Board’s Whispering Campaigns Carry Liabilities for All
Question: The common interest development where I live has 51 homes and an unresponsive and controlling board. When we purchased our house more than 35 years ago, the homeowner association was inactive, and everyone went about their business with no hassle, strife or complaints.
A group of homeowners has dominated board positions for more than 17 years. They do this successfully by implementing whispering campaigns of lies against homeowners they don’t like. They instill a fear of lawsuits and hold meetings behind the backs of homeowners without producing minutes.
The board has made it clear that it will not accept comments or complaints from homeowners unless they are “constructive.” No definition for constructive has been given.
Some homeowners are totally frustrated. Those who are not part of the clique stand no chance of getting on the board.
I hired an arbitrator to resolve this but the board refuses to return his calls. Because I hired an arbitrator, the board now says that all meetings are in executive session.
How can I stop these whispering campaigns? Can the board limit the types of complaints homeowners can make or how they will respond to them? If so, what can minority homeowners do?
Answer: Boards use whispering campaigns to further their own interests. Because targeted homeowners have no recourse against boards like yours, it is difficult to fight them.
Not surprisingly, it is difficult to pinpoint those who set the whispers in motion, which makes these campaigns successful for boards and disastrous for homeowners. The tactic is used to compel the complaining homeowner to either give up their complaints or sell and move away.
Either way the board gets rid of the complainant.
Whispering campaigns should be taken seriously and can be dangerous if initiated by board members because, depending on the content of those whispers, the person or persons starting or repeating them could be liable for slander, thus exposing all homeowners to liability.
The continual reelection of the same clique of board members rotating among themselves year after year can be a sign that they are trying to keep certain information from the other homeowners.
Under California’s Davis-Stirling Act, homeowners may attend any meeting of their association’s board except for executive sessions and, while the board may adjourn to an executive session to discuss your hiring of an arbitrator and its response, it may not call such sessions to conduct the everyday business of the association.
Civil Code section 1363.05 lists the reasons a board may adjourn to executive session. One requirement is that the board note in the minutes the general description of any matter discussed in executive session.
Merely because you hired an arbitrator does not give the board the right to conduct all its business in executive session. But because the law does not provide a penalty, there is nothing short of a lawsuit that can make your board change.
There is also nothing in the Davis-Stirling Act that requires homeowner complaints be “constructive.” Your board’s refusal to accept anything other than constructive comments raises the question of whether it is fulfilling its fiduciary duty to the other homeowners.
Adding the contingency of constructive to homeowners trying to contact the individuals who sign the checks, deposit money, maintain and repair the property, adds another layer of control between you and your asset.
Avoiding lawsuits takes common sense. Maintaining the property and acting in good faith while making decisions should be adequate protection from liability for most boards. Liability insurance required by the Davis-Stirling Act for associations covers the costs of providing attorneys to defend the association and its board members in the lawsuit.
By not answering your arbitrator’s calls, the board breached its duty to act in good faith. Boards know the only avenue open for you to pursue your rights is to hire an attorney and sue them. Once sued, the insurance pays for the board’s defense.
Raising the fear of lawsuits to get re-elected may indicate more serious problems behind the scenes at your association. Couple that with the whispering campaigns and the “constructive” contingency imposed on the homeowners, and your board’s actions may pose serious legal problems for all the homeowners.
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Stephen Glassman is a writer and an attorney in private practice specializing in corporate and business law. Donie Vanitzian, J.D., is a writer and arbitrator and manages commercial property. Both live in common interest developments and have served on various association boards. Please send questions to: Common Interest Living, P.O. Box 451278, Los Angeles, CA 90045 or e-mail your queries to: CID CommonSense@aol.com.
