The following is a summary of the September 20th HOA meeting of the BOD regarding the letter they sent in August 2011 proposing 4 CC&R amendment changes at a cost of more than $5,000!!!!!!!
Changes that there were completely unnecessary - AND - further examples of their abuse of authority under the guise of their fiduciary duty, which they tend to redundantly violate!!!
Given the low turn out in person, not to mention the lack of response either by phone, written correspondence – either by mail or email – and the straw poll taken during the meeting, it is patently clear that you were never going to get the required 75% approval of the homeowners in support of the proposed amendments vaguely described in your August 22, 2011 letter addressing the homeowners of the Oak Knoll Community.
Anyhow, at the onset of the meeting with the first homeowner speaking on the matter, I believe that that gentleman’s response to the Board of Director’s (BOD) proposals set the tone and clearly predictable end to that meeting.
This gentleman brought up important points: lowering the costs of the HOA by eliminating the management company and hiring fewer people to manage the affairs of the HOA; and encouraging homeowner responsibility to take care of that which they are already obligated to take care of under CC&R Section 8 and by the City of Newberg Ordinance 96.60 (A) and (B).
The second homeowner to speak questioned the wisdom of re-writing the CC&R addressing the waste receptacles when doing such would result in everything she described. Excess disposal that animals get into and drag across the homeowner’s yard, the smell, and the unaesthetic view of such collection of receptacles and excess waste would be to those within view of such trash.
According to the August 22nd letter, the BOD premise for changing CC&R Section 3.11 is based on a few homeowners complaining that they do not want to store their garbage in their garage. That is not a sufficient justification for the expense to re-write this section that makes it perfectly clear that:
“No Lot, or area in or part of Oak Knoll shall be used or maintained as a dumping site or depository for rubbish, refuse, trash, garbage or any other form or type of waste.”
That section also makes it perfectly clear that such garbage or waste may be made visible “from any Street within Oak Knoll for not more than twenty-four (24) hours” prior to its removal.
It goes without question that when an individual chooses to buy a home that they have to consider all factors, to include yard size or a lack of a yard where storing waste receptacles are concerned. If they have to store it in their garage, so be it. That’s part and parcel to being a homeowner in an association with rules that do not allow unsightly garbage being stored within view or smell of our neighbors until the day before or day of collection by the waste management company servicing the Oak Knoll Community.
In short, the BOD proposal to amend CC&R Section 3.11 was without merit and not well thought out. Hence the reaction from the concerned homeowners’ present and the ultimate failure of gaining enough anticipated support (i.e. 75% of the homeowners of the HOA) to move forward with this “adopted position” of the BOD.
These same homeowners questioned the BOD for their lack of enforcement of the CC&Rs regarding the storage of waste receptacles, because they like their neighbors but have been forced to have negative confrontations with them over the manner in which they dispose and maintain their garbage. Adding further, he stated that the HOA “is there to prevent confrontation between neighbors, this has not been enforced; so we are forced to have negative confrontations with neighbors that we like, not appreciative of that.”
The BOD’s response, a few homeowners have complained about not having a backyard or the configuration of their lot makes it difficult to maneuver the waste receptacles from the yard to the front of the house for pick up.
I reiterate, a few homeowners who purchase homes without taking into consideration small factors like storage of waste receptacles is not the responsibility or problem of the remaining homeowners. They can store their receptacles in the garage like everyone else, to include myself even though I have a yard accessible to place my receptacles but choose not to do so because it is more convenient to have them in the garage to access when taking out the trash then having to go outside into the backyard just to take the trash out.
Then the representative from the management company, Judy Moshberger, asked what the homeowners’ thoughts were regarding the waste receptacles being kept “behind a fence or enclosure of some sort?” Even asking this question is prima facie evidence that the management company is not familiar with the CC&Rs, since Section 3.11 makes it perfectly clear that such garbage, trimmings, cuttings, and like debris:
“…are maintained in a single enclosed location not visible from any Street and so as not to become an annoyance or nuisance to any other resident in Oak Knoll.”
Clearly the Declarant wrote the CC&Rs in such a manner so as not to let any refuse, regardless of the type, to become a problem “to any other resident in Oak Knoll.”
A further response from a member of the BOD was that an enclosure of some sort would have to be built/erected, and in doing so would not only cost the homeowner; but they would also have to get approval from the Design Review Committee in doing so.
