Blog Post #4

What’s wrong with the way our HOA board operates:

My wife and I moved to Laguna Woods Village – a senior gated home owners community (“HOA”) in sunny southern California – in late 2015, and quickly came to love it. The “inmates” could not have been more welcoming; and we immediately fell into so many great activities we hardly had time to catch our breath. In addition to the numerous clubs and Emeritus classes, I also became an advisor (a high-falutin term for “volunteer”) to the Third Mutual board’s Maintenance & Construction Committee; and when a board vacancy occurred and I was invited to apply, I suddenly found myself elected as a director, despite only living here for … what … just 14 months.

The Third Mutual board of directors is our HOA’s governing body, managing the business of our more than 6,100 members, responsible for a budget that exceeds $15Million. And during my roughly 19 months on the board, I threw myself completely into that job.

So why did I resign? Well, it may sound hackneyed, but I was totally committed to the idea of good government, the rule of law, to common sense, and the best interests of our members. And I found that many of the board’s decisions did not reflect those values.

I am a practicing lawyer; and the legal principle that has guided my entire practice is the idea that the law follows logic. That simple concept, using good common sense, is – or should be – at the very heart of every judicial decision. It is the reason why judges spend so much time writing formal opinions: they act (or should act) as well-reasoned road maps for lawyers to follow when advising clients, thus hopefully avoiding unnecessary problems – unnecessary litigation – down the road. More than anything, their decisions must build logically; they must make sense. Otherwise, as Charles Dickens’ colorful Mr. Bumble put it, “the law is a ass – a idiot!” Put more delicately, if the law does not make sense, people will lose respect for it . . . and then what?

But that same logic – I like to think – informs every decision I make in my private life. It surely should inform every decision an HOA’s directors make. As trustees responsible for protecting a community’s assets – as fiduciaries of the membership – they have an obligation to consider in depth every proposal that comes before them; and when they don’t honor that obligation, they violate their oath of office. And when their decisions don’t make sense, then what!

As a board member, we were expected to support all board decisions, whether or not we agreed with them. That is what you sign up for when you possess only one of 11 votes. We talk with a single voice. But when you know that the decisions are damaging or wasteful . . . or just don’t make sense . . . you have (or I felt) an obligation to separate myself from what I viewed as a mounting number of truly harmful decisions.

These decisions – which I shall separately discuss in future blog posts — were often illogical; cost the mutual unnecessary moneys; were at times mean-spirited; violated our own by-laws; exposed the mutual to potentially serious liability; and – most critically – were flatly contrary to the best interests of the members.

I am certain that very few directors knowingly voted for something they viewed as mean-spirited, or harmful to the membership. I can only assume, therefore, that many of those votes were taken with less than a full understanding of what was at stake. [It did not help that on one occasion – which I will discuss in my next post – all the documents I submitted for distribution with our agenda well prior to the meeting “mysteriously” disappeared; so an important vote was taken without the benefit of documents – and argument – I had spent several days preparing.]

Voting with incomplete knowledge is effectively voting with blinders on. Pair that with the natural instinct that encourages insular groups to “get along,” and you have effectively handed a proxy to the person with the loudest voice in the room; or to the person with the most influence. Instead of making an informed decision, you become an enabler.

As logic must be the very foundation of every board decision, concluding that so many of the board’s decisions were poorly-reasoned would pretty much guarantee that my stay would be short-lived. And that is what I found was occurring almost from the beginning of my board tenure.

How it all played out will be dealt with in future blog posts.

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