Workings of Our Board - Renters and Unit Owner Involvement at our HOA

Returning to the issue of renters attending HOA meetings, the core question is, "What are the advantages and disadvantages of such attendance, and what is our Board of Managers doing to promote such attendance by unit owners and renters?" Another question is, "How is such promotion of attendance of renters consistent with the requirements of the Board of Managers; specifically that they act at all times in accordance with the fiduciary duties?"  I'm going to use this particular agenda and vote to look more closely at the workings of the majority of our Board and under their "leadership" the workings of the Association.

This occurred during the March 2010 association meeting. Our board President was not in attendance. This item was brought to the table by a member of the Board. It was not on the published agenda. During the meeting it was discussed among our Board of Managers for less than five minutes! After listening to unit owners, including objections and concerns raised during the "homeowners session" by former members of the board and a "landlord", it was motioned, seconded, voted, and passed by the board majority. Our Treasurer cast a "No" vote.  During that meeting, more time was spent discussing the contents of the “Welcome Packet” than were spent on this issue by the board.

The member of the Board of Managers who is responsible for the welcome committee now wants to expand that packet to include our Balance Sheet and Financial Statements. Question: Why are we giving that information to renters, etc.? Ref: (1)

It's my understanding that a statement in the Welcome Packet was cited as the reason for discussing this item, superseding all other business, and bringing it to a vote at this time. A document in that packet states that "Association Meetings" are open to "all residents except during Executive Session." Apparently the majority of our current board believes the "Welcome Packet" transcends our Rules and Regulations, the By-Laws of the Association and the Illinois Condominium Act. This is consistent with a group, which appears to be the board majority, which believes their purpose is to run this organization based upon some nebulous definition of "neighborliness". It would seem that it is the will of the majority of the Board of Managers that BLMH is not a business, and is not to be run as one.   Ref: (2)

Before proceeding, I want to define the word “involvement” as I use it in this post. I view "involvement" as unit owner "participation" in the matters of this association. Those matters include the "duties, responsibilities and liabilities of a unit owner."  I do not include participation in the "Neighbor's Club" or "Homeowner's Club" because it is not officially affiliated with BLMH and our association. It might be useful to be aware of some statistics which indicate the level of involvement by unit owners, who are our voting members and stakeholders in this HOA.

1. Nearly 50% of voting members do not vote at the annual meeting.
2. Fewer than 25% attend the annual meeting.
3. Of those members who do vote by proxy, some reputedly have their favorite candidate fill in the signed ballots. Would you define that as unit owner “involvement” or not? If not, then the statistics for voting are possibly fewer than 50% of the owners.
4. About 4% of the voting members attend association meetings.
5. Our HOA has about 20% rentals.

Why does the majority of the board, including our CD and R&R Directors, want to expand the association meetings to include renters? Let's think about this, and I have a few questions concerning the position of these Managers regarding unit owners:

1. Would it be beneficial to the association if more unit owners were involved?
2. Would or could such unit owner involvement include attending association meetings?
3. Would or could such involvement include increased voting by the members?
4. If such involvement is a desirable thing, and everything I have read indicates that it is, then how should the members of our Board of Managers go about attracting more unit owners to become more involved and attend the association meetings? Note: I can and do cite my sources. See recent posts on “Fiduciary Duties”.
5. If our board wants to include renters in the circle of unit owners, then I suggest that the Board of Managers actively promote the purchase of units. There are several for sale here at BLMH. Wouldn't that be consistent with acting as a fiduciary of the Association? Ref: (3)
6. If our board wants to support and expand "ownership", unit owners acting and operating as "owners" which is to say, acting in accordance with "the duties, responsibilities and liabilities of a unit owner", then why isn't the majority of the board doing just that?  There is no component of "ownership" which exclusively includes attending parties and being "neighborly." That is the lowest level of participation in any community. Be it a retirement village, a rental building or whatever. Is that sufficient criteria for unit owners? I think not. So why is that the emphasis of the majority of the Board? Why do they persist in this path? What is the underlying commitment? 

