Trying to be cheep with the attorneys time

Started by TammyI • 9 replies • 1162 views

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TammyI (California)
Posts: 68

Posted:

I am hoping someone can answer some of these questions, as you have helped us through this whole ordeal. We just got one box of records from the MC from HELL and hired an attorney to write a letter to get the rest. When we picked up the box she told us she would be at the next meeting with proxies to vote us off the board. This is also why we hired an attorney. She insisted that she could vote the proxies even though we informed her that she would not be allowed into the meeting or to vote as a non property owner.

Question 1
We have sent out the double secret ballots to all members to vote in the new board and complied with Davis/Sterling in all ways. Do we need to except proxies?

Question 2
Can a MC use their own staff to do maintenance on a property, charge us a fee and then charge 10% on top for a management fee?

Question 3
Can a MC charge 10% above their charges for stationary, stamps and mailing for management fees?

Question 4
The MC cleared all accounts as of 1/1/2013 and started the statements with zero from there(hard copy only, claiming a virus), what can be done?

Question 5 We have found correspondence with statements attached that show one owner has never been current on dues, the statements given to us by the MC show he is current. Can we turn this over for prosecution? This owner has also been waved late fees and interest and at one time he was behind 37 payments. He is not unable to pay the $135 per month he is actually very wealthy.

Question 6
Anyone know what the chances are to get the rest of the records?

TimB4 (Tennessee)
Posts: 21,059

Posted:

Quote:

Posted By TammyI on 06/11/2013 1:36 AM
She insisted that she could vote the proxies even though we informed her that she would not be allowed into the meeting or to vote as a non property owner.

CA Civil Code §5130 is fairly straight forward that a proxy representative must be a member of the Association.

I would suggest that you print this in your next newsletter.

Quote:

Posted By TammyI on 06/11/2013 1:36 AM

Question 1
We have sent out the double secret ballots to all members to vote in the new board and complied with Davis/Sterling in all ways. Do we need to except proxies?

CA Civil Code §5130 is fairly straight forward that "Proxies shall not be construed or used in lieu of a ballot." Since the Association is voting by mail, I would think that proxies are not required for voting.

That said, if your still holding a meeting and a member shows up with a proxy for another member, you should accept that proxy.

If you are collecting ballots via mail and passing out ballots at the meeting, you must accept proxies. As a member may still cast a vote in person or by proxy.

Quote:

Posted By TammyI on 06/11/2013 1:36 AM

Question 2
Can a MC use their own staff to do maintenance on a property, charge us a fee and then charge 10% on top for a management fee?

Probably. It will depend on the what the contract says.

Quote:

Posted By TammyI on 06/11/2013 1:36 AM

Question 3
Can a MC charge 10% above their charges for stationary, stamps and mailing for management fees?

Depends on what the contract says.

Quote:

Posted By TammyI on 06/11/2013 1:36 AM

Question 4
The MC cleared all accounts as of 1/1/2013 and started the statements with zero from there(hard copy only, claiming a virus), what can be done?

You say they have them, they say they don't. Honestly, not much can be done. If the MC is telling the truth, there are no files to collect. If the MC is not telling the truth you have zero proof otherwise. Consider it a lesson learned and insist on copies of ledgers at the end of each year.

In order to recreate the ledgers (and verify the bank balances)Banks keep copies of deposit slips and may also keep images of the deposited checks. Ask the bank for copies and recreate the files. This will cost you some money for the copies and money or time to physically recreate the files.

How much time or money will depend on how far back you need to go.

Quote:

Posted By TammyI on 06/11/2013 1:36 AM

Question 5 We have found correspondence with statements attached that show one owner has never been current on dues, the statements given to us by the MC show he is current. Can we turn this over for prosecution?

The MC has already indicated that there was a virus that destroyed the files. This can of course aid an argument that the error was data entry.

My suggestion, consider it an expensive lesson learned. Recreate the ledgers and move on from there.

Quote:

Posted By TammyI on 06/11/2013 1:36 AM

Question 5 (continued) This owner has also been waved late fees and interest and at one time he was behind 37 payments. He is not unable to pay the $135 per month he is actually very wealthy.

Until you can recreate the actual ledgers from the actual deposits aided by the correspondence, you won't know anything for sure. I reiterate my previous suggestion: consider it an expensive lesson learned. Recreate the ledgers and move on from there.

Quote:

Posted By TammyI on 06/11/2013 1:36 AM

Question 6
Anyone know what the chances are to get the rest of the records?

50/50

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Tim gives good advice. I just wanted to add in that the person behind may not be if they are paid up. The HOA can waive late fees and interest in a deal to settle with the owner to avoid a lien. Which could be the case here. We've done similar things when working out payment plans. I do NOT pretend to know someone's income and means they are able to pay. That is just an ASSUMPTION. You know they can pay when they do NOT what you think they can do.

Hope you have a new MC lined up or are going to self-manage. You all can just go down to a bookkeeper/accountant until you find an adequate MC. We only used an accounting firm and self managed. Our treasurer was an owner and owner of the accounting firm.

If you want to save money with your attorney here are some tips. 1. NEVER EVER leave a message with your name or the HOA names attached to it. Try to only call when you know they will be in the office. They may charge you for those messages. Not all will do it but it's how they keep track of calls.

2. Limit your emails or correspondence with the attorney. They can charge for your email correspondence as well.

3. Understand what your attorney's job is. A HOA is to have an attorney to appear in court on their behalf. The HOA attorney represents ALL the members and NOT just one person or even board. A member can't just consult the HOA attorney. Should be ONLY one approved contact that discusses issues with the attorney. This saves money and time. The Attorney should be used to process the papers you want them to process that you can't legally do through the court system. So be careful here if your just hiring them to send out threats. It should be proper paperwork needed for your case.

Former HOA President

CarolR11 (Colorado)
Posts: 2,563

Posted:

Given all that your HOA of 16 (?) units has been through, Tammy, I don't think that it's wise to try to play it cheap concerning legal counsel. Do you now have a contract with an HOA attorney? If so, read it to see what s/he can charge you for and how much, etc. Do not speculate about this.

Or did you hire an attorney just to deal with your former PM?

Your #s 2 & 3: Tim's right--what did that contract say???

#1: Do your bylaws permit proxies? And Tim points you to the citation about your former PM voting. As a non-owner, she may not participate in the election. Your inspectors of election should be instructed to not count her proxies. She should not be allowed on your premises or in the meeting room. Change locks if necessary.

TammyI (California)
Posts: 68

Posted:

Thanks guys, to be clear, the MC has all the hard copies back to 1964 she just did not want to give them to us; they are in her garage at home. She stated that her computers in the office get viruses all the time and did not want to give us the records on a thumb drive so as not to pass any on to us. She also did not want to print the records. We got a 1 page statement for each owner that started Jan 2013 with a zero balance.
We found several statements for the owner who doesn't like to pay shoved in with some old correspondence that showed up to Feb 2013 that stated he owed almost a year. I googled his address and He lives in the inner gated community with a golf course around it, worth over 1 mil. He has made 6 payments in the last 7 years; the last was a year ago.

We have put together the last 18 months for all the owners with the banks help. Most of the dues reported by the MC don't match the bank records. There are numerous blunders in the handling of our money. Last year we paid for 1 month gardening of another HOA, and there was a check to another HOA for $200. And writing off last years’ debt instead of trying to collect is ridicules. We would so like to have her prosecuted for putting us in this situation, we just don’t know if it is worth pursuing it.

We hired the attorney just to write the MC a letter so far, explaining proxies and asking for everything including a copy of her contract made in 1997. According to the CC&Rs her contract was void years ago.

According to the CC&Rs proxies are fine if they are in the hands of a member in good standing the MC has been allowed to hold them herself for too long.

The new MC takes over on the 1st, but they do not want to deal with these issues.

TimB4 (Tennessee)
Posts: 21,059

Posted:

If the MC has to be licensed, have you considered filing a complaint to the licensing bureau?

CarolR11 (Colorado)
Posts: 2,563

Posted:

Good observations, Tim. I

don't think PM' s are required to be in that position in CA HAOs, the PM better be ready to show certification of the requirements in your definitions for your hOA.

CarolR11 (Colorado)
Posts: 2,563

Posted:

Good observations, Tim. I
in most cases is 'Our r byl,rs that rule.
I don't think PM' s are required to be in that position in CA HAOs, the PM better be ready to show certification of the requirements in your definitions for your hOA.

TammyI (California)
Posts: 68

Posted:

You know she does have a real estate license and I did run across her brokers name one time, or maybe we could go to the real estate board.

I forgot to mention the MC from hell still manages one of the rentals here and her latest tenants have installed a hot tub, 2 dogs, and have 2 mentally challenged children all in the common area shared with another unit. The other unit can not use the back yard at all and the children hit the other units back wall and door with sticks at all times of the day and they are not cleaning up after the dogs. The unit in front has the same issues along with all the toys. I wish we could get a restraining order.

I just finished comparing the bank deposits to the monthly profit and loss statements from last year. She reported collecting $3200 more than the bank received. It's just one thing after another.

GlenL (Ohio)
Posts: 5,491

Posted:

Whether she manages the rental or not you treat it like any other violation but make sure you are not singling out that unit for "special attention". In addition to the attorney, it sounds like you need to have an audit done, something that will not come cheap. I know from your other posts that you have only recently moved in and I applaud you for your efforts so far but let this be a lesson to those willing to shirk their responsibility and let others carry the load of just what can happen.

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