If there is one character, I receive the most calls on, it’s this one. The calls come in quite often about the crazy board president that is ignoring everyone and is getting away with all sorts of crimes. The allegations are fierce and politics are usually at a boiling point. If you’ve lived in a community association for any length of time, you may have experienced this type of person at the helm of your community’s assets. If you live in Florida, especially South Florida, you have surely been part of a community with one of these special characters. Highrise condos in South Florida are synonymous with dramatic reality shows. Are these board members all stealing? Are they all really in total control?
So what do you do? How can these people stay in control and continue to spend your money? When I receive these calls, I ask one question, “if you had everything you wanted for your association, what is the outcome that you would want from my evaluation?”. Most of the time, the answer is a resounding “I want that son of a bitch in jail”. While that is possible, depending on the circumstances, there more important details to be searched out first. The results they seek should be to have a better run association with procedures in place that would prevent this type of person from taking over again. From a consulting standpoint, I am interested in knowing if this “rogue” board member has the approval of the other board members. Are there procedures in place that allow for a majority vote on matters, or is this person truly a one-person force that doesn’t allow for proper governance?
Often times, people acting in such a tyrannical manner do have some support. They somehow got on the board and people voted for them. My purpose is to find the intent behind their actions. Are they acting out of malice or are they simply not aware of the industry standards for operating an association? Believe it or not, there are countless boards out there that are not familiar with the industry standards for procedures. When you have this character type that appears to be in total control, you must evaluate the procedure spelled out in the documents as well as other resolutions that should be in place or can be put into place with a formal vote of the board. For example, is there a Code of Conduct in place that is adopted annually at the annual meeting? Is there a spending resolution that spells out just how contracts and different purchases can be made? Are there limits to the approval of spending from a single board member?
When a community suffers at the hand of one of these rogue characters, the community needs to make sure that moving forward, the proper checks and balances are in place. This is like having been a victim of a crime such as a break -in. You can’t change the past, but you can surely improve the circumstances so that you can prevent the negative occurrence from happening again. What steps will your current board (or new board) take to evaluate the totality of the circumstances? Where are the loopholes in your association’s management? Is the manager or management company partly to blame for lack of guidance? Has the association’s legal counsel been participating in important matters? How are your finances being handled?
Where do you go to when you have such an important problem? Recently, the Grand Jury Report for the Miami-Dade State Attorney’s Office revealed a number of deficiencies with the State’s investigation procedures. The State of Florida now realizes the frustrating journey for home and condo owners when they seek assistance in Community Association matters. Board members and residents usually have allegations of malfeasance and fraud but there is no entity to turn to. Most police departments are restricted from investigating complaints because of the civil nature of associations. As stated in the Grand Jury Report “the DBPRs practice is to dismiss complaints if the allegations have any components of criminality”. Furthermore, it admittedly states “many DBPR investigators lack proper training and motivation to investigate regulatory violations”. The Office of the Ombudsman is limited in what they can respond to. Usually, the Ombudsman assists with complaints dealing with elections. The public does not currently have the resource they believe should exist.
As mentioned in a recent USA Today article, “Miami-Dade County's top prosecutor said lawmakers had the unprecedented opportunity to turn many of these civil infractions into criminal offenses”. “This would put condo owners, board associations and everyone on notice that if you fail to do the simplest things; hold honest elections, keep minutes, turn over engineering reports it’s potentially a crime and investigators are going to come looking,” Fernandez Rundle said.
Running an association is no easy task. There are far too many areas that must work together, and proper checks and balances need to be in place. Who do you have right now assisting your association in improving your operations? If you have nay similar concerns, reach out to me. There’s a good chance I may be able to steer you in the right direction.
I hope to hear from you and maybe your feedback on some of this information.
Karel Costa-Armas, LCAM, CMCA, AMS, PCAM
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The Rogue Board President at the HOA or Condo