Concerning the attendance of renters at the association meetings of our voting members:

1. A member of the Board of Managers stated during the discussion of this issue during the most recent association meeting that allowing renters to attend the association meeting “is a good thing” and should therefore be voted “yes”. Other comments and arguments used in support of this agenda included “renters are members of our community” and “renters may not be comfortable with the landlord.” Are these relevant arguments for a member of the Board of Managers in fulfilling their fiduciary duties? What about the Illinois Condominium Act? Answer: Section 18.4 of the Illinois Condominium Property Act states in part that “In the performance of their duties, the officers and members of the board, whether appointed by the developer or elected by the unit owners, shall exercise the care required of a fiduciary of the unit owners.” The board is not empowered to act for or on behalf of the renters.
2. Is it possible that the board by acting for or on behalf of renters, can be in breach of its fiduciary duties, if they interfere in the contractual agreements between the unit owner as landlord and the renter? Whether knowingly or unknowingly? Answer: Yes.
3. Who has a contract with the association? The renters, or the voting members which is to say, the unit owners? For example, if there is a violation by a renter, who is cited and fined by the Association? Is it the renter or the unit owner? Answer: the unit owner.
4. Does a renter have something at stake here at BLMH? If so, with whom? For example, if there is a problem in the unit occupied by the renter, or it involves the limited common elements, who is responsible per the renter’s contract? The association or the unit owner who is the landlord? Answer: the unit owner.
5. If a renter breaks the rules and regulations of this association, or damages the property, who is responsible? Answer: the unit owner. The association will levy fines, etc. against the unit owner for tenant breach of the rules and regulations. 
6. Who is responsible for damage to the unit, other units or common elements either by accident or by negligence? The unit owner as landlord or the renter? Answer: the unit owners. For example, should the tenant flood the unit, damaging the common elements and/or adjacent units, the unit owner is held accountable by the association and must pay for repairs to correct the damage to the common elements of the association as well as other units affected. According to the Illinois Condominium Property Act 2010, the “unit owner may not assign, delegate, transfer, surrender, or avoid the duties, responsibilities and liabilities of a unit owner.”
7. Who is required to carry insurance by the Association? The renter or the unit owner? Answer: the unit owner.
8. If the renter doesn’t like the tree outside his unit, wants a bench along the walk, would prefer better carpeting in the hall, or wants to have a garage sale, etc. who would he or she approach to discuss this? The unit owner who is the landlord or the association? Answer: the renter’s contract (lease) is with the unit owner, who is the landlord. The renter will discuss this and should only discuss this with the landlord. It is the discretion of the unit owner to discuss renter comments about the common elements or rule changes with the Board of Managers. Why? Contracts and all else aside, whose money will be spent to address any and all of these issues? The renter’s or the unit owner's? Answer: the unit owner’s fees will be spent by the association, in accordance with their fiduciary duties on behalf of the unit owner, and only the unit owner.
9. Association meetings are held “for the voting members”. Are renters voting members? No.
10. If a renter is in violation and the unit owner is being fined, what are the possible consequences if the Association puts itself in the middle? For example, the association fines the unit owner, but the renter comes to the association meetings. The association “controls the interests” of the unit owners. Does the association "control the interest" of the renter? No, because the renter has none in the association. How will the attendance of renters enhance the interest of the unit owner so controlled? How will it detract from that interest? If it detracts from that interest, the board of managers is in breach of it’s fiduciary duties. According to the Illinois Condominium Act, "the board....shall exercise the care required of a fiduciary of the unit owners." If the board puts itself in a position to support renters over the "care required of a fiduciary of the unit owners" then the board is in breach. Could this happen? I have the perspective that "if it can happen, it will happen"; what we do not know is "precisely when it will happen." Ref: (4)
11. Our Board of Managers could have an "open house" once or twice a year for unit owners and board members alike to meet the renters. That could be similar in venue to the "Meet the Board" coffees or, it could be included in one of the parties held by the "Neighbor's Club". Better still, it could also be a part of a "Spring Cleanup" drive here at BLMH. During the March Association Meeting, one of the unit owners complained about "wood chips" left on a sidewalk during a tree felling about six months ago. Well, let's all get our brooms, unit owners and renters alike, and go for it! What better way to meet OWNERS, who are acting and behaving as OWNERS.   Ref: (5)

