Q: What is an appropriate use of HOA funds by the developer prior to turnover to an elected board of owners? Our developer spent nearly R20,000 on "lawn mowing maintenance" for his unsold lots.

A: Developers control the HOA board prior to turnover so wear two hats. If spending HOA money, the developer should follow the adopted HOA budget which often includes Landscape Maintenance. Unless the budget calls for mowing of all lots, this sounds like an inappropriate expenditure which should be reimbursed to the HOA's bank account.

At handover, it is a good idea to have an independent audit of the HOA accounts by a CA to ensure that all expenses and receipts have been properly accounted for and that all members, including the developer, has paid all fees owed to the HOA.

Q: Our HOA has a resident owner that claims there is a mould condition which the HOA is responsible to remediate. The board wants to be proactive but is hesitant to incur costs just because an owner demands it. Whose responsibility is it to pay for testing?

A: It is possible that the mould problem could be the HOA’s responsibility to repair. It is also possible that the unit owner is creating the condition. But until qualified testing is done, the answer to that question will not be known. Get the owner to agree to pay for the testing if it proves to be something that the HOA is not responsible to repair. If it turns out to be the unit owner’s problem, seek reimbursement and if he doesn’t pay, process the account for collection just like you would for any other sums owed.

Q: Is it permissible for the board to convene a "brainstorming session" simply to talk as long as no decisions are being made?

A: Theoretically it sounds okay but brainstorming generally leads to decision making. And the board needs to be careful about perception. If these sessions happen too often, it will appear that they are merely being called something other than a meeting to circumvent being open to all members.

Q: At our annual meeting, the procedure for voting in person and voting by proxy was different.  Those who attended the meeting registered by signing in. Proxies were only counted if the signature on the form matched the signature of record. Is this standard procedure?

A:  Presumably, whoever was monitoring sign in recognized the owners who were signing in. Signatures on proxies could be forged by someone trying to manipulate the election. While this is not common, it is a good idea to verify the identity of both attendees and proxy signers to make sure there is no election fraud.