Owners suspect a sweetheart agreement
Question: After a homeowners association board meeting during which the board president was seen holding the manager’s hand under the table, owners began asking questions about the company he hired. After years of getting excuses and the runaround from our boards, other owners and I sent letters requesting to view the association’s books and records, and I finally was granted an appointment.
On the day of my appointment, I began taking copies of all the 2004 minutes. I then asked for 2003 minutes, only to have an assistant in the management office tell me they were “purged.” I asked what that meant, and she said they were in storage and would not be available. I next asked for monthly reports, bank statements and storage receipts, but she would only let me see statements from June 2004 to present -- no monthly reports or receipts for anything. Everything else was purged, she said.
When I asked for the management company’s business license number, the assistant pointed to a picture frame high up on a wall in the next room where the manager was seated. Before I could copy the number, the manager jumped up from her desk, snatched the license off the wall and hid it from view. She started yelling, “Why do you want my license number?” Very calmly I explained, “I just want your license number.” She said: “I only have to show you I have one, I don’t have to give you the number.”
Then she began flapping her hand in my face and advancing me toward the door, saying, “I’ve had enough of your harassment, you’re not getting another appointment, get out of here now.”
I am aware of three other owners who received similar treatment. Rather than put up with it, they sold immediately.
Others have their units up for sale because the board has created an unstable situation. We don’t have enough votes to change anything and we have management interference. Can the manager stop us from looking at the books?
Answer: The books and records belong to the association, not the management company. Management companies are third-party vendors and cannot prevent titleholders from making an inspection, nor can they pick and choose which books and records an owner can view. A request to examine the association’s books and records means all the books and records, including the ones management claims were purged.
As an owner you have an absolute right to review the books and records and the minutes of the association under Civil Code section 1365.2(e). The minutes are prima facie evidence of the board’s actions, so purging these minutes and the resulting inability to prove the legality of a board’s actions are a recipe for disaster.
If it is necessary for you to hire an attorney to sue for access to these records, and you are successful, the court must award your reasonable costs and expenses, including reasonable attorney’s fees, and may assess an additional civil penalty of $500 for each violation.
That means each time you successfully sue to get access to records, the court must award your attorney’s fees and may give you an additional $500.
There are several reasons why a management company would act as you described, one of which might be that it has ignored the law regarding its duties to the association and its owners. Refusal to show a license number leaves homeowners with no way of determining whether the company is licensed or that the license is current.
If your present board president has a personal relationship with the management representative, it is a conflict of interest that should have been disclosed before a contract was signed with that company.
Whether you have enough votes to change the situation in your project can only be determined when a vote is taken. There may be others in the project who, although silent, feel as you do about the current board and would vote for change if they were given the opportunity.
Quick sales often mean lower prices, and the move-out exodus has probably lowered comparable resale values for all units in your project. The actions of a few can hurt all homeowners but especially those left behind to finance and clean up the mess.
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Send questions to P.O. Box 11843, Marina del Rey, CA 90295 or e-mail noexit@mindspring.com.