Concerning the involvement of member of the Board of Managers who are promoting this:

1. Why, instead of working with and expanding unit owner participation at our association, are members of our Board of Managers working diligently to expand the participation of our renters?
2. Is is possible that it is a goal of certain members of the board of managers to increase the number of rentals here at BLMH? If the actions of the members of the Board of Managers encourages rentals, and that number increases, making sales here at BLMH more difficult or, if that number reaches or exceeds FHA guidelines, making it impossible for potential buyers to obtain financing, thereby preventing the sale of units, is such involvement or activities by the Board in breach of their fiduciary duties?
3. Why aren't our CD and R&R Directors working diligently to get more unit owners to attend the association meetings, to vote at our annual meetings, etc.?
4. What other things could our Board of Managers do to promote unit owner involvement? Why isn't this part of an ongoing discussion at our association meetings?
5. Why would members of our board obstruct, or not support such efforts?
6. Why are our CD and R&R Directors pursuing renter involvement in the meetings, when to do so is not a part of their duties and job description as members the Board of Managers of our HOA?
7. Is this really a part of the "fiduciary duties" of the members of the Board of Managers; that is, are they acting as those "entrusted to make decisions for, and control the interests of, another person or persons?" Are they acting "in good faith, in a manner each director believes to be in the best interest of the association, and with such care, including reasonable inquiry, as a prudent person in a like position would ordinarily use under similar circumstances?" Are they acting "with undivided loyalty to the association and its membership?" Where such membership is defined as the unit owner? Or are they acting in their own interests or with a conflicting interest?
8. What information does this association need to provide to renters so that they will be "good renters" and will be so informed? Isn't that all that the association should provide? To put it another way, using language familiar to the majority of the board, isn't it the duty and obligation of the Board of Managers to support the renters in being "good renters" and nothing more?  In other words, support the renters in keeping their agreements and that includes their rental agreement with their landlord, as well as keeping the Rules and Regulations of BLMH? And nothing more?
9. What would be the political consequences to certain members of the Board of Managers if more unit owners became involved? Does this have a bearing on their actions?
10. If doing "the good thing" is the principal criteria for the majority of our board, then these members of our Board of Managers should be working day and night to increase the involvement of the unit owners. Unless, of course, they don't perceive that as "a good thing."

I want to state that I consider renters to be or have the potential to be "future owners" at BLMH. As such, and as members of this community, it is beneficial if they be kept "informed". Such information would and does include our newsletter. However, the renter has no duties and responsibilities to the Association other than acting in accordance with and keeping the Rules and Regulations of BLMH. The Illinois Condominium Property Act 2010 states the “unit owner may not assign, delegate, transfer, surrender, or avoid the duties, responsibilities and liabilities of a unit owner.” It would be obvious that the Board cannot assign or transfer those responsibilities to the renter, either. Keeping renters informed does not require our balance sheet, or participation in events paid for by the voting members, or participation in activities such as our association meetings, which are defined in our By-Laws as "Meetings of the voting members", nor attending the "Meet the Board" parties organized by the CD over at IHOP for unit owners and at unit owner expense.   Ref: (6)

The renters could certainly join the "Homeowner’s Club" or "Neighbor's Club" which is not officially associated with this HOA. The "leadership" of that club can actively promote such attendance by renters; that leadership has no fiduciary duties and are not so bound. They can party to their hearts content using the funds provided by their membership, until such funds are expended. Perhaps that has been a problem for the club, which I understand has fewer than 20 paying members, and would be a powerful motivation for the creation of  the "Meet the Board" events, which have to potential to replace some of the club meetings and reduce the club expenditures.    Ref: (7), (8)

