Pay an Assessment that the Board Never Approved?

What is the name of your state (only U.S. law)? NJ

In our condo association, the board holds "closed door" meetings and "decides to invoke" an assessment. Then, one person sends an email stating that the board decided to assess the owners X amount of dollars, with a due date, and a warning that if late, fines would be imposed.

We protested because the Board never held an open meeting to vote on / approve / levy the assessment. We sent a letter stating that we would be happy to pay our share of an assessment once it was formally levied by the Board at an open meeting called for that purpose. We also asked for invoices as a record of where the money is going, and that a response could be sent by them and their attorney.

BTW, their attorney supports this - he stated at a meeting that it was OK for them to do this because the amount was under $10,000. (What law is that?)

We probably will not get any response from them or their attorney, but when the due date comes & goes we'll probably get a letter imposing a late fee.

We have paid these unofficial assessments in the past as good-faith gestures, but the time has come to demand a record of these assessments.

What stand should we be taking, and how should we proceed?

Thanks.

As a former Board Member in an HOA here in NJ I can tell you that they do not need to have the membership vote on most assessments, however any and all business where binding decision are made must be help in an open session. That is the law. If they vote on anything, it must be done in an open session. You could fight this, if it is advantageous for you.

"All meetings at which a board takes a binding vote are required by law to be open to all owners and advance notice of such meetings must be given as provided by law. The laws governing open public meetings in planned real estate development associations can be found in N.J.S.A. 45:22A-46 or for condominiums in N.J.S.A. 46:8B-13a and N.J.A.C. 5:20-1 et seq."

As for your financial records, you have a right to see them, ALL of them.

"The New Jersey Condominium Act, N.J.S.A. 46:8B-14(g) states that an association, acting through its officers or governing board, shall be responsible for the maintenance of accounting records, in accordance with generally accepted accounting principles (GAAP), and shall be open to inspection at reasonable times by unit owners. Such records shall include a record of all receipts and expenditures and an account for each unit setting forth any shares of common expenses or other charges due, the due dates thereof, the present balance due, and any interest in common surplus. Section 16 (d) of the Act empowers our Department, acting through the Bureau of Homeowner Protection, to enforce this right of inspection. The right of inspection includes the right to make copies."

The two quotes are from the NJ Department of Community Affairs - Bureau of Homeowner Protection
http://www.state.nj.us/dca/codes/newhome_warranty/assoc_regs_initiative.shtml

You can read all about your rights regarding these issues and even download the forms to file a complaint. From my experience, before I served on the board, the NJDCA worked! It took a couple of phone calls to keep them focused, but they were able to address my issues.

Good Luck.

Thank you - can you tell me - what exactly did the DCA do for you?

Complaints were filed with the DCA against this Board months ago for (1) decisions considered binding not made in open meetings, and (2) no access to financial records. The DCA sent them letters, but that is all.

We contacted the DCA by phone 2 days ago, and she said she would have to look at the file to see if their lawyer ever responded. She said she would call back in a few days. If I don't hear from her I'll call again.

Exactly how much muscle does the DCA have - and flex?

Also - since it is clear that these assessments were never voted on openly, are we justified in not paying them at this time? - Yes, we intend to fight it, but what about now?

Thanks.

ghtix said:

Thank you - can you tell me - what exactly did the DCA do for you?

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The Board at the time was not letting me see all the financial records. I had some property damage that I considered to be their responsibility and they knew I was searching for earlier cases of it via the "checkbook." I was right, but that isn't the point. They would refuse to share some of the data and only show what they wanted me to see. They also were taking votes via email and much of what they were passing was not reflected in the minutes. Actually I couldn't even get minutes for most of the meetings. At any rate, I contacted the DCA, filled out all the relevant reports. I stayed on the DCA once a week. With their pressure, the Board finally gave me access to the records as well begun "memorializing" their votes in Open Session.

ghtix said:

Complaints were filed with the DCA against this Board months ago for (1) decisions considered binding not made in open meetings, and (2) no access to financial records. The DCA sent them letters, but that is all.

We contacted the DCA by phone 2 days ago, and she said she would have to look at the file to see if their lawyer ever responded. She said she would call back in a few days. If I don't hear from her I'll call again.

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The DCA is a Govt. agency=they move slow, but they do move. Don't be afraid to pressure them by calling and sending letters. Remember, if they don't do their job and you eventually take this to court, it will be known. However, always remember is easier to catch flies with honey and not vinegar. When I spoke to the DCA, I was always polite and friendly and was never accusatory or abrupt with them.

ghtix said:

Exactly how much muscle does the DCA have - and flex?

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NJ passed a law giving them the authority to enforce the three areas that are stated on their website. They can impose fines and penalties to the HOA for non-compliance. They have teeth, you just got to get them to bare 'em.

ghtix said:

Also - since it is clear that these assessments were never voted on openly, are we justified in not paying them at this time? - Yes, we intend to fight it, but what about now?

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This is the tricky part. Your logic may say not to pay, but to be honest, you're going to end up paying it eventually. All the Board must do, is vote on it in an open session. The have the power to make these assessments, plain and simple. You are basing your whole case on a technicality... one which can easily be rectified. There is no such thing as Double Jeopardy when it comes to HOA assessments. My only advice would be to document in some way that the check you write is for that specific assessment. Perhaps it would be wise to use the Memo section of the check.

ghtix said:

Thanks.

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You're Welcome. Let me add though, that HOA probably needed to have this special assessment. There probably was a large unforeseen expense that they need to pay for. It is important for you to realize that the money being spent is for your own well being too. I understand that not being able to see exactly what it is being spent on gives you concern. However, their lack of understanding of their obligation to be transparent doesn't necessarily mean they are doing something rotten.

Good Luck and keep us updated.

Want to know what these assessments are for? You're gonna love this one:

Because prior requests were ignored, we finally had to hire an attorney to try to see books & records. That was 3 months ago. The Board is still resisting, stalling, dragging feet. Deliberately, of course.

Meanwhile, during this dragging-it-out interim, they are "assessing" - get this - for fees for the Board's lawyer to "deal with this." They & the Board's lawyer are telling the Association that we hired an attorney to "challenge the daily operations of the Board", and because we have made "false allegations" against them, their lawyer now has to work to counter this (by his letters to the DCA, to our lawyer, and all the other shucking & jiving that unethical lawyers do). Not one word has been said to the Association about us really hiring an attorney to see books & records. Not one word that this could have been over months ago.

So - here's the Catch 22: the Board has already made 3 "assessments" for their lawyer's legal fees, and they say that they will need to keep "assessing" for this indefinitely - with no end in sight. Neither they or their lawyer are doing anything to produce the books & records. So - why should their lawyer counsel them to do this - and end it all - when HE is the beneficiary of these assessments?

Ka-CHING.

This could have been ended months ago. But instead, WE are now the bad guys - with the lies being told about why we REALLY hired an attorney, and "because of us" they are bleeding everyone for money - for their attorney, who is doing nothing to stop this madness.

The President told someone else that the bills for their lawyer to "handle" this are already at $4000 with no end in sight.

We have asked for a cost breakdown of their lawyer's fees. No response. We have told them numerous times that they need to levy assessments in open meetings - not behind closed doors (which they have stupidly admitted to in writing). No response. We have told them that when we get these documentations we will be happy to send our share of a bona fide assessment.

We hear nothing from them - but - how much you wanna bet that when an "assessment" is considered "late" they will slap on late fees, fines, etc.?

This is downright criminal - and I wish that I could enlist law enforcement to do something.

There is something very, very rotten going on here.