However, under CC&R Section 3.11, nowhere in that section does it state any requirements of the homeowner to get prior approval from the BOD via the Design Review Committee to approve such an “enclosure” to maintain one’s garbage and other debris.
This was a false and improper response by this member of the BOD in order to illegitimately substantiate their weak position in proposing the change to Section 3.11 to allow a few whiny homeowners to store their garbage outside rather than inside their garage but for the simple fact that they either don’t have a yard or an accessible point in their yard from which to store and maintain their waste receptacles.
Again, maintaining one’s trash is a common sense responsibility that goes along with being either a homeowner or a renter; as such there is/was no need to even propose an amendment to CC&R 3.11 just to appease a few whiny homeowners. Therefore the BOD’s proposal, supported by the management company, to even amend the CC&Rs at the expense of a majority of homeowners who would clearly not want such a revision was careless and a clear breach of your fiduciary duty where Duty of Care and Duty of Undivided Loyalty are concerned.
The next homeowner to speak was there on behalf of his father who owns a residence within the Oak Knoll Community, and he prepared a written response to the BOD for this meeting and provided copies to the BOD and those homeowners present who wanted a copy.
This homeowner was clearly upset, and stated as much, in regards to the deceptive language and underlining alleged intent of the proposed changes to the CC&Rs that would cost the homeowners more than $5,000 in legal fees to change without any rational basis.
Responding to this homeowner, the speaker for the BOD stated, ad nauseum (i.e. as he always does at every meeting when the BOD’s intent and actions are rightfully called into question), that “We’re a volunteer board, all five of us are volunteers on the HOA board.” This is always stated as if it is some justified excuse for the BOD’s lack of responsibility in its fiduciary duty to the homeowners of this association; but under the CC&Rs and the Oregon Planned Community Act, being a volunteer board member does not absolve your from illegal and unethical actions as board members.
Moving back to the upset homeowner, he clearly interpreted the BOD’s intent to make these changes years after the HOA’s inception, with or without the consent of the homeowners, patently unethical and wholeheartedly deceptive in practice. He is correct on all counts, which are supported by the CC&Rs, ByLaws of the HOA, the Oregon Planned Community Act, and the Fair Housing Guide for Home Owner Associations (FHGHOA) in Oregon (June 2010).
In the FHGHOA, under HOA Liability (p. 2), states that “Board members of HOA’s have a fiduciary responsibility to serve their community in the best interests of the entire community and to avoid any personal conflict of interest in making decisions.”
During the meeting another homeowner called out one of the members of the BOD who lives on Foothills Dr who would clearly benefit from the first two proposed amendments regarding the care, maintenance, repair and/or replacement of the street trees and sidewalks along Foothills Dr.
This is a clear conflict of interest on this board member’s part, the very same board member who advanced the motion to move forward with the legal expense of making these proposed changes and presenting them to the homeowners of the Oak Knoll Community. Yet another example of a breach in the BOD’s fiduciary duty to the homeowners regarding the Duty of Care, Duty of Undivided Loyalty and Duty to Act Within the Scope of Authority (Peter H. Harrison, Fiduciary Duties: Board Member Fiduciary Duties, Vial Fotheringham LLP, June 4, 2009).
Regardless of this fact, the speaker for the BOD went described the following in justification of its inaccurate interpretation of CC&R Section 7.1 where the issue of the street trees and sidewalks along Foothills Drive were concerned:
“For years, as long as I have been in the association and on the board, it’s been the board’s interpretation that the street trees along Foothills and the round about, are the only trees that the HOA was to maintain; as well as the planter strips along Foothills and the round about. Those are the two…those are the elements of the common areas that, that the HOA was going to maintain. And we have for years, have done that; the status has been set for those areas that are common areas that will be maintained.”
“Last year we had some trees, that…the roots, the shallow roots popped up a few of the sidewalks. So the street trees on Foothills popped up some of the sidewalk panels, creating a tripping hazard; and we went to our attorneys, they said…we could put the liability for fixing the sidewalks onto the homeowners, the homeowners could turn around and sue the HOA and say, you’re responsible to maintain these trees or they would just cut the root off so it stops doing that again.”
“Under the…status that we maintained those trees we said, ‘You know what, we don’t want anybody to to mess with those trees, but our servicers, contractors, under our guidance, so we were going to fix the sidewalks.”
