HOAleader.com - Tip of the Week - January 20, 2017
Published: Fri, 01/20/17
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HOAs Sue Without Following Their Procedures. And Lose Because of It
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In this week’s tip, we scratch our heads and wonder if a North Carolina court went too far in dismissing two HOAs’ lawsuits because the HOA boards didn’t follow their own governing documents.
According to the court’s opinion, in 2013, the Charlotte-Mecklenburg Housing Partnership Inc. had the local city council rezone more than seven acres of land abutting portions of the Willowmere Community Association Inc. and the Nottingham Owners Association Inc.
The CMHP planned to develop up to 70 multifamily housing units on the property. That decision riled local residents, and the boards of the WCA and NOA united to file suit against the CMHP and city council.
The defendants, however, filed a motion to dismiss. They essentially argued that the boards rushed into the lawsuit without following the processes required under their own governing documents—and that the boards therefore had no legal standing to challenge the actions.
To support their case, the defendants noted that Willowmere’s board decided to sue without a formal meeting, instead relying on an email string among the directors it claimed served as written consent to act outside a meeting under its bylaws.
The trial court, however, found that email consent wasn’t expressly authorized by Willowmere's bylaws as a means to satisfy the written consent requirement of the governing documents.
The evidence of following its own procedures for Nottingham wasn’t strong, either. A director testified that he had a phone call with at least one other director, and there was no record of a meeting with a quorum of directors in person or by phone at which the litigation was authorized. The board also didn’t have any record of written consent or minutes showing consent under procedures authorized by its governing documents.
The trial court held that while the HOAs’ bylaws each allow their directors to bring lawsuits regarding matters affecting their communities, they also require the directors to act through a meeting or a consent action without a meeting. Since neither HOA did that, both were found to lack the legal authority to bring their lawsuit.
Yikes. Dismissal on a technicality? Or is there more to this case than meets the eye? Find out in our new article: http://www.hoaleader.com/members/2494.cfm
Best regards,
Matt Humphrey
President
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Recent articles posted at HOAleader.com:
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HOAs Sue Without Following Their Procedures. And Lose Because of It
In this week's tip, we scratch our heads and wonder if a North Carolina court went too far in dismissing two HOAs' lawsuits because the HOA boards didn't follow their own governing documents. According to the court's opinion, in 2013, the Charlotte-Mecklenburg Housing Partnership Inc. had the local city council rezone more than seven acres of land abutting portions of the Willowmere Community Association Inc. and the Nottingham Owners Association Inc.
Click here to read full article:
http://www.hoaleader.com/public/HOAs-Sue-Without-Following-Their-Procedures-Lose-Because-It.cfm
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Lawsuits Booted Because HOA Boards Didn't Follow Their Governing Documents
Well, this is certainly a lesson in boards' need to follow their own HOA documents. A North Carolina court has dismissed lawsuits brought by two HOAs because their boards authorized the lawsuits in informal phone and email conversations rather than by following their governing documents.
Click here to read full article:
http://www.hoaleader.com/members/Lawsuits-Booted-Because-HOA-Boards-Didnt-Follow-Their-Governing-Documents.cfm
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HOA experts frequently advise board members to begin building a pipeline of future leaders for the association. But what should board members say about their position? It's got some definite negatives--difficult owners and a failure of many owners to appreciate the work going on behind the scenes. Should those be discussed, too?
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http://www.hoaleader.com/members/What-Say-and-Not-Say-When-Youre-Recruiting-Future-HOA-Board-Members.cfm
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What HOA and Condo Boards Need to Know About Regulating Rentals
Rental restrictions are unlike most other policies HOA boards create because they necessarily curb owners' real property rights. The law jealously protects property owners' rights, which means any HOA board that seeks to restrict rentals in their community needs to act wisely and deliberately. This report provides you with the information you need achieve that goal. It's filled with tips from our editorial team and experts on HOA governance and management from across the country. With the information in this report, you can begin investigating and working toward implementation of legal and enforceable rental restrictions immediately.
Click here to read full article:
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What's My Line? The Roles, Duties, and Responsibilities of HOA or Condo Board Members
We regularly hear from association members who want more detail about their responsibilities--or who want an easy way to educate their newly elected fellow board members about what, exactly, board members do They ask: What's the president supposed to do? How about the vice president, secretary, and treasurer? They also ask much more detailed questions on how their board can and should operate, like: "What's apparent authority?" "Who can act alone and when?" "Who chooses the officers?" "When am I personally liable for my actions as a board member?" And more. Join us for an in-depth webinar on January 26 led by two community association experts: A lawyer with nearly two decades of hands-on experience in advising associations, along with an industry-leading association manager who can speak to what he sees when it comes to on-the-ground roles of board members.
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http://www.hoaleader.com/products/responsibilities-hoa-board-members-a.cfm
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