$350.0M "mistake"? If this can be subtantiated I believe you should take legal action. Tal to a lawyer for advise. A "mistake" of this magnitud needs to be explained to the owners and individuals must be held accountable
With that much money being found and or hidden, what else are they hiding. OMG you really need to run to a lawyer and while your at it think about changing management services. This is only leaving me to be skeptical of going management now, our meeting has not been held yet for voting and I will bring this one up.
You should compile all the documents pertinent to the matter and present it to the attorney, further more ask for the association financial be audited, 350K is too much, even 350.00 needs to be justified.
Check your association docs and state law on how to proceed
Absolutely there needs to be complete transparency in all board & management processes. Not doing so could lead to civil or criminal action against participating board members, especially if the by laws and regulations for the board are well written.
Typically none of them has the right to spend more than any approved budget ever. If members of a board benefited individually by the initial improper acts or their concealment, fraud and conspiracy charges may apply. Even if there was no criminal intent or wrongdoing intially, covering it up to protect former or current board members can compromise the HOA putting the HOA at a potential disadvantage in any number of ways, adding further damages to any civil claim the members may have against the board members involved. Board members can't be "held harmless" if they committed any criminal acts.
If nothing else, talk to a lawyer and put the board on proper legal notice if they are breaking the HOA's rules or any laws.
Start by making non threatening inquiries about all the board rules,regulations, by laws, etc. Get actual copies. Find out who the HOA uses for legal representation. Send your demand letters to their lawyers, preferably from another lawyer you or others retain. Let the current board know you mean business and that you may seek reimbursement for your legal fees if it is determined that wrongdoing has or continues to occur.
It may be that they are just trying to protect a past member or prior board decisions and mistakes. As soon as they know they have no choice but to deal with all this above board or risk potential additional civil or criminal charges, they will likely become more co-operative.
They obviously believe no one will find a way to hold them accountable, which is insulting to HOA members in many ways. It will probably take some diplomatic work, strong posturing and / or legal action to get this moving in the right direction.
First, I would like to ask for clarification on how the Board "hid" or misplaced 350K, and how you found it.
It sounds like you have a pretty good size association. I would think they utilize some kind of accounting software.
All bank accounts should be reconciled each month. Reconciling allows any overlooked items to be found and is essential. Your ending and beginning balances should always match to the penny.
If the manager does properly reconcile the accounts, a simple print off of the check register(s) for the reserve account(s) would provide an accurate picture of what you have in reserves and what you have expended -- and there could be nothing "hidden" or overlooked.
Please give us more information on how the committee "found" 350K in mistakes.
Several of us were worried about this issue over the past couple years. Our Budget is about 110,000. I audited the books for the past three years about 4 months ago.
The printouts from the check registers don't match the bank statements. I loaded it all their check register printouts onto Quicken and then printed a register. There were a number of checks identified as Void on their register that I found deposited into the Capital Reserve Account - but by writing Void on their register it gaves a false bottom line to the owners. Since they don't pass out the information without our calling an attorney to get the documents - it was very hard to follow until we had all the documents.
Every couple of months the Board assures everyone we are within our budget to date. But last year they stole from Peter to pay Paul. But this "bottom line" fixing isn't the truth. Alot of work didn't get done that was regular maintenance -and that's why we had the city come in and site us to get the work done. They spent about 10,000 on lawyers last year - I think to see if they needed to do the repairs as required by our ByLaws. We have the breakdown from the attorney"s" but it's not very specific. Can't tell if there was any other advise given to the Board.
At our annual meeting the Board itself had a huge "issue" in front of all owners as to the fact that they "never move money around like this" and they will not do it this year. Flat out lies.
The real issue is noone cares. I found what I'd consider about 15-20,000 that is float money - which could easily be removed from the budget. We have extremely high monthly fees compared to our immediate neighborhood. Noone cared.
Again, we work with through the City Ordinances to get the work that is not done, done - on a timely basis.
It's been 2 plus months and a number of heavy rainstorms later - they say they won't fix the drywall in the locker ceilings until they are positive the leaks have stopped. Guess what. My locker was one of the leaking ones and they haven't asked once to check during a rainstorm and I know they do not have a key. Lucky for me. The membrane above it has now been fixed and the drywall damage and mold isn't extensive compared to several other lockers. We have rain in the forecast all week. Two + months is sufficient time to check for continuing leaks in our heavy rains here.
It's against code to have openings in our fireproof ceilings in our garage.
If we had a fire - can't imagine what the insurance company would do to us. Like not pay because the Board is holding off.
It's outrageous that Boards have so much power. Wish I knew how to propose legislation to protect owners.
Good luck with your issues. Make sure you get a copy of every bank statement for all accounts so you can verify the check registers they give to you. It's the only way. If you find something unusual, ask for a copy of the front AND back of the check to see where it has been deposited, very easy to find out.
MaryAnn I am with you, there needs to be stronger legislation to protect homeowners...especially those falling under the "Old Condo Act of 1963. These boards and management companies seem to think that they can do whatever they like and get away with it...because NO ONE cares. And honestly, that is the reason this type of activity can go on unchecked, is because of the lack of envolvement of the homeowners.
Every homeowner has the right to hire a CPA, at the property management/board's expense and request a full audit of the books. The board must supply all materials within 10 days of the request of there are monetary penalties. I would request that because it seems as though there may be more than just "mistakes" occuring.
Why do many of these conversations continually site bad management, even when there is clearly no manager involved here?
If they are contacting the attorney for the documents then they are probably self managed.
There's one quick way to start saving you money.... Get a part time property manager who will do the books properly and be able to tell you how to run your Association instead of running up legal bills.
Only call the attorney when necessary such as there are possible litigation issues or a contract which needs to be reviewed.
Your savings will also provide for an audit to be performed.
You cannot determine appropriate fees for your Association by looking at others nearby. Your building may be more expensive to run. You need to find out what your actually expenses are before you can say that the budget is wrong. Just because there is padding in certain places, doesn't mean the budget is incorrect. I have seen associations where they paid areas such as insurance, FPL, etc so that when unplanned expenses come up (and they always do), they can be covered.