Board Pres, committing fraud

We have a Board President, who has new Board members, never been on an HOA Bard before who the Board President has them convinced that the BOD Pres. is allowed to make all the decisions, approve contracts without other Board members voting, breaking the HOA R & R harassing certain residents in our community, taking $ from the HOA on false information, having resident's furious over their discrimination against certain residents in the community, and biggest issue of all not being current on their own HOA fees. The PMC appears to be on her side, knowing she is doing wrong, BOD member's resign, new ones get back on then BOD members resign again. This BOD member lies about certain items on having work done on their own home and billing it to the HOA. I have talked with the PMC but they don't seem to listen, the President is a good liar! What can we do about this Board President not doing their fiduciary duty?

Ns, not sure what you mean is this retaliation for the foreclosure?? Nothing was mentioned about a foreclosure, I am missing your point!

From a prior thread about foreclosures:

Hire an attorney and petition the court to appoint a receiver to run things until order can be restored.

I am assuming this was said tongue in cheek.

NpS, I am still confused as in an earlier response to you. I still am confused, no where in this do I mention anything about a foreclosure!

Interesting Kay. You ask me to explain myself, but you never answered my question - Is this a new issue entirely or is retaliation part of what's driving you? IMO, it's a fair question.

I must admit that I have little tolerance for someone who alleges fraud, illegality, misappropriation, embezzlement, etc. but doesn't give me the opportunity to reach my own conclusion after I have a chance to read the facts that are provided. Fraud is not a fact - It's a conclusion that you reached and want me and others to accept without question. The same is true for illegality, misappropriation, embezzlement, etc. All of these are conclusions. No factual context at all.

So I looked at your prior post to try to get an understanding of where you are coming from. Geno certainly figured out what I had done. And I expect, so have you. But you still haven't answered my question.

Instead, you seem to be annoyed because I brought up the foreclosure which was the centerpiece of your prior thread but you clearly omitted from this thread.

And unfortunately, you've uncovered another one of my foibles. I don't have much tolerance for posters who intentionally omit information, or choose not to disclose information if it isn't 100% favorable to their position.

As far as your 2 threads are concerned, it appeared to me that your allegations of misconduct were sufficiently similar but little progress has been made in the year between threads. And it appeared from your prior post that you lacked both the resources it would take to pursue your claims and the attitude it would take to gain support from your neighbors. To quote myself:



I do think that was a reasonable conclusion based on the information you provided. And I do wish you well.

So now I have explained myself to you. Would you give us all the courtesy of doing the same?

Thank you that have replied. Some openly and honest thinkof the post, others to critical and domineering.

1st, I am not in the HOA business for the 1st time! I have been in the HOA Business/Industry FOR OVER 30 YEARS!

HOA talk I have always liked as you can share, but sometimes for someone sharing for the 1st time with HOA talk would not be back, as some of you are very critical for the wrong reason!

Everyone knows how hard it is to get good Board members. HOA talk is help those with questions to get feedback, however some of you are to critical!

I have sent this information to get feed back from those posting, I do not want to say to much in these posts, as some have made decisions without knowing the whole story. I would tell you more, except by doing so would help give away my identity, and unfornutely as those of you who are familiar with HOA's both as current & past BOD members, who work in the HOA industry either with the PMC or attys know how much fraud goes on in/out of HOAs from fraudulent budgets to get loans to HOAS and BOD members who do not know what their fiduciary duty is or do they follow it and have a PMC or PMM who does know their jobs!

#1-A breach of the fiduciary duty to unit owners occurs whenever a board member's abuse of such power results in harm to one or more of his constituents. example: Common areas not taken care of causing health & safety issues as an example!!!

#B-Certain cases board members have the discretion to levy fines, withhold services, or deny access to amenities, all of which confers upon them sweeping powers over unit owners.

#C-We also have found that the Board had underfunded common asset repairs by spending only ”one half to two thirds” for recommended repairs as recommended by two assessment reports (reserve studies).Further, they have refused for years to set a common area repair schedule and budget, contrary to the association reserve policy. (required by Colorado law.) The shared value of common area assets has been reduced to the point that resale values are affected.

Fraudulent HOA documents done, changing Articles/CCR's without no HO approval is just another example.

Yes I do know what fraud is in HOA's. HOA fraud nationwide has become more common in the past 5 years than ever before.

Thank you Tim.

We have proof of everything I have talked about. Educating the community is not the problem, they already know and see from the Financials, Reserve Study, and fraudulent 2nd Budget.

Refusing to give homeowner Legal Documents of the HOA under HB- 1237 effective 1.01.2013.

Thank you again for your suggestions.

Again, I just apologized to you and answered my question on my confusion about asking me about the foreclosure when my current post, did not say anything about a foreclosure.

No this is NOT about retaliation, and yes it is the same offender, the Board President! this is about what is the law and non-fiduciary duties of the Board not following them!

I hope by now, it shows I am trying to work with you a BIT.

Hi NpS,

We had 3 successful petitions with qualifying signature's for a special meeting to recall the Board. However because of the past PMC and the current HOA atty, they had/have been part of the fraud going on, and they denied all 3 requests.

This is what I am working on with over a team of 25 HO's on getting signatures of 50% of the current owners which is to hire an attorney and petition the court to appoint a receiver to run things until order can be restored.

This has been very difficult the past year with my personal injury last July as a customer of a premise slip/fall in a large CO discount store, with sx on 11.4.14 of 4 discs with cadavers in my neck and other sx's coming up.

Thank you again, and any feedback is appreciated, on my guidance I am doing, as a past Board Member and President of 10 HOA's, have been in the HOA business,& living for over 40 years.

Kay O.

Posted By KayO2 on 09/20/2015 9:32 PM
Hi NpS,

We had 3 successful petitions with qualifying signature's for a special meeting to recall the Board. However because of the past PMC and the current HOA atty, they had/have been part of the fraud going on, and they denied all 3 requests.

*** Did you challenge the 3 denials through the courts? Outcome?
++++ We did the 1st 2, with still a letter from the HOA atty, it was not acknowledged and denied making all kinds of excuses that did not make since, like duplicated names, will we have duplicated owners of more than 1 unit, neither would meet with the 2 of us on the count names for clarification, both were at the holidays. One they waited till/ on the 30th day and sent us an email on Christmas eve.! When some people signed they signed on the wrong line, then signed next to correct line to make it clear.

This is what I am working on with over a team of 25 HO's on getting signatures of 50% of the current owners which is to hire an attorney and petition the court to appoint a receiver to run things until order can be restored.

** Any estimate on the cost to pursue receivership through the courts? Maybe someone else can comment on the difference between challenging the lack of a recall vote and the imposition of a receiver.

++++ I am waiting on 3 different meetings we have set up with attys., to get the cost!
Colorado is currently working on getting arbitrators for issues like this, but not in place as yet!

This has been very difficult the past year with my personal injury last July as a customer of a premise slip/fall in a large CO discount store, with sx on 11.4.14 of 4 discs with cadavers in my neck and other sx's coming up.

** Difficulties acknowledged and understood.

The time seems to be quite a bit of Difference are you on 2 or 3 hrs difference on the east coast. We are MST. Its now 11:06PM

Thank you again, and any feedback is appreciated, on my guidance I am doing, as a past Board Member and President of 10 HOA's, have been in the HOA business,& living for over 40 years.

Kay O.

Perhaps, however at the end of the day, this would be the only clear resolution because the majority of HO"s won't be willing to do the "hard" work that is involved to actually turn a board around.

In our legal system, there are certain automatic presumptions.

1. When it comes to voting (and recalls), every state has narrowly defined rules that must be followed. These rules are designed to protect the individual homeowner from manipulation of her right to choose her leaders. The presumption is always that the HOA leadership cannot interfere with an individual's right to elect, replace, or recall the HOA directors.

2. When it comes to budgets, allocation of funds, preserving HOA assets, maintaining a safe environment, etc., the presumption is the exact opposite. Every state has some version of the Business Judgment Rule (BJR) that presumes that once elected, Board members are acting within their authority. Unlike voting rights which are narrowly defined, the BJR is a general principle that gives the board a lot of discretion. It also gives the judge who hears the case a lot of discretion to find in favor of the Board.

A huge difference between (1) and (2) in our legal system is who bears the burden of proof. When (1) is involved, the burden of proof is on the Board. They must prove that the rules were followed. When (2) is involved, the burden of proof is on the homeowner. She must prove her allegations that the Board members failed to perform their fiduciary duties - but she doesn't get to decide whether her proof is sufficient. Nor does her lawyer get to decide. A judge will consider the allegations in the light most favorable to the Board.

Simply put, receivership is never a slam-dunk. Voting violations can be.

What does this mean? It means that Tim, I and others are wondering why you aren't pursuing the legal path that favors the homeowner (1) instead of the path that favors the Directors (2). Your investment of time and energy are certain to be less with (1). And your chance of winning is far greater with (1). If the goal is to win, why not follow the path that is more likely to get you what you want.

Receivership is a losing proposition (even if it's the only option left).

The Receiver answers to the court, not the Board and not the membership.
Complete loss of control of the Association until it's turned back over.

The Receiver is paid by the members at a rate determined by the Court.
Assessments will go up. Expect a salary and, perhaps expenses, equal to $50 to $100K per year.
Once Assessments go up, nobody will think it was a good idea.

The Receiver is named by the Court
The membership has little if any say. It's even possible that the current MC could solicit the court to be named receiver.

The Court says when the Receiver leaves
Again, complete loss of control of the Association.

Its not just the BOD ,President that committed the fraud, all the current Board did.

A small scenario of what has happened:

Not a very knowledgeable Mgmt.,CO talked the very unknowledgeable BOD into a 12 figure $$$$$ construction defect loan. for construction. We are pre : CCIOA 67 2/3 of the owners have to vote and approve this loan. It did NOT happen, minutes were written & forged for a meeting that did not occur. New law went into effect last year, if its found that the BOD & Mgmt company fraudulently put a budget together in order to get approved for a loan, it is fraud on both entities, the BOD & the mgmt. company. $$$the money is almost gone nothing to show for repairs. Annual meeting in Jan., if we were to get an atty, have the atty go to County court show what is going on, have a receiver put in place to stop fraudulently spending till we can re-elect a new Board.

We currently have 25homeowners collecting signatures to do a recall meeting. We need 67 2/3 to do the recall.

We are currently collecting and tuning in complaints against the Board and PMC to DORA.

Questions from those on what happened to our recalls (3) that we won.

1. was at Christmas, the HOA atty and the HOA secretary counted the votes, they altered the signatures/names. We kept copies, then they email me Christmas eve day they are no accepting the recall list, due to duplicate names,. Some owners owned more that 1 with different address the 2nd recall they deliberately spilled liquid on the sign up list to make it not legible, then the last, never counted it or looked or most of all refused the certified letter at the PMC. Again the HOA atty was part of this fraud.

Kay,

To clarify:

A 12 figure loan would be 100 Billion Dollars or more $100,000,000,000

OR

A 12 figure loan could be 1 Billion or more (counting the cents) $1,000,000,000.00

Perhaps you intended to say a 7 figure loan which would equal 1 million or more $1,000,000

Hello all,

Yes sorry meant to say it is a 7 figure loan which is over 5 million or even more.

KayO

Yowza.

Your 1,000% correct Geno. No typo.