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Board Malfeasance What to Do if You Suspect Foul Play

By Cooperator Studio   13 March 2019 On The Board Law & Legislation Board Operations Shareholder Relations Management Board Member 101
What should residents do if they suspect fraud, self dealing or malfeasance?
Most co-op, condo, and HOA boards are made up of honest people who truly want to act in the best interest of their community -- but sometimes bad actors do wind up on boards, and sometimes even whole boards can be corrupt. In this short clip, two legal pros discuss what non-board residents can do if they suspect that something fishy is afoot with their board. 

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4 Comments

  • Anthony de Fex on Sunday, November 17, 2019 11:54 AM
    Yes, board malfeasance, we got that. I've taken all those recommendations. Our board has been issuing false financial statements. I demanded an inspection of the books of account and not surprisingly the board declined. I got a lawyer of my choice and now we are in court for me to get those records. If you have good reason to believe that there is board malfeasance (no gut feeling, speculation, satisfaction of curiosity, ...), more than likely the board will deny you an inspection of the books.
  • Joyce Loc on Saturday, June 6, 2020 5:43 PM
    How do I get in touch with the attorneys and fees. I have a condo of 14 units and are not running properly, no books and shareholders requested few times and no response.
  • Lin Koenig on Thursday, October 15, 2020 5:08 PM
    Our Bylaws do not allow for purchases by or reimbursements to Board members, without notice and approval of members...but after inspecting 2 years of checks written due to too many non-local companies being hired, I found the following: old well-known local companies once hired were exchanged for no-name mom & pop "non-local" vendors with a new manager & company. One Mgr. in particular hired a gutter cleaner he was related to by 1 relative; an unelected Bd. member sat for 10 years in her seat & In 2.4 years was reimbursed by the manager up to $8k month after month while not notifying members (much less other Board members, I'm certain), since the new manager & the Bd. member were joined at the hip. As soon as I questioned such reimbursements, the "out of area" vendors, not 3 bids obtained, the unelected Bd. members finished renovations, like her predecessor did, and quickly moved. I checked public records where I learned the 11 year member had a conviction for fraud, and the one who left last April had charges in another county for writing bad checks. Our elections have been rail-roaded for years - no records of any terms or members holding them. Due to foreclosures from 2008-09 - when new manager came on board, and now Covid-19, the renters out-number owners, and we allegedly pay a property monitor $500 a month yet he does not get a 1099. No vehicles are ticketed for lack of a decal and commercial vehicles are ignored, greatly diminishing the looks of our property. We pay a landscaper picked by Mgr. and they only mow, occasionally trimming bushes. When I asked to see the backs of checks cashed by "property monitor", I was denied access. The Mgr. hired a non-local roofer in business under 4 years, and that company sub-contracted the work and almost refused to follow Reserve Study, shortening the life of many components, and maintenance goes on ad nauseam. Myself & another owner forced the roofer to obtain city permits by calling city. It goes on and on...what can I do. No ATL attorney will represent condo owners, just the "corporation", though my dues pay the condo lawyer. I'm stressed to the max and can't sell my unit to an unsuspecting new buyer. It's horribly sad. L.K.
  • Cas on Wednesday, May 5, 2021 10:27 AM
    My friend owns an apartment and received permission from the board to renovate. Shortly after work began, the building was thought to have a gas leak which was irrationally blamed without proof on the renovation. It has been suggested that building maintenance may have been to blame. The board has shut down the renovations since November 2020, leaving an unhabitable apartment. The board continues to blame my friend for the leak and the inconvenience of the other residents. This week, the board has demanded a $500,000 payment from her as retribution or they will release her name to the other residents as the reason for their inconvenience. Is this not extortion? How can they get away with this? She is at her ropes end with no where to live and facing a major financial upheaval.

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