Association Members Are Your Neighbors!

What appalls me most about the negative press around HOAs is how some Board Members – either individually or collectively – treat the Members of the Association like crap.  The Members aren’t your competitors; they’re not your enemies; they’re your neighbors!  Why can’t they be treated that way? Continue reading

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Elections – My Recent Experience

[Updated 10/05/2017 with additional Eligible Votes information.]

For those of you that took my survey on Board Elections – thank you!  I still owe you a summary of the results, which I have to say were very interesting.  I’ve also been unusually busy the last few weeks with some consulting work (custom programming and data analysis).

But I’ve also been “recovering” from my own HOA’s elections last week. Continue reading

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Do You Know Where Your Documents Are?

Something funny happened in my HOA this month.  Not “funny – ha ha”, but “funny – uh oh.”

My Association was incorporated in June of 2004.

I bought my home in this neighborhood last year in May 2016, and as part of the obligatory home-buying paperwork tsunami, I received a number of items from the then-current management company of the HOA as required by ARS 33-1806.  Among them was a copy of the Association’s CC&Rs and Bylaws.  The copy of the CC&Rs had the stamp of the Maricopa County Recorder’s office, but the Bylaws were not so emblazoned.  My assumption was, of course, that “these are indeed the Bylaws of the Association”.  As it turns out, this was the same copy being sent to all new owners in the neighborhood at the time, and since, and probably for some time before.

Further complicating things, this copy of the Bylaws had a section at the bottom for endorsement by the original Secretary of the Association to attest that these were, in fact, the approved Bylaws.  But the copy I and other new homeowners were receiving was not signed.

Fast forward to sometime in the last month or so.  Apparently someone (probably at the management company, but some details are hard to come by) tried to locate an “officially sanctioned” copy of the Bylaws among the Associations papers, both hard-copy and electronic.  None was found.  Questions were asked; an attorney was consulted.  (None of this was discussed in an open session meeting, and while I don’t really know any details, I’m assuming the actions in this paragraph occurred.)

At the July board meeting (I’m not on the board, but I have attended every meeting since moving in), our management rep said something about “the attorney said he would create Bylaws” for a stated sum, which I thought was odd, but never really had an opportunity to ask anyone about it.

Then yesterday, when I wrote to our management rep referring to a section of the Bylaws about elections (ours are upcoming in September, and yes, I’m a candidate), her response was:

Technically you don’t have legal Bylaws since they were never approved and signed.

WHAT?!?!  Don’t tell me the Association — now in it’s 13th year — has been operating according to a set of Bylaws, and now all of a sudden they “don’t exist”!!  The Association (in the form of the management companies) has been sending this to new homeowners telling them “this is the way we do business” for years, and they’ve been using the Bylaws in all the ways Bylaws ought to be used!

After seriously questioning the situation in my Email response, the management rep replied again, writing: “the attorney’s opinion is they [the board] cannot run according to what the Bylaws states since they were not approved.  I did talk to the Board about having the attorney draft up new Bylaws to approve and sign so they will be on the up and up.”

I was flabbergasted, to say the least.  Expletives were said.  Blood pressures rose.

Between yesterday afternoon and this morning, I tried numerous avenues to resurrect a copy of the “official” Bylaws:

  • I contacted the developer, DR Horton.  I was told they purge such documents after 10 years, and gave me the number of someone else to call.  I left that person voice mail, but have received no callback.
  • I searched the Arizona Corporation Commission files on our Association — again, having done this search a few months ago when I wondered about the presence of an executed copy.  Bylaws are not required to be filed with the AzCC, and indeed were not.
  • I searched the Maricopa County Recorder site (yet again – also not my first time), looking at all documents posted with our Association name attached, as well as numerous documents associated to DR Horton in the relevant timeframe; nothing there either.
  • I’m pretty good friends with my realtor, but he really didn’t have any useful guidance on short notice, but shared my concern and offered to ask others in his office if they had any suggestions.
  • An acquaintance in the Arizona HOA-homeowner activist space suggested searching the Corporation Commission (already a dead end), but then also suggested making a Freedom of Information Act (FOIA) request of the IRS for any records submitted by the Association relating to their filing for nonprofit status.  Turns out even the IRS doesn’t want a copy of your Bylaws.
  • I wrote an Email to the original management company from 2004 through the Association’s first transition in mid-2014, hoping that they would have something archived — but no return message from them either.
  • I even contacted a recent acquaintance of mine who is a Parliamentarian about the situation.  After some lively discussion about Bylaws in general, he had some ideas on how to proceed if none are found — but nothing new to add regarding a search for them.

