The LCPOA board is misinterpreting state law by claiming asset ownership is permissible without explicit bylaw authorization, leading to potential legal and financial issues, particularly with the undocumented fencing asset

 

For the past several years there have been many discussions regarding whether our POA can own assets. We have several individuals on our current LCPOA board who have stated that, “if the Bylaws don’t state we can’t do something, then we can.” That is incorrect and selective in nature.

 

Bylaws of any corporation are established to clearly describe how a corporation is run and what actions it can take in the general operations of the company. Per the California’s Davis Stirling Common Interest Development Act (Civil Code Sections 4000-6150) a POA can’t own assets UNLESS their Bylaws clearly state the types of assets the POA can own, how those assets are to be maintained, and how financial matters related to how the assets are to be managed (e.g., assessments and reserve funding.)

Mr. McLeavy kindly researched this last fall and addressed the Board at an open session. He, just like Ms. Rawlinson, our legal council chose to state only the part of the law that supports their position that a POA can own assets. They both left out the rest of the paragraph regarding this issue as it wasn’t supporting their position (please refer to the paragraph above in bold.)

Per Mr. McLeavy’s statement that, “LCPOA does NOT have any language within our governing documents EXCLUDING us from owning assets,” he, in addition to Ms. Rawlinson, doesn’t want to admit that our bylaws must include the above
referenced language in order for LCPOA to own assets. Our bylaws must be amended in order to own assets and be in compliance with state law. That’s a simple but difficult achievement as the entire membership must be queried and ¾’s of the membership approve the amendment to the Bylaws. You don’t have to be an attorney to read the COMPLETE law.

During a discussion regarding the fencing reserve of approximately $700k in 2023 it was stated that the LCPOA owns approximately five (5) miles of fencing throughout La Cresta. With this revelation the LCPOA Bylaws must be amended
in order to be in compliance with state law. It looks very worrisome for the fencing asset not to be listed on the LCPOA Balance Sheet. After reviewing the tax returns for years 2020-2024 we can’t see where the fencing asset is documented.

That naturally raises a concern with federal IRS issues. Ms. Rawlinson should be more careful to convey the complete written law, not a portion. Inaccurate recital can lead to just such a situation that we have here. She and the LCPOA’s
accountant (who won’t answer our inquiries) are both apparently supporting these actions.

Why doesn’t the Board have the LCPOA legal council and accountant attend one of our open session meetings so they can address concerns and discuss their positions with all of the members. If we are incorrect in some of these statements, we’ll stand corrected.

​

NOW THAT WOULD BE TRANSPARENCY!