Year 2008
Click History for a list of changes and updates.
__See Recent Posts for an explanation of the content. Click Continue for the listing of recent posts with brief summaries.
Don Nordeen
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December 31, 2008
December 30, 2008
Formal Protest — Proposed Amendment to DMCCR Concerning Venue
2008 December 30
Last Update: 2009 Apr 09. Click History for a list of changes and updates.
__The continuation of this post is my formal protest of the proposed amendment to the Declaration of Master Covenants, Conditions and Restrictions for the Michaywé Planned Unit Development concerning venue.
__Owners/members were provided no information on the validity of the proposed amendment nor were they provided the opportunity to review what analysis, if any, was done by an attorney. The board meeting minutes do not state any approval of a motion by the board of the Michaywé Owners Association to authorize such an analysis.
__When I asked board member Jay Welter for a copy of any legal analysis, he advised that such was privileged to the board. Nonsense! Owners/members paid for any analysis and the analysis potentially affects their rights.
__Since owners/members had no opportunity to discuss, debate, learn and understand the ramifications of this proposed amendment, the protest letter below will be revised to include questions directed to this concerned owner/member. See History below for additions and revisions to date.
__A related post, Are delinquent dues & assessments a personal debt?, analysis this question and concludes that delinquent dues and assessments are not a personal debt, and therefore cannot be collected in court as such.
__(added 2009 Feb 20) Collections Policy — Click Dues Collections Policy for MOA's policy posted on its website.
Don Nordeen
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Continue reading Formal Protest — Proposed Amendment to DMCCR Concerning Venue.
__The continuation of this post is my formal protest of the proposed amendment to the Declaration of Master Covenants, Conditions and Restrictions for the Michaywé Planned Unit Development concerning venue.
__Owners/members were provided no information on the validity of the proposed amendment nor were they provided the opportunity to review what analysis, if any, was done by an attorney. The board meeting minutes do not state any approval of a motion by the board of the Michaywé Owners Association to authorize such an analysis.
__When I asked board member Jay Welter for a copy of any legal analysis, he advised that such was privileged to the board. Nonsense! Owners/members paid for any analysis and the analysis potentially affects their rights.
__Since owners/members had no opportunity to discuss, debate, learn and understand the ramifications of this proposed amendment, the protest letter below will be revised to include questions directed to this concerned owner/member. See History below for additions and revisions to date.
__A related post, Are delinquent dues & assessments a personal debt?, analysis this question and concludes that delinquent dues and assessments are not a personal debt, and therefore cannot be collected in court as such.
__(added 2009 Feb 20) Collections Policy — Click Dues Collections Policy for MOA's policy posted on its website.
Don Nordeen
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Continue reading Formal Protest — Proposed Amendment to DMCCR Concerning Venue.
- Key Words:xx Attorney Issues, Governance, Governing Documents, Members' Rights, Michaywé, Amendment, Abuse
December 28, 2008
Estimate of Operating Loss for 2008
2008 December 28
Last Edit: 2009 Feb 14. Click on History for changes and updates.
__Making an ongoing estimate of the projected year-end financial results is one of the primary obligations of the board of directors. The budget is annual; so the primary checking point on financial status should be the projected results against that budget.
__One of my ongoing questions at Open Forums is asking for financial results — particularly compared to prior year results. In general, the board is not prepared to answer the question even though the board has just approved filing of the financial report for the prior month.
__The continuation of this post contains further discussion and my estimate of the operating loss for 2008 which is in the range of $200,000 loss (most optimistic) to $280,000 loss. Mr. Todd Chwatun, general manager, was unequivocal during the Dec 13 meeting that the operating loss would be the optimistic number — $200,000 loss. For 2008, the board approved a balanced budget, meaning that the performance to budget is an unfavorable $200,000 at best.
__The Line of Credit and Accounts Payable are also unfavorable to 2007. In 2007, the board used $80,000 from the reserve fund for operations. These three accounts are a short-term debt of $566,000 which is about 65% of the annual dues billing.
__But maybe members aren't interested in receiving correct and competent financial information since they voted to not have an independent audit committee that could provide trustworthy financial reports.
Don Nordeen
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Click Continue for Post Continuation and any Comments.
Last Edit: 2009 Feb 14. Click on History for changes and updates.
__Making an ongoing estimate of the projected year-end financial results is one of the primary obligations of the board of directors. The budget is annual; so the primary checking point on financial status should be the projected results against that budget.
__One of my ongoing questions at Open Forums is asking for financial results — particularly compared to prior year results. In general, the board is not prepared to answer the question even though the board has just approved filing of the financial report for the prior month.