I consider involvement in a leadership capacity in the “Homeowner’s Club” by any member of the Board of Managers as both irresponsible and a conflict of interest. The members of our Board of Managers are having difficulty performing their core duties and responsibilities. Some (most?) are woefully uninformed about the Illinois Condominium Act, or simply ignore it. I can't tell which. Some don't know the Rules and Regulations, and if they do, they prefer to see that they are not enforced; such enforcement "makes people uncomfortable" or to "feel unwelcome" or is "un-neighborly." As for the By-Laws? We can pass changes to the By-Laws by simple vote of the board of managers, can't we?  Ref: (9)

More questions, or questions paraphrased differently:

1. If this is not being completely and openly discussed by the board in view of the unit owners, why isn't it? Why are members of our Board of Managers discussing this with renters? Why would certain members of the Board of Managers pursue this and similar agenda items behind the back of and out of view of the unit owners? If such activity is occurring, is it "legal"? Is it consistent with their fiduciary duties? Answer: No.
2. If members of the Board of Managers have the time to enroll renters in attending the meetings, why aren't they putting that effort into attracting the unit owners to the meetings?
3. Why not expand the current association meetings to include the informal "meet the board" session and invite unit owners?
4. If the Association Meetings of "voting members" were expanded to a "meet the board" session, would that increase the attendance of unit owners at association meetings, reduce costs (no free donuts and coffee) and achieve both goals; i.e, increased participation by unit owners and informal conversation with the board? What would be the disadvantage to the association? What would be the political disadvantage to board members?
5. Would a Spring "community cleaning day" and a Fall "community prepare for winter" day be beneficial to this association? If so, why have our activist socialites never suggested such a thing?
6. What are the disadvantages to unit owners, who are landlords, if the board changes the By-Laws and allows renters to attend the association meetings? Consider that at present, if a renter has an issue he or she is to discuss this with the landlord, emergencies excepted.
7. What is the purpose of having renters attend meetings of the voting members of the association? The member who proposed this, stated that this was a "good thing" and other, but not all, of the members of the Board of Managers agreed. None of the proponents stated "how" this would be good for the association. Nor did they heartily discuss the "down side" or possibly detrimental issues. Is that consistent with "reasonable inquiry?" I think not.
8. If renters are invited to the association meetings, by change of By-Laws, then what is the protocol? Why wasn't that discussed and resolved before the rush to vote?
9. If renters do attend meetings, are they to remain mute during meetings? If not, how are they to act?  Renters can't vote and shouldn’t address the members of the Board of Managers during meetings of the voting members. They shouldn’t be given the opportunity to speak during the “homeowners session”. Why? Because they aren’t “homeowners”, that's why. So why are they there? If they can’t make requests, or demands; if they can’t discuss “homeowner issues” then what? Consider that the entire length of the “homeowners session” is usually less than 20 minutes. Frequently, unit owners are not given an opportunity to speak to the board because of a lack of time. Let's consider the problem when renters take up the time allotted to unit owners during the “homeowners session”. Would that cause any hard feelings and promote an environment of divisiveness? If so, then why would the board promote this? How would YOU feel as a unit owner if you attended a meeting and were not given an opportunity to address the board during the "homeowner's" sessions while renters were? How would YOU feel as a renter if you were invited to a meeting but, because you are not a unit owner, you were treated as a second class citizen? 
10. If renters truly shouldn't and can't participate as owners during the Association Meetings, then perhaps the meetings should be video taped and these made available for a modest cost, or "rental" to those who want to view the proceedings. There are other tangible benefits, including a clarification of "whom" said "what" during the meetings, so they can be properly and accurately documented. 

No discussion of protocol, of how to really make this work, was discussed. Is that a "reasonable inquiry?" Or are we just going to "wing it" and see how it all turns out? This from a group that is opposed to enforcing the Rules and Regulations. Can you see where this is possibly headed? If you can, then you  too possess a reasonable amount of common sense.

