By Justin Bayer, Caretaker Landscape
T he idea of an HOA board member going rogue and compromising the integrity or the future of a community is not uncommon. Going “rogue” can refer to various actions, including but not limited to; making impactful decisions without consulting others on the board, acting in an uncivil manner with other board members, using volatile language or behavior toward other board members, or utilizing their position as a board member or board officer to make personally beneficial decisions. Oftentimes these power struggles or bullying through personal agendas can lead to attorney involvement and litigation, avenues that can be fiscally damaging for an HOA and its respective membership.
While there are certainly times when a lawsuit is the only action left to take against a particularly difficult or tyrannical board member, avoiding this result completely is typically a more desirable route. That being said, taking the proper steps in the early stages of this situation can be confusing and stressful.
What rights do board members have when facing a rogue board president? What if that president is newly elected? How can the board deal with a board member who is hiring contractors behind their back? This article will aim to concisely address questions like these and bring to light a board’s rights, as well as proper steps to follow when faced with a difficult situation involving a rogue board member.
Step One: A Conversation
While a seemingly innocuous call to action, a simple conversation can go a long way. This type of correspondence can be behind closed doors if preferred, which can be especially effective for enlightening a board member who is beginning to “go rogue.” If board members are not comfortable with an off-the-record conversation, utilizing the structure of the board meeting forum can be especially helpful. By stating issues or questioning decision making within the boundaries of an official meeting, the concerned board members can ensure that their points will be officially logged in the meeting’s minutes.
Step Two: Resorting to Action
Oftentimes it is power over fellow homeowners that can get to a rogue board member’s head. They threaten the sanctity of their position by acting out on their own accord, a clear and direct violation of their commitment to the association. This sort of behavior can derive from a position of power on the board, one they were most likely elected to prior to this behavior. Rather than waiting for their term to expire (an option, to be sure, though a lengthier process in most cases), a board has the ability to remove an officer. This process typically only requires a majority vote, though many board members are unaware of this course of action.
If removal from a position of power is not enough (or the offending member refuses to step down on their own), there is the option of removing this person from the board entirely, although this can prove to be a bit more challenging. In most cases, the process of complete removal from an HOA board takes the vote of every member on the board. It should be noted that this is the bare minimum it would require to remove a member completely. As with any process that has serious legal and fiscal ramifications, it is best to become educated in the common interest-related state and federal laws that apply to your community. For Colorado, these laws can be found on the Colorado.gov website, on the Department of Regulatory Agencies (DORA) page.
Step Three: Covering Your Bases
If the rogue board member has already acted on their own accord and for their own interest or gain, it would be wise to notify all vendors and other community business partners that the board as a whole makes the purchasing decisions for the community. If action regarding third party businesses are not handled in a timely manner, the board could be forced to suffer the monetary consequences of the rogue member’s decisions.
In a 2016 article for HOALeader.com, Bob Kmiecik, a partner at Kaman & Cusimano LLC, advises that “You should contact contractors and say the president doesn’t have the authority to sign contracts himself and therefore those vendors don’t have a reasonable basis to rely on that authority in contracting with the association.”
A final step to ensure that the board is being properly represented legally is to involve the community’s legal representation in all emailed correspondence regarding the behavior of a rogue board member. This action can be of great importance if the decision making of a rogue board officer comes back to adversely impact the board or the community
Step Four: Mediation
There are instances where mediation is both beneficial and unavoidable. If the board determines that this rogue board member has acted in a manner outside his or her scope, the association may bring forth a lawsuit, and the court will likely mandate that the parties participate in mediation. The parties would participate in mediation either with or without their own respective legal counsel.
Mediation would involve both parties working toward an agreement while a neutral third party oversees and facilitates the process. All conversation and possible settlement terms in mediation are confidential and cannot be presented as evidence in a later court proceeding. This helps to ensure open negotiations. If the parties are able to come to terms and settle the dispute they would then sign a settlement agreement.
The process of mediation is non-binding, meaning if both parties are unable to come to an agreement during the process, the neutral third party cannot force the parties to reach a settlement.
Mediation varies from arbitration in that the latter is usually binding. During arbitration, instead of a neutral third party, there is an arbitrator or a panel of arbitrators who hear the arguments from both parties then make a decision as to who is right and who is wrong. The process is like a mini-trial and the arbitrator’s decision is enforceable by law.
While there is no perfect way to handle these extremely difficult situations, being well prepared and knowledgeable about the rights and authority of your board as a whole is invaluable. Always consult the proper channels of legal representation before proceeding with any action that may result in fiscally damaging or detrimental conduct to the community