guest blog by Deborah Goonan
A How-To Guide for HOA, Condo, and Co-op Board Members
1) Start off right – provide as little information as possible prior to closing the sale with a new buyer. Take full advantage of weak state disclosure laws. Delay providing a copy of governing documents and minimally-required financial documents as long as possible. Be sure to charge hefty “management” fees for this “service” to the buyer. Work with state Legislature to minimize disclosure requirements, and the time allotted for a buyer to review information and cancel a sale prior to closing.
–Provide even less disclosure to tenants and heirs of property, perhaps just a summary of the rules
–Make sure that sales agents do not educate their buyers by recommending that buyers obtain a legal and/or accounting review of documents provided prior to closing. The less the buyer knows, the greater the chance of closing the sale.
2) Maintain Developer control as long as possible. The Board will be appointed during this time, not elected. The Developer will maintain weighted voting in order to annex property (thereby increasing the period of Developer control) and amend governing documents without interference from residents. During this time, weighted votes of the Developer or any subsequent bulk investors will control the Board, and therefore the community, despite owner input. If and when turnover occurs, maintain as many Developer-appointed Board members as possible.
3) Communicate with residents as little as possible. Filter communications to present only information that is positive or neutral. Avoid publishing timely newsletters or posting information on a community website. In fact, try to avoid having a newsletter or a website.
Avoid open Board meetings. If state law requires open meetings, make minimally visible announcements, and try not to provide an accurate agenda. If residents show up at the meeting anyway, limit their input to speak to 3 minutes or less. Object if they try to record the meeting, even if allowed by state law.
–If a resident poses a difficult question, display an indignant response: accuse the resident of being disgruntled, unreasonable, unappreciative, or a trouble-maker.
–Alternatively, tell the resident you will “look into” the issue, and then table it. Do not follow up, and hope that if you ignore the problem it will go away.
–Intimidate residents by hiring a uniformed security guard or police officer to attend meetings. Threaten residents who dare to challenge your authority. Insist that the resident “shut up” or leave the meeting.
–Alternatively, immediately adjourn the meeting to avoid confrontation.
4) Conduct secret closed meetings outside the community, at a Board member’s residence, or by email. Hold any required open meetings for the formality of making motions and taking a pre-determined vote on issues already discussed and decided in the secret meetings.
5) Avoid posting minutes of meetings, and, if you must, keep minutes as sparse as possible.
6) Avoid distributing financial reports, including annual budget, reserve, and audit reports. Make residents request these in writing by certified mail, return receipt requested. Then delay response as long as possible, and provide incomplete information if possible.
7) Avoid elections, but if you must have them, control the vote as much as possible.
— Acquire as many properties as possible, because the more property you own as a Board member, the greater the percentage of voting interests you will own, and the more personal clout will have.
–Gather as many proxy votes as possible, by either intimidating residents to give you general proxy, or providing misleading information to obtain a directed vote favorable to your interests.
–Amend your ByLaws to “legally” rig the voting system so that the Board remains entrenched and in control without interference from residents. In large communities, create representative voting members or a multi-tier system of sub-associations with a Master Association. That way, only a handful of people actually vote on behalf of all residents.
–If your state requires secret ballot elections, you still have options. Try disqualifying voters by issuing bogus fines that, if unpaid, are grounds for removal of voting rights. Extend the deadline to get on the ballot, until you can arrange to get an insider on the ballot to challenge any potential trouble-makers. Mishandle or miscount ballots. Force candidates to challenge election results in mandatory arbitration.
8) If residents stage a recall, refuse to acknowledge it, and challenge it in court or arbitration. Work with your state Legislature to make the Recall process difficult to “stick.”
