Secretive Board Ought to Be Cooperative

QUESTION: I live in a co-op apartment. I have requested a financial statement or some type of accounting records to show the monthly expenditures. The board of directors says that a cooperative is not like a condominium association and they do not have to give out information regarding how the money is being spent.

In January, my monthly assessment was increased by a large amount but there was no explanation of why the additional money is needed.

Do I have a right to get an itemized accounting of the monthly expenses? Am I entitled to an annual statement of the financial status of the cooperative? How can I communicate with the board so that they will respond to my questions and concerns?

ANSWER: It sounds as if your board of directors just needs some education about the California laws that govern community associations. A community association is a nonprofit corporation or unincorporated association that was created for the purpose of managing a common interest development. And what is a common interest development, you ask? The law defines a common interest development as a community apartment (or “own your own”) project, a condominium project, a planned development or a stock cooperative.

This means that even though you are a shareholder in a cooperative, you are entitled to the same financial information that a condominium, planned development or community apartment owner would receive.

The California Civil Code states that an association must provide an annual budget that itemizes expenses and discloses detailed information about the reserve funds needed for future repair and replacement of the common elements of the building or complex.

If the association board did not distribute the budget at least 45 days, but not more than 60 days, prior to the beginning of the fiscal year, then it does not have the authority to increase your assessments. The owners would have had to vote to approve the increase.

In addition, at the end of the fiscal year, an annual financial review must be prepared by an independent licensed accountant if the association’s annual income exceeds $75,000. This information is supposed to be distributed to the owners within 120 days after the close of the fiscal year.

If the directors are not giving you this information, you should refer them to the California Civil Code, Title 6, Sections 1350 through 1372, also known as the Davis-Stirling Common Interest Development Act. These statutes were adopted in the mid-1980s and have been amended many times. Community association boards need to have familiarity with the current laws. It appears that your board has simply not kept up with the times.

You can visit your local library’s law reference section to do your own research. Perhaps you should make some photocopies for your board of directors. If they ignore your attempts to educate them, you may want to consult an attorney who specializes in community association law.

Readers who would like more information about owners’ rights may send a self-addressed, stamped envelope to Community Assns. Institute, P.O. Box 84303, Los Angeles, Calif. 90073-0303. You will receive a one-page guideline for associations called “Community Association Members’ and Residents’ Bill of Rights” that includes recommended procedures for open meetings, access to records, fair elections and ethical management practices.

Residents Chafed by Pesky Board Member

Q: My wife and I live in a condominium. We are very fond of many of our neighbors and we love our unit with its view of the city skyline. However, we are so disturbed by the actions of one of the board members that we are about ready to move out.

This person has served on the board for years and no one wants to challenge him. During the past year he has become more and more of a pest. He “polices” the building, questioning owners about their guests, checking unit doors to see if owners have left them unlocked and leaving notes on people’s doors chiding them for petty things, many of which are not even rule violations.

We would like to see him removed from the board if possible but we don’t want to start a recall. He has served several two-year terms. Is there a limit to the number of years that a board member may be elected to serve the association?

A: If there are any limits on the number of terms or number of years that one can serve on your board of directors, this restriction would probably appear in your association’s bylaws.

Have you spoken to the other board members about your dissatisfaction? Every board needs to have people who are not afraid to enforce rules but this guy sounds as if he is definitely overstepping his authority. The other board members need to speak up and take control of this situation.

If this board member has no hobbies or other interests, it may be very difficult to change his ways. In fact, he may continue with his policing even if he is not elected to another term.

I think your first step should be to talk with the other board members to find out if other owners are complaining and to discuss a few ways to deal with the situation. Perhaps you will want to submit your name for nomination at the next election. It will be difficult to replace this person if no one else wants to run for the board.