HOA Uncooperative with questions on accounting

It all started when myself and a few neighbors has some questions regarding landscaping around the entrances to our neighborhood. Budgets and Actuals were asked for for the last calendar year.

When they were received, many more neighbors had many more questions.
We all have a FB group, where we posted the PDFs.

I suggested we all get together, have a lunch and put together questions to be sent in. Turn out was poor. So, I took it upon myself to begin the correspondences.

There are 10s of 1000s of dollars on our budget, for which there is no explanation. They are under things such as "Welcome Committee", "Yard of the Month", "Community Events", etc. Noone in the neighborhood was ever welcomed by anyone, we've never had a yard of the month award, and no community events have ever occurred. I suggested we give away a big prize or hold a grand community event to spend those funds for 2018 and 2019 which were never spent.

Upon my query, we were told they need volunteers for these things to take place. So, I volunteered. We were then told we need committees. I offered to form committees. We were then told we need board approval and we could talk about it in several months at the annual meeting.

They offered to give us $175 of the thousands they had in budget for a Christmas light contest. They also told me no funds from previous calendar years were available to spend towards the "community" category.

I responded with the question "What happens to the funds that are budgeted, but not spent for a calendar year? Where do they go? When and how will they be spent?"

The conversation went downhill from there. I was told, "I worry I won't give you an accurate account, so you'll have to wait until the next annual community meeting."

Well, there are several problems with that:
1) Another year's funds will be gone
2) There isn't enough time in an annual meeting to dig into HOA financials in any kind of necessary detail.
3) 100s of community member don't want to sit through an verbal accounting audit.
4) We will most likely be answered with "Well, we'll have our accountant take a look and answer you some other time. Thanks. Next"

I wrote back, reminding them that home owners have a right to the HOA financials and can come in and take a look at all thier books, within 10 business days of a request, according to Texas Property code Sec 209.005. Waiting on the response to that. I am sure the tone is going to get more legal.

We are all aware the the board is the developer of our neighborhood tract houses, that the developer isn't exactly the most honest entity in existence, and that the sales, insurance, HOA, and everything else under the sun all goes to the same pockets.

What can I do from here? Any suggestions?

Some thoughts I had were:
1) Write a certified letter requesting specific accounting items and go in to see them. However, what do I do when they fail to supply adequate information. There is a big difference between a spreadsheet that says "$20,000 Landscaping" and receipts and invoices for landscaping.

2) I could write everyone in the neighborhood a letter with copies of the correspondence so far and see how much involvemnet I can get. I could start a website, etc. I could also link such a thing to all the reviews for the neighborhood, which would give the developer some frowny faces, but I don't know if I'll be crossing any legal boundaries sharing correspondence or writing my passionate opinions on a public website.

3) I could even go as far as to spend a few thousand on a lawyer and accountant. I was going to give to charity, but this kind of shenanigans really grinds my gears. How long and expensive is getting to the bottom of the books going to be?

We simply want to make sure that money collected for the community, for the benefit of the community, is being spent on the community. Currently, we are all under the impression that out HOA takes money and does next to nothing with it.

ohh,, I just saw you are in Texas. You absolutely have the right to see the records ,receipts and financials of your hoa.

where in texas are you?

I'm in Round Rock TX.
Neighborhood is Madsen Ranch, at 78665.

From what I've read on the HOA website and the CCRs, I am under the impression that the board is 3 members, 1 being the developer, and the other 2 undisclosed, and cannot be replaced for 10 years without a vote from 80% of the homeowners. After that, there is to be some manner of election. I might be wrong, but that was my take away from the very obfusicated language there.

I am not sure what state law has to say about it or if state law and the CCRs are contradictory. It seems very odd to me that they'd just give the developer supreme power over the HOA for 10 years.

I'd estimate we have somewhere around 100 homes with 2 more phases of 20 to 30 homes a piece in progress.

We all pay $30/mo, which isn't a lot, but our neighborhood really is lacking compared to some others close by. Not to mention lots of promises were made about parks, trails, entrance, playground, etc., when we were sold our homes.

As I understand it:
1) The HOA is non profit. As such, money collected from the homeowners has to be spent on the community. they've got Management Services in their budget, and no one is disputing that cost.
2) A Budget vs Actuals report accounts for the yearly budgets and expenditures.
3) When the HOA claims they budgeted money for something, on the report, we would like to see where that money went. If it was never spent, then we want to know what happened to it.
4) No one is demanding money that they did not present us with on their yearly budget. They claim to have budgeted money for community events, yard of the month, etc etc, but no one has seen or heard of any such thing. Furthermore, the HOA admitted those things does not exist at all until volunteers, committees, and board approvals all occur. So again, where did the money go? That's all we want to know.

Laska,

Terrible advice ... and absolute nonsense.

P.S this forum sorely needs an EDIT button, if I am going to be hitting "quote" and dealing with shuffling HTML tags around :p

Wonder the same thing.
I think your advice seems pretty good and is what I was looking for.