My next approach (spoiler alert: which worked!) was to search the Maricopa County Assessor’s GIS Maps web site for homeowners who had moved into the neighborhood in the first couple of years of its existence, and whom I had met or chatted with around the community.  My thought was that surely they would have received an executed copy from the original developer back in the early days.  I found one person I had befriended when hanging door hangers in the neighborhood about the Block Watch program back in January.  I sent her a message on NextDoor.com, explaining the situation and asking if she might have a copy of the signed document.

Much to my amazement, she replied within an hour:

Well, to say you have good timing is an understatement. I have been cleaning out closets in the past few weeks (we’ve accumulated some “stuff” in 12 years) and came across all of our purchase documents. I set them aside just last night thinking I should go through them and thin the pile.  So, you’ll be happy to know, I have a signed copy of the bylaws.

I’m told soon the official copy will reside on the management company’s web site.  Unfortunately, our board has stopped maintaining their separate site with community documents.  (The board even failed to elect a Secretary mid-year when the previous President, Secretary, and Treasurer each resigned.)

So the moral of the story is that HOA Boards — especially the Secretary — have a fiduciary duty to maintain copies of all important Association documents, but in my opinion they rely too much on management companies to do this for them.  As a result, important documents often go missing, especially when Associations transition between management companies.  I believe copies should be kept separately by the Association, and that Associations should audit the documents maintained by their management company.

Where are your official copies of governing documents?  “Trust but verify” would seem to be a good approach.

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Board Elections – A Survey

I think most Associations tend to hold their Annual Member Meeting and their Board Elections at the same time, and I have a sense that most Associations elect officers in the fall — or at least that’s what I’ve heard from a few folks I’ve talked with.

So with elections on some people’s mind, I thought I’d put together a brief survey about Board Elections.  There are 12 questions plus a few of the usual demographic items at the end, and should only take you a couple of minutes.  I hope you’ll participate!

Take the HOA Board Elections survey by clicking here.  Please forward this link to others you know that might be interested.

At the end, you can choose to receive an Email of the compiled results.  I’ll also share some of the results here on HOA Perspectives.

Thanks for helping out!

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Under New Management

You might have seen JCT’s post a short time ago about seeking someone to take over the HOA Perspectives web site.

I am that volunteer.  With a good bit of Word Press experience and HOA exposure, I hope to provide a similar viewpoint and tone as you’ve become accustomed to reading.

Expect to see very few changes… but maybe a few additions.  For example, I’d like to extend the reach to a few other social media venues, like an email list, Twitter, and occasional surveys for input.  I’ve also registered HOAPerspectives.com and pointed it to the WordPress-hosted site.

If you have suggestions, send them to me via email:

Ray at HOAPerspectives.com.

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Community Manager ordered to pay $1.6 million to HOAs

CONTACT 13

Darcy Spears (KTNV)

6:00 PM, Jul 7, 2017

Dozens of Home Owners Associations are out a ton of money. Over a million bucks all together. Contact 13 finds out who took it and how they got away with stealing homeowners’ money. Las Vegas, NV

Community Association Managers are supposed to look after homeowners and their HOAs.  But the Nevada Real Estate Division says one manager was only looking out herself.

Contact 13 obtained this order from the Commission for Common-Interest Communities.  It says community manager Leslie White defrauded 34 HOAs out of more than $1.6 million. White took much of that money after surrendering her community manager certificate. 

Real Estate Division investigators found fraud and hundreds of violations of state law with the two businesses white ran under the names Associated Community Management and Path Community Management.

The state says White used electronic signatures to transfer money that was not approved by HOA boards. And one of her companies “…was paid in excess of its contract for virtually every association it managed.”  

White has 60 days to cough up nearly $3 million dollars.  That includes fines and fees to the state and restitution to the HOA’s. 

We tried to contact her, but the phone numbers we found were disconnected. 

The case has been turned over to the Attorney General’s office for possible further action. 

Below is the list of Home Owners Associations impacted in this case:

Alterra Homeowners Association:         $19,592.71

Amber Wood Homeowners Association: $36,535.33

Avignon Homeowners Association: $67,070.70

Avila Court Homeowners Association: $22,980.36

Bella Lago Homeowners Association: $83,900.14

Benton Homeowners Association:         $30,485.73

Bonita Vista Homeowners Association: $34,893.77

Brighton Homeowners Association: $35,873.21

Calabria Homeowners Association: $36,353.90

Carmel Ridge Homeowners Association: $42,346.78

Centennial and Lamb Association: $75,958.23

Chatham Hills Homeowners Association: $61,536.65

Cherry Lane Homeowners Association: $81,207.34

Country Glen Homeowners Association: $27,208.24

Crestwood Homeowners Association: $9,000.00

Cumberland Homeowners Association: $26,448.00

Greenwood Homeowners Association: $19,650.00

Hillcrest Homeowners Association: $6,980.00

La Siena Homeowners Association: $56,763.41

Manchester Homeowners Association: $159,495.74

Mesa Verde Homeowners Association: $36,175.54

Moreno Homeowners Association: $91,114.62

Murano Homeowners Association: $62,897.04

Newbury Homeowners Association: $75,795.43

Paloma Homeowners Association: $35,063.94

Pinecrest Homeowners Association: $43,813.86

Sheffield Homeowners Association: $21,971.60

Somerset Landscape Maintenance Association: $15,653.17

Sterling Court Homeowners Association: $53,856.06

Sunrise Valley Estates Homeowners Association: $87,050.91

Terraza Homeowners Association:         $32,350.00

Trailwood Homeowners Association: $13,622.50

Whisper Rock Homeowners Association: $59,822.42

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When an HOA totters financially

Arizona Homeowners Forum

Posted: 05 Jul 2017 07:44 AM PDT, Reposted 7/6/2017

What happens to a Homeowners Association as it totters financially is fascinating.

In the case of the Crossings at Willow Creek, recent hearings in Yavapai County Superior Court confirmed that there is no bankruptcy alternative. That’s because a Homeowners Association is a corporation in name only. The members are on the hook for everything as it’s really a partnership.

We as property owners have scheduled a Member’s meeting on July 17 at 5:00 at the Community Room at 1235 E. Gurley St., Prescott to appoint a Board, without which Judge Mackey is almost certainly likely to appoint a receiver soon. This would be analogous to a mentally ill person with millions in the bank having their bank accounts run down by attorneys and other parasites.

Carpenter Hazelwood, who resigned as attorneys for the HOA last year, triggered this by arguing for a receiver to be appointed when faced with records requests pursuant to a simple AZDRE Order.

It’s already acknowledged properties in the Crossings are worthless because they can’t be sold. What then could homeowners be responsible for above that? Can their property values go negative?

Remember there is no insurance for the HOA now. Under a worst-case scenario, the liabilities to the HOA, and then the members, could easily amount to $20mm or more, especially if an accident takes place in the wash. That’s $250,000 each lot. So yes, property values could go negative.

