unauthorized use of funds

Started by JaimeR1 • 21 replies • 2056 views

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JaimeR1 (California)
Posts: 18

Posted:

we have a 2 unit condominium building in san francisco ca.. the owner of one unit wrote a check to pay for new locks on his unit and paid the bill using the HOA money.
nothing was discussed - we found out by looking at the bank account.
how should we handle this.
we are not friendly with the owner.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

I would send them a letter explaining the approval process of how to spend funds and quote the exact rules to reference to. Then I would state that they owe the HOA the money back for improper procedure and use. However, they can be re-imbursed if they do come back and follow the rules. If they refuse to return the money, then your HOA can lien them for it or sue. Which they would be responsible for the legal expense for recovery. Basically, pay the money back, obey the rules, and they may be approved if it's within guidelines to be approved.

Former HOA President

TimB4 (Tennessee)
Posts: 21,062

Posted:

I agree with Melissa.

Write a letter explaining what you discovered and ask why it was done that way and to please replace the funds.

If you get no response or the replacement doesn't take place as agreed, contact the local police and report the embezzlement.

LarryB13 (Arizona)
Posts: 4,099

Posted:

Jaime,

I suspect that this about more than just door locks,

You might want to look into Alternative Dispute Resolution (ADR) to see if you and the other owner can come to some sort of agreement.

This may help get you started. See: http://www.davis-stirling.com/MainIndex/ADRMenu/tabid/572/Default.aspx#axzz3og5FMdzs

PitA
Posts: 1,416

Posted:

! TWO UNITS !

They would be deadlocked in any disputed issue.

If the locks are a 'common element' the use of funds was authorized.

If not, it was theft.

Simple.

KerryL1 (California)
Posts: 14,550

Posted:

I'm with PitA. Your CC&Rs will say who's responsible for the exterior doors. If not the HOA, then follow the advice of others.

JaimeR1 (California)
Posts: 18

Posted:

u r correct in your assumption...this has been an on going theme with this owner. there have been 3 others in the many years we owned our unit but never an issue we couldn't resolve. my wife maintains that we should seel and get out of this mess and i'm inclined to agree now. we're probably going ask an attorney to send a threatening letter since that's the one time the other owner acted in a responsible way

JaimeR1 (California)
Posts: 18

Posted:

yes - this is a warning to others...never buy a condo in a two unit building. UNLESS U HAVE LOTS OF TIME AND MONEY and/or you're an attorney

PitA
Posts: 1,416

Posted:

..... ...never buy a condo.....

excellent advice

JonD1
Posts: 2,350

Posted:

" ........ Never buy a condo in a two unit building." If far different from " never buy a condo".

And as hard as it sounds there are few folks whose living in a condo and or HOA suits them just fine.

Like everything else there are good, bad, and indifferent.

Having just two owners making up the association can complicate any decision making process or interaction as to fairness of operation.

Just becuase ones own decision to buy into a condo/HOA has no worked out badmouthing the entire inventory of such properties is a bit drastic.

JonD1
Posts: 2,350

Posted:

JonD1
Posts: 2,350

Posted:

PitA
Posts: 1,416

Posted:

If you repeat it FOUR times you may convince me.

(you actually repeated 2 times so you would need 2 more)

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Jon

Personally I would be very leary of a two member condo association. As the OP said unauthorized use of funds but in his two person association it might be a tie vote (one to one) on it being unauthorized use......LOL

JonD1
Posts: 2,350

Posted:

Well John I think that was the point Jaime was making.

Just how to you resolve a tie vote with just two votes. How do you function as a board and the only two owners.

I would stay away from properties having just two owners multiple units is hard enough at times.

Seems PITA is miserable in his own living situation yet unable to take his own often given advice. MOVE!

Maybe in the next lifetime he plans to avoid HOAs and condos. This time around bite the bullet and whine about it to others whenever possible.

PitA
Posts: 1,416

Posted:

Not miserable.

Quite tolerable actually.

But, an error to buy into a HOA - PARTICULARY a 55+ one.

Just trying to warn people away from the 'communal living' HOA issues.

The very EXISTANCE of this discussion 'board' proves my point.