“And the intent of this…clean up of the CC&Rs of those two issues, of the sidewalks and the street trees, is to clarify that the only trees the HOA is going to maintain are the ones we’ve always maintained. And the only sidewalk we are going…we are going to take except…take responsibility…for the sidewalk damage that are street trees caused.”
A homeowner then interjected about the language of the CC&Rs, to which this same speaker replied that under the law their interpretation was incorrect in that the CC&Rs clearly state that the HOA is responsible not for the trees strictly along Foothills Dr, but rather all the street trees within the association.
It was at this point that the HOA attorney, Chris Tingey, clearly articulated that Section 7.1 specifically states that the HOA is responsible for “street trees on each Lot.” He then added that the HOA does not want to be responsible for “each street tree on each lot.”
The homeowner who previously interjected asked why Foothills was then the chosen street by the HOA to assume responsibility for the street trees and sidewalk maintenance, repair, and replacement. The speaker for the board replied as follows:
“This street was chosen by a person when the HOA was created.”
When this homeowner continued to question this decision, the Mr. Tingey read Section 7.1 and admitted, “Nowhere does it say street trees on Foothills.”
Another homeowner spoke up, in addition to the one who interjected, and stated that they were told by the City of Newberg – in writing – that they were responsible for the street trees on their lot. Mr. Tingey then stated the following:
“The city may do that. The reality is the city can do that all the time, but you have a private contract that supersedes the city.”
Mr. Tingey, being a high priced lawyer with the firm of Vial Fotheringham LLP, and on retainer by the HOA, should know better than to make such a prima facie fallacious statement where the doctrine of supremacy is concerned.
Private contracts DO NOT supersede local ordinances no more than they would a state or federal statute. Private contracts fall under contract law, which are subject to state and/or federal statutes. This was patently bad legal advice on the part of Mr. Tingey.
One of the homeowners who stated that the city told him he was responsible for the street trees stated that the contractors hired by the HOA cut a few branches from his trees, but overall did not do anything to care for the trees. Mr. Tingey responded that was something he would have to take up with the contractors.
Sorry, but the HOA hired the contractors to maintain, repair or replace the common improvements along Foothills Drive; therefore the responsibility for the management of those contractors is the HOA for which it incorrectly and inappropriately assumed the responsibility for the street trees and sidewalks along Foothills Drive contrary to the clear language of the CC&Rs. Therefore it is not that or any other homeowner along Foothills Dr. responsibility to take up any negligence on the part of the contractors hired by the HOA, but rather it is the HOA’s responsibility to do so. This is additional bad legal advice given from the representative of the law firm on retainer by the HOA representing the interests BOD, not the HOA, clearly.
Mr. Tingey continues his incorrect legal interpretation and bad legal advice when making the following statements:
“The reality is, by contract, by covenant, along…throughout the association, the association was responsible for maintaining the street trees with the policy and practice, since Oak Knoll was developed, was to do it solely along Foothills Drive, because that was the way the property was set up, way back thirteen fifteen years ago. That’s where they were having the entry into the community, that’s why it was set up that way. ”
A homeowner than stated, correctly, it made no sense for other homeowners who do not even use that street to have to pay towards the maintenance, repair and placement of street trees and sidewalks along Foothills Dr. when many homeowners do not even use that street to gain access to this community (in response to Mr. Tingey’s assertion that since it was the entrance to the community, that was the justification of the BOD to misinterpret the CC&Rs and assume responsibility for those items not declared as common improvements of the HOA).
This homeowner continued by stating that homeowners mow their own yard; take care of their planter strips and the street trees as well. A few board members interrupted stating “not necessarily,” and one so boldly stated, “No they don’t.” This board member is the one who lives on Foothills and stands to benefit from the proposed amendment to the CC&Rs in order to maintain the status quo. A clear breach of her fiduciary duty as a board member in failing to recues herself from any and all decisions regarding these proposed amendments.
There was than a debate about the HOA’s responsibility to enforce the CC&Rs under Section 8.1 to enforce the landscaping provisions vs. the fact that Foothills being the ‘entry way’ into the community; this the BOD justified their position because “80% of the residents” use Foothills Drive to access the community as the “main entrance.”
