Question: I live in a large condominium association. Many of the unit owners here are disturbed by the conduct of our Board of Directors. We are unable to obtain copies of the financial statements. Board meetings are not announced and thus we cannot attend those meetings.

What legal rights do we have?

Answer: My standard answer to community association owners who are dissatisfied with the operations of their Board of Directors is threefold: (1) get elected to your Board of Directors, (2) move out of the complex or (3) accept and tolerate the conditions.

It may not be any consolation to you, but you are not alone. I have heard similar complaints from unit owners throughout the country. Regrettably, many members who serve on Boards of Directors of condominiums, cooperatives or homeowner associations are on an "ego trip." They want to be called "Mr. or Ms. President." They do not understand -- or fail to recognize -- that there is a fiduciary responsibility owed by the Board members to the constituents who elected them to office.

In fairness, the great majority of directors are hardworking, fair and honest. Serving on a board is voluntary. Unfortunately, because it involves a lot of personal time -- which is unpaid -- many Board members often just do not understand their role.

You have indicated that your Board meetings are closed to the membership. You should read the law in the jurisdiction where your condominium is located to determine if there are any specific statutes requiring open meetings. For example, in 1989, the State of Maryland adopted a law which requires every meetings to be open. There are a few exceptions where meetings can be closed, such as a discussion of matters pertaining to employees and personnel, protection of the privacy or reputation of individuals in matters not related to the Council of Owners business, and investigative proceedings concerning possible or actual criminal misconduct. Otherwise, the State of Maryland has made it quite clear that public policy is in favor of open meetings.

The Commonwealth of Virginia has similar legislation. Unfortunately, there are no such laws in the District of Columbia, but most association legal documents will provide the same rights of access.

You should also read your Association legal documents, which include the Declaration and Bylaws, or the Covenants and Conditions and Restrictions (also known as CC&Rs). You will probably find some guidance in those materials. Finally, if you cannot find anything specific to assist you in your own documents, you still have the right to demand that the membership vote that Board meetings be open. This vote could come at the Annual Meeting, or (pursuant to your Bylaws), you could also call a special meeting specifically for that purpose.

With respect to your inability to obtain financial information, I feel quite confident that you will find some language in your documents giving you the absolute right to inspect and review financial documents of the Association. You should send a demand letter to the Board of Directors, by registered mail with a return receipt requested, and give them ten days in which to make these documents available to you for your review and inspection. You also have the right to copy those materials, although you may be asked to pay any copying costs.

If the Board refuses to give you access, you should consider filing a lawsuit against the Board. You should also talk to a number of other owners in your Association, to see if they will join you in this litigation. Not only will there be strength in numbers, but the legal fees can be divided among the owners who contribute to a "legal defense fund".

If the situation is so bad, you have the right to call for a special meeting for the purpose of recalling one or all of the Board of Directors. Your Bylaws will spell out the legal requirements for obtaining such a special meeting. You should be forewarned, however, that this is not an easy task. Many owners are apathetic, and fearful of raising their voices in protest. You must mount a major political campaign, not only for the purpose of recalling the existing Board members, but to present your own slate of directors who will serve as substitute directors if you are successful in your recall efforts.

Invite your neighbors in for coffee or tea to discuss your political campaign. Recruit as many neighbors as possible to be team captains to continue to mount the recall campaign. You cannot do it alone. After all, your Bylaws probably require that you need at least a majority vote (51%) to successfully recall members of your Board.

And, as is the case in federal or statewide elections, you will find that the incumbents usually have the stronger hand, since they are currently in office.

It is not an easy job to "throw the rascals out." But, you have a significant investment in your Association, by virtue of ownership of your property. This investment must be protected, and that is the message you should send to all of the other owners -- including your current Board of Directors.

For more articles by Benny Kass, please press here.

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Copyright 2001 Benny Kass. Posted by Realty Times with permission.

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Published: March 26, 2001

Use of this article without permission is a violation of federal copyright laws.