Legal Question in Landlord & Tenant Law in California
HOA Board - Conflicts of Interest
My HOA has 56 units, there are 36
large units and 20 small units, the
HOA Board is comprised of 5
members, 4 who own large units,
who are putting forth a change from
% of sq foot to a level mo.
assessment, under a Davis Stirling
minimum i.e., greater than 50% of
the ownerships vote for passage, in
the above equation the small 20
units are being SLAM DUNKED by
the ''tyranny'' that is the HOA
board, who refuse to re-structure the
voting to make for a fair system prior
to testing issues, they are obviously
''self dealing'', shouldn't this A) be
recognized by the law firm who
penned the CCR proposed changes B)
shouldn't this Board recuse
themselves from voting , given they
are to benefit knowingly, by the
proposed change and violating a
section of the BY-Laws regarding
Conflicts of Interest C) shouldn't a
reputable Law Firm who represents
de facto the Shareholders of the HOA
admonish the Board
Please advise....
1 Answer from Attorneys
Re: HOA Board - Conflicts of Interest
Your question is well thought out, and extremely erudite. The main problem is that the law regarding HOA's has given wide latitude to the HOA, i.e. the Board. In addition, since the lawyers drafting the documents, are usually retained by board members, the Board has a huge "home court advantage". Additionally, the courts have given wide latitude to HOA's as far as making their own CCR's and staying out of HOA "politics". The end result is that one can see a parallel between HOA's and Native American tribes with their own laws on the reservation ( their own casinos, no taxes on sale of cigarettes, their own courts and police force, etc.). The bottom line is that the law has almost always been construed in a way that favors the HOA. I regret that I do not have the time to research your answer thoroughly, because you pose some very interesting questions, including liability of some type for the law firm which was responsible for drawing up the paper work. A class action law suit gives one food for thought. My initial perusal was the possibility of a Constitutional question predicated on the denial
of equal protection, based on the detrimental aspects involving the owners of the smaller units. My ultimate advice would be to gather together as many of the owners of the smaller units, and consider hiring counsel for a potential class action suit. Before doing that, you might want to look closely at some Davis-Stirling remedies.http://davis-stirling.com/ds/laws/1363.820.htm. Good luck!