Category Archives: California

Oh What A Tangled Web We Embezzlers Weave

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Texas Senator

Texas SenatorYes, folks, it’s another million dollar embezzlement from trusting homeowners in California. At least the Feds are finally taking action. A Federal Grand Jury has indicted Chris Barna for stealing $950,000 from Homeowners Associations that once trusted him. Although he hasn’t been convicted yet, I have no problem calling him a dirtbag. Prosecutors say he misappropriated 342 checks, spent the money on nice things for himself, and manipulated the records for M&C Association Management.

He’s currently free on $200,000 bond, which is a crime all by itself. But heck, California is so broke they can’t pay to feed one extra prisoner.  And with state finances in such bad shape, does anyone really think Barna will get any kind of prison term?  Ah yes, it’ll be a federal prison, not a California prison. But then again, aren’t the Feds about to “go over the financial cliff” in the current parlance?

Mark my words, Barna will get to keep the 950,000 bucks, he’ll get little or no prison time, the court will order restitution, and Barna won’t pay back a dime. The homeowners will be on the hook, though. Each homeowner who lives in a Barna-swindled association will be hit with a special assessment to make up the stolen money. Ain’t California great?

Oh, and I almost forgot. The owner of Barna’s company is Associa. Who or what is Associa? Well, Associa is owned by Texas Senator John Carona. Ask anyone from Texas.

Or better yet, let me link you to Jan Bergemann’s website where he discusses Associa in detail. And God bless you, Jan Bergemann!

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Finally, A Good Court Decision!

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Reston's Shadowood

Reston's ShadowoodIt’s not often that the lowly homeowner has much of a chance of getting a fair hearing in court. The vast majority of all rulings are against the homeowner and in favor of the private non-profit corporation. And many’s the judge who’s told a miserable homeowner that he or she should have read his covenants before signing the real estate documents.

Last week’s ruling, though, by the Supreme Court of Virginia was a clarion call to the National Homeowners Association Movement that it can’t stomp on the homeowner’s Constitutional rights forever. Basically the court ruled that the Shadowood Condominium complex in Reston, Virginia cannot assess fines against residents because there was no such permission granted in the development’s master deed. Bam! Pow!

Stone-faced attorneys in Virginia said the ruling will have a profound impact on 10,000 Homeowners Associations across Virginia. It certainly will have a profound impact on lawyers who make a fancy living from dragging homeowners into court over stupid covenant violations.

Just reading about the wrongdoing by certain Shadowood officials over the years is enough to make one weep. Millions of dollars spent on ‘improvements’ with no accounting oversight. Tens of thousands of dollars paid to certain HOA board members for ‘services rendered’. Towing cars right before Thanksgiving. Turning off the heat and air conditioning to ‘punish’ rule-breakers. It’s ugly, and I’ve linked to the Washington Post’s story below.

Law professor Evan McKenzie predicted in his last book, Beyond Privatopia, that Homeowners Associations were going to face a day of reckoning. He was precognizant, a man of real genius.

Folks, the mightiest dam in the world can collapse. The collapse, no matter how large, starts out with a microscopic fissure somewhere.

This dam has not yet collapsed.

But it will.
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‘Tis The Season To Be Folly

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Ah yes, Good Friends. This is the season where bad neighbors are supposed to join hands, ill will is forgotten and life is reborn. After all, the Christmas holiday theoretically celebrates the birth of Jesus Christ, the human form of God Almighty. The birth of Jesus and His subsequent ministry changed the world in a mightier way than any other man, religion, idea, or concept in history.

True Christian brotherhood should never have permitted the Crusades, or the enslavement of races, or a host of other things that Mankind has brought upon himself. Belief in Jesus Christ mandates that believers forgive, forget, and make a moral and spiritual change that amounts to a profound rebirth of the inner spirit. True Christian brotherhood also mandates that even non-believers and skeptics be given as much respect, consideration and love as those inside the faith. Christ was inclusive, not exclusionary, and Christ-followers do not have the right to assume themselves better, or wiser, or more blessed than non-believers, or to demand that non-believers change their ways and accept a belief system against their wishes and without question.

Christ-followers make just as many mistakes as those outside the faith, and human conflict doesn’t vanish simply because someone wishes another “Merry Christmas.”  No, strife goes on, and will always go on because all men and women, including Christians, are imperfect.

This blog is usually about that odd American institution known as Homeowners Associations, an invention originally devised to keep blacks, Orientals and Jews out of white neighborhoods. Doesn’t sound very ‘christian’, does it?

Some believers like to play the WWJD game when confronted with a controversial and puzzling life situation. WWJD?  What Would Jesus Do? Trying to understand the life and ministry of Jesus, in light of a given current controversy, which side would this incredible figure in history take?

