Category Archives: embezzle

Ripples from HOA Media Exposure Continue

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The ripples from the investigative series in the Kansas City Star continue to move across the nation. Editors at many major newspapers are undoubtedly kicking themselves for not diving into the story earlier. Beleaguered homeowners in out-of-control Homeowners Associations who’ve been victimized by the local lawn Nazis are feeling a bit of satisfaction that someone in the newspaper industry is finally looking their way. And some HOA bully boards may be looking behind them to see if investigative reporters are shadowing their activities.

Lord Acton famously said, “Power corrupts, and absolute power corrupts absolutely.” Supreme Court Justice Louis Brandeis said, “Light is the best disinfectant.” The very structure of the modern Homeowners Association creates a system of absolute power. And only by opening up that corrupt and secretive HOA structure to public inspection will homeowners begin to reign in the abuses and financial corruption of a huge number of the nation’s HOA neighborhoods.

The editorial in the Kansas City Star is worth reading, although those of us in-the-know recognize that it doesn’t go far enough. Legislative control? Yes. It’s necessary. But a complete ban of these phony non-profit HOA corporations is the only way to truly restore Constitutional rights to tens of millions of homeowners who inadvertently signed them away.

(link to HOA editorial in Kansas City Star)

 

 

Seeing Through The Excuses In South Carolina

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guest blog by Nila Ridings

Communication and documentation. Key words in the business world.

Here’s a case of a contractor who sold windows to the HOA. He became ill and unable to perform as promised. He also stopped communicating. Why didn’t he call the contact person and explain he was ill and would be back on the job? Why did he spend the money that was supposed to pay for the windows? Why didn’t he refund the money immediately and apologize for not being able to fulfill the agreement?

As I see it, the HOA paid too much money up front. Why didn’t she get a surety bond to guarantee the work would be done? Why didn’t she require the money be put in an escrow account and withdrawn as needed to pay for the windows and then the labor? Did she talk to other customers of this company? If not, she should have. Did she do an internet search for lawsuits, past and pending?

The loss could have been much greater. Hopefully, the windows will arrive and the contractor will get them installed and all will be well. But if they aren’t this HOA will be in court trying to recover its money and the cost of litigation will more than likely exceed the recovery.

Another lesson learned about board members who lack the experience of negotiating contracts and operating on trust instead of logic. Amateurs managing an HOA? Always a formula for disaster. We’ve seen it happen all across America. And there are times when the best of people with massive business knowledge still get taken.

Who ever thought the HOA concept would ever work must have been out of their minds!

(link to story about HOA mistake)

 

More on Crooked HOA Nevada

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guest blog by Bob Frank

The massive corruption involved with major over-charging of assessments and accumulating hidden slush funds from surplus assessments is still going on in Sun City Anthem, Henderson, NV with no end in sight.  Neither the state nor the city leaders are willing to act to stop it.  The facts are plainly documented–even this year with yet another board member who got it, and was ignored.

The total waste and abuse in this association alone is over $10 Million by now and growing every year.  There has been no accounting for such fraud.   Annual budgets cover up the issues, and assessments are never reduced by the prior year’s surpluses.   After a decade of such openly illegal abuses, not a single dollar of over $10 Mil. of surplus assessments has ever been “returned/refunded” to the overcharged 7,144 unit owners.  Those thousands of dollars denied to be refunded or credited to members amounts to grand theft–accordingly to criminal law.

But, the Administrative Laws of Nevada give the Executive Branch no authority to punish financially corrupt board members (and that is how the legislative and executive branches want it to be)–except to remove them from a board–which almost never happens.  While board members can theoretically be fined $1,000 by the executive branch, it almost never happens (3 times in 10 years from 3,000 HOAs where there were over 1,000 unit owner complaints about law violations and gross board mismanagement) and when it does, the association is allowed to pay the fine and stiff the members for the second time!

Finally, after what happened to me with being falsely arrested, perp-walked, jailed for 4 hours, entered into the global criminal database, and finger-printed for daring to ask that such flagrant theft by the board be investigated and punished, others are understandably too afraid to file similar complaints with “law enforcement” in Nevada.  So, there is never meaningful punishment for stealing from HOA unit owners–even if it causes the association to go bankrupt.

In case anyone is interested, I have some first person experiences with “tolerated corruption” relating to my 3 years on the NV HOA Commission.   It is a fact that Administrative Law is knowingly and willingly unconstitutional by our federal and state legislators.  The combination of ignorance and greed (dependence on development, HOA management, and real estate industry campaign donations) is totally out-of-control.  It is hard to see through the fog of corruption to envision any progress in the future.  The abusive system seems perfectly protected from all angles.

 

You Can’t Say We Didn’t Warn You!

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guest blog by Dave Russell

I was recently interviewed by the Kansas City Star, for their series, HOAs from Hell. While the story about my HOA was flattering, please don’t think for one second that I actually encourage folks to move into these Associations.

I’ve said it millions of times, and I’ll say it again: “You are just one board member, manager or management company away from insanity.” Really, you are.

Sure, I was very flattered that the Kansas City Star selected my community as the one HOA that actually does it right. While our four swimming pools now sparkle, our roofs are sound and my HOA lives up to its original brand, ‘Welcome to Resort Style Living,’ this wasn’t the case seven years ago. And if you really think about it, in a few years from now, my HOA could easily fall once again into the abyss.

I could tell you stories about now-sparkling pools that were once literally swamps, leaking roofs and enough crime that the City of Mesa, Arizona actually had a strategical and tactical plan for our HOA.

I could also tell you stories about our completely dysfunctional former board members, who collectively had an I.Q. of three, who once attempted to manage my neighbors’ financial affairs. But I’m sure you have all heard these stories before.

Now that you have heard all of the HOA horror stories, have read and watched the series, HOAs From Hell reported by Judy Thomas, and you are still considering purchasing a home within an HOA…you can’t say that we ALL didn’t warn you about the pitfalls of owning or renting in a Homeowners Association.

http://www.kansascity.com/news/special-reports/hoa/article93272412.html
(EDITOR’S NOTE: The above link is to an on-camera interview with Dave Russell)