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Last night at the Special meeting of the Board held on December 17, 2024, the attending residents and channel 77 observers witnessed a group of elected trustees approve exorbitant amounts of money to correct the problems associated with performance issues of the contractors that have been selected by them and over the objection and frustration of members they approved these contracts and disputed errors in financial accounting that were rationalized away by ignoring the sentiment of the membership.

 

It is hard to accept that the people who are elected to represent and ensure the health and welfare of residents have become so insensitive and arrogant that they refuse to open their minds and realize that there are alternative methods of accomplishing their tasks without jeopardizing the economic welfare of the community residents. Well over 3 million dollars was approved for contracts that would last for over 5 years, more than any other period for this community.

Dealing with an unresponsive or unaccountable Board of Trustees in an HOA can be challenging, frustrating, and stressful. Trustees have a Fiduciary duty to all the residents within the community. Trustees have a legal obligation to act in the best interests of the HOA and its residents. Overspending, lack of transparency, and poor contractor management are indications that they may have violated their fiduciary duties, especially when there is a paid management in place that is also not performing adequately or overseeing all the important aspects and issues that occur within the community. 

 

Ignoring feedback and refusing constructive suggestions from residents undermines the democratic process and erodes trust. This has been a problem in our community, and it has eroded trust and has created an unhealthy environment which is essential in any senior adult community. Unfortunately, it is not uncommon in HOA communities that Board members become power hungry and exert their will on a group of senior residents that elected them because they professed to be knowledgeable about HOA concerns and sensitive to the resident's needs. And when they get elected, they develop different attitudes towards the people that most
need their understanding.

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If you were at the meeting on Dec 17, you might have heard some Board members comments and some comments by the members. For example, when the Treasurer of the Board was asked a question by a member his answer was simply “that’s the way it is” and refused to give a more responsive answer. When a committee chair rose to explain the need to spend more money, he admitted that there have been years of neglect in maintaining some of the systems within the community, especially the irrigation system. The Board, without hesitation approved a 5-year contract with a new Irrigation company that has been in business only a few years without going through a bidding process or explaining the criteria for performance for this company.

 

A former President of the Board and Condo Association who was at meetings in the recent past (when discussions took place about contracts and other important matters) raised an issue which was quashed by the present President of the Board. The response of the former President was “I guess I was sleeping when these matters were discussed. Are we electing Board members that do not take their position seriously?

 

And when a member exclaimed that the reason that members do not speak out at meetings and pose objections or make alternate suggestions is because they are fearful that they would be ostracized by the community and are afraid of repercussions, the Board had no response.

 

Excessive spending and long-term contracts without proper justification and oversight puts the community and residents at financial risk. Fiscal responsibility is critical for the community’s long-term viability. It is extremely important to ensure transparency in decision-making and the need to involve residents in major financial decisions. Boards that ignore transparency and accountability usually lose credibility and face legal challenges.

At Four Seasons prior projects and contractor responsibilities have not been completed or fixed adequately nor have they been supervised and managed properly by community managers. This was admitted by the Board Treasurer at the meeting and because of inaction, needs to be addressed again.

 

Over the last few years residents have requested the Board to create performance reviews and strict criteria to measure performance, but the results have never been brought to Board meetings for the resident’s information. It this transparency?

 

Continuing to engage the same contractors without a comparative bidding process is irresponsible. Our President and Treasurer clearly stated that the decision was made to continue with the current contractors because “they like them”. Is this an appropriate reason to award a contract for a community and what happened to the philosophy of good business practices? 

 

Residents have asked for detailed financial reports, contract terms and criteria used for contractor selection, however, the Board has refused to share this information with the residents. Even after hearing objections, suggestions and requests for reasons, the Board voted unanimously to approved millions of dollars’ worth of contracts to vendors who have not demonstrated their ability to do the job properly.

 

Future auditing and oversight are not the answer to awarding the same contractor with another 5-year contract and subjecting the residents to further irregularities in billing and further performance issues without serious consequences imposed.

 

A good example of poor management is the present situation regarding the Optimum Bulk contract noted below. The Board knew that the contract was going to expire more than a year ago and if they did not know they should have inquired about such an important aspect that affects people’s lives here. In the latter part of 2024 they asked for committees, to evaluate the situation in view of the incoming Verizon Companies intentions to obtain business.

 

We are all aware that within our maintenance fees, there are funds specifically going to Optimum for a TV service with components and connectivity in each home. However, the Treasurer of our Association knew, along with the rest of the Board, that there were other needs for the money being taken out of our maintenance fees (for projects and a new law requiring more funds in the “reserve fund account” for the renovation of the Clubhouse, a defined building under the new law). So, the Treasurer, approved by the Board, decided to apply the Optimum Bulk account funds (that come from our maintenance fees) towards the reserve fund account thereby taking funds directly from residents without seeking proper approval.

 

As late as this December meeting, the President did not address the diversion of funds from the maintenance fees and gave excuses that we are still awaiting a letter from Optimum to let us know what the expenses would be for the upcoming year. In other words, the Board did not proactively engage with Optimum to obtain a contract for the coming years despite what they claimed. Is this a dereliction of a fiduciary duty towards the residents? This situation could have been avoided at the time that Verizon was given permission to install fiber cable throughout the community, a project that was supposed to be managed by the community manager. 

 

What can we do about this dilemma? A review of the current legal reviews and published literature about this matter suggests the following.

Form a coalition of concerned homeowners to voice collective concerns. The strength of numbers can add weight to your arguments. A Website has already been established where residents can express themselves and make their opinions known. However, it is highly unlikely that the Board, management staff or committee chairpersons would read or take the suggestions seriously.

Draft a petition outlining grievances and desired changes. A signed petition demonstrates widespread dissatisfaction.

Request a special meeting to address financial concerns and demand transparency about the decision-making process.

Ask for detailed financial reports, contract terms, and the criteria used for contractor selection.

Review the HOA bylaws and governing documents to determine the process for holding trustees accountable or removing them from office. If applicable and necessary call for a vote of no confidence or recall election.

Consult an attorney with experience in HOA matters. They can provide guidance on whether the board's actions breach fiduciary duties and advise on potential legal recourse. The present Association Attorney functions only on behalf of the Board as a whole or individual Board members in the performance of the fiduciary duties or violation thereof. He will impose significant expenses on the Association for defending them, unless an alternate process can be implemented and pursued as suggested below.

Propose neutral third-party mediation to resolve conflicts and ensure the board takes resident concerns seriously. The alternative dispute resolution process (ADR) of the Association is in place specifically to take up issues of this nature. It can be directed to the Board as a whole or to individual members of the Board or any resident if necessary and appropriate.

 

Use newsletters, emails, or community forums to educate other residents about the financial risks and the board’s lack of responsiveness. THIS IS IT!

Encourage other homeowners to attend HOA meetings and voice their concerns.

Demand an independent audit of HOA finances to assess the legitimacy of past spending and identify potential irregularities. This may require some funds from the residents but if there is some irregularity, misinformation, miscalculation, or mismanagement of funds approved by the Board over the objection of the residents they can be held accountable and liable for the expenses and will be subject to dismissal from the Board, just as the management company (FSR) may be held liable for mismanagement.

Push for the establishment of an oversight committee composed of residents to review contracts and expenditures.

Identify and support candidates for the board who prioritize transparency, accountability, and fiscal responsibility. Prepare for the next election by organizing campaigns to replace problematic trustees with more responsible candidates.
 

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