guest blog by Nila Ridings
What do Walt, C.J., Bill, Molly, Pat, Porter, Vern, and Tom have in common? They were all HOA board members. Shortly after serving on the board or while on the board they sold and got out! Could that be because they had access to records and information about lawsuits that the ordinary HOA “pariah” didn’t? Could it be because they saw the “light” on this dilapidated HOA and all of it’s failed plans and programs? Or is it because of the million dollar debt?
Whatever the reason, it does make a difference when you have access to “insider” information.
When a “pariah” wants to see HOA records they must make the request and pay by the hour to examine them. A “pariah” has to pay additional copying fees for each page. They don’t know how many lawsuits the HOA has filed or how many have been filed against the HOA. They don’t have a say in whether the board borrows $1,000,000 on a line of credit… and then agrees to pay the property manager 10% of it as some sort of “finder’s fee” or “management fee” on top of the hundreds of thousands per year he’s already collecting.
What seems to have been “brushed under the rug” in a majority of HOAs is the fiduciary duty that a board member has to the homeowners. What happened to that? Is it just some unheard of and forgotten obligation that board members routinely ignore?
And how have these board members managed to get thousands of dollars worth of work done on their units before selling them? While the neighborhood “pariahs” have work orders that collect dust for years.
I’m going to offer up this piece of advice for whatever it’s worth to our readers. If your board members are heading out the exit…you should, too. Pay close attention to the real estate listings in your HOA. Check the addresses against your county records for owners’ names. Board members’ properties listed for sale could be a sure sign something is rotten in the HOA!!!
“Pariah” was used in an HOA newsletter by the HOA president to describe homeowners who insisted the dues be used to repair their wood rotted houses as opposed to having the clubhouse completely redone. Since the clubhouse is rarely rented anyway, that project made no sense when the exterior of the houses was rotted so severely there is frame damage. But the board president decided to self-deal the clubhouse redo through her personal “decorating” company. And the HOA newsletter (it was learned in court) is printed by her “publishing” company! Which was how she justified pocketing all the advertising dollars from the ads that paid for the newsletter…and the profits became hers, too. Another one of her self-dealings! Her “pariah” newsletter was presented in front of a judge and jury…it most definitely helped the homeowner win all counts of the lawsuit. Hooray! Just another reminder you just can’t fix stupid!
Oh yes, and imagine this…the state has NO RECORD of her owning a decorating or publishing company. How many 80 year olds do you know who have the energy to own and manage two flourishing businesses that “cater” to the HOA while being president of the HOA? Since she’s been exposed she uses her middle finger to express her displeasure to her neighbors. Nope, she’s not even a classy old lady!
Lawsuits are public record…in AZ it’s easy to search your hoa for any lawsuits by going to the Maricopa Superior Court website. I encourage owners to do this…and definitely watch if board members all decide to sell! Huge red flag!
Lawsuits are public record in general, but a person would have to check for them every day to see if one has been filed. When some HOAs have over 2,000 units that can be very time consuming. It would be more appropriate for the board to be forthcoming with the information so all owners are aware of the risks that lie ahead. Not every owner is in favor of their neighbors being beaten up in litigation…usually over issues that could have been easily resolved.
Here we can do one search, under business name, “xyz HOA”…that makes it easy.