Attorney Chris Tingey then interjected the following:
“The entrance is on Foothills, so the board has chosen to do it that way. That doesn’t make it right or wrong, it doesn’t make it the only way it’s going to happen, but it’s the way it’s set up now. And so the board…carrying on responsibility, and having obligations for maintenance under the documents, and the interpretation has been in place for 15 years, whether or not that interpretation is right or wrong, doesn’t matter, that’s what they’ve been doing for fifteen years; they developed that pattern, now, such as the board recognizes it, they need to address how they’re going to handle it. And that’s the purpose of the amendment.”
I cannot help but wonder how Mr. Tingey even retains his position at such a prestigious well known law firm specializing in Homeowners Associations given the incorrect interpretations of the law and bad legal advice stated at this meeting. Not to mention the fact that I bested him in the legal argument concerning CC&R Section 4.6.7 Street Trees being placed on every lot.
It really is dumbfounding that our BOD would hire a management company that has retained such a prestigious law firm with such inept lawyers. His retainer to the HOA has been proven to be nothing short of a hindrance to the homeowners of this association, as well as the BOD given my dealings with him and his participating and explanations given at this meeting. That, in and of itself, is a gross mishandling of the legal affairs of our HOA and is tantamount to malpractice.
Notwithstanding this fact regarding Mr. Tingey, let me continue with the events that took place during this HOA meeting. But before I do, let me quote something from the Fair Housing Guide for Home Owner Associations in Oregon (p. 5):
Differential treatment of homeowners. Watch out for:
· Inconsistent responses to service requests
· Inconsistent reasons for routine inspections
· Offering special favors for some community members and not others
· Making exceptions to rules/requirements for some community members and not others.
Even if you have no intent to discriminate, but you are inconsistent in your treatment of homeowners, your behavior may be interpreted as discriminatory.
One of the board members during the meeting admitted that prior to hiring the first management company, a former member of the board stole money from the association. This is a very interesting and telling fact brought to light for the first time, which should have been brought to the attention of the homeowners when it occurred and not years after the fact.
This theft raises the question, is that why the reserve that was voted in the late 1990s disappeared in the early 2000s? At one point there was a few thousand dollars in the reserves, then suddenly it disappeared without explanation.
Under state statute a reserve account cannot be diminished and omitted without homeowners approval. This clearly never took place when the initial reserve account voted in and established by the then BOD, and suddenly disappeared off the annual budgets provided to the homeowners without explanation for its $0 balance and lack of further funding without the homeowners mandatory majority consent.
As a result of this theft of funds from the HOA, the BOD decided to hire a management company, which costs a lot more than the funds that were stolen from the then reserve account. A management company that was as inept then as management company now that took its place.
Moving on, a homeowner acknowledged the options of how homeowners could participate in this meeting regarding the proposed amendment changes via email…the response was only three emails were received by the management company: two yes and one no. Not a large turn out via email or in person at this meeting. So it is/was clear from the start that the BOD was never going to have the required 75% approval of the homeowners to make the proposed amendment changes.
The BOD member who was the speaker admitted that for the last 14 meetings they could never get a quorum, and given the lack of response both via email and the lack of homeowners present during this meeting, he was unwilling to vote in favor of moving forward with the expense of going through the legal process of re-writing the CC&Rs and sending out ballots knowing full well that the BOD were not going to get the required 75% approval of the homeowners.
Notwithstanding, the board member who lives on Foothills Dr. and stands to benefit from these changes made the motion to move forward with the expense of putting these amendments to a vote via ballot to the homeowners. Yet further proof of her breach of her fiduciary duty as a board member in violation of the CC&RS, the law, and Fair Housing Guide for Homeowner Associations in Oregon.
Regardless, her motion was not supported; as a result the BOD voted to continue with the status quo despite admitting in this open public forum that the BOD were wrong, past and present, in its interpretation of the CC&Rs; as well as the attorney present admitting that the BOD were wrong in collecting funds for a reserve and spending it on the maintenance, repair and replacement of the street trees and sidewalks along Foothills Dr.
This action contradicts and flies in the face of the spirit and letter of the law where the CC&Rs, the Oregon Planned Community Act, and Fair Housing Guide for Homeowner Associations in Oregon are concerned. Something of which the law firm on retainer by our HOA via the BOD; which has published an article about Reserve Studies and Funds as written by Bruce Jenkins and published on its own website as of February 20, 2011.
