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CharlesB27 (Virginia)
Posts: 2
Posted:
I apologize in advance for the length of my post..bear with me. If i jump around its because I am trying to summarize.

I have owned a property since it was built almost ten years ago. This property was a rental property so I wasn't around much. About a year ago I noticed the dues were being raised among other things without proper votes being taken (no meetings or anything over the course of almost 10 years).

I called a meeting and got other residents out where we found even more issues. The HOA was being ran by one person for the most part the entire time. He was trying to raise the dues yet again without a vote. We are a small HOA with 15 units. No club house or amenities. We just have basic bills (trash, power etc). We asked him to step down and of course he refused. We ended up using the bylaws to get him to step down and we empowered a new board. He gave pretty much no records and said he didn't have any and didn't really keep records the entire time.

When it came to handing over the P.O. Box and Bank accounts he became resistant and finally admitted he had been using the HOA account to hide money from child support. Once we finally got access to the bank account it was immediately clear what was going on. Approximately $36k from 2011-2017 is missing and unaccounted for. There is hundreds of checks written out of the account for Cash. Ontop of the money missing almost all of our bills are/were past due. He only paid the city fees once over the period so now we have no money and owe close to 10k on back due bills.

What path should we take? What method is most likely to get us some of our money back? He kept raising the fees and creating a bigger surplus for his own needs so i would like to get as much of this money back for the homeowners as possible. People just trusted he was doing the right thing and not seeing any budgets or anything and when they would ask for a meeting he would tell a lie or dismiss them this caused people to blindly pay whatever he asked.
DouglasK1 (Florida)
Posts: 2,046
Posted:
Unless he can immediately pay what he owes, I'd be contacting a lawyer to help with the best course of action. One would be a civil suit to recover the missing funds. Note that winning a judgement and getting the money back are two different things. Another option would be to go to the police/DA with this and see if they will charge him criminally. I'm not sure if that would be any more effective in getting the money back, but assuming he is convicted the judge could enforce a restitution plan.

Escaped former treasurer and director of a self managed association.
SueW6 (Michigan)
Posts: 814
Posted:
Shame on you all for letting this happen!!

But - remember, some bylaws allow the "Board" to raise dues a certain percentage without a vote of the members. Look in your bylaws and see how the annual budget and dues are set.

You need to visit you local prosecutor and file criminal charges. The Civil suite comes later.

The price of neglect.

CharlesB27 (Virginia)
Posts: 2
Posted:
Quote:
Posted By SueW6 on 05/16/2018 6:52 AM
Shame on you all for letting this happen!!

But - remember, some bylaws allow the "Board" to raise dues a certain percentage without a vote of the members. Look in your bylaws and see how the annual budget and dues are set.

You need to visit you local prosecutor and file criminal charges. The Civil suite comes later.

The price of neglect.


Thank you for your reply! Most homeowners don't live in the home, they rent them out since its a very popular area. Of those that are there the majority are disabled veterans. Most people didn't know what was going on and assumed it was on the up and up. But you know what they say about assuming...

As far as raising without a vote, our bylaws specifically say a vote is needed. Fact is he never needed to raise the dues as we were generating a nice surplus. Greed got the best of him and he raised it twice. Each raise was more money in his pocket, none of the bills changed or went up...his greed did.

AugustinD
Posts: 5,144
Posted:
I think you must immediately contact (1) the police, filing a report of theft et cetera; and (2) the local district attorney. Get their advice on how to go forward. Explain you hope the HOA might recover what was stolen.

It seems to me that delaying reporting these criminal acts may complicate the subsequent proceedings.
MelissaP1 (Alabama)
Posts: 13,836
Posted:
Contact the police. Would not worry so much in getting your money back. It's kind of one of those situations where you most likely going to pay out more money to collect than get. Your basically suing a man who can't pay their own bills.

You may want to contact the Attorney General's office to see if that is a route to take.

Remember he is still a member of the HOA. Which may complicate things.

It's probably best to pursue this as a criminal case. Plus if this had something to do with Child Support, then family court may need contacted. They can modify or punish him for abuse of the funds.

Former HOA President
BenA2 (Texas)
Posts: 1,273
Posted:
I agree with those that say go to the police. This sounds like it is clearly embezzlement. There's no need to go to the Commonwealth's Attorney unless you find the police are not helpful. What normally happens is that a detective would be assigned to investigate and then she would speak to the Commonwealth's Attorney if necessary. The process varies by department so I would just call the police non-emergency number. They may have an officer take an initial report or they may have you contact their criminal investigations division directly.

I would let the criminal case go through before filing any suit. The judge could order him to pay restitution as part of a plea agreement and, unlike civil case, you stand a good chance of getting your money back. With a plea agreement, there is usually jail or prison time that is suspended on the condition he abides by the agreement. So, if he doesn't pay restitution he could go to jail or serve more time.

I am a retired VA police officer/detective. It's been many years but I don't think things have changed much.

What county are you in?
TimB4 (Tennessee)
Posts: 21,061
Posted:
Quote:
Posted By CharlesB27 on 05/16/2018 5:31 AM

What path should we take?

Contact the police and have him arrested.

Quote:
Posted By CharlesB27 on 05/16/2018 5:31 AM

What method is most likely to get us some of our money back?

Hopefully there was insurance to cover this, as I doubt you will ever recover the money.
I would also see about placing a lien on his property.
The court will likely ask that he pays back the debt, but this can take years if it is ever finished.

You also need to look at the big picture. The fault for giving into the temptation was certainly this individual.
The fault for allowing the temptation to exist (a one man show with no checks and balances) was that of the membership.
The buck stops with all owners (in my opinion).

The good news is that you found out now vs. later.

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