Yes, 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.
It’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!
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.
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.”
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.