__The continuation of this post contains further discussion and my estimate of the operating loss for 2008 which is in the range of $200,000 loss (most optimistic) to $280,000 loss. Mr. Todd Chwatun, general manager, was unequivocal during the Dec 13 meeting that the operating loss would be the optimistic number — $200,000 loss. For 2008, the board approved a balanced budget, meaning that the performance to budget is an unfavorable $200,000 at best.
__The Line of Credit and Accounts Payable are also unfavorable to 2007. In 2007, the board used $80,000 from the reserve fund for operations. These three accounts are a short-term debt of $566,000 which is about 65% of the annual dues billing.
__But maybe members aren't interested in receiving correct and competent financial information since they voted to not have an independent audit committee that could provide trustworthy financial reports.
Don Nordeen
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Click Continue for Post Continuation and any Comments.
- Key Words: MOA Financial, Working Capital, budget
December 13, 2008
Accounting for the Reserve [Preservation] Fund
2008 December 13
Posted: 2009 Mar 11.
Click History for a list of changes and updates.
__This post including graphics is available as a PDF file at Accounting Preservation Fund.pdf.
__This post is my 2008 Dec 13 email to Vice President Kirk Yodzevicis concerning an incorrect accounting of $80,000 from the preservation fund (reserve for repair, replacement and renovation) which occurred in 2007. This was posted on 2009 Mar 11 as Accounting for the Reserve [Preservation] Fund. This post is included to place the email in correct time perspective in this weblog.
Don Nordeen
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Posted: 2009 Mar 11.
Click History for a list of changes and updates.
__This post including graphics is available as a PDF file at Accounting Preservation Fund.pdf.
__This post is my 2008 Dec 13 email to Vice President Kirk Yodzevicis concerning an incorrect accounting of $80,000 from the preservation fund (reserve for repair, replacement and renovation) which occurred in 2007. This was posted on 2009 Mar 11 as Accounting for the Reserve [Preservation] Fund. This post is included to place the email in correct time perspective in this weblog.
Don Nordeen
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- Key Words:xxFinancial Information, 2007 General; Financial Information, 2008 General; MOA Operations, General/Total; accounting; financial statements; preservation fund; reserve fund
December 8, 2008
Vote "NO" on Proposed Amendment to Michaywé Deed Restrictions Regarding Venue
2008 December 08
Last update: 2008 Dec 12. Click History for a list of changes and updates.
___The continuation of this post is an email to MOA members recommending a "NO" vote on the proposed amendment to the Michaywé Deed Restrictions to add a venue provision.
___Are you satisfied that the board has provided full and accurate information on:
___If the answers are "NO" to these questions, do you believe that the board has provided full and accurate information about the proposed amendment?
___If the last answer is "NO", then why would you vote for the proposed amendment based on the information provided?
Don Nordeen
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Last update: 2008 Dec 12. Click History for a list of changes and updates.
___The continuation of this post is an email to MOA members recommending a "NO" vote on the proposed amendment to the Michaywé Deed Restrictions to add a venue provision.
___Are you satisfied that the board has provided full and accurate information on:
- the financial status quarter by quarter?
- the financial status year by year?
- progress toward a balanced budget?
- not achieving a balanced budget?
___If the answers are "NO" to these questions, do you believe that the board has provided full and accurate information about the proposed amendment?
___If the last answer is "NO", then why would you vote for the proposed amendment based on the information provided?
Don Nordeen
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- Key Words:xx • Attorney Issues, • Governing Documents - General, • MOA Governance, • MOA Members & Members' Rights, CC&Rs, Declaration of Master Covenants, Conditions and Restrictions, duty of obedience, law, members' rights, POA members' rights, restrictive covenant, vote
November 23, 2008
Venue and Michigan Case Law on Amendment of CC&Rs
2008 November 23
Initial post: 2009 Apr 07. Click History for a list of changes and updates.
__The continuation of this post is an email to MOA Board Director Jay Welter concerning the board's proposal to seek an amendment to the Declaration of Covenants, Conditions and Restrictions ("DMCCR") defining venue for all purposes to be the courts in Otsego County. The reason for considering the amendment is a companion decision of the board to pursue collection of unpaid dues and special assessments in small claims court in Otsego County.
__Two significant questions are involved: (1) the requirements for amending the DMCCR for a new provision; and (2) whether or not third parties can change a resident's right of Michigan law that the venue for lawsuits is the county of the defendant (owner) for personal debt. Consequently, the amendment would affect venue only for owners of restricted property in Michaywé who are residents of another county or state. The effect of the amendment is to transfer the inconvenience of which court from MOA to the individual non-Otsego County resident.
