Management Company vs HOA

Started by SusanA9 • 24 replies • 558 views

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SusanA9 (Arizona)
Posts: 33

Posted:

Hello All
I am back with yet another issue that I hoping someone might help with.
Long story short, Management company (MC) keeps sending back my assessment payment because I specify on the check that the payment is for the quarterly assessment fee. They tell me that I am not allowed to restrict where MY money goes. I have pointed out them the below law.
The Arizona Revised Statue - 33-1807 which all HOA and HOA Management Companies are bound by: Subsection J. unless the member directs otherwise, all payments received on a member's account shall be applied first to any unpaid assessments.
They ignore this, and still send back the payment. THEN they charge late fees and collection fees.
I have asked the MC to please provide me with the date, time and location of the next Board Meeting so we can address this issue. And I have asked several times for contact information, such as email address and / or mailing address, to directly contact the Board of Directors. The MC will not provide either of the requested information. We have sent letters addressed to the Board Members, through the MC, but we never get a response, which makes us believe that the Board Members never even see our letters. I feel that the returning of our assement payments and charging late fees is harassment.
Does the MC have to provide us with the direct HOA contact inforamtion?
Who do we submit a complaint to, against the MC?

NA1 (Massachusetts)
Posts: 190

Posted:

Maybe I'm missing something... why not just remove what you're writing on the check? They probably aren't set up to specify that you're only paying one thing but not another.

SusanA9 (Arizona)
Posts: 33

Posted:

because then they say we havent paid the assessment. We have fines on the account, which are being disputed. But we pay the assessment every single time, but they refuse it. Its our money, we can tell them what we are paying for.

TimB4 (Tennessee)
Posts: 21,062

Posted:

Quote:

Posted By SusanA9 on 12/21/2022 11:50 AM

Who do we submit a complaint to, against the MC?

See: Arizona Department of Real Estate

and Homeowners Association Dispute Process from AZ government

and this can be helpful Foreclosure, Homeowners Associations, and Landlord/Tenant from ASU

I would focus on the failure to accept your payment and the failure to provide you dates of board meetings.

From your posting, anything else sounds like they can have a good argument for. Those seem a clearly defined issue.

CathyA3 (Ohio)
Posts: 6,299

Posted:

I'm confused. If the statute already says that payments will be applied to assessments unless directed otherwise, and you want the check applied to assessments, why are you writing anything?

On the other hand, your governing docs probably specify the order in which payments are applied to money owed, and it's not unusual for payments to be directed to late fees and interest first. The next question is whether state statutes defer to the governing docs, or vice versa, or neither. This will change the answer you'll get.

If a homeowner can direct a payment to a specific line item that conflicts with this order in the governing docs, the homeowner is telling the management company to violate the governing docs. I'm not surprised they're balking.

But a general observation: if someone is planning to play chicken with the HOA over assessments, they would be well advised to consult with a lawyer since things can go badly wrong if they make a misstep, and ignorance will be no protection.

SusanA9 (Arizona)
Posts: 33

Posted:

That is the issue. They are not accepting our payments. then adding late fees.
One accounitng person told me via email to write on the check what we were paying so it would be applied correctly. The VP of the MC told me it was all taken care of and we would have no more issues, but again they sent back our payment.

TimB4 (Tennessee)
Posts: 21,062

Posted:

Quote:

Posted By SusanA9 on 12/21/2022 12:40 PM

The VP of the MC told me it was all taken care of and we would have no more issues, but again they sent back our payment.

This is new info.

Contact that individual again, explain the situation and ask them to again get it straightened out, and if it happens again you will make a complaint against their license.

KerryL1 (California)
Posts: 14,550

Posted:

Get replies in writing.

WendyM5 (North Carolina)
Posts: 1,522

Posted:

this is illegal for a MC company to do in NC.
I can look up the court case if you are interested.
unfortunatley you are in another state.

vis ta vie

JeffT2 (Iowa)
Posts: 880

Posted:

Quote:

Posted By SusanA9 on 12/21/2022 11:50 AM
I have asked the MC to please provide me with the date, time and location of the next Board Meeting so we can address this issue. And I have asked several times for contact information, such as email address and / or mailing address, to directly contact the Board of Directors. The MC will not provide either of the requested information. We have sent letters addressed to the Board Members, through the MC, but we never get a response, which makes us believe that the Board Members never even see our letters.