Moreover, the BOD have yet to conduct a reserve study and maintenance plan to justify its 2011 budget that included a reserve account as established and mandated by the CC&Rs and the Oregon Planned Community Act.
The failure of the BOD to conduct these studies is not only a violation of state law, it is also a breach of fiduciary duty in failing to protect the Oak Knoll Community; which doesn’t go without saying that Superior Community Management Company has also breached its fiduciary duty to both the BOD and the HOA, as well in its failure to properly manage the community as a whole (i.e. inconsistent response to inspections, inconsistent adherence to the CC&Rs, selective enforcement of the CC&Rs, and making exceptions to the rules/requirements for some members over others).
As the meeting continued, a homeowner questioned the attorney, Mr. Tingey, and the BOD what the homeowners present are suppose to do about all the other homeowners who did not show up or vote via email; and if the BOD are responsible and if so in what manner are they responsible for those homeowners who did not participate in this meeting or respond to the August letter regarding the proposed changes to the CC&Rs.
Mr. Tingey replied as follows:
“They do have obligation – a fiduciary obligation by being on the board, to protect and act in the best interest of the association. They no have legal advice – that they’re interpretation – may not be the right interpretation. So how do they deal with that?”
“One way to deal with it was to correct it, by…an amendment; but if they reached the conclusion there is no way they will get the votes; then they have to go forward, either interpreting the way they have been and acting on it, or changing their policy. And if they change their policy and start maintaining every street tree, in the community, you’re assessments going to go through the roof.”
“And I know they don’t want to do that cause they live here to, and they don’t want to pay those assessments. But they are kind of in a rock and a hard place, and um, and I am sure this is not going to be the last discussion with the board about, what they’re going to do; because there are people on each side of this issue. And um, at the end, I know there is a policy in place fifteen years…and I would feel comfortable going into the Yamhow, Yamhill County Circuit Court and arguing this.”
“But that is not to say the judge would look at the plain language of the documents that says completely otherwise; and saying ‘You’re right judge.’”
A homeowner then inquired of the board how they came to the decision of hiring a management company and whether or not they needed 75% approval of the homeowners to do that.
A board member answered in great length of past events alleging that some homeowners have threatened past board members, come to their home, made them feel unsafe, and it was decided that a management company was in the BOD best interest of the HOA.
Another homeowner questioned that reasoning to hire a management company given the expense charged, and given the current economic climate we should be lowering costs and not increasing it.
The previous member again spoke and stated that there isn’t an association that she is aware of that doesn’t have a management company, thus justifying the need for one in our community. However, what other communities do does not dictate what our community has to do. Which is why the homeowner continued to question the collective decision of the BOD to hire a management company when a few individuals could be hired to manage the communications and financial affairs of the HOA.
I then raised the point that if the BOD did not get the 75% approval of the homeowners, the BOD has the choice not to enforce Section 7.1 of the CC&Rs where all the street trees within the association being common improvements; and I cited a recent case ruled in December 2010 by the Oregon Appellate Court of Appeals opinion upholding a trial courts ruling in Levasseur vs. Armon and BOD of High Lostine Owners’ Association, that the CC&RS are discretionary and the BOD has “no legal duty to enforce the CC&Rs.” After a momentary silence, the main speaker for the BOD asked Mr. Tingey what his thoughts were in response to this point, which he replied as follows:
“CC&Rs are the law of the land, they are essentially a contract a homeowner makes with their brethren. So, um, you got, you got two issues. Got an association that is set up to allow the collective group of homeowners to take action, with regards to the management issue you’ve got; whether it’s the documents, um, application of, uh, CC&RS, hiring landscapers, whatever it is…that that, association handles the collective. Okay?”
“But – with that – with an association, each individual who makes covenants, and receives covenants back, and um, because of that…each individual owner has a right to enforce the covenants against anyone else. But in reality, if my neighbors house were painted pink and the CC&Rs said, no pink houses, and the association didn’t enforce that, I have a right to sue her, and I have a right to sue the association for failing to enforce those CC&Rs; because I have the contractual right, to the design being to protect my property values. Okay?”
“Um, um, so…there are cases in Oregon, both on the Supreme Court level and the court, court of appeals level, that talks about CC&Rs; their purpose, their efficacy, and the Oregon Planned Community Act where the legislators spoken as well. And quite frankly I disagree honestly with the characterization. I don’t believe if the association fails to enforce, that, um, there’s plenty of substantial case law and statutory law that, would put the association at risk.”
