Q: Options when BOD spends HOA funds without approval
I've noticed that our Board of Directors (BOD) spent $100,000 to install an electric fence/gate to the parking lot without holding a ballot, which is required by our CC&Rs. There have been minutes of BOD meetings regarding this decision. What are some options for homeowners when the BOD spends Association funds without approval of 51% of homeowners in violation of the CC&Rs?
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A:
If the Board of Directors (BOD) spent HOA funds without the required approval from homeowners, you have several options to address the situation. First, review the HOA’s CC&Rs (Covenants, Conditions, and Restrictions) and bylaws to confirm the specific voting requirements for expenditures. If the BOD violated these rules, this could be grounds for taking action.
You could start by bringing the issue to the attention of the BOD, requesting a formal explanation or meeting to discuss the improper expenditure. In many cases, BOD members are required to adhere to the decisions made by the homeowners, so this could prompt them to reconsider the decision or reverse it. If the BOD refuses to address the violation, you may gather support from other homeowners and call for a special meeting or vote to challenge the decision.
If these steps don’t lead to a resolution, legal action could be an option. You might consider consulting with an attorney who is familiar with HOA law to understand how to pursue a claim against the BOD or request court intervention to enforce the CC&Rs. Legal action could help prevent further improper expenditures and potentially hold the BOD accountable for any mismanagement of funds.
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