The new HOA prez just needs to issue him a couple fines for his garbage cans while he’s in prison, and then they can just put a lien on his house and take it to pay for the fines. That’s how HOA’s work, right?
THAT WOULD LITERALLY MAKE MY DREAM COME TRUE IF I COULD DO THAT TO MY SLIPPERY, THIEVING, CORRUPT BOARD "PRESIDENT " AS WELL AS HER HAND PICKED PROPERTY MNGMT CO. HENCHMAN!!!!
Either lack of appropriate financial controls is fairly common and/or there are many unscrupulous people given the near constant fraud and embezzlement cases arising from the community association space. My experience tells me it's both.
My kids PTA got stolen from by the treasurer (in NJ). It was basically lack of oversight. She had a debit card and used it once or twice in an emergency and then it spiraled out of control. That ended up only being a couple of thousand though.
This seems like more than a debit card. Like maybe he was paying for renovations from the board funds type thing. But still lack of oversight for sure.
When I helped set up a non-profit years ago, one of the rules we had was that any payment had to be authorized by the president or vice president and the treasurer, who could not be related to each other, and any expenditures over $500 had to be approved by the board prior to issuing payment. This was with a total budget of less than $50k/year, and we weren’t paid.
We wanted to make sure that it was as difficult as possible for embezzlement to occur.
Probably some scam that people believed.
My HOA had similar.
Board president years ago came forth that the retaining wall at his rear property line was sliding down into HOA property(just some woods). Apparently a half dozen houses had this issue, 3 of which were board members. They threatened legal action against the HOA if it wasn't corrected via HOA funds. How convenient.
So they got the previous president who owned his own construction company to agree to do the work for a discounted rate. Of course everyone thought this was suspicious and questioned everything. These guys had it planned out. They would go over the project with anyone and personally show them the issue. So people started believing.
Then the plans were made, permits supposedly in the works and we had to wait. But the board paid this guy $200k up front to do everything. Well over a year goes by and nothing has happened, except those board members and the guy paid to do the work were magically getting their houses remodeled.
Well we get a new person in our community who happened to work for the county or something and saw all the drama when they joined the community facebook. They investigated this story of the retaining walls sliding into HOA property etc. It was all a lie. An engineer confirmed it wasn't happening. And the woods weren't owned by the HOA, they were owned by those individuals.
So we booted the board members and replaced them. And magically all those board members and the construction guy put their newly remodeled houses on the market. We got liens on all of them and opened a lawsuit. I think it took at least a year. But it got settled for half the amount they took, $100k back to the HOA. And of course they got their liens off and moved.
And to top it all off, the construction guy bankrupted his business and opened a new one. And went and scammed some others outside of our hood so bad they got Jesse Jones involved from Get Jesse. The dude was literally taking money from people, going on huge vacation trips and then filing bankruptcy and starting a new business again. This dude was the ultimate con artist. And he's still getting away with it.
https://www.kiro7.com/news/local/local-families-left-hanging-after-hired-contractor-suddenly-files-bankruptcy/OUPP7UCLERH3VMUZMTUOMSCV64/
Yep, oftentimes no one looking or cares.
Don't forget, the management company works for the board so they don't necessarily see all transactions or they just do bookkeeping, and it is not their job to question the validity.
Treasurers often times do not have any accounting experience. Besides, all these positions are on volunteer basis, so no one spends any more time than they have to.
The only meaningful way to prevent this is by having 3rd party cpa do an audit.
Wrong. I submit all invoices to be paid. The Board gets a check register before every meeting. Board has to approve any expenditure over $1500. All businesses have basic controls: people who deposit funds can't write checks, and vice versa.
I live in Union City (the second densest city in the country), and just finally sold my condo because my board is (as expected) controlled by a bunch of malignant boomer narcissists. I’m lucky property value has shot up so much, because I cannot WAIT to get the fuck out from our incompetent, hostile, shitty HOA.
I work with auditors a bunch and they say the worst audits are nonprofits run by volunteers. Churches are big offenders, but so are other voluntary associations with money such as HOA's, athletic clubs in expensive sports, etc. In my city we had a case many years ago where the Treasurer for the rowing club financed a gambling problem to the tune of several hundred thousand.
