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Small condo association, majority owner and corrupt management

  
  
  
  
  

Small condo, huge problem: how to deal with the queen? Has anybody been in the situation when one of the owner who has 3 condos out of 9-unit condo and assigned herself a Queen: both president and “condo association manager”, paying herself association management salary ($2,700 per year) out of condo association money (about $20,000 per year)?

She runs the condo building herself without any kind of meetings and information provided in exchange on money she collected. She raises condo fees, as she wants, and doing everything she wants in the building. Literally, no condo meetings held and no any paper provided during 5 years!!!!

All answers we’ve got: “I know the judge”; “I own 3 condo units and have 3 votes”, “Who care about association bylaws?”, “We are small condo, everything is corrupted here" (which implies she have rights to steal money too).

She requested a condo fee increase from $200 to $225. After this we’ve got a copy a condo bylaw and read it, then requested her to provide us with minutes of the meeting, financial report and budget for 2009, which make this increase legitimate. Of course we’ve got nothing. Meanwhile, in absence of these papers we are paying old price ($200), but she is NOT accepting our money, and instead, threatening us with lien and foreclosure through her judge-attorney (btw, how come it could happened that layer serves as a judge as well?).

The list of her violation of condo by law is very long, but all our efforts go us to nowhere. We called a meeting (she did not come), elected a new board, but she refused to recognize a new board and give us a seal. She ignores all our requests to see financial documents as well, which make it very likely that she has problems with financial side of her “management”.

It could be funny, but lawyers recommended us to pay what she is asking, despite it is not. Then, in we want, we may go to court, which may cost us $10,000 to $12,000 just to bring situation to Bylaw.

Everything seems illegal:

1) one-person holding position a president and hiring herself as Manager and paying herself money

2) didn’t provide any explanation on fee increase

3) do not provide access to review her receipts, etc

4) no condo association, actually but lawyers convinced us that we could loose in the court, if we do not pay her extra money she wants.

Why? How come? Should judge ask her to provide condo assocation meeting minutes of where decision on price increase made, like bylaw requires? I moved to US 6 years ago, and I am very surprised to hear about corruption here. What should we do? Give up pay? Sorry for the long question, I have no idea how to explain situation in a fewer words.

Comments

What state are you in?
Posted @ Tuesday, December 29, 2009 7:26 AM by Tammy
If you have elected a new board, do not send her payments. The new board should set up new accounts, etc., and keep track of everything and document it correctly. The Association's legal counsel should send her a letter stating that she needs to turn these items over. 
 
I am assuming that the over 6 owners all attended a meeting and voted as required. Make sure all your t's are crossed and the i's are dotted. 
 
I can't see how any attorney can act as the Association's attorney and the judge in the case. It is a conflict of interest. I would have the new board contact and interview the attorney and seek a new attorney. 
 
This could get very messy and costly. You and the other homeowners may have to sue her to resolve it. You may want to try to meet with her (though she sounds like she will not meet) and try to resolve it as amicably as you can.
Posted @ Tuesday, December 29, 2009 8:29 AM by Joe Schuirmann
Joe has a great point. Don't send any money to her and make sure that you have everything documented in the meeting minutes. If a majority of unit owners voted, then the elected board is the legally valid board. It would even be wise to have a management company or attorney that you contact be there to witness and validate everything. 
 
 
 
Then, if she's not there, and if she doesn't pay her dues, you could turn the tables on her and start the process of foreclosing on her condo units. 
 
 
 
The other area I would watch out for is that if she hasn't kept any records, I would look at the possibility of filing suit to recovr damages for her breach of fudiciary duty. 
 
 
 
Check your governing documents. she's self managing. Most documents that I've seen in WA have a prohibition against self management unless you have 67% of the owners AND 50% of the mortgagee's approval for self management. 
 
