|
NEW MEETING TIME
 QUESTION:
I am the president of our association. Three directors want to change
the time of our board meetings but a fourth director opposes. Can we
change it without her consent? Also we are not happy with this director
because her grandson is always doing things like drugs and fighting on
the property. She is always negative and affects the other board members
and we would like to know if we can get her off the board.
ANSWER:
When it comes to meeting dates and times, directors should be sensitive
to the needs of fellow directors and accommodate schedules whenever
reasonable. However, boards cannot be held hostage to the schedule of a
single director--they can change their meetings to accommodate the needs
of the majority. Your problem director can always attend by phone.
Removing a Director. So long as the dour grandmother meets the qualifications of a director, fellow directors cannot remove her from the board--only the membership can remove her. You can, however, hold hearings and levy fines
against her for the behavior of her grandson. The other thing you might
do is amend your bylaws to increase director qualifications and
eliminate cumulative voting to make it easier to remove problem directors.
EMPTY SEAT
 QUESTION:
One of our board members quit. Do we have to seat the next person on
the ballot tally who received the next greatest amount of votes in our
recent election?
ANSWER:
No. Unless your governing documents require you to (i) seat the next
person on the ballot tally from your most recent election or (ii) hold a
special election, the board appoints a replacement director. The board can choose anyone it wants to fill the seat, provided the person meets the qualifications of a director.
SMALL CLAIMS
COMMISSIONER
QUESTION:
I believe you stated a pro tem was a lawyer acting as a judge in small
claims court. Please explain the difference between a commissioner and a
judge. Can you refuse to have a case heard by a commissioner?
ANSWER:
A small claims commissioner is a step above a pro tem and a step below a
judge. Instead of being volunteers who fill in from time-to-time,
commissioners are paid a salary and hired full-time to hear small claims
cases. I don't believe you can refuse to have your case heard by a
commissioner.
RECORDING A JUDGMENT
FOR FINES
QUESTION: Can an abstract of judgement be filed against an owner for fines imposed by the board of directors?
ANSWER: Yes, if done properly. Boards can record an abstract
if they first go to court (small claims or superior) and get a
judgment. The prohibition against recording liens that include fines
pertains to assessment liens related to nonjudicial foreclosures. Civil Code §1367.1(e).
CONFLICT OF INTEREST
 QUESTION:
Our HOA president is a convicted felon and registered sex offender. He
served 2 years in prison and is presently on probation until 2012. Over a
3-year period, $192,000.00 of our HOA funds have gone to a company that
employs our president. We believe this is a conflict of interest. We
submitted a complaint to the Attorney General's Office but received a
reply and they do not get involved in cases such as this. We are at our
wits end.
ANSWER:
Your options are limited. Although the Corporations Code states that
boards may declare vacant the office of any director who has been
convicted of a felony (Corp. Code §7221(a)), the felony conviction must occur after the director has been elected to the board. Remillard Brick Co. v. Remillard-Dandini Co.
(1952) 109 CA2d 405, 424. To prevent someone with a prior conviction
from serving on the board, associations must amend their governing
documents. Your options related to his sex offender status are also
limited. For more information, see Megan's Law.
Insurance Issues. Having a felon on the board may create insurance problems which could result in the denial of coverage for some claims. Your board should contact the association's insurance broker to find out if it negatively impacts your coverage.
Attorney General.
As you already discovered, the Attorney General's Office will not get
involved in most HOA disputes. The AG's jurisdiction over associations
is limited to enforcement of the Corporations Code. Since the
Davis-Stirling Act is part of the Civil Code, most HOA issues fall
outside the purview of the Attorney General's Office.
Conflict of Interest. Paying $192,000 to the president's employer is clearly a conflict of interest. As such, it requires the president to disclose the conflict and then recuse
himself from any discussions or votes involving his company. If he has
done that, your president has complied with the law. If the president is
steering work to his company, you have a problem both with the
president and with fellow directors who are allowing him to influence
their decisions. At that point, the membership should recall the president and any directors enabling the president's unethical behavior.
RECOMMENDATION:
If your insurance is not affected by your president's status as a
felon, and he has disclosed his conflict of interest and recused himself
from all matters involving his company, and the association is
receiving proper value for the monies paid to his company, and the
membership is happy with the president's performance as a director, then
you don't have reason for concern. You should work with him for the
betterment of the community. If the situation proves too uncomfortable
for you, you may want to quietly step off the board and serve again when
the president is no longer on the board.
INELIGIBLE CANDIDATE
 QUESTION:
What would happen if just before they count the ballots for board
elections someone points out that some of the candidates are not
qualified? Isn't it the management company's responsibility to verify
candidate qualifications? Do they just eliminate those candidates or do
they invalidate this election and start over?
ANSWER:
It is not the management company's responsibility to verify candidate
qualifications unless the board specifically assigns that task to the
company. However, once a candidate's qualifications have been
challenged, the Inspector of Elections must investigate and make a
decision as to whether a candidate is qualified. Civil Code §1363.03(c)(3)(H).
A New Election?
Whether the election proceeds or not would also be a decision for the
Inspector to make. Normally, the election would proceed. If there are
three open seats and one disqualified candidate out of five, the
Inspector could (and should) proceed with the election. If there are
three disqualified candidates out of five, the election could still
proceed with the two qualified candidates being elected and a third
person appointed
by the board to the empty seat. The decision to proceed or start over
would be a judgment call that factored in the circumstances surrounding
the disqualifications, the cost of another election, the availability of
candidates, etc.
FEEDBACK
 Senator Corbett. Regarding SB 209, Senator Corbett was also the author of flawed SB 561. She doesn't seem to have a very good understanding of how her legislation affects the HOA community. -Pat C.
Senator Corbett #2.
I tried to send Ellen Corbett an email on her lack of understanding
concerning HOA issues but the response was "You are not in my district -
contact your rep." Can you tell us how to reach this person (who
shouldn't be representing anyone!)? -Angela D.
RESPONSE: Ms. Corbett's contact information is:
Senator Ellen Corbett
State Capitol, Room 313
Sacramento, CA 94248-0001
(916) 651-4010
CAR's Legislation.
As a large-scale, onsite manager (going on 20 years), I applaud your
response to Mr. Bjernefalt of CAR. Anyone who has been in this industry
for any length of time could read through CAR's rhetoric and notice the
obsequious play on sympathy for the downtrodden member who has suffered
some form of malady. You are quite correct in that management would
normally take care of any special circumstance that comes up. I’ve been
following and enjoying your blog now for some time and have never
responded, but this latest bit of hogwash from CAR was just too much.
-Rick A.
Newsletters are for advertising & general information by
Adams Kessler PLC. Readers should not act on issues raised in our newsletters or website without consulting legal counsel. |
|
|
|