I am part of a new HOA Board in Texas and recently found out that our previous Board kept no minutes… at all. We have repeatedly requested the previous Board to provide us with copies of meeting minutes so we can learn how certain resolutions and decisions were made… but apparently the previous Board didn’t do things according to procedure.
There are no minutes, no records… absolutely nothing that can tell us what we need to know. The previous Board apparently didn’t make discussions at official meetings and instead relied on one or two Board members to make the decisions who then informed the rest of the Board. That essentially means our contracts were illegally signed and enforced.
Now we are trying to retrace and audit everything. In the process we discovered that one contractor had been paid for work that they did not do. None of the previous Board members even thought to check. When asked, they just kept giving us the runaround saying they had the authority to sign the contracts because they were Board members or something to that effect.
We want to hold the previous Board accountable but apparently they have protection from negligence claims?? We can’t even prove most of our accusations because there are literally no records or minutes…
I’m sorry to hear that your HOA had such a terrible board like that. Unfortunately, you don’t really have a lot of options here. The best thing you can do is to simply move on and try to do a better job than the previous board. It’s also best to put proper procedures in place and ensure compliance in the future to prevent this type of thing from happening again.
With the contractor, perhaps you can work out some sort of negotiation? If you can prove that they failed to deliver the work as agreed upon but still received compensation, maybe they can do the work now instead. That way it won’t be all for naught.
If you found one contractor that took advantage of your awful board then their may be others. I suggest examining your other contracts as well. You might also benefit from a third-party audit of your finances just to be on the safe side, but this will cost somewhere between 5-10 grand. Melanie
@chrstphr58 Thank you for your advice. We did manage to go after the contractor since we can prove they didn’t do the work that they signed off on. We have the work orders and everything… thank goodness for that. I guess I’m just wondering how we can even begin to correct the mistakes of the previous Board… if that makes sense??
Its true that board members are afforded a level of protection against liability claims because of the business judgement rule. But if you feel that the board committed a crime, you might be able to find a local district attorney who can porsecute. Its still likely though that a judge wont impose a severe penalty.
Since your board did a bad job of running the HOA before, your current board may want to hold a meeting to make that clear to all the members. Keep it transparent and all that.
I also think that suing the previous board would be a complete waste of time. They were definitely horrible at their job but suing would only make things worse for your HOA. Not to mention suing the board, past or present, is like suing the HOA and, by extension, yourself and your fellow homeowners.
I agree with a previous commenter that your best recourse here is to move on. Realistically, you may not be able to undo all the wrongs of your previous board.