"Homeowner Association Titleholders ARE “Human Capital”"
guest blogger D. Vanitzian, JD
"When criminal liability is not charged against the “criminals” in an
association, then the titleholders become the Human Capital used to fund the
criminal activities and wrongdoing.Titleholders fund the excesses of errant boards and their errant third party vendors and agents because laws not only in California, have no meaningful incentive for deterrence of such crimes when they occur in a residential common interest development.
While homeowner association-related “crimes” are taking place in record numbers today, little is being done to prevent their occurrence. The criminality linked with wrongdoing in homeowner associations more often than not revolves around an economic and financial benefit flowing to the wrongdoer–whether it be a third party vendor or board director or association advisors. Even a board director’s $15.00 haircut paid or reimbursed by the association might be viewed as a “financial benefit.” And, yes, it did happen. If the board member uses the services of the association to improve himself and his own property, he has obtained a “financial benefit” that is quantifiable and should be prosecuted by the corporate entity. If the board member is not fined for paying his association’s monthly dues late, he has obtained a “financial benefit.” If a board director takes his friends to lunch at association expense, that is a financial benefit to the individual board member–NOT the association and certainly NOT the titleholders who fund the bank accounts for the association or who funded the lunch.
BENEFITS TO THE ASSOCIATION AND BOARD
What of the board director who does not receive a so-called “financial benefit” for his services on the board? There are also non-economic benefits for being a director. In one such situation a board director was known to “get off” by signing his name as the association’s C.E.O. This allowed him to represent himself to the outside world as a “somebody” where he would have otherwise been a “nobody.” Playing C.E.O. and receiving the non-economic benefits of “recognition” accolades, plaques, applause, elevated status within his or her community and the like, are no different than the $15.00 haircut and no different from going to the front of a mile-long line because you have the perceived benefit of being someone important. Why? Because actions like these deprive owners of protecting their own assets at the expense of recalcitrant directors who overreach their positions. These actions also deprive titleholders of full advantage of the corporate protocol at the expense of an inept board director(s) who has/have nothing better to do than waste his position on the board and squander the owners’ resources to benefit himself and his friends and family. These directors ignore or disregard the corporate opportunities that should otherwise be made available to the association and to the titleholders’ benefit, while they continue to misuse their authority, they do this for no other reason than “they can.”
The same can be said for the board director who is a “yes man” to a management company or to association advisors, including association attorneys, or to his fellow board directors. Actions like these should be considered a WASTE of corporate assets – - the assets being valuable time lost and money spent, that cannot be regained at any cost due to the connivance and manipulation of individuals merely sitting on the board of directors because it makes him/them feel important or boosts their collective egos. Going from “meeting” to “meeting” with no concrete evolution of accomplishment for the owners who elected them, these so-called meetings are a waste of corporate resources and years taken off the lives of those owners who relied on immediate “change” in their quality-of-life. Doing “nothing” but sucking up to vendors is also costly and it is a breach of the board’s fiduciary duty to every owner who has a vested interest in property and whose assets are at risk in that development. Make no mistake, an owner’s assets are always at risk in a common interest development subject to a board of directors and a homeowner association. (Villa Appalling! Destroying the Myth of Affordable Community Living)
There are also the obvious off-the-books “benefits.” That board director who gets his unit’s maintenance performed before all the other owners get their units fixed. Or the directors who don’t want the sprinkler water spraying their back walls at a certain hour off the golf course, they get to “choose” times when the sprinklers will go on. Other owners are stuck in the 30-day cycle between board meetings, and writing letters, and taking the association to court to get such simple things accomplished. The real benefit of course, to being on the board, is that those directors and “friends of the board” are able to protect their quality of life AND their assets better than those who are not on the board.
As fiduciaries, these board directors are vested with the highest duty to those whose money and assets they control: the titleholders. Board directors are supposed to be independent thinking decision makers. Playing “follow the leader” is a breach of duty, especially when the “leader” is a board director beholden to a vendor with a contract at that association. It is also a breach of duty to “follow” third party vendors AS IF the vendors are leaders, and to do the same with management companies, their personnel, association advisors, or managers, in general these practices place the association and all its titleholders at risk. The board’s duty is to supervise and oversee every such entity without fail and to NOT follow them to the grave or jail, whichever the case may be. Yet at the same time, every board of directors are vested with the authority to, in a sense, criminalize and punish the behavior and actions of their neighbors who own property and reside under the same corporate umbrella that the board director controls.