It is possible that members of our Board of Managers, who are proponents for this and many other changes which they say are "good" or "better" or "nice" or the ultimate justification "I have read somewhere that this is a good thing" will take any and all positions necessary to have this change take affect by decree. It is possible that they will "decree" that it is not a "By-Law" change, or a Rule change. They may say that because our "Welcome Packet" invites everyone to association meetings that it is the law. They are incorrect. The hierarchy is:

1. Illinois Condominium Act
2. Our By-Laws
3. Our Rules and Regulations.

The "Welcome Packet" is just that, an assembly of documents for distribution to unit owners and possibly to others, including our renters. Perhaps the language needs to be revised. Members of the Board of Managers are required to use sound business judgment and common sense. One can always hope for "change".

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Errors, Omissions, Comments, References ( ) :

On occasion, the majority of our Board will push measures through the meeting to a rapid vote. There is little deliberation on those issues, and because of the method employed, the members of the Board are given no opportunity to research these proposals, or to consult with professionals. Unless there is some legitimate urgency, why can't these non-critical issues be discussed, tabled until the next meeting so the board can their homework and become "informed" about all aspects of the issues, the pros, the cons and so on? When unit owner objections to these proposals are raised, there are sometimes supporters who "talk over" and "talk down" the speaker. When board member concerns or objections are raised, they are countered with ambiguous and unsubstantiated statements such as "this is a good thing" or "I have read somewhere that..." The word "good" when evoked by the board member in support of their agenda, seems to be some sort of code, or trigger which stimulates an automatic response from other members of the board and demands a "yes" vote for the proposal.

Of course, "good" people would never vote against a "good thing" would they? And if they did, then what are they? I suppose the answer is obstructionists or "bad people?" Usually, the board member who is promoting these "hot" issues will only discuss or promote one side of the issue. In all issues there are costs and benefits. There are also those who will benefit and those who will not. A member of the Board of Managers should have the capacity, and the willingness to discuss all sides of an issue. That is not occurring here at BLMH. I interpret that as one of the signs, or evidences, of an individual operating in accordance with their personal agenda. Our professional manager is consulted during the association meeting, but such consultation on an issue is often cursory and limited to a single comment. This was the method employed to vote on the budget. In the example contained in this post, most of the board members were given no opportunity to prepare for this question. That is to say, they "officially" were given no opportunity. It is possible that sub-groups of the board had discussed this issue and had pre-determined their positions, as a group. In such a situation, who wins and who loses? This type of activity by board members "squeezes out" other members of the board, and as a consequence the group does not make a decision; individual board members make the decision. The "losers" are the unit owners. The "winners" are the members of the board who are promoting the agenda.

(1) I understand the necessity of providing this information to unit owners and to qualified buyers. A renter is neither. If a renter wants this information; i.e Financial Documents for the Association, he or she should contact a realtor and make a bona-fide offer to purchase a unit. Such information is available to all qualified buyers. Question for the Board: How is publishing or uncontrolled distribution of these documents promoting the interests of the membership of this association; such membership defined as "the unit owners?" Publishing this information is effectively advertising how deep our pockets are to those with nothing at all at stake. In this litigious society, when they have that unfortunate accident, they can whip out that "Welcome Packet" and hand it to their attorney, who can readily calculate exactly how much we are good for. While we are at it, why don't we include a copy of our association insurance policy for "good measure". Using the logic of the board majority, we should make it easy on them. After all, that would be the "good thing" to do, wouldn't it?

(2) In our December newsletter it was stated "As of November 2009, a new procedure for handling violations went into effect." This went on to say that "we hope that this new protocol will reduce the number of violations and subsequent fines." The only method of handling violations that I am aware of that will reduce the number of violations, is simply to ignore them and to "look the other way". This occurred during the Association Meeting when a unit owner who reported a violation and asked for an inspection was told by the Rules and Regulations Director "That isn't Part of My Job Description." The terms "arbitrary and capricious" and "creation of multiple classes of unit owners" comes to mind when these types of things occur.

