California has over 40,000 homeowner associations, yet over 75% of them are involved in some kind of litigation.  Why is this?

For one thing, most of the CC&Rs in use today were written by developers 20 to 30 years ago and have never been updated.  Overall, they are generic documents and usually vague.  This is true of those in our association.  What you will find in all of them, however, is an “interpretation clause” which provides a great deal of latitude granted to a very few.  In our association, it reads:

CC&R Article 4.3: INTERPRETATION

In case of any uncertainty as to the meaning of any of the provisions of this Declaration, DERC and/or the Association shall in all cases interpret the same and such interpretation shall be final and conclusive on all interested parties.

In our (over) 1600-member association, the CC&Rs grant only twelve individuals, referred to collectively as the Board of Directors and the DERC, powers beyond those exercised by local, state, and federal governments.  The homeowner association’s private, corporate government provides no system of checks and balances.  Board members simultaneously occupy the legislative, judicial, and executive branches.  As in all homeowner associations, they are also shielded from any personal liability.  And worst of all, no experience is required… 

This type of structuring requires adequate attention being paid to the election of board members.  Almost all conflicts in associations are not the result of actual written clauses in the CC&Rs, but rather, restrictions created by the boards.  When you sign a contract, you expect to know what you are getting; in a homeowner association, it is a blank document which can be rewritten at any time in the future by persons who are, as of that moment, unknown to you.

So what happens when people are occupied by demanding jobs, long commutes, raising families, other familial duties, etc. and have no time and/or little interest in neighborhood politics?  The void that is created can attract those persons most likely to abuse these positions of trust.  What is being described here is referred to as a “rogue board”.  With the exception of one of its newly elected members, Bobbi Nugent, we believe that is what has happened to the DBPOA in the last eight years.

It is easy to see the types of people who can be drawn to a board that acts as accuser, prosecutor, judge, and jury.  When those who genuinely try to act in the best interests of the association complete their terms, the closet dictators are always drawn to these positions that offer not only freedom of prosecution for their actions while serving, but they can bring suit against any homeowner for any reason and the association pays all their legal expenses.  They can obtain complete power over one’s neighbors and there are no minimum levels of education or competency; only a measurable pulse is required.  This group can also include those homeowners who, for whatever reason, have a great deal of time on their hands and display a distinct inclination towards adversarial engagement; or those individuals in search of some measure of self-aggrandizement; or those who feel, for some sad reason, they are not receiving the respect they deserve. 

Once on the board, these people tend to develop a confrontational posture towards the other homeowners, imposing on the association members their own personal standards of neighborhood appearance and homeowner behavior. This is true of the current DBPOA Board of Directors.  They micro-manage your property through means of creative interpretation and, in our association currently, outright exaggeration of the CC&Rs. 

Since we have no common interest property to manage, for at least the past eight years, the board members have had the time to re-interpret the CC&Rs (in their constantly amended Construction & Usage Standards) to include every conceivable enhancement or alteration to properties as being subject to board approval.  During this same time, fees to improve your property have doubled or tripled.  Penalties (fines) for disobeying behavior rules have also been doubled.

The board has a fiduciary obligation (meaning they are being trusted by the rest of the homeowners) to act in the best interests of the association, but this has not been possible with the recent makeup of the DBPOA Boards.  In 2008, due to being questioned by homeowners about specific actions, the board hired a past board president as its consultant.  Due to his suggestions and actions, the board lost an expensive campaign in 2008 to significantly increase annual dues while removing homeowners from the equation in future increases.  The board then lost two significant players, its president and treasurer, through resignation.  The president was replaced by another “dedicated” president who then applied for a position on the CSD Board saying if he were appointed, he’d resign from the DBPOA Board.  This board, still being advised by the same consultant, hired the ex-treasurer who'd resigned to represent them in the 2009 IRS audit which resulted in almost $10,000 in fines for incorrect filings for the previous two years.  This ex-treasurer was training the replacement treasurer.  The vice president referred to homeowners as “clowns” or “bozos” and has a police report on file for physically assaulting a homeowner; but promised not to hit anyone, at least for a year, on Candidate’s Night in 2009.  Due to a position still unfilled, they appointed a final board member who was actually appointed the prior year but, for some reason, resigned after a month.  It is also unknown why this board member had to leave, following being sworn in, after receiving a phone call during the November 4, 2009 board meeting.  In 2008, the monthly meetings were rescheduled to another day earlier in the month so that the membership chair could accommodate his other social activities, but this precluded updated monthly treasurer’s reports being available at board meetings due to the bank statements not having been received yet.  This same board member appeared to be totally out of tune at board meetings.  Could this be because a great deal of board business is conducted via the internet and he doesn’t own a computer? 

Meanwhile, and still utilizing the services of the consultant who led them down the path and over a cliff on the dues increase, this board managed to also accumulate $44,000 in legal fees.  Earlier in 2008, they followed the consultant’s suggestion in filing a lawsuit against a homeowner for not removing a curb cut owned and maintained by the County.  He complied with the directive to remove a driveway to his side yard and installed drive strips instead, but it didn’t stop there.  After the consultant consulted with the County by sending a picture and asking, “What’s wrong with this picture?” to which the County replied, “Well, the curb cuts aren’t 16’ apart,” they demanded removal of the curb cut.  To make a long story short, they lost the case (because they forgot to enjoin the County) due to a lack of jurisdiction in the suit and because they didn’t follow the Davis-Stirling Act which governs common interest homeowner associations.  While we or the board own no common interest property, we have mandatory membership, so it was decided that we are governed by Davis-Stirling since this particular homeowner’s property is zoned a PUD while most of the rest of us are zoned Waterfront Recreation.  This was on September 18, 2009.

On November 10, 2009, this board held an emergency meeting, without notifying the homeowners (could this be considered secret?), which by definition can only be called for an item that requires immediate action.  See DBPOA Agenda 11/10/09 Meeting (Click here) and DBPOA 11/10/09 Meeting Minutes (Click here).  They passed a resolution (once again, suggested by the indispensable consultant) stating we are now governed by the Davis-Stirling Act and the association’s rules and documents will be changed accordingly, but also deciding against raising the dues by 20% (allowed by the Act each year) for the coming year.  This was not being magnanimous, since they had also extended the balloting period for a current vote being conducted to once again raise dues…how would it look to increase dues in the middle of a vote currently being taken to do the same, especially when it was more than likely being defeated once again?

Since November 2009: