hoa board member kickbacks.. devonaire3

Started by PatrickA • 39 replies • 6019 views

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PatrickA (Florida)
Posts: 9

Posted:

Hello

I am a vendor doing work for an HOA.

The president of the board made me give him $8100 in kick backs.

He told me to raise the price and give it to him,the checks were issued by florida property management group and when I reported it to them they turned on me banning me from working there.

I was told by other vendors the president of the board picked this company and was in a trucking business with one of them. They have no meetings..no voting and I heard over $30,000 has been taken.

I talked to some homeowners and they fear questioning the board..

Is this legal can I turn them into to the law.

This is my opinion

SheliaH (Indiana)
Posts: 6,964

Posted:

How, pray, does anyone make you give them kickbacks??? Were there other Board members you could have reported this to??

As far as turning in the president, this isn't a law enforcement issue because the Association isn't a government agency and the Board president isn't an elected or appointed official - or government employee, otherwise you might have something. Assuming everything you said is true, the homeowners are the ones who will have to decide enough is enough and get rid of the guy - if they can't or won't do so, they are apparently ok with it.

Personally, you're probably better off not working in that community - I know you could use the money, but if you have a Board president demanding kickbacks and the other homeowners are afraid to stand up to him AND the property manager (who takes direction from the board) doesn't say anything either, you might have found yourself in more mess had you gone on with the job.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

MatthewW4 (Arizona)
Posts: 500

Posted:

Patrick,

This is a criminal matter and you should report it to local law enforcement ASAP.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

This may be a "white collar" crime. You may need to talk to a District Attorney's office about this. I am not sure the exact details and if this was a "kick back". Seems like an odd amount to request. Which leads me to believe there could have been a misunderstanding somewhere. If the checks came from a Management company to pay for your services but then you were requested to raise your rate and pay the difference to the president, does not sound like good business practice. You said you no longer are working for them. This was after you reported this incident?

I would need more details here as something just seems off. Maybe that is just me. It usually is...

Former HOA President

PeterD3 (Florida)
Posts: 708

Posted:

Shenanigans.

KellyM3 (North Carolina)
Posts: 2,239

Posted:

A kickback is a criminal matter. It's a form of embezzling funds of the HOA

PeterD3 (Florida)
Posts: 708

Posted:

Yea. And the OP just admitted doing it with full knowlwedge of doing it.

Stupid or Liar?

MatthewW4 (Arizona)
Posts: 500

Posted:

Quote:

Posted By PeterD3 on 04/20/2013 7:03 AM
Yea. And the OP just admitted doing it with full knowlwedge of doing it.

Stupid or Liar?

Sounds more like victim of an extortionate scheme. He did object and they told him to hit the road. No more business because he won't pay the bribes.

Sorry, Peter, but I do not blame victims for falling prey to crime.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

We don't know what type of vendor the OP is. Could they actually be a soft drink/snack vendor? I say this because there are some arrangements for those machines to pay back the HOA for having them. Coke/snack machines typically "rent" out the space they are in. They are not owned by the store they sit at. The vendor has to ask and pay rent for that space. That rent maybe in a form of a "Kick-back". Meaning they get a quarter for every coke/snack sold. It could be they pay a yearly fee or monthly fee for the vendor to sell their goods.

So I can't say for sure if this was an "illegal" situation without knowing the business relationship this person had with the HOA/President. Some piece of information seems to be missing here. More details are needed.

Former HOA President

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

The soda money is being paid to the HOA - illegal
The coda money is being paid to the president - illegal

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

disregard my last post. typos.

The soda money is being paid to the HOA - LEGAL
The soda money is being paid to the president - illegal

MelissaP1 (Alabama)
Posts: 13,836

Posted:

They also mentioned a management company. I wonder if this is still developer owned or owner operated? If they are under developer control and the president is the developer (or works for the developer as a representative) one would need to know this. There could be a different business relationship going on here that isn't so illegal. If it's owner owned/operated then I would have lots of questions. Overall need more details on the business relationship of all involved.

