Voting Directors/Officers - Developer - Pandora's Box

[Guest Guest Tammy]

I am the newest resident in our subdivision (4 years ago).  I was voted to the VP position in September. 

Development document signed year 2000.  144 lots.  2 Out-parcels.  We live beyond 'rural' country, we live in 'frontier' country.  A 4 WD is necessary during rain or snow.  Our #1 (governed) priority is 'Roads/maintenance' 'health, safety & welfare'.  

CCR's state:  Annual 'normal' assessment fee: $50.00 for 'owners' (recorded, whether legal or equitable title.)   Developer herein called GB.  Developer Exception 1/5 'normal' assessment on unsold lots.  ($10.00).  

The income reported at the meeting was 95 lots at $50.00 and 49 lots at $10.00.  

Questions posed at Sept 2018 Annual Meeting:

1) Why is our Landowner's association receiving less income in 2018 than in 2004?
2) Why does the Developer still have the voting power to control the board (18 years later).  Voting for Directors/Officers.
3) Do we 'own' the 'community well'?
4) Detailed late Fees, penalties, fines and attorney's fees must be added.

1) A review of county property records shows:  95 individual owners.  Developer GB has 30 properties recorded in it's name.  19 (individual owner) properties in the name of an out of state realty company called MH.   
MH & GB are owned by the same people.  When the developer GB repossesses  a property, it is deeded to MH, and MH has been afforded the 'developer' exception.   The Board objects as 1) the property is no longer 'unsold'.  2) MH is not the developer.   The President insists that MH is a 'developer', because it is owned by the same people who own GB, and therefore should receive the Exception.  (Total losses to date $7440.00).  As a result of this practice, the association fell below the stated 'viable' target set of 96 lots sold that allowed the developer to deed roads and turn over their care and maintenance. The road, etc., were turned over in 2004 (but not recorded until 2007 when the 'legal' target of 108 was met.  But I digress.)  The Board disagrees with the President's opinion and requested a meeting twice. No remedy was provided.   A meeting was held in view of the President's 'inability...refusal to act', a quorum of 5 prevailed in determining a letter of inquiry should be sent to MH inquiring about their use of the exception and giving a 14 day window for written reply/dispute of value and supported by our governing documents.  The President and Treasurers declined to vote and insisted that their abstaining be reported to MH in the letter.  MH responded that "just like driver's licenses and social security cards" that all lead back to the same person,  MH & GB are the same and entitled to the exception.  GB responds that when one of their properties is sold and later repossessed, it becomes 'unsold' once again, no matter what name it's recorded in, and therefore is entitled to the exception.  The Treasurer was satisfied with the response and was unwilling to bill the 'normal' amount.  State statutes regarding personal liability were forwarded to the Treasurer.  The Treasurer billed for 2019, but not the arrears of 2018 that were detailed in the letter to MH.   The BoD is hoping to add 'reasonable' fees, etc to community documents and the ability to recoup expenses in full above and beyond the full assessment fee when liens are placed.  Is there something more the Board should consider?   

2) Developer's voting  power.   Our President talked with Mr. & Mrs. Smith the owners of GB & MH (her neighbors in another state), and a reply from  Mrs. Smith was received, reminding the Board that they are bringing their 49 votes in person or by proxy to the next meeting.  (State statutes limit the developer to 15% vote, but the Board was unaware.)  The President has been voted in by the 'members' during an annual meeting for the last decade.  However, recent review of the governing documents and state law dictate that the membership should be voting for 'Directors' and then at the first meeting of the Directors, the Directors vote for 'Officers' (President, Treasurer & Secretary).   This seems to answer the 'developer voting power' question, but now has the BoD questioning how to correctly remove the President.   Governing documents allow for 'removal with or without cause' of an 'officer' by the board, but this is based on the belief that the board placed them there.  The removal of a 'Director' calls for membership vote, because the membership put them there.    Logic dictates an immediate return to state law and governing documents.   Does logic prevail or are there considerations to be made?   

3)  Long-time landowners are under the impression there is a community well.  There is a well located on an out-parcel that is available for all landowners that don't have a private will and need to haul water.  Disclosure states:  Water:  Must drill your own well.  Community Well: None.   The developer/owner of the out-parcel threatened to put a lock on the well when the question was asked at the meeting.  The developer, Mr. Smith stated that the well was a 'courtesy'.   Review of county records show a 2007 Well Agreement granting "ownership and use" of the well on the out-parcel to our association (signed by Mr. Smith of/for GB) until landowners no longer need it.   The electric meter was put in the association's name at that time.   The Well Agreement states that the 'line' (a direct water line) running to lot #126 (previous vacation home of the Developer) shall have 'perpetual use that 'runs with the land'.  The 'sales office' on the out-parcel is also connected to the association's electric meter, as is their water.  There is no agreement made with the Developer regarding the electric bill (the sales office has been closed for years).   The Developer just sold lot #126.  Recent reply (via President) from The Developer informs the Board that they will collect monies toward the 'repair and maintenance' of well from lot #126, and put their portion aside also.  There is no easement filed for the well located on the out-parcel.  The BoD questions the developer GB, contracting for repair and maintenance through a third party and saving unstated amounts for a well they do not own.   The Board is unsure where to even begin with this.  Landowners suggest survey, easement, our own electric pole or separate meter & disallowing direct water line access, and other landowners question that our Disclosure doesn't represent a 'community well', and the simplest solution would be to give the well back.  The BoD is unsure where their responsibility lies.  The Developer told buyers that there was a 'community well', but the disclosure says different.   Does the board have a responsibility to landowners who rely on that well (and many do) or a responsibility to the community documents?   Is there a middle ground?

