How to stop board directors from acting beyond their authority

Stopping the installation of common hallways carpeting not approved by owners may require hiring an attorney quickly and getting the court to issue an injunction preventing the board from continuing the unlawful actions.

By Stephen Glassman and Donie Vanitzian

October 2, 2011

Republished with permission from copyright holder

QUESTION: A specific carpet choice for the common hallways was approved by homeowner majority vote and purchased. I later attended a board meeting and learned directors took it upon themselves to change the carpet that was already purchased, approved and voted on by the owners and instead buy a more expensive carpet without owner vote or approval. There are over 23 floors to carpet, and the board's choice raised the carpet price by $3 a yard. The burden of paying this overage is on each owner.

I asked for receipts of expenditures and the treasurer told me there is no central file for receipts on the money spent. Directors are moving forward with the more expensive carpet. What recourse do owners have against this board?

ANSWER: Without the board's cooperation, stopping directors from acting beyond their authority may require a lawsuit. It could mean finding and hiring an attorney quickly and getting the court to issue an injunction preventing the board from continuing the unlawful actions. Since you are seeking to enforce the covenants, conditions and restrictions (CC&Rs), by getting the board to act in a lawful manner, you should be able to recover your attorney fees in addition to any costs, once the lawsuit is decided.

Additional funds to pay for the more expensive carpeting amount to a separate special assessment that was not approved by the owners. Because the cost of the more expensive carpet needs a separate special assessment, it is very likely the expenditure would require titleholder vote and approval before it can be assessed.

Pursuant to Civil Code section 1365.2, titleholder requests for documents, including invoices and copies of checks and checkbook registers, must be provided by the board to the person requesting them within specific time limits. Any request should be in writing, addressed to the board and sent certified mail, return-receipt requested. Be certain to keep the return receipt as the time for responding with the documents runs from the date the request is received.

If the board fails to provide the requested documents within the time limit, file a Small Claims Court action for those records and $500 damages for the board's unreasonably withholding such information. Each owner is entitled to demand copies and file a damages claim.