Former HOA President

PatrickA (Florida)
Posts: 9

Posted:

Hello I am the OP of the kick backs

I am very impressed with your interest and let me clarify.

I am did electric work for Dev 3 and a board member looked at my proposal and told me to add
$75 per light for him and make a new proposal. I was told by other vendors this has been going
on for years. I have been in business many years and I never had to pay kick backs, I was told
it would be a few lights and I needed the work..the board member made the order bigger as the work
progressed and I got sucked into having to pay up or not get more work...in the end I installed
about 108 lights under the direction of the board member,he made $8100. He made more than me after
expenses.

I am in the process of reporting him, my witnesses are afraid but are starting to come around.
Anyone wants to give me advice... email me [email protected]

this is my opinion..

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

Depends on what kind of proof you have. Do you have a paper trail? Checks being paid to him personally?

It will be criminal, so it's important you have evidence, otherwise the district attorney won't bother.

PatrickA (Florida)
Posts: 9

Posted:

I was in an association once and when I blew the whistle on a board member you would not believe the hell they put me through...I stuck it out and a year later they were removed..I lost money and my property was vandalized.

This board already had legal problems with treating a homeowner unfairly, most of the honest board members left years ago and when I tried to tell the maintenance company about the kick backs they blacklisted me from doing anymore work there..They had a lawyer send me a letter meant to scare me into shutting up..

this is my opinion

PatrickA (Florida)
Posts: 9

Posted:

Quote:

Posted By SteveM9 on 04/20/2013 8:50 AM
Depends on what kind of proof you have. Do you have a paper trail? Checks being paid to him personally?

It will be criminal, so it's important you have evidence, otherwise the district attorney won't bother.

Yes I have checks..he wanted cash but when I told him I would take the taxes out of his end he had me make out the checks to his trucking company..I have been holding off because my star witness another vendor is afraid to back me up, he needs the work and he fears getting black listed too...

MelissaP1 (Alabama)
Posts: 13,836

Posted:

You may want to contact your local Better Business Bureau for advice. They may give you a direction to go in with the reporting. The proof I would say you need is your original bid and then the one he requested you change it too. How he got this proposal/bid through a board of people and not show the difference in payment is beyond me. You had to have put a total amount and they had to cut you a check for that amount. So you need to show proof somehow that he was part of your contract to give back that $75 charge. You need a member of that HOA to get a copy of the records for you if possible. It should show the differences of what they paid out and the money the board approved.

I am also an electrician and dealt with a very crooked unlicensed handyman. He too tried a kick back program using the HOA to funnel the money. He wanted me to write up violations on owners and have the HOA pay him to do the work. The HOA could then lien that owner for not paying for the work to clean up that violation. Which is fully legal for a HOA to do. It was a "win-win" for him. He could charge the HOA whatever amount he wanted and then have us have to spend the legal money to collect plus what we paid him... Let's just say his plan did not work when I was in charge. Instead I suggested him as his own contractor if they were looking for someone to do the work. Leaving the HOA out of it. Unfortunately, due to circumstances beyond my control he could not be gotten rid of.

The BBB should give you some good advice for your situation. It's best to deal with this honestly and within the system. Even if the system seems flawed. You may have a case against this person not as a board member but as an individual instead. I hesitate in saying to sue the HOA. Suing the HOA in your case would be suing all the members. Which would not win you any friends. Plus this could be an insurance claim with the board member being protected. So going on an individual stand point may be an option than taking on the HOA.

Former HOA President

PatrickA (Florida)
Posts: 9

Posted:

Quote:

Posted By MelissaP1 on 04/20/2013 1:15 AM
This may be a "white collar" crime. You may need to talk to a District Attorney's office about this. I am not sure the exact details and if this was a "kick back". Seems like an odd amount to request. Which leads me to believe there could have been a misunderstanding somewhere. If the checks came from a Management company to pay for your services but then you were requested to raise your rate and pay the difference to the president, does not sound like good business practice. You said you no longer are working for them. This was after you reported this incident?