One author states “punishment is a conventional device for the expression of attitudes of resentment and indignation, and of judgments of disapproval and reprobation.” Therefore, if the board of directors’ failure to impose punitive measures against the wrongdoer and/or it does not punish another board director or its own agent(s) for wrongdoing, then the message to ALL others is that the deterrence factor is undermined if not neutralized, and a new benchmark has been set for the corporate value system.
(to be continued)"
Comments:
Deborah Goonan on September 2, 2014 at 5:19 am said:
And what of the Board that is controlled by the Developer,
sometimes for decades? In FL, Google Poinciana, MetroWest (Orlando) for two
egregious examples of decades-long reign by developers, controlling the
majority of Boards. Donie Vanitzian understands the truth about common interest
developments (HOAs): the corporate model for creating “communities” is
fundamentally flawed. Florida and California have the greatest number of HOAs
in the US, and some of the most voluminous and complex sets of statutes
governing them. Yet these two states appear to be models of political
corruption and inefficiency, with almost daily media reports of failedHOAs,
embezzlement, and violations of rights of residents. Reply ↓
Cynthia on September 2, 2014 at 10:08 am
said:
Donie Vanitizan is a brilliant HOA homeowner advocate and
author. One, of the true “voices,” HOA homeowners have in the country, who
speaks the truth with her own unparalleled skill and expertise. The credible
and verifiable facts, which all too often homeowners don’t want to hear, or
acknowledge. This “first part,” of this series should be required reading for
every American, as should the remaining parts of the series to follow. Any
reader, should commit the information to memory.
Every word in this post is true, but Donie brings up a very important aspect of the HOA boards they seen to forget, or ignore: fiduciary duty.
Donie states;
“As fiduciaries, these board directors are vested with the highest duty to those whose money and assets they control: the titleholders. Board directors are supposed to be independent thinking decision makers. Playing “follow the leader” is a breach of duty, especially when the “leader” is a board director beholden to a vendor with a contract at that association. It is also a breach of duty to “follow” third party vendors AS IF the vendors are leaders, and to do the same with management companies, their personnel, association advisors, or managers, in general these practices place the association and all its titleholders at risk. The board’s duty is to supervise and oversee every such entity without fail and to NOT follow them to the grave or jail, whichever the case may be. Yet at the same time, every board of directors are vested with the authority to, in a sense, criminalize and punish the behavior and actions of their neighbors who own property and reside under the same corporate umbrella that the board director controls.”
There are facts, and cases of horrific HOA board abuses of violations of fiduciary duty and even worse, good decent and honest board members having their finances, families, careers devastated and their homes stolen because they were performing their fiduciary duty and the corrupt, criminal board members conspire a knowingly criminal plan and lawsuit (slapp) to shut them up and carry out their criminality. I will provide more on this unthinkable abuse on a later date. I highly encourage everyone to read Donie’s book, “Villa Appalling! Destroying the Myth of Affordable Community Living.” Look for it on Amazon.com, another book supplier, or internet seller. You will come to find it is probably one of the best purchases you will make in your lifetime!Reply ↓
Every word in this post is true, but Donie brings up a very important aspect of the HOA boards they seen to forget, or ignore: fiduciary duty.
Donie states;
“As fiduciaries, these board directors are vested with the highest duty to those whose money and assets they control: the titleholders. Board directors are supposed to be independent thinking decision makers. Playing “follow the leader” is a breach of duty, especially when the “leader” is a board director beholden to a vendor with a contract at that association. It is also a breach of duty to “follow” third party vendors AS IF the vendors are leaders, and to do the same with management companies, their personnel, association advisors, or managers, in general these practices place the association and all its titleholders at risk. The board’s duty is to supervise and oversee every such entity without fail and to NOT follow them to the grave or jail, whichever the case may be. Yet at the same time, every board of directors are vested with the authority to, in a sense, criminalize and punish the behavior and actions of their neighbors who own property and reside under the same corporate umbrella that the board director controls.”
There are facts, and cases of horrific HOA board abuses of violations of fiduciary duty and even worse, good decent and honest board members having their finances, families, careers devastated and their homes stolen because they were performing their fiduciary duty and the corrupt, criminal board members conspire a knowingly criminal plan and lawsuit (slapp) to shut them up and carry out their criminality. I will provide more on this unthinkable abuse on a later date. I highly encourage everyone to read Donie’s book, “Villa Appalling! Destroying the Myth of Affordable Community Living.” Look for it on Amazon.com, another book supplier, or internet seller. You will come to find it is probably one of the best purchases you will make in your lifetime!Reply ↓
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