Tweet
No names mentioned 
Almost 7 years ago my wife and I moved into our current home which is part of a town home community. We met the board president and we thought everything was fine. Not even a year later a lot of suspicious things started to happen.
We used to get financial statements and they always showed 20% of the association fees not coming in. Two years after moving in they raised the rates by 25% (pull out your calculator and do some match). It seemed that 1/5 of the units were not paying their fees so the president raised them 25% so everyone else could pay for them - that was my suspicion since it was rumored that the board wasn't paying their own fees (and their friends).
Two board members moved out and we just had our president on the board for over a year.
Since the bylaws allowed it my wife and I joined the board to try to help out the community. We found out that the president had not been paying any association fees because she couldn't afford them and that's why she hadn't put liens on anyone's properties because then she would have to put one on her own. Also, a lot of work wasn't being done because she (personally) couldn't afford the fees - she's making financial decisions for the community based on her financial situation.
My wife and I were going to request to have a bylaw added - all board members need to be current with their fees (we were trying to decide between 60 and 90 days). Of course the president started a smear campaign and got us both pushed out of the board.
For several years she was the only person on the board. I always requested the financial statements from the CPA what I got was a joke - "money in: money out" for each year. No listed expenses, no bank account information (balance etc..), etc.
Luckily last year (Jan 1, 2009) one of the other home owners joined the board and started things in motion. FL also passed a law anyone more than 90 days in the rears. Late last year the new person (VP) had enough support from the community and had two people ready to step up (myself and one other person) that he used this law to kick her off the board.
We suspected some scary shit going on but I had no idea - our first order of business was to get rid of our "management company" (a single person doing it on the side when she worked for a company that also did it), our CPA (explained later), our attorney, and our bank.
Then we audited the books and it is quite scary. These are the facts:
You'd think someone (like the manager, attorney etc..) would step forward and say something? Nope. Why?
A lot of shady and illegal shit was going on.
When we took over this is our our expenses shifted:
Management fees - went from $400 a month plus $100 fee every time she did something down to $250 a month.
CPA fees went from $300 a month to nothing (CPAs are included with the management company)
Attorney fees went from $300 a month plus extra fees to just fees (no monthly retainer if we use the attorneys who work with the management company).
Lawn maintenance - $1500 a month to $400 a month (and yet the former lawn guys never did anything).
We also had new roofs put in. Supposedly there wasn't enough of an insurance payout so each unit had to pay a $3500 special assessment (roughly $100,000 total). The roofing company is refusing to give us any statements or invoices and even the management company agrees, that would have been $500,000. We could have gotten gold plated roofs for that much. We should have only paid $250,000 for high end roofs, maybe $200 for average.
Yet some people are still supporting the ex-president, mainly because she's spreading lies about he board (she claimed one board member stole someone else's air conditioner - yeah, he just went out and took a 3 ton package unit on top of the roof and brought it over to his building).
What's pissing me off is that we cannot tell the homeowners exactly what is going on. We do have a "vague" letter going out 3-5 days before the ballots go out. Legally we can't discuss what we know, only to remain vague and can't mention any names (but it would be obvious). We've had draft after draft go between us and the attorneys for a version we can send out and it is so watered down it may not do much with some of her hard core supporters.
What's REALLY pissing me off is that each homeowner does have the right to the financial records and if they asked us to go over them we can. Yet we can't coach them to do that, they have to do it on their own so even if ONE did this and asked us to go over them, then we could show them the inconsistencies.
Our management company and attorneys do agree, while a lot of this does go on and they've seen larger total issues (some in the millions of dollars) this is, my far, the HIGHEST per unit per month they've ever seen.
We have 3 letters ready to go out before the election ballots go out:
1) A brag letter for 2009 and a plans letter for 2010 - what the new board has done.
2) The general "what happened" letter - letting the home owners know that a former board member is under investigation.
3) A full disclosure letter - once charges are filed it becomes public record. We can let the community know exactly what charges and why there are against the ex-president.
After we're done with the ex-president we're going to go after the CPA and attorney (with their respective state agencies), and the ex-manager as well as letting her company know what she was pulling (taking customers away from them).
Almost 7 years ago my wife and I moved into our current home which is part of a town home community. We met the board president and we thought everything was fine. Not even a year later a lot of suspicious things started to happen.
We used to get financial statements and they always showed 20% of the association fees not coming in. Two years after moving in they raised the rates by 25% (pull out your calculator and do some match). It seemed that 1/5 of the units were not paying their fees so the president raised them 25% so everyone else could pay for them - that was my suspicion since it was rumored that the board wasn't paying their own fees (and their friends).
Two board members moved out and we just had our president on the board for over a year.
