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RichardL7 (Colorado)
Posts: 105
Posted:
Hello one and all. Well it has been a long time. SOooo, With your help on my questions, we did finally fired our old Management Company in 2013, but only to fine we were about $60,000 + Dollars in the hole for our 66 Units. Charges were filed and the police and they have him on fraud charges. Long story. You can see this on the web as follows. David Martin, PMG Management Co. Colorado. Our new Management Co with our finances look to be OK at this time, but still not sure as I'm not on the board and major problem look to be coming up with bylaws and association laws and a failure to implement and enforce parking rules when reported, we get all kinds of excuses from the Board and Association Rep. who works for the Management Co.
I do have more question, but will hold for now. You cannot understand just how much good you did on the question and answers and it took a long, long time for our association to make changes, I just would not give up but we did it, but at a cost of $60,000 plus Dollars. Please friends, don’t let this happen to you. My thanks to all of you. Please keep up the good work.
Richard.
TimB4 (Tennessee)
Posts: 21,059
Posted:
Richard,

Thanks for the update.

Remember that linking to a story is allowed. The actual mentioning of names, etc. is not (see posting rules)

Now, haven't read the story yet, I'm confused on how the Association is in the hole $60K.

Was it alleged embezzlement, terms for ending the contract or failure to collect assessments?

TimB4 (Tennessee)
Posts: 21,059
Posted:
OK, I just read a story on the issue. It appears to be theft.

This is where the Association can make a claim on their crime insurance policy.
They can also make a claim against the MC's insurance policy.

If you read the story, it's also a good lessen for Boards to know who is on the signature card for their funds and, regardless of who is on it, trust but verify by having financial reviews or audits every year or two along with someone who does not write the checks reconcile the bank statements. If this was done, perhaps the theft would have been caught earlier.
RogerB (Colorado)
Posts: 5,067
Posted:
This is an example of why a management company is now required to have E&O insurance and the agent must have crime fidelity insurance in order to to be licensed in the State of Colorado. But I wonder why it has cost your HOA $60,000? Were you able to recoup these funds?

I suggest the following procedures to prevent theft.
1) Your HOA should carry crime fidelity insurance in an amount which will cover total cash assests.
2) Your HOA should never allow a manager access to withdraw funds in cash. However, our management agreements allows for reserve funds to be transferred into the checking account for payment of reserve expenses.
3) Your HOA financial reports should be monitored monthly and independent bank statements matched to the balance sheet yearly and preferrably quarterly.
4) When an audit is done, it should include confirmation of companies who get large and/or ongoing payments since managers could set up dummy companies to pay themselves.
RichardL7 (Colorado)
Posts: 105
Posted:
Thank you for your comeback. I will try to explain. First of all if you can believe it, Apathy is so prevalent it would require being seen to be believed. I’m not sure I can put it into words. Note: This is also with the board and well as homeowners, Many promises and not much action. Stonewalling, excuses, and ECT, --- on and on for the past two years. Mind you not all, but the majority of them.

Let’s start with the $60,000+ loss. Check this Web Address, it may help. But some are listed here, Water Bill’s, Landscaping, Trash removal and small related charges for work done for the association to name a few. He took the money and did not pay the bills.

See the following Web. Address and Subject info.

http://www.bizjournals.com/denver/blog/finance_etc/2015/12/owner-of-aurora-hoa-management-company-allegedly.html

Subject: Owner of Aurora HOA management company allegedly diverted funds, state officials say.

I feel as well as other that the Association Manager from our Management Company is all talk and very little action. Again I feel the manager does not Analyze, investigate, verify and Report back on related Association problems, then act on it to eliminate or correct the problem with whatever required authorization that is needed..

Such problems as, free roaming Dogs and related issues. Modifications of units without approval, Association bylaws on parking, such as - no commercial vehicles allowed except for repairs or Association related work, hording of Visitors spots, and at weeks on end. Also, Flagrant violation of our parking rules and when reported no action is taken. Bottom line, no bylaws are enforced to any extent. OK, best stop for today.
Thanks. Richard7
TimB4 (Tennessee)
Posts: 21,059
Posted:
Richard,

Use this as both a learning experience and as a call to rally the apathetic.

Inform the members that, even though questions were being asked, the Board failed to act and as a result $60K was able to be embezzled by the previous MC. Gather support and recall or not reelect the Board. Then seat those who will do their due diligence.

You will likely have to lead the charge and you can't do it alone. You will need others willing to step up and serve. If there aren't enough willing to serve, then I wouldn't sound the alarm as it will likely only annoy those who are in charge. If the apathy remains after this issue and the membership can't be rallied, you seriously may want to consider moving.
RichardL7 (Colorado)
Posts: 105
Posted:
Thank Tim, I may need more help from you and the Community.

A word about moving before we move on. :-) I understand it was only a option offered after all fails, and I appreciate your comeback on the subject.

It was with the help of the Community (HOA /talk) that stopped our first problem and I think it will help a great deal on the next. Your remarks are greatly appreciated please understand that. As such I’m sure we have good management Companies in our area but just cant find them. A few ruins the work of many and we need to eliminate them as best we can.

I like the saying from Edmund Burke, ā€œNobody made a greater mistake than he who did nothing because he could do only a little.ā€

As such many factors enter into the subject of moving especially by wrong doings by certain people in a association community. Financial as well at mental( don’t Run) stops me from doing so, but--also trying to better the community, and that’s my main goal, it’s not about me but those who are weakened or unable to speak up. I fully understand your last resort and I have considered it, but I can’t run and if I had, our first problem would still be with us. And yes it may be the same dance but with different music. So I will try again. ;-)

Yes Apathy is prevalent, but I understand why. Many are single men, yes men and woman of age. They wish only to have a peaceful life without confrontations, my wife and I wish only the same & I’m 76 Y.O.A . Our Community has many hard working woman and men trying to support children or the quiet life style they wanted, also they may have had a very bad situation with their partner that left them traumatized. It did for me at one time.

The situation with us is about the honest people in the community, those who think they don’t have a voice. Those who feel repercussions from neighbors if reported. It happened to me, but I can deal with it. Language problem for some, being alone with no family, they feel no support from neighbors. Highly abusive verbal responses from violators. So I can’t stop trying to help. Not sure where this will go but I can’t run. So now I will start again. Why not, look who helped the first time. Someone had my back, HOA Talk. :-).
Richard7

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