HOA State Laws (condominium, how much, lawyer)

[Mad Bear]

Can someone tell me where to find the TN laws that govern HOA's. We are
in a community with a HOA set up. The president pays no HOA dues and the other two board members get a discounted 50% reduced dues for being on the board. They do not send out any information on how to get on the board, they just rotate these positions. All three out of state board members get "free airfare to the meetings". None of these "perks" are in the deed or by-laws, it was just voted on in one of the board meetings. The president is now proposing a 57% in dues, but he will not need to pay his dues. Isn't this a conflict of interest? Please help send me in the right direction for answers!

[alleycat]

I would suggest questioning others in the association. If any of them also have problems with the way the HOA is working, then go see a lawyer. It wouldn't cost that much for a consultation and the group of you can split the fee. Sometimes just having an attorney send one of those wordy "lawyer letters" can convince someone to change their ways.

[knoxgarden]

It's called the Tennessee Horizontal Property Act. There's an explanation of it here:
The Tennessee Condominium Act Of 2008 - Law Firm of Baker Donelson
I'd suggest contacting an office of that law firm to help you sort things out.
You can find the actual code here:
Legal Resources
And some useful articles and information here:
condolawyers.com - legal information written by condominium lawyers
I doubt that Tennessee or your county law covers that situation. You'll have to take action yourself and/or join with other owners.

[JoeCartpath]

I certainly think the help of an attorney is going to be necessary. Your association bylaws should certainly set out requirements for an annual membership meeting, election requirements, etc.

I suppose the obvious question is why does your association continues to elect those Board members?

[JoeCartpath]

Now that I've got a few more minutes, let me expand on my comments.

First of all, I don't mean any offense to you. I have no idea what your relationship is with the Board, or how knowledgeable you are about it's functions and the governing documents, or how much you have participated in the past. My comments are based on my experiences. I'm a HOA member. I've been a Board member, and still serve as webmaster for the HOA as well as a member of the Architectural Review Committee. However, ours is a small association. I'm just guessing that your's is much, much larger it they can justify paying airfare for Board members to come to meetings.

Have you read your association's bylaws? How about the Conditions, Covenants and Restrictions? If not, some of your answers may be there. I'll bet at least 90% of our HOA members have never even glanced at these documents - even though they are available on our website (along with a summary of the major items written in plain English).

The fact that the same Board members are just rotating positions may not be that unusual. Our Board members have been reelected to the same positions for the last 3 years - and most have served for the last six in one position or another. Why? Because they are willing. We're lucky to get 10% attendance to our annual meeting. Most people just pay their annual dues and don't want to participate at all. Our current Board does a fine job...and no one else wants to be bothered.

The issue of Board compensation, though, may be an issue - or it may not. It would appear on the surface that your Board members are receiving compensation for their service in the form of forgiveness of their dues. That may require that compensation to be reported to the IRS as income. If that's not being done, the HOA and those Board members could be in violation. I'm neither a tax accountant or an attorney, so I can't tell you if there is a problem there. For that matter, they could be reporting that income and be in full compliance. The airfare to meetings would not be considered compensation - that would be reimbursment of expenses.

Also, does the Board do most (or all) of the work for the HOA, such as accounting, handling complaints, etc. - or do they hire a management company to handle the day-to-day business. If the association is large and the Board spends a lot of time with it's business, compensating them by forgiving their dues may be a good investment.

As for the reimbursment of airfare, I suppose that would depend on the size of the Board, the size of the HOA and the makeup of it's members in regard to percentage of permanent residents and part time residents. Our small HOA could not afford that expense - and we're a *normal* subdivision where the vast majority of homes are occupied by the owners on a full time basis. If your association is very large and is more of a resort area where a large percentage of the property owners aren't full time residents, it would make sense that they should have representation on the Board - and due reimbursement of expenses if the HOA's budget allows.

As you see, it's difficult to pass judgement on your Board based on the little information you've posted here. Hopefully my comments will help you shed some light on the situation and decide for yourself if there is a problem or if all is well in paradise.

[Mad Bear]

First, thank you all for taking the time to respond to my question. This is my first time using this forum and I was not sure what to expect.

Update: According to the recorded 2006 Annual Minutes, an unidentified person made a motion to "waive the dues for the President & Vice President of the HOA" This motion also included paying their travel expenses to the Budget & Annual Meeting.

Per your recommendation: I have extensively reviewed the HOA Master Deed. The By-Laws of the Master Deed state: Compensation, No Director shall receive compensation from any service he may render to the Association.

This 2006 "Motion" did not meet any of the requirement outlined in the Master Deed for a By-Law Amendment; no notice sent to the owner about a proposed By-Law Amendment & did not meet the minimum vote of 75% of the owners required to pass this for a change to the By-Laws.

After the 2006 Annual Meeting, the board had its dues waived & started charging its travel expenses to the HOA. I do not believe the recorded 2006 Minutes to Meeting were filed with the county until I questioned this "Motion" last month.

My question is regarding Time. If the board has been enjoying the benefits of the motion for three years, does "time" alone make something into a legal By-Law Amendment when it does not meet the
requirements outline in the Master Deed?

[mbmouse]

Personally I think you need to call a lawyer for that question. I bet some of your neighbors want to now be involved. Sounds like the board needs to pay back every penny to the HOA. But I am not a lawyer.

[Magnolia Bloom]

There is a very good forum on hoatalk.com that I think you will find helpful.

[Mad Bear]

Thank You!

[TNMOMX4]

Hi, I'm new to the board and found it by searching for information online. I need some help finding the laws and requirements for an HOA in TN. We have a relatively new neighborhood that started their own HOA. It was never formally conveyed over by the developer and he is now in bankruptcy. A few here have taken it upon themselves to put it together and are running homeowners off with their "dictator" mentalities. Several have refused to pay their dues. There has never been an election held and we have lots in here that are a mess from builders going bankrupt and abandoning their lots. Now the HOA wants to threaten liens on property, etc. - the landscaping stinks, the pool isn't properly taken care of, money issues are questionable and they don't enforce the restrictions that are in place, while discussing making new ones. Can anyone help, without telling us to hire an attorney that will cost us thousands?