in places, these towers have been burned to the ground due to this kind of disinformation. I recently saw a news story where a man installing a 5G tower here in Phoenix was threatened with a rifle. In my view, this is only fuel for an impending fire and is dangerous, false rhetorical propaganda.

Regardless of who the sender of this trash was, the board is ultimately responsible for any content sent to the homeowners. That makes them culpible. It would seem to indicate that either one or more of the board members are, as we say online, conspiritards. I’m just wondering if their next rant will include flat earth “theory”, or perhaps an anti-vaccination tirade. All of this aside, it decidedly is NOT one of their duties outlined in the bylaws. It would take several paragraphs to describe some of their misdeeds: from demanding I take down an antenna that’s been there legally since 1996, to allowing parking on the streets in this project that are owned by the city, to kicking me off of the board in 2017 without a recall. I could write a novel on the these topics.

Concerning your second post, there are only 147 homes in this project. A recall might not be that difficult.

Barry,

You will need to provide me a little more context as to why this is an HOA issue? Was the letter from the board or the management company? Was it sent to you individually or in general to all of your community? Is the community considering the installation of a new 5G cell tower that is opposed by the board or the management company, and was this was a calculated negative campaign to attempt to scare the community away from approving such an issue?

Recall of the board is always an option in any community but it is a lot of work and should be used only when appropriate. Writing the management company is always a waste of time, Bringing the issue up directly to the board will be more fruitful especially if you can flood the board meeting with angry and insulted homeowners demanding either a retraction from the board or at the very least the board sending out a rebuttal letter from the utility company with the truth and impact of the proposal addition.

Dennis

Barry,

Was this communication provided by either the board or the management company? Was your community asked to have a cell tower installed on community property? I’m having a hard time understanding why this is an HOA issue involving the management company. Was the communication provided to you directly or a general communication provided all homeowners?

While I’ve learned through my years of experience that most if not all management companies are totally incompetent and anything out of their mouths is totally fabricated to benefit them and not the community. So a letter like this from a management company would be taken like everything else from any management company, thrown in the round file and ignored as useless self-serving rhetoric.

Help me understand your concern and i’ll see if i can help you in any way.

Dennis