Unlawful Distributions?

The Summit's HOA may have been making unlawful distributions since February 2023.

Treasurer Vernell Butler signed a contract with RCSD for extra police enforcement here. Unfortunately, the contract carried the name of "Summit HOA", which is not The Summit Community Association, Inc.

The HOA has been paying invoices from RCSD. Those would be considered "unlawful distributions."

No amount ($0) could be paid by the SCA to RCSD lawfully.

Thanks, Vernell. Have you straightened out the mess yet? Why did you sign the contract, instead of Justin (President) and Greg (Secretary)? Have you reimbursed the HOA? Get a little help from your friends (on the board), Vernell. I'm sure they will be delighted to kick in.

$6,216 has been paid to RCSD through 6/30/2023. (Nothing paid in May or June.)


SECTION 33-31-833. Liability for unlawful distributions.

(a) Unless a director complies with the applicable standards for conduct described in Section 33-31-830, a director who votes for or assents to a distribution made in violation of this chapter or the articles of incorporation is personally liable to the corporation for the amount of the distribution that exceeds what could have been distributed without violating this chapter.

(b) A director held liable for an unlawful distribution under subsection (a) is entitled to contribution:

(1) from every other director who voted for or assented to the distribution without complying with the applicable standards of conduct described in Section 33-31-830; and

(2) from each person who received an unlawful distribution for the amount of the distribution whether or not the person receiving the distribution knew it was made in violation of this chapter.

This is why it is essential for each director to think critically and independently. Don't just go along with the herd. If you don't agree with the action being proposed, speak up. Vote No. And make sure your vote is recorded properly (by name) in the Minutes.

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