Inception

The EagleBranch subdivision opened in the early $1980$s$.$ Located in an upscale suburb of a major metropolitan area, the subdivision started with plans for $133$ custom homes. The common properties of the subdivision included a park with a playground, a full$-$sized pool, a baby$/$wading pool, and a building that housed restrooms and showers. After approximately $50$ homes were sold, the developer created a homeowners' association called EagleBranch Homeowners' Association. $($The definition and operation of a homeowners' association are discussed in Appendix A$.)$ Seven homeowners volunteered to serve$-$four as officers and members of the board, one as a member of the board, and two as the architectural control committee. The association needed a president, vice president, secretary$,$ treasurer, and one additional board member to prevent any tie votes on decisions. Two of these volunteers were a married couple.

These charter officers worked hand in hand with the developer to file an application and the association's articles of incorporation with the state. Being the first board members of a new homeowners' association required a great deal of time to create the bylaws and policies for the association and to locate and engage service providers to maintain the common properties. The board members were a congenial group and enjoyed working together. To some extent their meetings were like a productive social event. Some of the policies and procedures established by the board included the following:

Treasurer:

A checking account would be opened in the name of EagleBranch Homeowners' Association. The treasurer would be on the signature card and be responsible for recordkeeping for the account. All receipts and disbursements of cash would be made by the treasurer from this account. The treasurer would provide a list of all cash receipts and disbursements and present it along with the monthly bank statement reconciliations to the board members at their quarterly meetings.

Annual dues owed by each homeowner would be $$450$ a year. A notice would be mailed by the treasurer in January of each year stating the amount due and the due date. A stamped, return envelope addressed to the treasurer would be included with the notice. Checks would be payable to the EagleBranch Homeowners' Association. The treasurer would purchase a stamp to use to endorse checks for deposit to the association's checking account.

President:

The president would approve cash disbursements. The president would initial invoices as evidence of authorization and give them to the treasurer to pay.

The president would be responsible for making sure all maintenance work was completed on time and to specifications.

The president would be responsible for calling board$/$officer meetings as needed. These meetings were usually to discuss maintenance issues.

Vice President:

The vice president would act in the place of the president in the event of the president's absence or inability to act and perform any other duties as requested by the board members.

Secretary:

The secretary would prepare minutes of the board meetings. This person would send the minutes to the members of the board and provide copies to any association members who requested them.

The secretary would provide nuts and chips at the board meetings. The vice president would bring the beer.

Board Members:

The board members would determine any special assessments or changes in dues.

The board members would decide what maintenance work to do and what service provider to use.

Subsequent Events

By $2002,$ the five original volunteer board members were ready to pass on their responsibilities. Surprisingly, there had been no turnover in these positions in the approximately $20$ years they had served. The group was dedicated to making their subdivision a pleasant place to live and enjoyed working together. Also, they were smart enough to realize the better their subdivision was maintained, the greater the chance their property values would remain stable or even increase.

Gino, an affable resident of the neighborhood who owned a struggling pool business, stepped up to become the new president of the association. Most of the residents were happy and grateful that someone was willing to volunteer for this position. To streamline operations and save on the cost of maintaining a post office box for the HOA, Gino had all bank statements and bills sent to his home address. He was able to quickly hand$-$pick four volunteers to replace the others, i$.$e$.,$ three officer$/$board members and one board member. Gino felt it was important for the volunteer board members to feel comfortable serving on the board so he made sure that the insurance to limit the liability of the board members was kept up to date. Gino has remained president of the HOA to the present day. During the summer of $2013,$ it came to some of the residents' attention that not all was well with the HOA. Below is a recount of recent event