__The analysis indicates that unanimous approval for such an amendment would likely be required to effect a redefinition of venue for litigation against an individual owner. To respect the rights of owners/members, the board should ensure that the proposed action is unquestionably valid under the law and governing documents.
Don Nordeen
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Initial post: 2009 Apr 07. Click History for a list of changes and updates.
__The continuation of this post is an email to MOA Board Director Jay Welter concerning the board's proposal to seek an amendment to the Declaration of Covenants, Conditions and Restrictions ("DMCCR") defining venue for all purposes to be the courts in Otsego County. The reason for considering the amendment is a companion decision of the board to pursue collection of unpaid dues and special assessments in small claims court in Otsego County.
__Two significant questions are involved: (1) the requirements for amending the DMCCR for a new provision; and (2) whether or not third parties can change a resident's right of Michigan law that the venue for lawsuits is the county of the defendant (owner) for personal debt. Consequently, the amendment would affect venue only for owners of restricted property in Michaywé who are residents of another county or state. The effect of the amendment is to transfer the inconvenience of which court from MOA to the individual non-Otsego County resident.
__The analysis indicates that unanimous approval for such an amendment would likely be required to effect a redefinition of venue for litigation against an individual owner. To respect the rights of owners/members, the board should ensure that the proposed action is unquestionably valid under the law and governing documents.
Don Nordeen
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Please be advised that the writer is not an attorney, and this is not legal advice. The information is based on research on information available in the public domain. ------------------------------------------------------------------------------------------------------
Please be advised that the writer is not an attorney, and this is not legal advice. The information is based on research on information available in the public domain. ------------------------------------------------------------------------------------------------------
- Key Words:_ Attorney Issues; Governing Documents,; Members' Rights venue; amendment; governing documents; CC and Rs; Covenants Conditions and Restrictions; restrictive covenants
September 19, 2008
Dismissal of Nordeen v MOA Lawsuit
2008 September 19
Last update: 2008 Sep 21. Click History for a list of changes and updates.
___The continuation of this post is an email to MOA Members concerning the dismissal of the Nordeen v MOA Lawsuit. Included is a discussion of the rule of law and democratic issues involved with governance of owners associations.
___The court order not only dismissed the lawsuit, but also created the possibility of significant personal liability if I proceeded with an appeal. The Opinion and Order creates a number of claims of reversible error including a major one of using an incorrect Standard of Review upon which the Opinion and Order is based. Had I won the lottery in August, I would have appealed the Court's decision in a heartbeat.
___Your comments are invited and are welcome. Thanks. I am available for discussion and to answer any questions.
Don Nordeen
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Last update: 2008 Sep 21. Click History for a list of changes and updates.
___The continuation of this post is an email to MOA Members concerning the dismissal of the Nordeen v MOA Lawsuit. Included is a discussion of the rule of law and democratic issues involved with governance of owners associations.
___The court order not only dismissed the lawsuit, but also created the possibility of significant personal liability if I proceeded with an appeal. The Opinion and Order creates a number of claims of reversible error including a major one of using an incorrect Standard of Review upon which the Opinion and Order is based. Had I won the lottery in August, I would have appealed the Court's decision in a heartbeat.
___Your comments are invited and are welcome. Thanks. I am available for discussion and to answer any questions.
Don Nordeen
==========
- Key Words:xx• Attorney Issues, • Governing Documents (General), • MOA Board of Directors, • MOA Governance, • MOA Members & Members' Rights, • Nordeen v Michaywé Owners Association, attorney, board of directors, breach of fiduciary duty, business judgment rule, bylaws, CC&Rs, Covenants Conditions and Restrictions, Declaration of Master Covenants, Conditions and Restrictions, dues, duties, duty of care, duty of loyalty, duty of obedience, duty to act, duty, fiduciary duties, fiduciary duty, fiduciary, governance, governing documents, governing, law, laws, lawsuit, members' rights, POA Board of Directors issues, POA governance, POA members' rights, restrictive covenant
August 29, 2008
2007 Audit Financial Statements
2008 August 29
Last update: 2008 Sep 13. Click History for a list of changes and updates.
___The audit reports for 2007 are finally available. They should have been available and summarized in the notice of the annual meeting.
___The continuation of this post is a summary of the results reported. Roughly, the results for 2007 are about $100,000 worse than for 2006, which were unfavorable as have been prior years. The cash flow for 2007 was negative (meaning unsustainable).
___If my review of the the 2007 audit report is incorrect, or if you have concerns about the findings from the review, please post a comment.