I would need more details here as something just seems off. Maybe that is just me. It usually is...

odd amount....I installed 108 lights...he made $75 each = $8100..

I have an original proposal showing I would do the job for $225 a light..the board member told me to make a new higher proposal for $300 per light and give him the difference..there were many checks over the months as the work progressed..I was concerned the management company could tell the work was over priced but the board member told me 'we all do it'.

They have only have 3 board members and the property management company seems to call the shots..they have no meetings or voting on how to spend the money...they are suppose to have 2 signature checks but some were signed once..The property manager has been trying to keep me silent..the board member and the property management employee were in the trucking business together while this was going on.

this is my opinion

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

I agree. You report it as he did it, as an individual, not as a HOA president. Simply contact your local police dept and ask them who handles financial crimes such as embezzlement. No need to give them any details until you find the person you need to talk to.

PatrickA (Florida)
Posts: 9

Posted:

Quote:

Posted By PeterD3 on 04/20/2013 7:03 AM
Yea. And the OP just admitted doing it with full knowlwedge of doing it.

Stupid or Liar?

Yes I was stupid...I needed the work and I only thought it would be a small amount of money, I was talked into it hoping once I got in the kick backs would stop..I had to trade checks on the spot..he wanted cash until I told him I would take the taxes out of his end...he was making more than me after my expenses..

I talked to owners who were fearful of the board..when I told other board members and the management company let their lawyer write me letters meant to scare me off...I offered to take a lie detector and help the homeowners get their money back..I had proof of $8100 being stolen and heard rumors over $30k has been taken over the years.

When you go to the police they are over worked and they say the victims should report it...
the victims dont want to stick their necks out..just last year one of the home owners won a lawsuit for some kind of board abuse..

this is my opinion

PatrickA (Florida)
Posts: 9

Posted:

I was told the board member brought in this management company...it appears he was buddies with the employee who over looked this account.The board member implied all was cool when I told him if they got competing bids my new proposal with his kick backs figured in would be very high.

An ex board member told me they had over $100k in escrow years ago before the new president took over, now I was told they are broke and the board member has moved out of state...the management company claimed it would look bad if they removed
the board member now...he still gets certain benefits at the home owners expense and moved last year.

this is my opinion

PatrickA (Florida)
Posts: 9

Posted:

Quote:

Posted By MelissaP1 on 04/20/2013 9:00 AM
You may want to contact your local Better Business Bureau for advice. They may give you a direction to go in with the reporting. The proof I would say you need is your original bid and then the one he requested you change it too. How he got this proposal/bid through a board of people and not show the difference in payment is beyond me. You had to have put a total amount and they had to cut you a check for that amount. So you need to show proof somehow that he was part of your contract to give back that $75 charge. You need a member of that HOA to get a copy of the records for you if possible. It should show the differences of what they paid out and the money the board approved.

I am also an electrician and dealt with a very crooked unlicensed handyman. He too tried a kick back program using the HOA to funnel the money. He wanted me to write up violations on owners and have the HOA pay him to do the work. The HOA could then lien that owner for not paying for the work to clean up that violation. Which is fully legal for a HOA to do. It was a "win-win" for him. He could charge the HOA whatever amount he wanted and then have us have to spend the legal money to collect plus what we paid him... Let's just say his plan did not work when I was in charge. Instead I suggested him as his own contractor if they were looking for someone to do the work. Leaving the HOA out of it. Unfortunately, due to circumstances beyond my control he could not be gotten rid of.

