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HOA - directors who enrich themselves

By Anne Granada on Mon, 05 Mar 2012 at 18:29

I find it difficult to understand the rules under which directors of a non profit Home Owners Association Pty Ltd operate.
However I would like to endorse the following for the running of a HOA Pty Ltd and would appreciate your comments.
In the USA there are also serious problems with the directors of HOA.( see suggestions from www below)
1) Disclosure – of all Articles and Restrictions and the By Laws to any potential buyer BEFORE the closing date of any purchased property. .2) Education of board members who report in to an oversight agency with area examiners for each general municipality. If the board members do not study and pass a test they do not get to serve on the board.
3) Audits mandated yearly ( as is written into my HOA By Laws and I believe most of them. If a board does not comply, they are FINED by the oversight committee. Such funds for fines being half to go to the NCREC or oversight committee and the other half to the cash reserves for the community. These audits are to be done on time and not delayed.
4) Enforcement agency to warn, fine or remove board members who do not follow the Chapter 47 laws and their respective By Laws, using “reason” and to follow their own rules with submitted proof of these indiscretions by any homeowner . The using “reason” is where most of us are finding huge problems and where the abuse occurs. If a board does not hold the legally noticed Chapter 47 NOTICE for a board meeting with any homeowner noting any violation or concern by the board, the board is to be held accountable. That they cannot then jump to suing or fining a homeowner.
5) Equal representation if a lawsuit is taken on as we as homeowners pay into the monthly insurance premiums and yet only the board members who are also equal homeowners get free representation. This is a conflict of interest if we are paying for the other side’s defense. We as the homeowners have to pay out of pocket but we also pay for the premiums to fund the insurance attorney for the board members. THIS IS NOT RIGHT.
6) ANTI-SLAPP legislation that 23 other states have, …(which may be exclusive of just the HOA problems and for other problems also) .THAT “IF” the By Laws are not followed with proof, if there is no dispute resolution process that has taken place, that no retaliatory lawsuit can be filed by the board member responsible. SOMETIMES retaliatory lawsuits are taken on for a homeowner who owes NO HOA dues and even OWNS their home free and clear or not, is attacked in lawsuits only for a homeowner complaining that the board minutes are not made available, the walk through reports for violations are not made available, the audits are not made available, and the financials are not made readily available and therefore such complaints are filed with the NCREC if the property manager has a licensed realtor in the business or the Better Business Bureau then the homeowner should NOT BE SUED.
7) A property manager’s licensing law to mandate that ALL property managers be trained, educated and licensed and that they be held accountable in order to keep their license with a process included for complaints by any submitting homeowner.
8) Oversight for fair voting procedures with NO proxies for important agenda that needs to be discussed at the community meetings involving large amounts of money. A candidate from the board of elections could be chosen to do this as their job.
9) No abuse by association attorneys – Limits on what association attorneys can do as far as upping fees for foreclosure after the homeowner has agreed to pay and does so in time according to their submitted finances to show the board and the association attorney what they can pay and when.
10) A support group to help any homeowner who does not know what to do to be able to go to for this kind of education and support with a website link for training and who to contact.
I would appreciate such a lsit for South African directors of HOA.
Do they obey the consumer protection act, the competition act and the new companies act? How should one act against them. we need DETAILS and a PLAN OF ACTION.


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RE: HOA - directors who enrich themselves

Annie Graeme replied on Tue, 06 Mar 2012 at 09:24

Book on HOA - does it exist? We have studied a number of books on sectional title, but cannot find a book on HOME OWNERS ASSOCIAITONS in SA. We also find it difficult to explore the fundamentals as articles in Property ands Financial magazines on the fiduciary duties of directors of HOA Pty Ltd are sadly lacking. It appears that conflict in Home Owners Associaitons are mostly settled - huge financial settlements - but that a no disclosure policy is followed. So the ‘guilty' parties , who are possibly continuing their wrongdoings at other HOA, remain to carry on. This is specially sad in the case of gated or walled estates, where people have moved to, to get away from stress. Retirement villages are also targets.

RE: RE: HOA - directors who enrich themselves

Gerhard Bezuidenhout replied on Tue, 06 Mar 2012 at 16:47

Paddock's offers a course on this topic - approach them

RE: HOA - directors who enrich themselves

Anne Granada replied on Wed, 07 Mar 2012 at 10:39

Employee Fiduciary Duties

Employees have moral and legal obligations to individual and collective homeowners

Fiduciary duty is commonly understood to be an obligation of one party to act in the best interest of another party. Employees have an obligation to the homeowners to act in the best interest of the organization and ALL its stakeholders –specifically the homeowners.
1.Employees Fiduciary Duty to the Company
◦ Because employees represent their employers, which are the homeowners, it is expected that they fulfill various moral and legal obligations to the homeowners. Employees are expected to be loyal to the homeowners. This means defending the interest of organization; being honest with peers and management; protecting and not misusing company property and resources and protecting the privacy of any material information. They are expected to obey homeowners’ policies and code of ethics. Moral behavior is expected. Employees also are obligated to demonstrate care and skill when completing daily tasks.

2.Employee Fiduciary Duty to the Client
◦ Certain professionals have fiduciary responsibilities to their clients that extend beyond their obligations to employers. For instance, financial advisers have to sell clients investments that are appropriate for them even if they receive much smaller commission from the sale. Managers of HOA are expected to recommend appropriate contracts regardless of whether or not they (or the directors) will make money from it, They are not allowed to personally benefit from the transactions. They are obligated to offer the quickest and best and cost-effective available solutions to their clients.

...Show More

RE: HOA - directors who enrich themselves

Anne Granada replied on Wed, 07 Mar 2012 at 10:41

3.Breach Of Fiduciary Responsibilities
◦ The breach of fiduciary responsibility occurs when the employee does not act in the best interest of her individual and collective homeowners. Conflict of interest represents one such breach. It occurs when the employee's responsibilities to her company/employer conflict with other legitimate responsibilities. Conflicts of interest may become difficult to solve because both responsibilities may be important and affect many people.
 Another breach of fiduciary responsibilities involves receiving large gifts in, say, the form of holidays or use of a car, based on material nonpublic information with a purpose of making a profit. To benefit from such a ‘deal’ would be a breach of an employee's fiduciary duties. 
Misappropriation of company property and resources is also considered a breach of fiduciary duties to the employer. Employers entrust employees with their property so that they can do their jobs better and benefit the organization. When employees misuse company technology and petty cash or use work time for nonwork-related issues they are not fulfilling their obligations.

If they give preferential treatment to certain to certain homeowners so that they can benefit from that

4.Limit To Fiduciary Responsibilities
◦ An employee's obligations can only extend so far. His legal and moral obligations generally supersede his obligations to the company. When the conflict of interest occurs that involves the best interest of the homeowners versus the best interest of the manager or a specific large homeowner, the organization can in no way hold the employee liable. For instance, an accountant may be asked to report false numbers on the balance sheet or a personnel manager may be persuaded to hire more staff than needed. Whether this is in the best interest of the company or not, the employee has no obligation to fulfill these requests.

Professionals like chartered accountants have fiduciary duties to their clients.

Artisans like plumbers, electricians, mechanics have a fiduciary duty to their clients, which in this case is homeowners.

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