Don Nordeen
===========
Click Continue for Post Continuation plus Comments.
Last update: 2008 Sep 13. Click History for a list of changes and updates.
___The audit reports for 2007 are finally available. They should have been available and summarized in the notice of the annual meeting.
___The continuation of this post is a summary of the results reported. Roughly, the results for 2007 are about $100,000 worse than for 2006, which were unfavorable as have been prior years. The cash flow for 2007 was negative (meaning unsustainable).
___If my review of the the 2007 audit report is incorrect, or if you have concerns about the findings from the review, please post a comment.
Don Nordeen
===========
Click Continue for Post Continuation plus Comments.
- Key Words: Financial Information, 2007 General; MOA Operations, General/Total; accounting; financial statements; preservation fund; reserve fund
July 28, 2008
Which attorney should be believed?
2008 July 28
Click History for a list of changes and updates.
__Maybe a more appropriate title is "Should any attorney for MOA be believed?" Or, what actions should a board take to ensure that any opinion of an attorney is likely to be valid under the law and governing documents?
__Part of the broader question is "Who does the attorney represent?" or "Who is the client?"
__The continuation of this post discusses these questions in the context of Article IX of the bylaws for which MOA has conflicting opinions from two different attorneys on whether or not the board of directors has the authority to amend the bylaws.
Don Nordeen
===========
Click Continue for Post Continuation plus Comments.
Click History for a list of changes and updates.
__Maybe a more appropriate title is "Should any attorney for MOA be believed?" Or, what actions should a board take to ensure that any opinion of an attorney is likely to be valid under the law and governing documents?
__Part of the broader question is "Who does the attorney represent?" or "Who is the client?"
__The continuation of this post discusses these questions in the context of Article IX of the bylaws for which MOA has conflicting opinions from two different attorneys on whether or not the board of directors has the authority to amend the bylaws.
Don Nordeen
===========
Click Continue for Post Continuation plus Comments.
- Key Words:_ • Attorney Issues, • Community Association • Governing Documents (General), •Members' Rights, • Michaywé Owners Association, attorney, board of directors, engagement letter, governing documents, lawyer, organization as client, property owners association, transparency
July 27, 2008
Document From MOA Board Re Nordeen v MOA
2008 July 27
Click History for a list of changes and updates.
__A one-page undated yellow insert entitled, Re: Nordeen v MOA, was included with the 2008 May Business Review on the Nordeen v MOA lawsuit. "Signed" by the board or directors, it doesn't even have many of the counts properly described. The Complaint in the lawsuit speaks for itself. The document is available on the
__This is another example of the board not providing full and accurate information to the members. Providing full and accurate information requires an understanding of the issues.
__The continuation of this post provides my discussion of the lawsuit followed by the text from the Board's yellow paper with my comments added. Please call for a confidential discussion.
Don Nordeen
(989) 939-8240
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Click Continue for Post Continuation plus Comments.
Click History for a list of changes and updates.
__A one-page undated yellow insert entitled, Re: Nordeen v MOA, was included with the 2008 May Business Review on the Nordeen v MOA lawsuit. "Signed" by the board or directors, it doesn't even have many of the counts properly described. The Complaint in the lawsuit speaks for itself. The document is available on the
__This is another example of the board not providing full and accurate information to the members. Providing full and accurate information requires an understanding of the issues.
__The continuation of this post provides my discussion of the lawsuit followed by the text from the Board's yellow paper with my comments added. Please call for a confidential discussion.
Don Nordeen
(989) 939-8240
===========
Click Continue for Post Continuation plus Comments.
- Key Words:_ access; access to records; accounting; Accounting Principles; accounting standards; AICPA; AICPA Audit & Accounting Guide; AICPA Audit & Accounting Guide for Common Interest Reality Associations; Attorney Issues; breach of fiduciary duty; business judgment rule; case law; CC&Rs; CI/DR Dues; closed session; complaint; consolidated financial statement; Covenants Conditions and Restrictions; duty of care; duty of loyalty; duty of obedience; duty to act; executive session; fiduciary duty; lawsuit; Members' Motion; members' rights; Michaywé; Michaywe; Michaywé Owners Association; Michaywe Owners Association; open meetings; organization as client; planned unit development; prudent person; PUD; restrictive covenant; roles and responsibilities
July 24, 2008
Preservation of MOA's Assets
2008 July 24
Posted: 2008 Sep 05. Click History for a list of changes and updates.
___One of the major obligations of MOA through its board of directors is the preservation of MOA's assets. The quality and appearance of the assets provides an important indication of the well being of the Association. Wear and tear are inevitable. Assets in need of restoration are an obvious indicator of the financial health of the Association and poor management by the board of directors.