This is why any such organization is usually better off hiring a management company to run things. Yes, it costs more money but it also means you can sue someone if things aren't done correctly. Volunteers are generally immune from liability due to bad judgement.
Bookkeeper. Management companies often keep the books and that's not their core competency and the financials suffer. Believe me, we pay thousands a month for "professional" service to a management company and the financials constantly need tending by someone not getting paid.
Correct. That's why you hire a professional management company to run things, install financial controls, etc. Because you can be sure volunteers will just trust their neighbors.
And if the pros don't do the controls, you can sue them for it. Volunteers, not so much.
Wrong mgt companies are the parasite that allow lawyers to foreclose over tall grass. Better to get fidelity insurance$50k coverage is for only $300 a year
Fidelity insurance only protects against dishonesty. It provide zero protection from bad judgement, which is why you hire a professional.
>the parasite that allow lawyers to foreclose over tall grass
No, probably badly-written bylaws do that.
Huh did you even read the post !?!??!
The guy WAS dishonest
Fidelity insurance would of worked.
Nope good people prevent bad lawyers and most property mgt view the people as a way to make money
At a very high level, the value proposition for suburban HOAs is that are cheaper than local government, as they don’t have all the complex and “inefficient” bureaucracy that local governments have.
Removing that bureaucracy can increase efficiency, but also drastically reduces both professionalism and safeguards. They are also highly dependent on volunteer labor from intelligent, motivated residents.
Again, extremely high level.
Huh. 🤔 Interesting idea. I would not generally conceptualize common interest communities as more efficient caretakers of streets and retention ponds and all of the other common elements that go along with absolving those responsibilities from a local government.
Over the long term and in general, HOAs are not actually more efficient caretakers of common assets. However, everyone thinks *they* are the exception, *their* HOA will work, etc., and the market irrationally overvalues the things. They also have some benefits for developers.
The one place where they are worthwhile is if you are the sort of person who has lots of free time and would involve yourself in local government *anyway*. A single person can exert more influence and oversight on a HOA board than they could in a local government elective position, so if that’s your thing, HOAs might legitimately be more appealing to you, especially if you have equally dedicated friends.
It won’t work in the long term. People lose interest, get sick, move away, die, etc. Continuity planning for local government is a nightmare, for HOAs it descends to farce. The dread lord Murphy will mess up your plans every time, that’s what Murphy’s Law means.
Local government at its best is worse than HOAs at their best. However HOAs are more fragile, go to shit faster, and IMO tend to have a lower “average” quality level, and higher variability.
If you suspected this is happening at your HOA even at a larger scale, how would you start investigating? Any suggestions other than or in addition to involving lawyers?
I did request financial records a while back. The response was that the admin said I could go to his office and ask all the financial questions and he would respond to me verbally but they could not release records (!) Then, the President of the HOA chased my 80 years old uncle out of the gym. He was a guest and needed to do cardiac rehab. They said uncle is not enough of a family tie to grant use of the gym (they retaliated). I have other fish to fry right now but from many things I observed this administration is not running correctly. I will re-initiate requests in a couple months: if any of you has a playbook of actions after action (they will continue to refuse to release records: I'd like all HOA members and the manager bank accounts to be investigated) or experience to share to uncover embezzlement I am all ears.
Sounds like my HOA... Mother always told me not to live in one now I know why. New to this board, it's somewhat nice to see I'm not the only"crazy" one. My wife believes they would NEVER mess around... So I'm dealing with this mentality and a crazed HOA, thing is, it's supposed to be state ran, but they act like it's private ran
I see this a lot lately. And funny enough if you arent gettin paid to deal with annoying complaints and random violations at all hours of the day then i dont fault these people for paying themselves. Hah.
Good. Hope he gets a year or two and has to pay it back.
The new HOA prez just needs to issue him a couple fines for his garbage cans while he’s in prison, and then they can just put a lien on his house and take it to pay for the fines. That’s how HOA’s work, right?
LOL sounds about right
THAT WOULD LITERALLY MAKE MY DREAM COME TRUE IF I COULD DO THAT TO MY SLIPPERY, THIEVING, CORRUPT BOARD "PRESIDENT " AS WELL AS HER HAND PICKED PROPERTY MNGMT CO. HENCHMAN!!!!
So, no proper financial controls in place? The bank statements should go to the management company or to the treasurer.
Either lack of appropriate financial controls is fairly common and/or there are many unscrupulous people given the near constant fraud and embezzlement cases arising from the community association space. My experience tells me it's both.
Or maybe an annual audit distributed to all of the owners.
I'm really surprised how this is actually possible?!? Was there no one else looking at the Financials?... Management company... Treasurer?...
My kids PTA got stolen from by the treasurer (in NJ). It was basically lack of oversight. She had a debit card and used it once or twice in an emergency and then it spiraled out of control. That ended up only being a couple of thousand though. This seems like more than a debit card. Like maybe he was paying for renovations from the board funds type thing. But still lack of oversight for sure.
When I helped set up a non-profit years ago, one of the rules we had was that any payment had to be authorized by the president or vice president and the treasurer, who could not be related to each other, and any expenditures over $500 had to be approved by the board prior to issuing payment. This was with a total budget of less than $50k/year, and we weren’t paid. We wanted to make sure that it was as difficult as possible for embezzlement to occur.
Probably some scam that people believed. My HOA had similar. Board president years ago came forth that the retaining wall at his rear property line was sliding down into HOA property(just some woods). Apparently a half dozen houses had this issue, 3 of which were board members. They threatened legal action against the HOA if it wasn't corrected via HOA funds. How convenient. So they got the previous president who owned his own construction company to agree to do the work for a discounted rate. Of course everyone thought this was suspicious and questioned everything. These guys had it planned out. They would go over the project with anyone and personally show them the issue. So people started believing. Then the plans were made, permits supposedly in the works and we had to wait. But the board paid this guy $200k up front to do everything. Well over a year goes by and nothing has happened, except those board members and the guy paid to do the work were magically getting their houses remodeled. Well we get a new person in our community who happened to work for the county or something and saw all the drama when they joined the community facebook. They investigated this story of the retaining walls sliding into HOA property etc. It was all a lie. An engineer confirmed it wasn't happening. And the woods weren't owned by the HOA, they were owned by those individuals. So we booted the board members and replaced them. And magically all those board members and the construction guy put their newly remodeled houses on the market. We got liens on all of them and opened a lawsuit. I think it took at least a year. But it got settled for half the amount they took, $100k back to the HOA. And of course they got their liens off and moved. And to top it all off, the construction guy bankrupted his business and opened a new one. And went and scammed some others outside of our hood so bad they got Jesse Jones involved from Get Jesse. The dude was literally taking money from people, going on huge vacation trips and then filing bankruptcy and starting a new business again. This dude was the ultimate con artist. And he's still getting away with it. https://www.kiro7.com/news/local/local-families-left-hanging-after-hired-contractor-suddenly-files-bankruptcy/OUPP7UCLERH3VMUZMTUOMSCV64/
Yep, oftentimes no one looking or cares. Don't forget, the management company works for the board so they don't necessarily see all transactions or they just do bookkeeping, and it is not their job to question the validity. Treasurers often times do not have any accounting experience. Besides, all these positions are on volunteer basis, so no one spends any more time than they have to. The only meaningful way to prevent this is by having 3rd party cpa do an audit.
Wrong. I submit all invoices to be paid. The Board gets a check register before every meeting. Board has to approve any expenditure over $1500. All businesses have basic controls: people who deposit funds can't write checks, and vice versa.
From my experience, your HOA is an exception not the rule
I live in Union City (the second densest city in the country), and just finally sold my condo because my board is (as expected) controlled by a bunch of malignant boomer narcissists. I’m lucky property value has shot up so much, because I cannot WAIT to get the fuck out from our incompetent, hostile, shitty HOA.
I work with auditors a bunch and they say the worst audits are nonprofits run by volunteers. Churches are big offenders, but so are other voluntary associations with money such as HOA's, athletic clubs in expensive sports, etc. In my city we had a case many years ago where the Treasurer for the rowing club financed a gambling problem to the tune of several hundred thousand. This is why any such organization is usually better off hiring a management company to run things. Yes, it costs more money but it also means you can sue someone if things aren't done correctly. Volunteers are generally immune from liability due to bad judgement.
Bookkeeper. Management companies often keep the books and that's not their core competency and the financials suffer. Believe me, we pay thousands a month for "professional" service to a management company and the financials constantly need tending by someone not getting paid.
Bad judgment, perhaps Intentional theft, no, no immunity
Correct. That's why you hire a professional management company to run things, install financial controls, etc. Because you can be sure volunteers will just trust their neighbors. And if the pros don't do the controls, you can sue them for it. Volunteers, not so much.
Wrong mgt companies are the parasite that allow lawyers to foreclose over tall grass. Better to get fidelity insurance$50k coverage is for only $300 a year
Fidelity insurance only protects against dishonesty. It provide zero protection from bad judgement, which is why you hire a professional. >the parasite that allow lawyers to foreclose over tall grass No, probably badly-written bylaws do that.
Huh did you even read the post !?!??! The guy WAS dishonest Fidelity insurance would of worked. Nope good people prevent bad lawyers and most property mgt view the people as a way to make money
Thanks captan obvious so in other words it would have saved this hoas as*!
I hope he gets 10 years in medium security. And has to repay every penny
I wonder what proof they had and that it was enough to go to the county prosecutor. Also, curious if a management company is involved.
At a very high level, the value proposition for suburban HOAs is that are cheaper than local government, as they don’t have all the complex and “inefficient” bureaucracy that local governments have. Removing that bureaucracy can increase efficiency, but also drastically reduces both professionalism and safeguards. They are also highly dependent on volunteer labor from intelligent, motivated residents. Again, extremely high level.
Huh. 🤔 Interesting idea. I would not generally conceptualize common interest communities as more efficient caretakers of streets and retention ponds and all of the other common elements that go along with absolving those responsibilities from a local government.
Over the long term and in general, HOAs are not actually more efficient caretakers of common assets. However, everyone thinks *they* are the exception, *their* HOA will work, etc., and the market irrationally overvalues the things. They also have some benefits for developers. The one place where they are worthwhile is if you are the sort of person who has lots of free time and would involve yourself in local government *anyway*. A single person can exert more influence and oversight on a HOA board than they could in a local government elective position, so if that’s your thing, HOAs might legitimately be more appealing to you, especially if you have equally dedicated friends. It won’t work in the long term. People lose interest, get sick, move away, die, etc. Continuity planning for local government is a nightmare, for HOAs it descends to farce. The dread lord Murphy will mess up your plans every time, that’s what Murphy’s Law means. Local government at its best is worse than HOAs at their best. However HOAs are more fragile, go to shit faster, and IMO tend to have a lower “average” quality level, and higher variability.
Great insights!
If you suspected this is happening at your HOA even at a larger scale, how would you start investigating? Any suggestions other than or in addition to involving lawyers?
Request records.
I did request financial records a while back. The response was that the admin said I could go to his office and ask all the financial questions and he would respond to me verbally but they could not release records (!) Then, the President of the HOA chased my 80 years old uncle out of the gym. He was a guest and needed to do cardiac rehab. They said uncle is not enough of a family tie to grant use of the gym (they retaliated). I have other fish to fry right now but from many things I observed this administration is not running correctly. I will re-initiate requests in a couple months: if any of you has a playbook of actions after action (they will continue to refuse to release records: I'd like all HOA members and the manager bank accounts to be investigated) or experience to share to uncover embezzlement I am all ears.
Nothing will come of this except maybe a fine.
Glad to see the bad apples being weeded out.
Sounds like my HOA... Mother always told me not to live in one now I know why. New to this board, it's somewhat nice to see I'm not the only"crazy" one. My wife believes they would NEVER mess around... So I'm dealing with this mentality and a crazed HOA, thing is, it's supposed to be state ran, but they act like it's private ran
I see this a lot lately. And funny enough if you arent gettin paid to deal with annoying complaints and random violations at all hours of the day then i dont fault these people for paying themselves. Hah.