The BBB should give you some good advice for your situation. It's best to deal with this honestly and within the system. Even if the system seems flawed. You may have a case against this person not as a board member but as an individual instead. I hesitate in saying to sue the HOA. Suing the HOA in your case would be suing all the members. Which would not win you any friends. Plus this could be an insurance claim with the board member being protected. So going on an individual stand point may be an option than taking on the HOA.

I did that...From what I have learned the management company is partly at fault for letting this board member spend money unchecked...When I contacted the management company I got treated rudely and they had all kinds of lame excuses for not reporting it..They would not give me last names and when I wanted a copy of the Bylaws they wanted money..I offered to pay it and they had their lawyer send me another letter.

The board member has put other people up to harassing me, last year they were telling me I would go to jail.

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

Quote:

When I contacted the management company I got treated rudely and they had all kinds of lame excuses for not reporting it..

The management company works for the president, they are not going to help you. Stop talking to them. If the police won't help, go above them. Talk to the district attorney directly. If they won't help, talk to another district attorney. Keep going.

PeterD3 (Florida)
Posts: 708

Posted:

THis post/thread is in violation of the new rules here...

* No advertising here.

* This site is for Community Association Boards & Their Volunteers
to discuss topics concerning their association duties.

* Individual homeowner questions are often addressed here as long as the individual is here to learn in a positive way.

This person has ID himself as a 'vendor' for an HOA.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

What are you talking about? Just being smart alecky as usual? The OP is stating his relationship with the HOA. There are NO posting rule violations for doing that. He is not advertising his business or posting any links to a business. Plus not tossing out some "New Idea" that everyone should check into that is false and fraudulent.

Former HOA President

PeterD3 (Florida)
Posts: 708

Posted:

* This site is for Community Association Boards & Their Volunteers
to discuss topics concerning their association duties.

* Individual homeowner questions are often addressed here as long as the individual is here to learn in a positive way.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

I have no problem with this poster posting a question. There is no violation. Your just sore we kicked Richard off. Who was clearly violating rules and hurting people with his business advertising. I don't see anything not positive by the OP from asking a question and seeking help. All is good right now with this OP. Anyone else have a problem they can come on here and comment about it. Otherwise leave this guy alone and offer some advice or get out yourself.

Former HOA President

PeterD3 (Florida)
Posts: 708

Posted:

Quote:

Posted By MelissaP1 on 04/21/2013 6:00 AM
I have no problem with this poster posting a question. There is no violation. Your just sore we kicked Richard off. Who was clearly violating rules and hurting people with his business advertising. I don't see anything not positive by the OP from asking a question and seeking help. All is good right now with this OP. Anyone else have a problem they can come on here and comment about it. Otherwise leave this guy alone and offer some advice or get out yourself.

I don't know who Richard is nor was I hurt by his advertising.
I gave my comment without the need of your invite.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

The OP indirectly named the association thus I have some issues with that. Not strong enough issues for me to report it, but I think the OP could have been a bit more discrete.

I would have no problems if the reference to devonaire3 was removed.

As the OP has nothing to sell and no web linkages, I do not see him in violation of the terms.

YvetteR (Florida)
Posts: 24

Posted:

Is it customary for BOD and Management Group to get Kickbacks when ever a community is doing a special project or changing a vendor for services such as Landscaper? When looking into changing management they stated they would get 10% of any project over $10,000. Where as our old management was charging 20%. Is this legal?

YvetteR (Florida)
Posts: 24

Posted:

TimB4 (Tennessee)
Posts: 21,059

Posted:

Yevette,

Typically, what you are posting about isn't a kick-back but a fee for services.

The Management Group's fee is typically for the work of overseeing the project. This fee would have been disclosed in the contract entered into by the Association. Many Management Companies and/or Property managers will specify this type of fee as special projects are not part of the normal day to day duties contracted for.

If your Board is paid for their services, then it may be possible for them to be paid additional funds for special contracts or vetting a new vendor. This would depend on their contracts with the Association or language in your governing documents.

