Board member’s unilateral actions are risky for association

Question: Our homeowner association is up against a bad economy and years of maintenance neglect. The board is fairly upfront with owners, but we have a new homeowner who came into his very first board meeting up in arms about suing the board and wanting to be a director at the same time. He knocked on doors, promising lower association fees and amnesty on past-due fees. Once elected, he began making false and ridiculous accusations against prior boards. He initiated his own investigations at association expense into all allegations he has heard since he purchased his unit. His witch hunt is keeping our association mired in expenditures without results. What can we do?

Answer: Perhaps you and your board do not completely understand the meaning of majority rule. Even if your association board consists of only one board director, there must still be a motion and vote on any association expenditure. That action is then reported in minutes distributed to all titleholders. Whether or not this new board director claims to be acting on behalf of the association, his unilateral actions, including his investigations, may land the board in hot water.

Part of using any association-related funds is performing the due diligence that accompanies each expenditure before actually spending any money. Much of that research includes determining whether or not a problem actually exists.

No director is in a position to make any promises regarding a unilateral reduction in fees or amnesty for unpaid fees. The Davis-Stirling Act provides that certain fees may be raised, not reduced, without titleholder approval or vote, and there is no mention of statutory amnesty for unpaid fees or assessments.

Before any bids are sought or any contract is entered into, the association must decide exactly what it needs in terms of maintenance or repairs. The board then prepares a “statement of work” for the project. This is provided to qualified potential bidders, enabling the board to compare the bids received before deciding which to accept. This process should be basic and uncomplicated, and should include due diligence resulting in a selection of the best contractor for the job.

Some bylaws contain provisions requiring a board majority vote before approving any expenditure. Diligent boards demand that contractors provide proof of current insurance, including worker’s compensation coverage for their employees. And no work crews are allowed on the association’s property before a contract is signed and subcontractors are identified.

Boards have a duty to keep their expenses under control while managing either flat or declining income. Living within the association’s budget doesn’t mean postponing maintenance, just being more prudent with the funds it has and the way those funds are spent.

Send questions to P.O. Box 10490, Marina del Rey, CA 90295 or email [email protected].