___The continuation of this post provides the parts of the 2005 preservation study for the items identified for RRR in the 2006-2010 time frame. It seems clear that the current board has decided not to take any action on preserving the assets, even though the board made a report in 2006 stating that the estimates were on the low side, items were omitted from the study, and the preservation fund had a major shortfall.
Don Nordeen
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Continue reading "Preservation of MOA's Assets".
Posted: 2008 Sep 05. Click History for a list of changes and updates.
___One of the major obligations of MOA through its board of directors is the preservation of MOA's assets. The quality and appearance of the assets provides an important indication of the well being of the Association. Wear and tear are inevitable. Assets in need of restoration are an obvious indicator of the financial health of the Association and poor management by the board of directors.
___The continuation of this post provides the parts of the 2005 preservation study for the items identified for RRR in the 2006-2010 time frame. It seems clear that the current board has decided not to take any action on preserving the assets, even though the board made a report in 2006 stating that the estimates were on the low side, items were omitted from the study, and the preservation fund had a major shortfall.
Don Nordeen
==========
Continue reading "Preservation of MOA's Assets".
- Key Words:_ access to records; accounting; annual meeting; arbitrary; arbitrary and capricious; Balanced Budget; Business Reviews, 2007; consolidated financial statement; depreciation; Fiduciary Duty; Financial Information, 2007 General; Financial Information, Capital Projects; Financial Information, General; preservation; preservation fund; reserve; reserve fund; Reserves for Capital Repair; transparency;
May 26, 2008
Q and A for Article IX of the MOA Bylaws
2008 May 25
Click History for a list of changes and updates.
_____Not much information has been provided concerning the advantages and disadvantages to members for Article IX of the MOA Bylaws. Article IX established two committees (Audit and Governing Documents) of the membership with election of two co-chairs serving two-year staggered terms.
_____The continuation this post provides questions and answers for the known questions. If you have another question or have a comment, please add by clicking on "Post a Comment" at the end of this post. Questions and Answers are below.
Don Nordeen
===========
Continue reading Q and A for Article IX of the MOA Bylaws.
Click History for a list of changes and updates.
_____Not much information has been provided concerning the advantages and disadvantages to members for Article IX of the MOA Bylaws. Article IX established two committees (Audit and Governing Documents) of the membership with election of two co-chairs serving two-year staggered terms.
_____The continuation this post provides questions and answers for the known questions. If you have another question or have a comment, please add by clicking on "Post a Comment" at the end of this post. Questions and Answers are below.
Don Nordeen
===========
Continue reading Q and A for Article IX of the MOA Bylaws.
- Key Words:_ access; access to records; accounting; Accounting Principles; accounting standards; annual meeting; bylaws; governing documents; meeting; members' meeting; Michaywe Owners Association; MOA Operations, General/Total; nonprofit corporation; nonprofit corporation act; nonprofit GAAP; planned unit development; POA; preservation fund; property owners association; reserve fund; Reserves for Capital Repair
April 5, 2008
Letter to MOA Board re Nordeen v MOA
2008 April 05
Click History for a list of changes and updates.
__The continuation of this post is a letter to the MOA Board of Directors Re Nordeen v MOA and Related Issues. The letter includes three attachments: A. Overview of why this lawsuit; B. Roles of Board and Attorney; and C. Fiduciary Duty. Posted for members' information. Comments are welcome. Please scroll down to the end of this post after the attachments.
__A PDF file of this letter with its three attachments can be downloaded at 2008 Apr 05 Letter to the Board.
__The Complaint in Nordeen v MOA is available at Complaint, MOA Governing Documents.
__Some of the links in this post are to the password-restricted website. See the Welcome page to gain access.
Don Nordeen
==========
Click Continue for Post Continuation plus Comments.
Click History for a list of changes and updates.
__The continuation of this post is a letter to the MOA Board of Directors Re Nordeen v MOA and Related Issues. The letter includes three attachments: A. Overview of why this lawsuit; B. Roles of Board and Attorney; and C. Fiduciary Duty. Posted for members' information. Comments are welcome. Please scroll down to the end of this post after the attachments.
__A PDF file of this letter with its three attachments can be downloaded at 2008 Apr 05 Letter to the Board.
__The Complaint in Nordeen v MOA is available at Complaint, MOA Governing Documents.
__Some of the links in this post are to the password-restricted website. See the Welcome page to gain access.
Don Nordeen
==========
Click Continue for Post Continuation plus Comments.
- Key Words:xxKeyWords
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