statue of limitation to pursue past board's wrongdoing

In the USA, there is a statute of limitations for everything but murder. How long ago was this?

A quick google search indicates that this is likely covered by a three year statute of limitations. You always need to double check what the other side claims, but this seems correct. Even on the outside, it would not likely be more than five or six years.

You have no case.

And if you haven't already done so, please put a formal policy in place stating such activities are strictly prohibited. In fact, double-check your governing documents to see if there's language about board reimbursement (usually, the bylaws state board members are not to receive any compensation for serving on the board). If not, that's something you may want to work with your attorney in drafting for homeowner approval (I would think this amendment wouldn't have any trouble being approved!)

Good catch, Sheila.

They would have had to get a Misc. Income form for whatever year the check was written from the HOA.

Was that listed in that year's Annual Report to the members?

Wonder why it was never caught until now.

However, check your bylaws about compensation to Board members. Weirder things have been allowed to happen.

"reasons of they achieved substantial savings for HOA and they deserved a refund of their overpayment of HOA fee for the past."

Why would they be an elite bunch?

Why didn't ALL homeowners get a refund for an overpayment.

See if you can find the minutes of the meeting where this was decided.

What does the current boards attorney say?

How was the reimbursement discovered? Did the previous board attempt to conceal the reimbursement? The fact that the board achieved a substantial savings for the HOA should not factor in to any decision for them to pay themselves. Did they in fact overpay on their HOA fees?

That's what I think

I think Nigel's question is a good one, Sue: What is your actual HOA attorney's opinion of this problem? None of us, so far as I know, are in the legal professions.

Are there other ways to look at it, i.e., could their behavior be considered fraud? And does that carry the 3-year SOL?

And are you saying that all board members at that time (2010) received this $12,000 to share? Or apiece? How many board members are/were there?

I, too, would definitely want to see the meeting minutes where this action was approved. In CA, that type of board decision would have to have been in an open meeting.

This reeks of Embezzlement

Typically, I believe (but check to be sure), that the statute of limitations clock starts when the issue is discovered.

If the refund wasn't issued to all members, it is embezzlement.

If there was no refund to all, then send a letter of demand for the back payment or you will turn the issue over to the State
AG office for embezzlement charges.

So by that thinking, if my friend embezzled from me in 1985, but I just figured it out yesterday, I could successfully sue him?

I think not.

It starts when it last happened.

For California:

Quoting California Penal Code, Sec. 801.5.
Notwithstanding Section 801 or any other provision of law, prosecution for any offense described in subdivision (c) of Section 803 shall be commenced within four years after discovery of the commission of the offense, or within four years after the completion of the offense, whichever is later.

IF, in California.......................maybe????

Since this was probably published in the financial report of the HOA, the date of discovery becomes murky. Was it when somebody years later finally read the report, or was the tolling date when the report was published and open to all to read? This likely wasn't done in secret, but out in the open for all to see, so any later date of discovery was due in part to apathy by some earlier individuals, which does not stop the statute clock.

BUT, it would apply to interstate, which is federal.

NOT what I was referring to. Think about it.

It depends on where you live. In Arizona, the clock starts ticking when a reasonable person would realize they had a cause of action.

If new information came into your possession yesterday that caused you to believe your friend embezzled from you in 1985, then that is when the clock would start.

On the other hand, if you reached that conclusion without new information then you are SOL. If the information was in your possession the whole time but you were not smart enough to figure out what happened then you are screwed.

If you were to sue over a 31-year-old embezzlement it would be a lead pipe cinch that the defendant would raise the issue of limitations. The burden would be on you to prove that no reasonable person could have concluded that your friend embezzled from you until you came into possession of some new evidence.

That would not be a federal crime the federal statutes relating the theft and embezzlement are very specific and relate primarily to theft and embezzlement from govt and financial institutions or theft and embezzlement by public employees.

Oops, fixed it I hope. Real nice not having an edit feature





The subject of this thread is about a Board which improperly refunded fees to itself. No wonder I couldn't figure out what you were refering to, even after you implored me to "think about it".

The subject had nothing to do with large multi-state Management Companies embezzling funds in a inter-state crime wave. Think about it

Thank you for all your responses. We learned a lot.
The past board members who took the money were developers. Our HOA was established in 2007 and only has 3 board members (the developers designed the bylaw for their own interests.) The three bod consisted of the 2 developers with the 3rd one as their figurehead. They controlled the board in the past 8 years. While they were bod, they hired themselves to manage our HOA and handled all the financial matters for our HOA. We tried very hard to kick them out. We finally succeeded with the 2016 elections. After we took over the board, we went through the past records and discovered they reimbursed themselves of HOA fee in May 2016. We decided to ask the past board to pay HOA back. Unfortunately, they rather paid their attorney to address the issue than paying back the money to HOA.

By the way we had sued the developers for construction defect and settled with good outcome for HOA. The legal proceeding was very complicated and lengthy (it lasted 6 years.)

We did get the answers we were looking for from some of your responses. Thank you.

our HOA has 88 units. What is average 'boot the declerant out' threshhold?

That is quite a different matter from a community managed HOA.

While under developer control the developer generally has absolute power over the HOA which it incorporated. The developer can appoint the directors it wishes to appoint and the community has no say in how the HOA is run. The developer only has to comply with those restrictions contained in the Bylaws, or the other legal governing documents. The developer can also exempt unsold lots from assessment.

The governing documents generally will indicate at what point the developer is required to relinquish control of the HOA and turn it over to the community for example in our case, the developer turned over control of the HOA when the single vote per lot of the homeowners equaled the developers three votes per vacant lot that the declaration granted them.

The reimbursement to themselves may very well be legitimate. In our case, when the developer passed control of the HOA to the community, there was a $17,000 liability on our books in the form of a loan by the developer to the HOA. When HOA's are formed they usually have instant expenses such as landscaping, utilities, water etc. In our case the assessments from the few houses that were built out did not cover the first year of HOA operation and the developer had to provide funding. Our developer elected to do so with a seed loan that was repayable on demand.

As the subdivision got built, more houses and assessment came on line and the HOA became financially viable. The developer could have recalled the note and repaid themselves for the loan prior to control passing to the community but they did not do so, and waited about a year to ask the loan be repaid, The new board declined to repay the note citing a number of things that the developer had not done such as lighting at the entrance columns and finishing two sections of sidewalk. The developer acquiesced to the refusal by not challenging the refusal to pay, and the statute of limitation for claims in Texas passed.

What I'm saying is that the $12k may be a legitimate repayment and you need to look at the financial records to determine exactly what it was for.

Typical on this chat especially when one feels they were wronged so the whole story/facts are unimportant.