4) There are no stated fees of any kind in our documents.  There is a requirement to file liens within 30 days.  However, under the current documents, the association has paid $25 to place a lien and $25 to remove it when the landowner finally pays his $50.00.  The President and Treasurer respond that filing liens is not cost effective.  They state that they've charged fees before and no one paid them.  The Board now faces MH not paying past and current assessments and the association having 'no teeth' to pursue or recoup, and a President and Treasurer who don't understand or are unwilling to understand.  This is another consideration for removing the President.  What, if any, time factors would be present in assessing actual costs/fees that were just entered by amendment?

Thank you.

Tammy

  

[Josh Martin]

1 hour ago, Guest Guest Tammy said:

1) A review of county property records shows... Is there something more the Board should consider?   

This question does not appear to relate to parliamentary procedure, so this forum cannot provide any assistance.

1 hour ago, Guest Guest Tammy said:

2) Developer's voting  power.   Our President talked with Mr. & Mrs. Smith the owners of GB & MH (her neighbors in another state), and a reply from  Mrs. Smith was received, reminding the Board that they are bringing their 49 votes in person or by proxy to the next meeting.  (State statutes limit the developer to 15% vote, but the Board was unaware.)  The President has been voted in by the 'members' during an annual meeting for the last decade.  However, recent review of the governing documents and state law dictate that the membership should be voting for 'Directors' and then at the first meeting of the Directors, the Directors vote for 'Officers' (President, Treasurer & Secretary).   This seems to answer the 'developer voting power' question, but now has the BoD questioning how to correctly remove the President.   Governing documents allow for 'removal with or without cause' of an 'officer' by the board, but this is based on the belief that the board placed them there.  The removal of a 'Director' calls for membership vote, because the membership put them there.    Logic dictates an immediate return to state law and governing documents.   Does logic prevail or are there considerations to be made?   

Yes, the organization must immediately act to comply with its governing documents and state law, notwithstanding the erroneous customs to the contrary. If the bylaws provide that an officer of the board may be removed with or without cause by the board, that is the procedure to follow.

1 hour ago, Guest Guest Tammy said:

3)  Long-time landowners are under the impression there is a community well... The BoD is unsure where their responsibility lies.  The Developer told buyers that there was a 'community well', but the disclosure says different.   Does the board have a responsibility to landowners who rely on that well (and many do) or a responsibility to the community documents?   Is there a middle ground?

This question does not appear to relate to parliamentary procedure, so this forum cannot provide any assistance.

1 hour ago, Guest Guest Tammy said:

4) There are no stated fees of any kind in our documents.  There is a requirement to file liens within 30 days.  However, under the current documents, the association has paid $25 to place a lien and $25 to remove it when the landowner finally pays his $50.00.  The President and Treasurer respond that filing liens is not cost effective.  They state that they've charged fees before and no one paid them.  The Board now faces MH not paying past and current assessments and the association having 'no teeth' to pursue or recoup, and a President and Treasurer who don't understand or are unwilling to understand.  This is another consideration for removing the President.  What, if any, time factors would be present in assessing actual costs/fees that were just entered by amendment?

According to RONR, amendments to rules are effective immediately unless otherwise stated. Given the nature of these rules and of this organization, however, it seems highly likely there are applicable legal provisions, so it would be prudent to consult an attorney.

[Richard Brown]

Guest Tammy, I agree with Josh Martin.  Your questions are really more legal in nature and are also beyond the scope of this forum.  Besides seeking legal advice, you might want to consult with a professional parliamentarian who can provide you with personalized service.  Both the American Institute of Parliamentarians (AIP) and the National Association of Parliamentarians (NAP) have websites and referral services for credentialed parliamentarians.  You might also be able to find a parliamentarian through your state's state association of a local unit.  That information is available on the NAP website.  The NAP is the larger of the two organizations, but they both have similar credentialing processes and referral services.  Many members belong to both associations.   Some professional parliamentarians are also attorneys.  If you can find one of those in your state, that might work to your advantage.

Here is contact information for NAP and AIP

National Association of Parliamentarians (NAP)
213 South Main St.
Independence, MO  64050-3850
Phone: 888-627-2929
e-mail: hq@NAP2.org  
www.parliamentarians.org

American Institute of Parliamentarians (AIP)
618 Church Street, Ste 220
Nashville, TN 37219
Phone: 888-664-0428
e-mail: aip@aipparl.org
www.aipparl.org