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November 2, 2005
What to Do When The Board Ignores the Law or Documents
A reader sent me this question: "I would like to know what recourse the members of a HOA have when they know their Board is operating outside of the California Civil Code requirements and not adhering to the HOA'S CC&R's."
This sounds like a reader who has some knowledge about the laws and governing documents. I hope it is. Sometimes homeowners assume that the Board is doing something illegal, because it is doing something that feels or "tastes" or "smells" illegal, but it actually is not. Education is the key here. And remember, I speak with a California hat on, but some of these tactics might work in other states too.
Assuming the Board is violating (or more often ignoring) the law or what is in the governing documents. I suggest starting with a letter.
The written word becomes a record that is hard to ignore. Speaking out at a meeting does not have the lasting impact of putting a pen to paper (or should I say in this day and age whipping off an email). Do not expect the board to have available all the resources you have drummed up. Refer them to a specific site (giving the entire url address is recommended if an email, or a copy of the resource if you are of the pen and paper crowd). Specify the action you believe is in violation of the law or document provision, and specify the law or document provision itself.
Ask for an Answer, and wait for an answer. No answer? (Wait a reasonable time please, at least until the next board meeting is over.) ...
Step 2. If the gripe is about something for which damages can be quantified (such as increasing the assessments without providing a budget to the members in a timely fashion), write another letter, outline the damages in it and tell the Board you are considering seeking damages in small claims court. Still no answer ...
Step 3. Choices: Consult an attorney (knowledgeable in this area of the law is key), ask for a meeting with the Board under statutorily required practices such as that found at Civil Code Section 1363.810 (which you can look up on the state website by navigating to California laws) or file a small claim and take the Association to court. At this point Boards usually will start a dialogue if one was not commenced before this point. Its a cheap way to exert rights.
If you decided to consult an attorney, and the attorney finds your issues viable, you could have her or him write the letter to the board about following the law. And there is still the small claims venue available for less than $50 for filing and service fees.
What if the "wrong" does not have identifiable or quantifiable damages attached. Make sure the letter of demand is sent to start a record. Consult an attorney. Or bide your time and at the next election, point out [FACTUAL ONLY]issues to others when seeking their vote. Of course, if you don't want to run for the Board, look for someone to support who is concerned about the issues.
Yelling at a Board at every board meeting or disrupting business does little for your reputation, or to help resolve the situation for that matter, and if you happen to be wrong about your complaint, you may end up with egg on your face.
If eggregious conduct continues, it will probably take an attorney to help make the appropriate threats to get the attention of the board.
However, laws that take effect in 2006 relating to assessment collection, records inspection and election challenges allow for resolution in small claims court and allow the judge or referree to make orders that can involve recovery of attorneys fees spent and fines of up to $500 per occurrence. So the doors of small claims courts are opening up to more disputes. The maximim claim for individuals has increased to $7500 I believe, and the small claims courts are required to offer advisory services.
Hope this helps all of you out there who have a complaint about improper practices. Be sure to educate yourself though, before making assumptions about what constitutes a violation of the law or documents. Accusing someone of "acting illegally" without a factual basis can lead to a defamation claim.
Posted by Beth Grimm at November 2, 2005 11:23 AM