 
 
Finally, judges are lawyers. They are members of the bar. However, its a very small percentage of them that still have a private practice while they are on the bench. So, it's likely that she's blowing smoke when she says she owns the judge and the lawyer unless there's some connection there like a physical relationship or something else. In that case, the judge would recuse himself (or should) from the case. My best guess is that your attorney said that you could lose because there's no guarantee when you go into court of how the judge will rule. Finally, make sure the attorney you are speaking with specializes in condominium law. This is a specialized area of practice so make sure it's the majority of what the attorney does. 
 
 
 
Darron 
 
HOA Receivables Management.
Posted @ Tuesday, December 29, 2009 11:00 AM by Darron
your accusations are very strong - if you are accurate then the condo mgr would be under investigation with the state and their license- this is extremely serious- not a civil matter-
Posted @ Monday, January 04, 2010 10:06 AM by no name
Contact your State's Attorney General Office.
Posted @ Friday, January 08, 2010 11:13 PM by Sherry
I want to thank Tammy, Joe, Darron and Anonymous for replying. I wish I would have known these advises before. 
 
TAMMY: our Condo in West New York, Hudson County, NJ. Oh yeah... Soprano's, corruption scandals – it is entertaining when seen on TV, not in everyday life. 
 
JOE: “If you have elected a new board, do not send her payments.” Again, I wish I new this before.  
 
Now this is a bit too late. You may ask - where is the or new board (that we elected in February 2009).  
 
This "board" never started. When people faced with strong resistance from our "Queen" they gave up right away. We couldn't organize any collective actions. Everybody complains, nobody acts and taking responsibility.  
 
I think that they all scared It is easier and cheaper to pay some extra bucks than fight in court.  
Especially when everybody knows that she use support from her friend attorney (the one who also serves as a judge in neighbor township). Now she use his help to threaten us with foreclosure on our unit, and call him “Association Attorney”  
 
Plus, only 3 units occupied by owners (including us, so just 2 more). Those who do not live do not ready to invest much effort into resolving situation, despite they do not like our Queen and the way she is acting. I believe they are waiting to join the “winner team”. This is sad, but not very surprising.  
 
DARRON: Our Bylaws says nothing about self management, but it says that board officers shouldn't work for compensation.  
 
I do not think she has management license, but she do not need it for such a small association as ours.  
 
What is definitely not allowed is 1) conflict of interest and 2) running building without any kind of contract between association and management. I do not think that this contract exists, otherwisse she will have to hire herself. And I am sure that her records in a bad shape as well.  
 
Despite we do not have all financials, but we do have some documents like tax returns, where “Management fee” in amount of 2700 presented. And we have some documents where she called herself manager, and President, simultaneously. Plus, she never hided the fact that she is paying herself money.  
 
Anonimous: Thanks, we have wrote to Attorney General recently. We do not have response yet. 
 
If you can advise where to find a proof that our case is not civil matter, this would be helpful. I mean actual documents, law or act.  
As I told, we cannot afford expensive lawyer, it can eat all our savings. Plus, I lost my job recently. So keep some money for attorney to protect us from foreclosure (she is not accepting our checks and continue to collect our “arrears”).  
We already talk to somebody from Prosecutor office and he agreed that this is corruption, but the level is “too low to file a case”.  
 
Our other actions include complain with Homeowner Protection Bureau of NJ State Community Affair. They promised help in getting access to Condo financial docs and meeting minutes. And we wrote to local newspaper "Hudson reporter" (November 09), but got no answer.  
 
So my question are:  
 
Who exactly in NJ should be interested in this case (responsible for any action in this regard), or this is considered completely personal and private matter?  
Posted @ Sunday, January 24, 2010 10:35 AM by Marina
Most States ghhave adopted a State Law usually titled 
 
 
 
Maryland Condominium Act. Put you state's name in your browser. "____Condominium Act 
 
That law will clearly define how board must be established etc etc. If yopu find your situation does not meet the mandated requires call your Attorney General's office.
Posted @ Thursday, May 06, 2010 10:15 AM by Scott Adler
If your state has adopted the Condominium Act used by most states you will find that condominium associations must hire a qualified management company to support their operation. It;s not a question-the law demands that support.
Posted @ Thursday, May 06, 2010 10:17 AM by Scott Adler
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