Domineering board president can be handled

Question: We have only 29 townhomes in our simple and uncomplicated complex. For 46 years we had smooth sailing and no problem with people serving on the board. If owners wanted to look at books and records or make copies, we let them at no charge. We all pitched in to keep fees low.

Then a turnover in owners occurred about seven years ago and a new owner became board president. People just didn’t like it here anymore. We got lectured at meetings about efficiency, corporate logic and how expensive everything was. The president called specialists and experts for every minor thing and drove up costs to the point where several original owners could no longer afford to live here. She hired a management company and attorneys, something we never needed before. The other board members became her puppets.

When the president wants something, she gets a specialist or attorney to write an opinion letter saying what she wants it to say, and then she passes out the document to support her views.

For the first time in 46 years we ran out of money. We were shocked by several assessments and fee rises. The president said the association didn’t have enough money to do things. She told owners if they didn’t vote to increase monthly fees, she would raise it 20% each year without a vote and would then continue to assess us. In seven years our $98 monthly fee went up to $292 a month.

Each time I request to see the books, I’m denied or ignored. Finally, I walked into the management company office and said I wanted to see the books. The manager gave me a one-page summary sheet and said, “That’s it.”

I went back the next day and said I want to see “all” the books. He told me to leave or he’d remove me.

The next week I received a letter from the association’s attorney that read: “In no event are you to raise your voice with employees, demean employees, interfere with their duties and/or responsibilities in any way, or harass or mistreat employees. You are disturbing the safety, tranquillity and peace of the residents. If you do not comply with this request, fines will be levied against you and/or legal proceedings will be commenced to compel your compliance. You are hereby responsible for all costs incurred by the association including attorney’s fees.”

I did none of what the letter claims, but because of letters like that, no one wants to live here. More units are up for sale, and our turnover is tremendous.

The president still dominates the board. How do I answer the attorney letter, and what can I do about the way this place is being run?

Answer: The increase in dues from $98 to $292 shows what can happen when homeowners are either prevented from participating or allow themselves to be ruled rather than taking part in their own governance.

The board has breached its fiduciary duties to every titleholder. First by running out of money and second by not seeing it coming. The board is supposed to prepare a budget every year and then stick to it. That means no spending sprees and no excuses.

Homeowners trusted the board to stay within the budget that was presented to them. But boards have no incentive to stick to a budget if they are advised that when they “run out of money” the homeowners will have to pay through assessments. That attitude relegates the homeowners’ position to one of a never-ending bank account for board withdrawals. It puts every deed-restricted titleholder at risk and requires increasing incomes to pay the rising assessments, even for incompetence.

A titleholder’s right to inspect and copy association books and records changed in 2004, giving owners the same rights as directors. The right is absolute. If legal action is necessary to enforce one’s rights under the governing documents and the Corporations Code to see association books and records, the court must award attorney fees to the prevailing party. If the titleholder is the prevailing party, the association pays the fees.

Do not be intimidated by the association attorney’s letter. This threat to sue is typical of the bully attitude of some lawyers. The letter is inappropriate.

While the association pays his fees, the lawyer will say anything to preserve his paycheck. Send a copy of the attorney’s letter and your complaint about his conduct to the California State Bar. Download the complaint form at: www.calbar.ca.gov.

It will take several owners to call an election to remove the president. It is exhausting work that may take some time, but it is your home.

Please send questions to: P.O. Box 451278, Los Angeles, CA 90045 or e-mail your queries to: NoExit@mindspring.com.