Since the bylaws allowed it my wife and I joined the board to try to help out the community. We found out that the president had not been paying any association fees because she couldn't afford them and that's why she hadn't put liens on anyone's properties because then she would have to put one on her own. Also, a lot of work wasn't being done because she (personally) couldn't afford the fees - she's making financial decisions for the community based on her financial situation.
My wife and I were going to request to have a bylaw added - all board members need to be current with their fees (we were trying to decide between 60 and 90 days). Of course the president started a smear campaign and got us both pushed out of the board.
For several years she was the only person on the board. I always requested the financial statements from the CPA what I got was a joke - "money in: money out" for each year. No listed expenses, no bank account information (balance etc..), etc.
Luckily last year (Jan 1, 2009) one of the other home owners joined the board and started things in motion. FL also passed a law anyone more than 90 days in the rears. Late last year the new person (VP) had enough support from the community and had two people ready to step up (myself and one other person) that he used this law to kick her off the board.
We suspected some scary shit going on but I had no idea - our first order of business was to get rid of our "management company" (a single person doing it on the side when she worked for a company that also did it), our CPA (explained later), our attorney, and our bank.
Then we audited the books and it is quite scary. These are the facts:
- The ex-president was writing checks in excess of $3000 a month for "expense reimbursements" - there were even checks written to other respectable people in the community (including my wife) for the same yet we NEVER took a check from the association Checks from the association were also written to pay for cell phones, car chargers, and other related accessories for the ex-president's BF (receipt was sumbitted and it was on his cell phone account)
- The ex-president was writing checks off of the community's account to pay for two cell phone bills, AT&T bills (presumed home phone and internet), electric bills, water bills
- The ex-president wrote checks to pay for car rentals and hotel bills
- The ex- president used association money to pay for her notary license and her fees to the notary association.
- The ex-president used association money to form her own business
- The secretary of our CPA got at least one check (hundreds of dollars) as a "gift" from the association.
- When the new CPA got the records, the ex-president, for some reason, was current with her association fees
- Inconsistent money transfers. For example, $50,000 would be taken out for insurance but then a check for only $48,000 would be written to them - where's the other $2000?
You'd think someone (like the manager, attorney etc..) would step forward and say something? Nope. Why?
- The association paid for the manager's business license and insurance
- The manager would bill us for everything she would do at a rate of $100 an hour (minimum an hour). So she'd write a check for insurance, then she'd write herself a check for $100. Then she'd write another check, then one for herself for $100. This is on top of the monthly fee she charged us.
- The attorney is the one who formed the above mentioned businesses (for the ex-president and the manager).
A lot of shady and illegal shit was going on.
When we took over this is our our expenses shifted:
Management fees - went from $400 a month plus $100 fee every time she did something down to $250 a month.
CPA fees went from $300 a month to nothing (CPAs are included with the management company)
Attorney fees went from $300 a month plus extra fees to just fees (no monthly retainer if we use the attorneys who work with the management company).
Lawn maintenance - $1500 a month to $400 a month (and yet the former lawn guys never did anything).
We also had new roofs put in. Supposedly there wasn't enough of an insurance payout so each unit had to pay a $3500 special assessment (roughly $100,000 total). The roofing company is refusing to give us any statements or invoices and even the management company agrees, that would have been $500,000. We could have gotten gold plated roofs for that much. We should have only paid $250,000 for high end roofs, maybe $200 for average.
Yet some people are still supporting the ex-president, mainly because she's spreading lies about he board (she claimed one board member stole someone else's air conditioner - yeah, he just went out and took a 3 ton package unit on top of the roof and brought it over to his building).
What's pissing me off is that we cannot tell the homeowners exactly what is going on. We do have a "vague" letter going out 3-5 days before the ballots go out. Legally we can't discuss what we know, only to remain vague and can't mention any names (but it would be obvious). We've had draft after draft go between us and the attorneys for a version we can send out and it is so watered down it may not do much with some of her hard core supporters.
What's REALLY pissing me off is that each homeowner does have the right to the financial records and if they asked us to go over them we can. Yet we can't coach them to do that, they have to do it on their own so even if ONE did this and asked us to go over them, then we could show them the inconsistencies.
Our management company and attorneys do agree, while a lot of this does go on and they've seen larger total issues (some in the millions of dollars) this is, my far, the HIGHEST per unit per month they've ever seen.
We have 3 letters ready to go out before the election ballots go out:
1) A brag letter for 2009 and a plans letter for 2010 - what the new board has done.
2) The general "what happened" letter - letting the home owners know that a former board member is under investigation.
3) A full disclosure letter - once charges are filed it becomes public record. We can let the community know exactly what charges and why there are against the ex-president.
After we're done with the ex-president we're going to go after the CPA and attorney (with their respective state agencies), and the ex-manager as well as letting her company know what she was pulling (taking customers away from them).
I AM the evil bastard!
Eric the Grey
funds went to the ex-HOA leader's pockets, the IRS would like 
Comment