Board of Directors’ Squabbling Results in Over Budget, Out of Control Legal Expenses

The 2017 budget was presented and approved at the September 28 Board of Directors meeting. Our assessments will be increasing, attributable mainly to the County mandating curbside recycling which will increase our costs by $8 a month per household.

The allocation for legal expenses was increased by 300 percent — from $3,000 in 2016 to $9,000 in 2017. Why? Because that is about what the Board has already spent in 2016 and in their wisdom they want to continue wasting our money on unnecessary expenditures rather than finding ways to cut back. One of the major causes of the runaway legal expenditures is the dysfunction of the Board. Three members have resigned mid-term. A very expensive dispute resolution involving Jim Bailey and the other Board members occurred in July. All attendees signed a non-disclosure agreement. In mid-September Jim Bailey resigned.

At the September Board meeting I asked if the legal costs of the dispute resolution were the cause of the legal budget being overspent so drastically. President Paiz said it was. I asked how much that unsuccessful dispute resolution cost and Paiz said he could not tell me because it was confidential. He said he would have to ask Lynn Krupnik, who received payment for the dispute resolution, if it was “OK to release the information.” He stated that it would cost $250 to get an answer, Ms. Krupnik’s hourly rate. Apparently she does not bill in anything less than hourly increments. All RVS residents pay for the attorney’s services and we have the right to know the amount paid to her. While the content of the dispute may be confidential, the cost is not.

Rancho Viejo North has a legal budget of $2,000 and it usually goes unspent. Why does Rancho Viejo South spend so much more? The North has a Board composed of rational people who solve disagreements without involving an attorney. Our Board likes to waste residents’ money on their internal disputes and asking for legal advice from Ms. Krupnik on ridiculous things. Our Board does not represent the interests of residents. They are a disgrace.


4 responses to “Board of Directors’ Squabbling Results in Over Budget, Out of Control Legal Expenses

  1. The dispute resolution involving board members of RVSCA was “amicably resolved” on July 12, 2016. That is all I am allowed to say. That is all board members and their attorney are allowed to say. Neither Mr. Paiz nor Ms. Krupnik can release any further information beyond stating that the dispute was “amicably resolved.” As the dispute was “amicably resolved” to say that it was “unsuccessful” is inaccurate.

  2. Your point is well taken, Jim, however, MY idea of “success” for the Association would have been having you remain the active Treasurer (no offense intended toward Mr. Schatzman). Residents who attended board meetings know that Director Corbin was excluded from the proceedings at the advice of the Association Attorney, a ridiculous tactic that Ms. Krupnik has recommended in the past. Shame on the Board for allowing it, since each Director has an equal vote according to our bylaws. In addition, during the initial stages of a dispute resolution before your term, the Association Attorney recommended using Association funds to cover the President’s legal costs, but not the other Director involved, an unfair practice that probably pertained to you as well. Board President Paiz verified the impact on the Association’s legal expenditures (over $9K now), but not what it cost you personally – at $250/hour for most attorneys in this town, I’d bet it wasn’t cheap. So, since New Mexico state law doesn’t allow residents to recoup legal fees unless association bylaws allow it, and we have no oversight body for HOA’s, “success” in a dispute with a heavy-handed board will remain a relative term until our legislature decides to offer greater protection for residents.

  3. REALLY?????????????? The board actually approved $9,000 for legal???? Egads!!!! We need a new board- and definitely a different attorney!!!!!!!!!!! WHY were our association fees used- AGAIN- to pay legal expenses for SOME board members but not all? Isn’t the attorney supposed to represent the ENTIRE board? Sounds like SOME members of the current board fully intend to continue harassing anyone brave enough to speak out against violations of the bylaws, as evidenced by this HUGE bump up in legal for next year. Interesting that the North doesn’t even use all there meager $4,000. Must be they have all adults on their board- AND NO PUPPETS.