Ask the HOA Expert: Can a New Board Overrule a Previous Board's Decision?

Written by Posted On Monday, 01 October 2018 22:07

Question: I have had a picket fence around my front yard for 10 years. Recently the new board decided that it does not fit in the approved theme of dog eared fencing. They have ordered me to remove it or change it to match the neighboring fences. My fence was built only after my architectural request was approved by the board in writing. Does the current board have the right to require us to change it because they don't like it?

Answer: No, the board 10 years ago approved the installation and the current board cannot reverse that decision. But try to maintain the high road on the matter. Offer a compromise: The next time the fence needs to be replaced, agree that it will be done with a conforming design. Offer to sign a recordable document that discloses this requirement to future owners.

Question: Please explain the difference between the three types of CPA services known as compilation, review and audit.

Answer: An audit involves examination of financial statements, on a test basis, evidence supporting amounts and disclosures in financial statements. It also includes assessing the accounting principles used as well as evaluating the overall financial statement presentation. In conducting an audit, CPAs are required to obtain reasonable assurance about whether the financial statements are free of material errors or irregularities. An audit offers assurance that the statements present a homeowner association=s financial position, results of operations and cash flows in conformity with Generally Accepted Accounting Principles (GAAP).

CPAs also offer two other types of services: review and compilation. In performing a review, the CPA applies analytical procedures to financial statements and makes certain inquiries of the bookkeeper. Review procedures are substantially less comprehensive than those performed in an audit. They allow CPAs to express limited assurance on conformity of the financial statements with generally accepted accounting principles.

In compilations, CPAs put financial information supplied by the clients into the form of financial statements, but do not express any assurance on the statements.

Question: Do you have any information or data on what formats Aprogressive@ HOAs are using at their board meetings? For example, do they permit some discussion from the audience rather than require any discussion to be among board members only?

In our HOA, only board members can engage in discussion at these meetings. The rest of us are limited to one timed statement each at the beginning of the meeting. This means we can not respond to anything board members may say in response to our comments even if their remarks indicate they have misunderstood our comments.

And this also means we can not comment on anything that a board member or another commentator may say during that meeting.

Answer: The format you describe is the recommended way of holding board meetings. If non directors are allowed to interject, the meetings would invariably be overly long or degrade into shouting matches. You do have the right to speak or ask questions during the board meeting if the Chair allows it.

Directors are elected to serve without interruption to accomplish business in an orderly way. If you disagree with how the board handles business, you should run for the board, get elected and start making a change. You also have the right to speak your mind at the annual homeowner meeting or call a special meeting if supported by an appropriate percentage of owners (as defined in the governing documents) requests one.

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