BOARD MISMANAGEMENT

QUESTION: We get minutes from past meetings some 6 months later, reports by CPAs are inconclusive as they clearly state improper and inadequate information. Delinquent assessments are not being pursued. Our funds are mostly unaccounted for or miserably spent. How can we get the board to follow the rules of conducting our business?

ANSWER: You have four options. The first is political--actively campaign to elect responsible directors. If you run into paralyzing apathy from the membership, you have a legal option--go to court and seek an order forcing the board to follow its statutory obligations. Unfortunately, the legal option has no guarantees and can be costly. Your third choice is to live with the mismanagement. However, this could result in  large special assessments when the board's negligence catches up with everyone. The fourth option is to sell and get out before the poo hits the fan.

WHEN IS A MEETING A MEETING?

QUESTION: I have been told that if a majority of the board is at a meeting called for some other purpose, such as a discussion group or advisory committee, that this is an illegal board meeting. This seems prohibitive. Just being in attendance, it seems to me, is not a board meeting. Could you clarify?

ANSWER: Directors are not prohibited from attending barbeques, birthday parties or committee meetings, unless a majority of the directors "hear, discuss, or deliberate upon any item of business scheduled to be heard by the board." Civil Code §1363.05(j) If the matters discussed in a committee meeting are not scheduled to be heard by the board, a majority of directors can attend and participate. It's entirely possible the committee's discussions will result in recommendations that will ultimately be scheduled to be heard by the board. This appears to be permissible. For example, directors attend a landscape committee meeting where the removal of a tree is discussed by the committee. This matter has not been scheduled for board action but may be added to the agenda after further research by the committee. Even so, the safest course of action is to give notice of committee meetings whenever a majority of directors plan to attend. That way, you avoid any controversy.

QUORUM PROBLEMS

QUESTION: I have an HOA that has not amended their voting rules. They have had 2 meetings to open ballots but still do not have a quorum. We are on the 3rd meeting and still no quorum. What's next?

ANSWER: The board can (i) continue rescheduling meetings until they get a quorum, or (ii) go into court and ask the court to lower the quorum requirement for this election to the number of votes cast, or (iii) end their attempts at meeting quorum, leave the existing board in place and pour their energies into amending the bylaws to end quorum requirements for the election of directors. I recommend amending your bylaws; it’s the only option that makes sense.

CC&R AMENDMENTS
AND CALIFORNIA

QUESTION: I thought the CC&Rs were a California state document. If we were to change something, doesn't the state have to amend everyone's CC&Rs? 

ANSWER: CC&Rs are not "state" documents and the state does not oversee the amendment process once the developer transfers control to the association. CC&Rs are unique to each common interest development and are recorded with the County Recorder's Office. Amendments approved by your membership do not effect the CC&Rs of any other developments in California. Although amendments do not require state review, they should be reviewed by your association's legal counsel. They must then be sent to the membership for approval using secret ballots. Once an amendment has been approved by your membership, it becomes effective upon recordation.

ZERO VOTES
FOR A CANDIDATE

QUESTION: What happens if one of the three candidates (for a three member board) receives 0 votes?

ANSWER: That person is not elected. The seat remains empty until the new board appoints someone to fill it. Unless the governing documents state otherwise, the new board is not required to appoint the loser to the empty seat. The board may appoint anyone who meets the qualifications to serve on the board.

  Very truly yours,
 
   Adrian Adams, Esq.
   Adams Kessler PLC