I will move when I can break even.

In the meantime I will run for re-election to the BOD after my mandatory 1 yr break after serving 2 terms. (term limits)

I estimate 3-4 months to fix the damage done to the record keeping. (or lack thereof)

My my, the pure joy of HOA living !

What could be better ?

;)

PitA
Posts: 1,416

Posted:

Oh, Joy !

I was elected for my two year term, or sentence.

I was elected Treasurer at the 'organizational meeting'.

Oh Boy, Oh Boy, now I get to spend 5-10 hours a week doing 'shlock work'.

AFTER I straighten out the records (AGAIN) to show actual OWNERS as opposed to residents.

Many 55+ers transfer ownership to their children/relatives w/o informing the BOD.

Yet they continue to act as members, without bothering to get limited POAs or proxies.

Which may, or may not, effect the election results.

We will not know until AFTER I straighten out the records.

My, how I just looooove my HOA

.....not

GenoS (Florida)
Posts: 4,276

Posted:

5-10 hours a week sounds like a lot. Where records are in disarray, though, I can see that happening. We've got a similar situation. We're not an age-restricted 55+ community but you'd never know it by looking at it. There are 3 different lists of owners, residents, and phone numbers (and alternate phone numbers and alternate offsite addresses for many) and I probably spent 5-10 hours a week myself back at the beginning of the year straightening it all out. At least I got most of it straightened out. One owner is in her 90s and her son actually owns her home. He lives in Virginia. The vote belongs to him but she is the one who shows up and signs in at the annual meetings and votes. No POA, no proxy, no nothing. At the last annual meeting we just made quorum. Without her lot being represented there would have been no quorum. Nobody questions it.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By GenoS on 11/11/2015 4:27 PM
5-10 hours a week sounds like a lot. Where records are in disarray, though, I can see that happening. We've got a similar situation. We're not an age-restricted 55+ community but you'd never know it by looking at it. There are 3 different lists of owners, residents, and phone numbers (and alternate phone numbers and alternate offsite addresses for many) and I probably spent 5-10 hours a week myself back at the beginning of the year straightening it all out. At least I got most of it straightened out. One owner is in her 90s and her son actually owns her home. He lives in Virginia. The vote belongs to him but she is the one who shows up and signs in at the annual meetings and votes. No POA, no proxy, no nothing. At the last annual meeting we just made quorum. Without her lot being represented there would have been no quorum. Nobody questions it.

Not uncommon.

We had the unmarried, live in boyfriend show up and wanting to vote for her, He had no paperwork (Proxy, Power of Attorney, etc.).

We had the daughter (actual resident) of the owner. Same thing.

We had the father (actual resident) of the owner. Same thing.

We had the husband and wife (separated) both claiming the right to vote.

Some just do not get it.

PitA
Posts: 1,416

Posted:

Even many DIRECTORS 'do not get it'.

Ever hear: "But that's how we always did it?"

In my HOA: 25+ years of 55+ incompetence.

Hopefully, myself (68) excluded.

At least I have studied the Covenant and Bylaws.

GenoS (Florida)
Posts: 4,276

Posted:

Quote:

Posted By PitA on 11/12/2015 5:20 AM
Ever hear: "But that's how we always did it?"

I think it's contagious. My neighbor resigned from the board 4 years ago citing concern and disdain about the "We've always done it that way" attitude she perceived permeating the board. Last month she stood up at our board meeting and argued from that exact point of view against an owner who was asking questions.

I'm the secretary and I occasionally browse through the old minutes books. Not exactly great summertime reading, but I truly believe that those who cannot remember the past are condemned to repeat it. One thing that stands out very clearly is the cyclic and repetitive nature of issues and problems. Dogs off leash, entrance gate broken, irrigation system woes, etc. It's like Battlestar Galactica: All this has happened before and it will all happen again. Some of the minutes from 10 years ago could have been written last month.

The will to change things for the betterment of the community is weak and I think it will take a crisis to wake up most of the owners.

PitA
Posts: 1,416

Posted:

Quote:

Posted By PitA on 11/06/2015 4:43 AM

..... ...never buy a condo.....

excellent advice

I repeat my post.

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