For example, WWJD in a neighborhood where widows have their homes foreclosed upon when money is short and the HOA dues are late?  WWJD in a neighborhood where a child with Down’s Syndrome is forbidden from playing outside because the HOA won’t permit a porch enclosure to keep the child from wandering into the street? WWJD with a neighborhood where Negroes are subtlely steered by Realtors away from Caucasian enclaves? WWJD with a Homeowners Association that threatened to sue, seize and auction off a home where a child used firewood and branches to set up a temporary kids’ fort, or where a grandmother was told to face a lawsuit because her daughter’s backyard playhouse was pink instead of beige?

And what about neighborhoods that sue to force homeowners to remove Christmas lights that are set up to celebrate the birth of Jesus Christ?

That last question is actually pretty easy to answer. Jesus was not a maniacal egotist. He would never have demanded that humans set up displays to celebrate his birth. He would have preferred that warring neighbors just find a way to treat each other with love and respect, lights or no lights.

Ward Lucas, author of:

Neighbors At War! The Creepy Case Against Your Homeowners Association

Tiny Mice Gang Up on Big HOA Rats

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Homeowners usually get the raw end of the deal when they try to fight the “Bigs” in the HOA industry. Some Homeowners in California are trying to turn that trend around. An HOA in Riverside County has sued three former property managers for “fraud, conspiracy to defraud, breach of contract, and breach of fiduciary duty. They had employed the management companies for eight years.
 
Canyon Lake Association then sued its own law firm, Fiore, Racobs & Powers, accusing them of “fraud and malpractice.” They say a lengthy investigation found “no cash management, no separation of accounting duties, credit card abuse by employees, employee salary increases that were not approved by the board.”
 
The lawsuit further claims that three HOA managers “created and concealed a secret, systemic pattern of conversion and theft of (HOA) assets and funds…and made representations to the board that were not true and were a cover-up designed..to delay discovery of the cover-up.”

One final thought comes to mind here. We haven’t heard much from the federal investigators in Las Vegas. We hope the widespread corruption they found in the Vegas HOA industry hasn’t depressed them to the point that they want to ‘throw in the towel’. Actually, we hope the opposite is true. We hope they take a look around the country and discover that the legal scams in Las Vegas are as identical and numerous as the legal scams in Riverside County, and Modesto, and Weld County, Colorado, and Dallas, and Houston, and Miami, and North Carolina.
 
If you don’t think it’s happening in your own community, you are either naive or dumber than a box of rocks. When we signed those CC&Rs, we stepped into an entirely new form of government with no checks and no balances. We essentially told law firms and property managers, “It’s OK to steal from us.” And then we whine when they steal from us.

How to Wrench a Neighborhood Apart

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HOA lawyers tell their clients, “Show no mercy on neighborhood scofflaws. Warn them about the violation. Tell them this is a “no tolerance” neighborhood. Then pop them with a lawsuit.”

That kind of advice can tear a neighborhood apart. It also means some pretty nice paydays for lawyers.

Sammi Goldsten lives in the Southern Oaks Society Homeowners Association in the Stevens Ranch area of north Los Angeles County. The HOA asked Sammi to repaint her house, so she painted it almost the exact color as a house down the street. But the HOA decided her choice of colors was wrong and they filed a lawsuit. Surprisingly, they got an $18,000 judgment against Sammi, despite the fact that she wasn’t even aware the lawsuit had been filed.

Sammi had two plausible reasons for being unaware of the lawsuit. She was never served with the subpoena. And at the time, Sammi was at the Mayo Clinic in Minnesota. Her young daughter was deathly ill and was undergoing a series of surgeries as doctors attempted to save her life. Sammi never left her daughter’s bedside.

On the other side of the country, the Southern Oaks Society HOA continued its war against the Goldstein family. To satisfy the $18,000 court judgment, the HOA drained the savings accounts of Sammi’s two children. And when Sammi finally returned to her neighborhood she was served with a contempt of court citation that basically said, either paint your house or go to jail.

It’s not often that an embattled homeowner wins against an HOA. But Sammi’s lawyer, Kenneth G. Eade, appeared in court and asked the judge to set aside his prior ruling. Eade argued that fairness demands two elements; that a defendant to notified of the lawsuit and second, that a defendant be given a chance to be heard. Sammi was given neither.

The judge agreed and set aside his former ruling.

Still, it’s hard to believe there were any winners in this case. Certainly not Sammi Goldstein who now owes a small fortune in attorney’s fees. And it cannot be the Southern Oaks Society HOA, which has now built up a stack of its own legal bills. Finally, it cannot be the neighborhood itself.  Realtors who show clients any homes for sale in Southern Oaks must disclose any “defects” in a property. That would include the contemptible actions of a rogue HOA board that has no compassion for a family during its time of grief and distress.