It takes a lot of dot connecting to figure out what is involved here and we have been doing that for almost 10 yrs. So ahead of the meeting, I will be taking the dots one by one daily to make things clearer. This will be done via the blog at www.thecrossingsatwillowcreek.blogspot.com We’ll also have the documents pertinent to the case available soon via links posted there

A couple of points

  • The Meeting is technically members only but some contractors with construction deposits are welcome
  • Any member wishing to appoint an agent, especially an attorney, must have that approved ahead of time by us.
  • Out of town Press will be welcome but need to be accredited first. Please do that by email to jasellers123@gmail.com
  • There is a current investigation underway by Detective Brazell, Badge #350, at the Prescott Police. If you have relevant information to give to him you would not wish to share with us, his number is (928) 777-1925
  • Conversations with him leave me totally confident the meeting will be safe and not masked by threats as has previously occurred.

Feel free to post questions or comments on the blog as it will not be censored except for totally outlandish comments

SIMPLY ENTER YOUR EMAIL ADDRESS ON THE BLOG TO RECEIVE DAILY POSTINGS

ONLY GOOGLE WILL KNOW YOU ARE WATCHING

A mere selection of issues to be addressed daily will include:

  • Why could the City of Prescott file bankruptcy over this?
  • Why are the US Supreme Court 9thCircuit Rulings in the Kayanne Riley case so relevant?
  • Why there will be no Big Chino without fixing the Crossings – properly?
  • Why was the subdivision ever built in a floodplain anyway at the intersection of all the City’s water mains, including those for the Big Chino, Major Sewers, a main road, and a wash carrying more water than the Colorado River in flood -10,000cft/sec+
  • Is Carpenter Hazlewood looking to collect fees or did something happen with a recent foreclosure they would like to cover up?
  • Why is Chubb Insurance engaged with high powered attorneys? – http://www.manningllp.com
  • What is the role of Metro Phoenix Bank here?
  • Where is Justin Scott?
  • Where is Kathleen Yamauchi?
  • Why did the Board, Attorneys and Management Company all resign on the same day?
  • Who jumped ship first and why?
  • And a lot more dots!

John Sellers

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Defining HOA-LAND

An important article, click to open and view the following link:

https://pvtgov.wordpress.com/2017/05/29/defining-hoa-land-what-it-is/

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HOA Attorneys: Lacking Moral and Ethical Perspective

Source: HOA Attorneys: Lacking Moral and Ethical Perspective

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Arizona HOA Honey Moneypot

Reposted from ArizonaHOA.blogspot.com

   The “Arizona HOA Honey Moneypot“ – why all these problems in Arizona HOA’s?

  • Honey attracts bees. Money attracts the worst of behavior
  • It’s the cash stupid!
  • We estimate that $3bn of CASH is sloshing around in HOA bank accounts owned by YOU
  • Worst example which went unnoticed in the excesses 2008 financial crisis
    • Community Association Banc (CAB), a division of First National Bank of Arizona (“FNBA[1]”) attracted over $1bn of deposits in the months prior to 2008
    • Only $75mm was funneled back to communities
    • Only the FDIC knows where the rest went
    • They used wholesale deposit harvesting via HOA Management Companies
    • Few Boards even knew or know where their cash is
    • The only credentials of the President of CAB, a $1.5 billion plus bank, were membership of CAI, HOA management, and ownership of Las Vegas nightclub
    • I’m not making this up – See this – click HERE
    • When FNBA went under in the shadow of IndyMac, the Federal Government injected $862mm of FDIC taxpayers money
    • In a highly unusual step, they also bailed out UNINSURED DEPOSITORS
    • Many Arizona HOA’s had millions in excess of the FDIC insurance limit
    • We believe the decision was political
  • What this got to do with you?
    • Be aware there are powerful dark forces at work in the HOA industry
    • Few Management Companies, and none of the so called specialized HOA Law firms, have incentives to promote transparency
    • The Edge at Grayhawk lost $2.4mm in fraud because nobody was keeping an eye on the Management Company
    • CAI , a national organization, has huge lobbying power because of their access to money

 

[1] Not to be confused with National Bank of Arizona

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