Category Archives: Fraud

Lawyers Whining About Florida HOA Reform

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Florida lawyers and HOA board members are in a snit because of a new state law designed to reign in dictatorial boards and embezzling board members.

The new law requires HOA boards to maintain records for seven years. It slashes the price HOAs can charge homeowners for copies of documents. HOA elections have to be fair and reasonable. Board members can no longer have those outrageous four hundred dollar apiece high-end meals they routinely force fellow homeowners to finance. But above all, board members have to have crime and fidelity insurance to prevent them from embezzling. And any board member charged with embezzling has to be immediately kicked off the board.
All common sense, right?

Well, the law will cut deeply into the fees that HOA lawyers hand off to all homeowners. 

(click here for an HOA lawyer’s blog)

 

Embezzlements, Galore!

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Fascinating few days of embezzlement news. Two ‘ladies’ in Sevierville, Tennessee, were indicted for embezzling from the Shagbark Homeowners Association. It’s alleged they used the HOA credit card to run up tens of thousands of dollars which will now have to be paid by the homeowners. Their police mug shots make them look a little worried.

For the record: Alice K. Ball and Judy M. Hixon.

(click here for web story)

But the wilder news is from Ventura County, California. Two big HOA embezzlement suspects were arrested there.

Kristin Davis and Melissa Hoff ran the Paradigm Management Group. They were charged with a nearly one million dollar embezzlement from the Big Sky Homeowners Association. When they were caught and fired by an HOA, they allegedly changed the name of their company and did it all over again!

But wait. It gets better.

Turns out these two ladies managed fifty other Homeowners Associations all over Ventura County and Orange County… and many of them are also missing money. At this point, who knows how much dough is involved!

(click here for yet another!)

 

Nevada Can’t Make HOAs Obey The Law!

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A wild story was broken this morning by the Las Vegas Review-Journal. A member of the Nevada state board which oversees Homeowners Associations says financial conflicts of interest on his own board essentially render it impotent and dysfunctional.

Jonathan Friedrich is one of the most prominent Homeowners Rights advocates in Nevada. Earlier this year he was appointed as one of seven members of the Commission for Common Interest Communities and Condominium Hotels. But Friedrich has been frustrated in his efforts to reign in some of the more outrageous behavior of many Homeowners Associations.

A prominent example is the habit of Homeowners Associations to tack on huge collections fees and legal costs on fines issued to homeowners. A fine of a couple hundred dollars often soars to thousands of dollars, far exceeding what state law allows. But HOAs really don’t bother to follow state statutes. They just want the money. And four of the seven member State Commission in Nevada apparently have no intention of enforcing the law.

HOAs have super-priority liens on all housing meaning they collect their money before the mortgage company gets a chance to collect. And that’s led to a vast number of Nevada houses sitting vacant. No prospective buyer wants to invest in a house which has thousands, sometimes tens of thousands of dollars in liens that have to be paid off. Even the federal government, which owns a large number of foreclosed homes, can’t get rid of its Nevada inventory.

Friedrich says a majority of the members on the state panel have conflicts of interest: They are representatives of the Homeowners Association industry. They personally profit from sheltering HOAs and their illegal fines. And they oppose any move to force HOAs to abide by state limits on how high a homeowner’s fines can go.

Not covered in the Review-Journal article linked below is that one of the commission members who’s thwarting HOA reform has said he’s a founding member of CAI, the powerful money-guzzling Community Associations Institute. And at least two other commission members are CAI members.

Conflicts of interest, illegally excessive fines, flouting of state and federal law: It’s really no surprise in the HOA industry.

(click here for Las Vegas Review-Journal story)

 

Ugliness Over Wittenberg Decision

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The knives are out for homeowners in California after the historic Wittenberg v. Beachwalk court decision. The Court of Appeals ruled that Homeowners Associations MUST PROVIDE equal access to all means of communication if an HOA takes any kind of advocacy position for a board candidate or change in HOA rules. After 24 of California’s top HOA law firms pleaded with the courts, they were set back on their heels. The Court of Appeals essentially told the law firms to ‘get lost.’

But don’t think for a moment these out-of-control boards will take it sitting down. These ruling elite make hundreds of millions of dollars a year in legal fees for fining and suing homeowners over such incredibly petty things as parking a car on the driveway ten minutes after the mandated deadline.

A number of HOA boards and websites are now referring to homeowners as ‘dissidents’! In other words, if you want to run for a board position, or you want to stop your board from making outrageous tyrannical decisions, you’re a dissident. If you remind a board that it’s in violation of the law established by Wittenberg, you’re a dissident. If you just want to be left alone, you’re just a lowly dissident.

Arrogance.

There’s no other word to describe these rogue boards.

Sadly, Wittenberg doesn’t create a precedent for the 49 other states. But it does create a wonderful roadmap.

(click here for Wittenberg decision)

 

 

How Many Conservatives ‘Get It’?

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Historically, many Republicans and indeed many conservative Republicans have strongly supported the idea of Homeowners Associations. They falsely believe that the smaller a governmental entity gets the closer it is to the people. Many conservatives AND liberals have discovered over the past few years this is an empty-headed belief.

An old-time outdoorsman’s axiom is that if three people get into trouble in the wilderness two will always turn against the one. You can’t get any closer to true democracy than three people. And as John Adams and Toqueville warned us eons ago, we all need to beware of the “tyranny of the majority.”

Democracy is an ugly word unless it’s accompanied by guaranteed restraints like a Bill of Rights, due process, and an orderly court system. Always remember that a mob running down the street breaking windows and burning buildings is a true democracy.

If there is no set of checks and balances, it’s basic human instinct to try to dominate all those around you. And right there is the fulcrum around which the national Homeowners Association scandal spins. Without checks and balances there are no human rights. Believe it!

The article linked below is a couple of years old, but it’s fantastic when a columnist for the conservative Townhall.com begins to understand that the Homeowners Association Movement has the potential of being downright dangerous to the finances and freedom of individual homeowners. The real tragedy is that we don’t hear a constant drumbeat from both the Townhall crowd and the ACLU crowd. Anger at this national scandal is not conservative or liberal. Every political faction should be screaming at the outrages going on in every state in the union.

All that being said, the attached column is worth reading again.

(click here for Townhall column)

http://townhall.com/columnists/rachelalexander/2011/06/22/homeowners%E2%80%99_associations_becoming_unavoidable_and_quasi-governmental/page/full