New Board members have moved $30,000 from bank

Started by FloreneS • 8 replies • 1336 views

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FloreneS (South Carolina)
Posts: 4

Posted:

Where to start? I live in a SC gated community. The developer stepped down and according to the covenants a 3 member board was elected in Sept. Now 2 of the 3 board members have taken about $30,000(all) from the bank and fired the management company. The third board member notified the HOA of these actions.. The 2 board members are the only ones who know where the money is. They have told the 3rd member of their actions but nothing else. What recourse is there? One of the 2 members is an attorney.

DonnaS (Tennessee)
Posts: 5,671

Posted:

FlorenS,
Did they say where the money went? I would get everyone to a special meeting and demand an explaination. Hire an independant attorney unless they can show proof that the funds are still in the associations name.
Was this member funds or was it from the developer? You need answers and fast!!!

FloreneS (South Carolina)
Posts: 4

Posted:

The 3rd member has no idea where the other 2 members put the money when they removed it from a local bank. There are about 250 homes and I have no idea how or where to get everyone together.There is no clubhouse or similar amenity here. Who should hire an independent attorney? The management company was fired by the two members. The money was from the homeowner assessments. Do the two members have the authority to do this?

DonnaS (Tennessee)
Posts: 5,671

Posted:

Take charge here Florenes,
It sounds very fishy to say the least. No, they do not have the authority to do this and as an owner, I would be hopping mad and would demand to have an explaination. Someone has to initiate getting some answers and it should be sooner than later. (after they take an extended vacation on association funds)

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Florenes,
First thing I would do is type out request to review all bank statements within the last six monthe, send it Certified mail, return receipt. Give them ten days to respond and the same amount of time to allow you to see records. (10 days total) You have the one Board member to notify them (the other two) the request must behonored or he will use his offical capacilty to engage a Lawyer at owners expense to solve the problem. As always, docyment everything you do, keep a ledger, and set time limitation for all request or inquires to anyone.

I suspect you will be contacted and an explanation offered. It seems to blatant to be criminal, but who knows.

RW1 (Texas)
Posts: 149

Posted:

Sounds like gossip to me.

Get the facts before assuming anything.

Maybe they bought a Cert. of Dep. or some other investment tool.

We do, sooooo technically it was withdrawn (from one account to another).

RW1

RogerB (Colorado)
Posts: 5,067

Posted:

Florene, the recourse is for the third Board member to request a Board meeting. No action on transferring funds should be done without proper authority. Nor should the MC Agreement be terminated without a vote by the Board. These actions should be documented in the minutes.

The third Board member can request a Board meeting and request the Treasurer's report includes amount in each account, where each account is located, and details such as interest rate compared to other options for investment of funds. Also, to find out why the termination of the MC Agreement was done without a vote at a Board meeting.

Why didn't the third Board member request this information when they were advised of the actions taken by the other two Board members? IMO the third member acted improperly when they told other members without knowing all the facts.

Notwithstanding the above, if the third Board member knows there was theft involved action against those two Board members needs to be taken by the Association. In which case, I hope the HOA has theft insurance.

FloreneS (South Carolina)
Posts: 4

Posted:

The new board has been in place about 6 weeks. The third board member was not told of a meeting to terminate the MC. because the two members acted without any meeting. The 2 members went to the office of the MC president and told him their sservices were terminated and that a resolution to terminate had been approved by the Board. There was never a Board meeting that the 3rd member was made aware of.
The document they gave the MC is not dated, not agreed to by both parties and ignores the 30 day notice of termination.

The two board members have been asked directly and by several people including the 3rd member where the money is and refuse to say where it is. They have stated that they didn't like the propaganda from the 3rd board member, that the money is safe, that they hired an attorney with our money, that they hired a new MC, that they did not think that homeowners needed this info but they will send a letter in a few days.

These activities took place without the 3rd members knowledge....ie...There was no official board meeting that was related to any of these actions. The third members communication to the homeowners was only what the two members had done as told to him by the 2 members and contact by the newly fired MC.

There is an upcoming meeting for the association and the board. There is a petition going around to fire the 2 board members .

The money is not in the original bank. The two members had taken all the signature cards at the last official meeting so theirs are the only signatures the bank had.

FloreneS (South Carolina)
Posts: 4

Posted:

The 2 members refuse to say where the money is other than they moved it from the original bank and it is safe. The MC has been terminated without a full board resolution although the mc was told this was the way it was done. A new mc has been hired according to one of the 2 members. According to the contract with the mc and our covenants these actions are completely wrong. Also, one of the two board members has not paid his assessment so I have no idea how he legally can be on the board to begin with.

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