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legalgems
legalgems, Arbitrator
Category: Real Estate Law
Satisfied Customers: 9689
Experience:  Just Answer consultant at Self employed
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I live in a 27 unit condo. A woman owns 3 units. One of her

Customer Question

I live in a 27 unit condo. A woman owns 3 units. One of her units is in default to the tune of $15k for unpaid dues & legal fees. Nothing has been done by the board. The owner's God daughter lives in the condo & is supposed to pay the dues, which she has not done in over 2 yrs.The assoc is in financial trouble due to insane spending (another problem). So to cover the loss of this money they are raising the dues so everyone will pay for this free ride.My questions are somewhat related. This woman votes for 3 units, so she always votes herself on to the board. Is this allowed? Also, as the owner of a unit that is in arrears on dues, should she be allowed to be on the board?We are in CA.Thx
Submitted: 7 months ago.
Category: Real Estate Law
Expert:  legalgems replied 7 months ago.

Hello! I will be reviewing your question and posting a response momentarily; if you have any follow up questions please respond here. Thanks!

Expert:  legalgems replied 7 months ago.

Thank you for your patience as I looked into this.

I am sorry to hear you association is having such serious issues.

First, the governing documents (bylaws, CC&Rs) are what dictates the rules of the association, so long as they don't conflict with statutory/case law. An HOA can restrict the number of units, votes, and seats a family may have-so that multiple unit owners are given only one vote, spouses cannot serve simultaneously, etc. So the governing documents would need to be reviewed to determine what the particular restrictions are.

Secondly, the HOA has a fiduciary duty, as do the board members. This means that they must treat each owner equally, and they cannot raise dues to avoid collecting back dues.

A fiduciary duty means that the person in the fiduciary capacity owes a duty to the other person- and that the fiduciary must act in good faith, with the best intentions, to preserve any property that is at issue. Failure to act in this manner (essentially, a trust/guardian) is considered a "breach" and can result in:
1. removal of the fiduciary
2. sanctions (ie fines, award of attorney fees, etc)
3. damages (economic liability for the damages suffered by the party to whom the duty was owed)

So while an HOA typically has owners that will have an interest (some do allow non-owners to govern) they are expected to act impartially.

Before suing an HOA, the owner must comply with Civil Code section 1363 et seq, which requires that the owner first utilize the HOA's internal dispute resolution process, among other restrictions. If one intends to sue, it is best to hire an attorney because the board will have an attorney. The court may award legal fees to the prevailing party.

As for arrears, unless the bylaws specify that the owner is disqualified, then they would be eligible to serve; the idea is that the governing documents constitute a contract between the owners and the HOA, so the parties are to negotiate the terms. Of course, these can be amended, so if a lawsuit results in the ouster of a board member, (or multiple members) it is quite common to then review the bylaws to see if an amendment is necessary.

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Information provided is for educational purposes only. Consultation with a personal attorney is always recommended so your particular facts may be considered. Thank you and take care.

Expert:  legalgems replied 7 months ago.

Hello again; just checking in to see how things worked out;
if you have further questions please don't hesitate to reach out to me here on Just Answer.
Thanks!

Expert:  legalgems replied 6 months ago.

I am letting all of my open questions know that I will be out of the office from December 21 through the 26th so if you have any follow up questions please post today otherwise I will respond upon my return.

Thanks! Enjoy your holidays!