“Furthermore, uh, I think it would put the board at risk, because, you have an insurance policy…are going to look at that and say the board willful, um, willful choice to ignore the CC&Rs to not enforce them is a willful act it’s not a negligence and therefore we’re not going to cover it.”
“So, that is my interpretation; that’s my opinion, um, and, and…again I don’t agree with the interpretation there, but I’m not saying you’re wrong; it’s something lawyers fight over all the time. So, that’s my position.”
To be up front, honest, and straightforward…that position is the incorrect position. Mr. Tingey’s assertion that homeowners create and enforce covenants on one another is legally inaccurate.
The declarant of the Oak Knoll Homeowners Association is the one who wrote the CC&Rs and filed them with the Yamhill County Clerk, not any one individual homeowner. Moreover, it is written within the CC&Rs and ByLaws of the HOA that it is first the BOD’s responsibility to enforce the CC&RS, not the individual homeowner.
However, under ORS 94.780 Remedies, (1) Failure of the declarant, association, any association member or any other person subject to ORS 94.550 to 94.783 to comply with applicable sections of ORS 94.550 to 94.785 shall be cause for suit or action to remedy the violation or to recover actual damages. The prevailing party is entitled to reasonable attorney fees and court costs; and (3) A suit or action arising under this section must be commenced within one year after the discovery or identification of the alleged violation.
Once that one-year has passed, there is no further remedy.
Case in point is the street tree issue on every lot per CC&R Section 4.6.7. First off, the declarant had no legal right to contract their legal responsibility with the City of Newberg onto a third party (the home buyer/owner) who was not a part of the original contract of development between the developer and the City of Newberg. Before obtaining the permit of occupancy, the declarant was required by contract to have the landscaping (to include the planter strips) and planting of the street trees completed on each lot.
However this was clearly not the case given the fact that the BOD back in 2005 admitted in a OKHOA Newsletter the aforementioned and they were going to seek remedy with the City of Newberg before asking 98 of 198 homeowners in the Oak Knoll Community to plant street trees on their lot.
According to one of the board members at this meeting, that BOD did do that and the developer did have a crew plant some trees, to include lots that didn’t even have homes built on them, as well as the fact that these trees were incorrectly planted. As a result, many died and were eventually replaced by subsequent BODs’ at our expense without the proper reserve study and/or maintenance plan provided as required by the CC&Rs and ORS 94.595 Reserve account for maintaining, repairing and replacing common property; reserve study; maintenance plan.
Therefore, the question of any lot without street trees was laid to rest in 2001 following the then BOD initial identification of the deficiency of the CC&Rs where the lack of street trees were concerned with its 2000 Newsletter announcing that acknowledged deficiency. As such, any letter sent by the BODs since then demanding a homeowner plant street trees or face a lien as a result of the BOD hiring landscapers to plant said trees was in violation of the statute of limitations laid out in ORS 94.780.
This fact was addressed by one of the board members present during this meeting with her sincere concern that the BOD would face not only a lawsuit over its misinterpretation of Section 7.1, but the fact that the BOD, past and present, have forced homeowners to comply with parts of the CC&Rs that it had no legal right to do so, namely the street trees. As a result, and as noted, she feared that homeowners would sue the HOA to recoup their out of pocket expenses in planting those street trees when they were under no further (il)legal obligation to do so.
Moving on, once there were no further questions and answers from the homeowners in the open forum, the official was then called to order and officially started. The homeowner who lives on Foothills Dr. made the motion to continue with the $5,000 “special” assessment to continue with the legal changes to the CC&Rs and send the ballots to homeowners.
A new board member questioned the wisdom of this motion and the costs of this assessment when clearly they were not going to get the 75% approval of the homeowners. The speaker of the BOD noted that given the low turn out and lack of response, he did not feel comfortable passing this vote and assessing this fee.
Another BOD member then spoke up and felt that she felt that “either way we’re going to spend money” to see if it works or not or of they are taken to court either way. This statement is indicative of a failure to appreciate the lack of ethical (i.e. fiduciary) and fiscally responsibility of the BOD to acknowledge the fact that past board to present have been wrong in its interpretation and application of the CC&Rs, as well as in its collection and expenditures of fees from the assessments collected.
