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Ely
Ely, Counselor at Law
Category: Real Estate Law
Satisfied Customers: 102506
Experience:  Qualified attorney in private practice including business, family, criminal, and real estate issues.
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Our DCCR and By Laws require Northbridge POA, gh Point, NC

Customer Question

Our DCCR and By Laws require Northbridge POA, High Point, NC to have a budget. Can Board members spend monies exceeding what is budgeted without presenting to hone
owners for approval. Can President of POA enter into a Management Company Contract
without advising hone owners content. We had contract with Management Company
from Sept 09 till Sept 13 which included management company overseeing all maintenance
needs for buildings, attending all meetings and continuous inspections. Contract changed
on September 13, 2013 for Management to handle financials (collections, writing checks
but had to have permission from president regardless of what payment for, occasional
mails if president requested. Homeowners have no one but a board member to report
any problems but we were not advised of that fact. I only procured copy of new
contract last week because board refuses to have repairs made on my home.
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  Ely replied 1 year ago.

Hello and welcome to JustAnswer. Please note:This is general information and is not legal advice. No specific course of action is proposed herein, and no attorney-client relationship or privilege is formed by speaking to an expert on this site. By continuing, you confirm that you understand and agree to these terms.

I am sorry to hear about this situation. Can you please tell me:

Do the declarations/bylaws/covenants allow the President to enter into a contract unilaterally on behalf of the HOA or is it silent on the matter?

This is not an answer, but an information request. I need this information to answer your question. Please reply, so I can answer your question. Thank you in advance.

Customer: replied 1 year ago.
By Laws states President may get help if needed but homeowners need to approve expense. Original contract $530
monthly, new agreement $500.00 monthly. There is nothing that prevents home owners from being advise of
activities that affect them and their property.
Expert:  Ely replied 1 year ago.

Thank you.

So in other words, the bylaws state that the President cannot unilaterally enter into such a contract without the owners approving the expense prior to this happening. Correct?

Customer: replied 1 year ago.
Now that we have no 'maintenance company' we cannot get work done not even an answer and as of yesterday
the President is angry because I am trying to get my repairs done, per her written promises (letters, emails and notes) and shw emailed me to NEVER CALL HER HOUSE AGAIN AND IF I SENT AN EMAIL TO SEND TO BOARD. She has been
a tad testy since 2010 and after she hung up on me three times, but did front door,etc. I have never dialed her home no again. I send emails to vice president and most of them copied to her. Those copied to her she said she would not reply to regarding work! Vice President is only person I know of that would take a call. Now he will not take mine either.
Expert:  Ely replied 1 year ago.

Thank you.

You must realize that an HOA is a self-governing entity. There is no "state agency" to appeal to. Under the HOA law, most people resolve disputes with HOAs themselves internally, or via the Court.

In this case, if the owners feel that the Board/officers/directors are acting (a) without proper authorization, (b) with an aim to defraud or otherwise breach fiduciary duty of the HOA, and/or (c) otherwise unlawfully, then they can pursue this matter in court.

The owners may file suit against the Board, and/or the specific officers/directors.

To sue in a state court, one needs to have a "cause of action." There are numerous causes of action, such as "breach of contract," "negligence," "fraud," "unjust enrichment," etc., as well as causes of action rooted in statutory law. Every state has their own although they are very similar to each other in every state because they all stem from the same common law. A pleading in Court needs at least one cause of action, although it is not unusual to have more than one.

Herein, the owners can sue for (depending on what happened):

-negligence, if the Board/officers/directors are acting despite steps outlined in bylaws/declarations/covenants, and possibly harming the board

-breach of fiduciary duty, if their actions cause monetary harm and damage to the HOA, and

-the owners can also request a receivership, to ask the Court to appoint a RECEIVER with sweeping powers to control and "reset" the HOA, clean out any issues, and call for elections once the HOA is back on track.

Often, the threat of such a suit itself will help resolve the issues. If not, then there is always the option of actually pursuing relief via the Court.

I hope this helps and clarifies. Please use the SEND or REPLY button to keep chatting, or please RATE when finished. You may always ask follow ups at no charge after rating. Kindly rate my answer as one of TOP THREE FACES/STARS and then SUBMIT, as this is how I get credit for my time with you. Rating my answer the bottom two faces/stars or failing to submit the rating does not give me credit and reflects poorly on me, even if my answer is correct. I work very hard to formulate an informative and honest answer for you; please reciprocate my good faith with a positive rating.

Expert:  Ely replied 1 year ago.

Hello again. This is a courtesy check in to see if you needed anything else in regards ***** ***** question. I am simply touching base. Let me know. Thanks!