It appears to me that these are likely the applicable statutes for Christopher's situation. Christopher, if you are not already paying particular attention to the requirements in 201.005(e), then do so. In addition, you should become familiar with what your HOA's Declaration says about viewing records. Then I would send a certified letter to the developer/declarant saying something like:

Dear Declarant of ___ HOA,

Pursuant to Texas statutes Sections 22.351 and 209.005 and the Declaration at Section ___, please provide me with (1) the monthly income and expense reports; (2) the monthly balance sheets for all of 2018 and 2019; and (3) the end of year income and expense report and end of year balance sheet for 2018 and 2019. Pursuant to Section 209.005, I understand your response is required on or before the 10th business day after receiving this request.

Thank you for your assistance,

Christopher _____
Member, ____ HOA
[Your address]

After 15 business days go by, report back here.

For the archives, sites with the full statute sections above that have more detail on how Christopher is to proceed:

https://statutes.capitol.texas.gov/Docs/BO/htm/BO.22.htm

https://statutes.capitol.texas.gov/Docs/PR/htm/PR.209.htm#209.005

Laska continues to opine about how bad HOAs are, and how bad those that serve them are - all the while offering advice that is nonsensical.

The purpose of this forum is to assist association leaders, not to provide a open forum for complaining about HOAs.

I am sure there are limits as to the shots that can be called.



No homeowner is debating another homeowner. Everyone is pretty much in agreement. All correspondence and documents sent from the HOA are shared by a neighbor for all members to see. Facebook offers private groups and the information is shared with other members of the neighborhood. Seems far more efficient than knocking on doors. What good does it do for me to ask for the budgets and actuals, if I can't show it to my neighbor and discuss it with them? Or do you want everyone to show up to an hour or two long meeting completely unaware of whats going on around them and unprepared to discuss it? What is it that you are proposing as an alternative?

In addition we can post things like, "Hey someone's dog got loose this morning. Do you know who it belongs to?", which has proven quite the asset to the community.



You seem to be under the impression that all social media posts are public.



I always find it amusing when I am on the internet asking for information and people tell me to get on the internet and look for information...



That would make sense. All they'd have to do is show us the deltas between actual expenditures and the budget for the year, along with line items for said reserve account going up or down.

No mention has been made of reserves. That is what we are trying to get to the bottom of.
If they said something like, "You can see we only spent X of the budgeted Y amount for 2018. Here we've adjusted the amount in the reserve account by that amount and it will be spent on years where the actuals exceed the budget, or be carried over. You are welcome to follow this amount year by year and we are here to answer any questions you might have."

Instead we got, "Let's not talk about this anymore. Bring it up at the yearly meeting verbally instead."

Along the lines of what others have said . . . the developer has significant control over the situation and regardless of what the budget says, ultimately decides what money is spent on what things. Homeowners at this point have little say in the matter. That said, you should still be able to receive and/or review documentation IAW your governing docs and state HOA law, ask informed questions, and get appropriate answers . . . so I think you're on the right path.

I suggest extreme diplomacy and trying to get what you want while being as polite, agreeable, and professional as possible (even though it may be tough in the face of the opposite treatment). If situation turns confrontational or finger-pointing, the developer may quickly shut down all communication and you'll need to go the legal route to get anywhere (time-, money-, and labor-intensive for all involved) . . . and your money (by way of payment of your HOA assessment) may actually go to fund the HOA's own lawyer to fight against you, and things already not getting done will be without funding even longer.

Cathy's info about facebook was more cautionary I think. And I have to agree with a lot of what she stated. In my experience, fb definitely is an asset in some respects (lost dog, free crap to give away, package delivered to wrong house, etc.); however, more times than not (and if you haven't seen it yet, you will), posts get negative very quickly and devolve into name-calling, finger-pointing, and arguing (much like some of the back-and-forth on this site). I understand your fb page is private, but it really isn't since nothing is preventing that info from getting outside of your HOA and spreading in your community, municipality, county, etc. People talk, screenshots can be taken, and info will get out about things that may not otherwise be put in writing if the page didn't exist . . . not good for building community, not good for your home values, not good for future home sales, not good for owner/developer/builder relations, and not good for rapid completion of your neighborhood (at which point you and your neighbors will have must more control over things).

I agree.

Christopher,, I Just reread your oringinal post,, I also went to the madsen ranch hoa portal. to see if I could find any info.. the portal is password protected..

anyway,,

one thing i noticed,, you said, the board which is compromised of developer and 2 unknown.. can not be replaced for 10 years UNLESS 80% of owners vote to remove them.. There's your in. you technically can vote them out,,but it's a high percentage requirement.

question.. you say the 2 other board members are undisclosed,, I believe the hoa is required to also give you the names and addresses and email if they have the email registered with the hoa.. (several court decisions have stipulated so)
Anyway, the board is the governing body of the hoa,,i don't think it's legal for the developer to refuse to give information on the identity of the other 2 board members.

Maybe someone else here can confirm this..

lolol