The members of the BOD went back and forth over the expenditure of this assessment in proposing the CC&Rs, and Mr. Tingey interjected about how much risk they are willing to take, but in the end the BOD voted down the motion to assess the homeowners of the HOA the $5,000, and subsequent finalized legal fees, when it felt, as a majority, they were not going to get the 75% homeowner approval.
In response, Mr. Tingey then advised the BOD to continue with the status quo regardless of the fact that they have been incorrectly interpreting the CC&Rs and spending HOA funds on what they believed to be common improvements under the CC&Rs when in fact they were not.
Again, bad legal advice from the attorney representing our HOA via the BOD through the management company hired by our BOD; which is indicative one just one bad decision after another that has been digging the BOD into one hole after another the BOD simply cannot crawl out of, legally speaking that is.
Despite the emphasis of Mr. Tingey’s encouraging the BOD to “clean up” this mess by pushing forward with the amendments of the CC&Rs with this special assessment, the main speaker of the BOD opined that he was uncomfortable to spend HOA funds to push this amendment; especially given the fact that within this association there are renters who really have no say in the goings on of the HOA, but the owners that are absent do.
The speaker of the board then commented on a resolution that could be made and adopted by the BOD for future board’s to follow, but Mr. Tingey, for the first time, actually gave accurate legal advice that such a resolution is not enforceable and contradictory to the CC&Rs, it would not hold up in court given the fact that the CC&Rs are in place.
As such, Mr. Tingey’s advice was just to continue with the status quo despite the fact that the BOD were wrong in its interpretation of the CC&Rs and in its collection of the 2011 reserve account for the expenditures of the street trees and sidewalks along Foothills Dr.
This continuation of the status quo patently goes against the standing CC&Rs and Oregon Revised Statutes governing Planned Communities; not to mention the articles published by attorneys and members of the law firm on retainer by the HOA regarding reserve accounts and maintenance plans, as well as a BOD’s fiduciary duty towards the homeowners of the association for which it manages referenced and cited herein.
In short, it is plainly clear that the BOD has made an egregious error in the past carried to the present where the interpretation of Section 7.1 of the CC&Rs are concerned. As a result, the BOD have illegally assessed and paid funds for items that were clearly not “common improvements” of this HOA.
Moreover, the BOD simultaneously violated ORS 94.780 and breached its fiduciary duty where the planting of street trees were concerned throughout the association.
Additionally, as outlined in previous correspondence with the respective law firm on retainer; I have provided a copy of a letter from one of its attorneys affirming back in the late 1990’s that the BOD of the Oak Knoll HOA that a reserve account was voted in and established per the CC&Rs and the required ORS. As such, given the reserve account assessed for budget year 2011, the BOD was in violation and continues to remain in violation of that ORS requiring a reserve study and maintenance plan before instituting or carrying forward a reserve account for the common improvements of the association.
This letter advocates the BODs last opportunity to follow the CC&Rs and the Oregon Planned Community Act where the issues addressed herein and previous correspondence is concerned; otherwise these matters will be legally addressed in the Yamhill County Circuit Court via Writ of Mandamus forcing the BOD to abide by the Oregon Planned Community Act.
Under the Oregon Appellate Court’s ruling cited herein, it is clear that any HOA in Oregon is not legally obligated to enforce a discretionary contract such as the CC&Rs. Regardless of Mr. Tingey’s premature interpretation of this citation and incorrect legal advice throughout the meeting, the BOD has options, and they are options they should carefully consider given the legal precedence.
In short, my next official correspondence to the BOD of the Oak Knoll HOA will be my last.
If the BOD do not cease and desist from assessing homeowners for the street trees and sidewalk maintenance, repair, and/or replacement of such along Foothills Dr. when neither are declared as common improvements of the association; and/or prepares the required reserve study and maintenance plan for those items that are “common improvements” of the association, I will take the HOA to court via a Writ of Mandamus and force the BOD to follow then Oregon Planned Community Act as it was written and intended by the Oregon State Legislators.
The August 2011 letter was in clear response to my March 2011 official letter...
During the meeting they (the BOD and the HOA attorney) admitted they were wrong...
What else, other than going to court, is it going to take for them to do their job correctly!?!
Being volunteers on the BOD is NO EXCUSE when you have a 'so-called' professional management company - AND - HOA experienced law firm on retainer.
Either do your job RIGHT or don't do it all...
