Board won’t stand up to management

Question: Our Irvine homeowners association has a problem with our management company because one of its employees attends every board meeting, including executive sessions, and types notes from board meetings into a laptop. A management employee has been named secretary for our association and assumes the same duties as a board member. Yet our CC&Rs; state that “only titleholders” can hold office on the board of directors. This secretary is not a titleholder.

Another management employee tells our board what to do. If management doesn’t like the way the meeting is going, it tells the board to adjourn and to order all homeowners to leave the premises.

Management personnel freely confer with our association’s lawyer. This costs all owners a lot of money. It has become a financial nightmare living here.

Now management is raising its rates yet again because its employees are required to take some training classes. Why does our association have to pay for the training classes? Are management companies supposed to commandeer and take over association meetings while the board just sits there? And what about the information that the company has collected into its laptop from our supposedly private meetings? Can we get it back?

Answer: Boards do what homeowners allow them to do. Each association’s governing documents determine whether nontitleholders can serve on the board.

All association records, including board meeting minutes, are association property -- whether entered into a personal laptop computer, floppy disk, recorded or handwritten. Upon request for return of documents, any reputable business will immediately comply. But there have been cases where management companies ignored such requests, refused to return records or claimed they were lost or erased.

Should that happen, both the management company and its employee acting as association secretary can be sued for the costs of re-creating association records that the secretary was obligated by law to maintain. Such actions may also constitute a criminal offense.

Disbanding a board meeting on instruction by management is an improper delegation of board duty and violates the basic rules of parliamentary procedure by which boards are obligated to conduct their meetings.

Many board duties may not be delegated. Delegating certain board duties to a management company may be a breach of each individual director’s duty to the association and to other board members.

Rather than waste time trying to correct the situation, owners can initiate removal of the board.

Whether the association is incorporated or unincorporated, for the purpose of board removal under Corporations Code section 7510(e), 5% of member signatures on a petition must be obtained for calling a special meeting. After the special meeting is called, the removal process must comply with the association’s governing documents and Corporations Code sections 5033 and 7222.

There are no guarantees what the new board will be like. A different approach toward management will only occur if like-minded owners band together and make it happen.

The management has no business billing your association for training classes. It is conceivable it is simultaneously billing other clients for the same training, a questionable practice at best and double billing at worst.

Boards should take pains to scrutinize management contracts closely or consider doing away with the company altogether. California common-interest developments were predicated on self-management through owner volunteerism so that no law requires an association to hire a management company.

Volunteer board members were elected to manage their associations without the added complications and costs that management companies can bring to the equation. If board members are unable to fulfill their elected positions or do nothing more than delegate their duties to a company, they should resign from the board.

When management employees discuss matters with an association’s attorney, there is always a possibility that breaches of confidentially occur. This may be especially true when a management company initiates the contact. Similar breaches can occur when management personnel are allowed to attend regular board meetings or executive sessions.

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Please send questions to P.O. Box 11843, Marina del Rey, CA 90295, or e-mail noexit@mindspring.com.