I have concern for our Treasurer. He has years of experience as a member of the Board of Managers, was called upon by the board to fill an empty position, and accepted the appointment. I really don't know how he deals with these questionable practices.  "Those who are most qualified to serve, such as architects, accountants, and attorneys, and those who are best equipped to make decisions and stand up to unit owners, don't want to serve."*** Gee, I wonder why that is? Second question: if those who are "best equipped" to serve don't, then who does?
[***I believe this statment was made by Tom Skweres of Vanguard Community Management].

(3) I realize that the "landlord" would be unappreciative if his tenant left at the conclusion of his or her lease and purchased a unit. However, that is always a possibility with a renter. It is always in the power of the landlord to work with his or her tenant to keep them happy and encourage them to recommit to another lease. It is also a reality that renters do periodically move on, whether it be to another rental or to a "home."

(4) I'm paraphrasing "Murphy's Law". I am a businessman and a mere mortal and I don't have the godlike powers which some on our board believe they possess. They can not only foresee the future, they can control it!

(5) Per the instructions of the Board of Managers, per several discussions held during Association Meetings in 2009, the "Neighbor's Club" or "Homeowner's Club" or whatever it is called, is not affiliated with the BLMH Association and all outdoor parties are to be held off of the property. This was decided in part for liability and insurance reasons. Or has that decision been reversed behind the backs of the unit owners? It's a question that needs to be asked.

(6)    I attended the most recent "Coffee with the Board" meeting at IHOP. I abstained from the "free" coffee and donuts because I was uncomfortable spending our unit owners' funds this way. There were about 20 attendees. I stated my concerns during the next Association meeting, and stated that I would make a "donation" to cover my expenditure during such "coffees" but I would not accept the "gift" of my fellow unit owners, who were not present. The former AD objected to the use of Association funds on the basis that he had to fight for funds for every limestone window-sill he installed and that if funds were that "precious" then they should not be spent frivolously. His point: What are our priorities at BLMH? and what are the priorities of the Board?

(7) Our Board majority has specific definitions of "neighborliness" which are manifested in different ways and apparently requires staging coffees and parties. There are unit owners who are very enthusiastic about attending these "freebies". It is common knowledge among "experts" that many condominium owners buy a condo because they don't want to do the outside work or maintenance; they want someone else to do it. They also want someone else to do the board work, and all other work, too. These individuals will not attend "spring cleaning" events. Nor will some of our renters. However, does that relieve our Board from organizing and promoting such events? Why the emphasis on "entertainment"? Is it possible that the core issue of one or more members of the Board of Managers is about themselves, their self esteem and self worth, which is predicated on have people around them who "make them feel good" or "important" or "agree with them"? 


(8) At the time of the formation of the "Homeowner's Club" or "Neighbor's Club" or whatever it is currently called, the professional manager recommended to the Board that the Board of Managers  review of the rules pertaining to the posting of notices at BLMH. These rules currently prohibit postings and advertisements, including the notification of unit owners about the meetings of the "club." This did not occur, and the majority of unit owners are now excluded from such notifications. Instead, the members of the board who had promoted such a club proposed the "Meet the Board" coffees and now promote those coffees. Why? Was this change due to the issues of funding for the club?  


(9)  I have written to the board many times, with instructions to the professional managers to forward my letters to the Board of Managers. For the most part, the majority of these communications were never acknowledged or responded to. Some are directed to the CD or other specific members of the board. I now continue to send letters to the management for forwarding, but I only send emails to specific members of the Board of Managers who are gracious, courteous, and sufficiently professional and aware of their fiduciary duties to at least acknowledge that they have received them. Officially we are encouraged by the board to send such communication. The reality is different. Using my personal experience as a guide, I suspect many of the board never read these unit owner communications.