Something funny happened in my HOA this month. Not “funny – ha ha”, but “funny – uh oh.”
My Association was incorporated in June of 2004.
I bought my home in this neighborhood last year in May 2016, and as part of the obligatory home-buying paperwork tsunami, I received a number of items from the then-current management company of the HOA as required by ARS 33-1806. Among them was a copy of the Association’s CC&Rs and Bylaws. The copy of the CC&Rs had the stamp of the Maricopa County Recorder’s office, but the Bylaws were not so emblazoned. My assumption was, of course, that “these are indeed the Bylaws of the Association”. As it turns out, this was the same copy being sent to all new owners in the neighborhood at the time, and since, and probably for some time before.
Further complicating things, this copy of the Bylaws had a section at the bottom for endorsement by the original Secretary of the Association to attest that these were, in fact, the approved Bylaws. But the copy I and other new homeowners were receiving was not signed.
Fast forward to sometime in the last month or so. Apparently someone (probably at the management company, but some details are hard to come by) tried to locate an “officially sanctioned” copy of the Bylaws among the Associations papers, both hard-copy and electronic. None was found. Questions were asked; an attorney was consulted. (None of this was discussed in an open session meeting, and while I don’t really know any details, I’m assuming the actions in this paragraph occurred.)
At the July board meeting (I’m not on the board, but I have attended every meeting since moving in), our management rep said something about “the attorney said he would create Bylaws” for a stated sum, which I thought was odd, but never really had an opportunity to ask anyone about it.
Then yesterday, when I wrote to our management rep referring to a section of the Bylaws about elections (ours are upcoming in September, and yes, I’m a candidate), her response was:
Technically you don’t have legal Bylaws since they were never approved and signed.
WHAT?!?! Don’t tell me the Association — now in it’s 13th year — has been operating according to a set of Bylaws, and now all of a sudden they “don’t exist”!! The Association (in the form of the management companies) has been sending this to new homeowners telling them “this is the way we do business” for years, and they’ve been using the Bylaws in all the ways Bylaws ought to be used!
After seriously questioning the situation in my Email response, the management rep replied again, writing: “the attorney’s opinion is they [the board] cannot run according to what the Bylaws states since they were not approved. I did talk to the Board about having the attorney draft up new Bylaws to approve and sign so they will be on the up and up.”
I was flabbergasted, to say the least. Expletives were said. Blood pressures rose.
Between yesterday afternoon and this morning, I tried numerous avenues to resurrect a copy of the “official” Bylaws:
- I contacted the developer, DR Horton. I was told they purge such documents after 10 years, and gave me the number of someone else to call. I left that person voice mail, but have received no callback.
- I searched the Arizona Corporation Commission files on our Association — again, having done this search a few months ago when I wondered about the presence of an executed copy. Bylaws are not required to be filed with the AzCC, and indeed were not.
- I searched the Maricopa County Recorder site (yet again – also not my first time), looking at all documents posted with our Association name attached, as well as numerous documents associated to DR Horton in the relevant timeframe; nothing there either.
- I’m pretty good friends with my realtor, but he really didn’t have any useful guidance on short notice, but shared my concern and offered to ask others in his office if they had any suggestions.
- An acquaintance in the Arizona HOA-homeowner activist space suggested searching the Corporation Commission (already a dead end), but then also suggested making a Freedom of Information Act (FOIA) request of the IRS for any records submitted by the Association relating to their filing for nonprofit status. Turns out even the IRS doesn’t want a copy of your Bylaws.
- I wrote an Email to the original management company from 2004 through the Association’s first transition in mid-2014, hoping that they would have something archived — but no return message from them either.
- I even contacted a recent acquaintance of mine who is a Parliamentarian about the situation. After some lively discussion about Bylaws in general, he had some ideas on how to proceed if none are found — but nothing new to add regarding a search for them.
My next approach (spoiler alert: which worked!) was to search the Maricopa County Assessor’s GIS Maps web site for homeowners who had moved into the neighborhood in the first couple of years of its existence, and whom I had met or chatted with around the community. My thought was that surely they would have received an executed copy from the original developer back in the early days. I found one person I had befriended when hanging door hangers in the neighborhood about the Block Watch program back in January. I sent her a message on NextDoor.com, explaining the situation and asking if she might have a copy of the signed document.
Much to my amazement, she replied within an hour:
|Well, to say you have good timing is an understatement. I have been cleaning out closets in the past few weeks (we’ve accumulated some “stuff” in 12 years) and came across all of our purchase documents. I set them aside just last night thinking I should go through them and thin the pile. So, you’ll be happy to know, I have a signed copy of the bylaws.|
I’m told soon the official copy will reside on the management company’s web site. Unfortunately, our board has stopped maintaining their separate site with community documents. (The board even failed to elect a Secretary mid-year when the previous President, Secretary, and Treasurer each resigned.)
So the moral of the story is that HOA Boards — especially the Secretary — have a fiduciary duty to maintain copies of all important Association documents, but in my opinion they rely too much on management companies to do this for them. As a result, important documents often go missing, especially when Associations transition between management companies. I believe copies should be kept separately by the Association, and that Associations should audit the documents maintained by their management company.
Where are your official copies of governing documents? “Trust but verify” would seem to be a good approach.