Hope this helps,

Tim

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Yvette

Kickbacks (illegal) and announced service charges like 10% of a project are two different issues.

That said, I think the service charge while legal are outrageous. I have never seen anything like it.

MatthewW4 (Arizona)
Posts: 500

Posted:

Quote:

Posted By JohnC46 on 05/01/2013 6:43 AM
Yvette

Kickbacks (illegal) and announced service charges like 10% of a project are two different issues.

That said, I think the service charge while legal are outrageous. I have never seen anything like it.

It might not even be legal.

In my state one would need a general contractor's license to charge a fee for work performed by a licensed contractor.

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

Quote:

When looking into changing management they stated they would get 10% of any project over $10,000. Where as our old management was charging 20%. Is this legal?

Its not a kickback, its a service charge for dealing with the contractor. Someone needs to get the quotes, make sure they show up, finish the job satisfactorily, deal with problems/complaints, contract issues, payment. Your paying them to deal with the contractor, not do the job.

JonD1
Posts: 2,350

Posted:

Once again it appears some peoploe have little understanding as to how the real world operates and what is rational.

Yes, lets use the dirty word "kickbacks" to set the tone for the discussion because without understanding what it is you might be speaking about better pass judgement right from the get go.

Well the contract with the MC on most properties includes normal management and the time and effort that might require. Now lets say you decide to do a roof replacement project lkets say the cost would be $1 million dollars well then who will be overseeing the project? Who will be there each day to represent the best interests of the property in seeing the work is done properly? Your choices 1) nobody 2) the MC 3) a volunteer who knows nothing 4) a volunteer who knows about the type of work being done.

In most cases #1 is not a wise choice. #s 3 & 4 are rare if ever done.
That leaves #2 the MC and for that trime and effrot many MCs add in their contracts a fee for projects out of the norm.

Or you could just demand this person do more for the property for the same amount of money. Which IMO would be irrational.

So no you don't have kickbacks or bribes or some criminal activity but rather as stated a fee for services to oversee a project that benefits your community. And a license to charge in this manner is not required as the MC is not performing the work rather but rather representing the property during the time the project is done.

PatrickA (Florida)
Posts: 9

Posted:

Quote:

Posted By YvetteR on 05/01/2013 6:27 AM
Is it customary for BOD and Management Group to get Kickbacks when ever a community is doing a special project or changing a vendor for services such as Landscaper? When looking into changing management they stated they would get 10% of any project over $10,000. Where as our old management was charging 20%. Is this legal?

Not so...the management company gets paid to perform a service, When the board member was questioned about the kickbacks he stated I gave him the money to invest in his trucking company. It was a lie, he had nothing in paper that I had invested money and I had no recites from him or stock. His buddy at the management did not report this to the police, he blacklisted me from working on the property. The home owners I talked to wants the police to investigate but they wont stick their necks out, just last year 2011 the board/maintenance got into trouble for abusing a home owner...this is my opinion...

YvetteR (Florida)
Posts: 24

Posted:

Thank you all for your imput. I am now clear on this. Thank you. I will pass this on to some homeowners.

CarolR11 (Colorado)
Posts: 2,563

Posted:

Yvette, Management charges whatever is in the executed contract with the management co. (MC).

Our MC charges us nothing extra for overseeing large projects nor for seeking bids, but does have a schedule of extra charges for things like going to court, more than two board meetings a month or on weekends (where they take minutes), and other extra expenses. But we have a full time onsite property mgr. and a full time onsite asst. mgr.

I'm guessing that in smaller less complex HOAs that the MC devotes say, 15 hours a week to --whether onsite or not-- there would be additional fees for overseeing big projects, sending out the requests for bids, and getting the bids on same. These additional fees should be specified in the MC contract with the HOA. They probably would be in the form of an Appendix. They are not "kickbacks."

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

PatrickA, your situation is unique. It is a kickback. It's different than what is talked about here.

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