Why not send letters to board members at their home address? You have the names. It should not be hard to find some home addresses.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

It is legal in some states that any money paid can be applied to the outstanding balance even when fines are part of the outstanding balance.

JeffT2 (Iowa)
Posts: 880

Posted:

Quote:

Posted By SusanA9 on 12/21/2022 11:50 AM
...all payments received on a member's account shall be applied first to any unpaid assessments.
I feel that the returning of our assement payments and charging late fees is harassment.
Who do we submit a complaint to, against the MC?

I'm thinking criminal fraud and theft. The law is there to protect you, they are a knowledgeable management company, and they are basically stealing from you. It may be time to contact your local district attorney or the attorney general. Also Tim's links.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

I am confused. How is what you write telling them where to put the money? We just required you put your lot number.

It sounds like you have fines you are dealing with?

Former HOA President

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Mel

I believe the OP's outstanding balance includes fines and the MC wants to apply any money she sends in to outstanding balance be it fines and/or dues. The OP is saying on the check, to be applied to dues only. The MC is saying that limits us to how we apply the payment so we are refusing the payment.

SusanA9 (Arizona)
Posts: 33

Posted:

I really dont know what to do. This is the email I got from the MC accounting department, and please note that she is very wrong..

The association will not accept a check with any restrictive writing on it, because by doing so they agree to the terms of the restrictive writing on that legal note. This means that if your write assessments only on the check and there are no assessments due at the time it is received then we cannot process the check, to honor your request to not apply the payment to violation fines and any other fees on the account. If you write that the check is to pay for a specific month due and there is a balance due for a previous assessment we cannot process that check. Per the Arizona statutes that you have already been provided, payments received must be applied to the oldest balance owed at the time it is received. The monthly assessment is not due until the 1st of the month.

Now I have asked them several times to provide the CC&R rule for this and the Arizona Revised Statute she claims above, but they ignore my requests. Here is the true Arizona Revised statutes 33-1807 (which all HOA and HOA Management Companies are bound by

Subsection J. unless the member directs otherwise, all payments received on a member's account shall be applied first to any unpaid assessments.

I contacted the Arizona Department of Real Estate and asked about filing a complaint. This was their response:

To reiterate, there is no state agency in Arizona that regulates HOA Management Companies. You may wish to contact the Arizona Corporation Commissioner, as all businesses in the State of Arizona must be registered through their Office.

The MC are clearly breaking the law, but I dont know where to turn to, for help. They (MC) will not provide contact info for the Board members, they claim no meetings are scheduled for the year. Letters have to go through the MC, and even when looking up the HOA, it has the address of the MC.

JohnT38 (South Carolina)
Posts: 1,631

Posted:

Quote:

Posted By SusanA9 on 01/11/2023 4:22 PM
I really dont know what to do. This is the email I got from the MC accounting department, and please note that she is very wrong..

The association will not accept a check with any restrictive writing on it, because by doing so they agree to the terms of the restrictive writing on that legal note. This means that if your write assessments only on the check and there are no assessments due at the time it is received then we cannot process the check, to honor your request to not apply the payment to violation fines and any other fees on the account. If you write that the check is to pay for a specific month due and there is a balance due for a previous assessment we cannot process that check. Per the Arizona statutes that you have already been provided, payments received must be applied to the oldest balance owed at the time it is received. The monthly assessment is not due until the 1st of the month.

Now I have asked them several times to provide the CC&R rule for this and the Arizona Revised Statute she claims above, but they ignore my requests. Here is the true Arizona Revised statutes 33-1807 (which all HOA and HOA Management Companies are bound by

If you cannot afford an attorney and you continue to do what you are doing this is not going to end well for you.

SusanA9 (Arizona)
Posts: 33

Posted:

why? I am not breaking the law, THEY are!

JeffT2 (Iowa)
Posts: 880

Posted:

Have you tried to look up the address and phone number of board members in the phone book, on the internet, or in property records?

JackieB4 (California)
Posts: 398

Posted:

Susan, lots of honest advice has already been shared; many of us have dealt with numb Directors and arrogant Management companies. It remains our choice which battles we pick?
How about signing up for AUTOPAY with your Bank to stop this power struggle and request( via PM) to meet with Directors in Exec session (privacy) to ask for the extra charges to be dropped?

SusanA9 (Arizona)
Posts: 33

Posted:

we would LOVE to speak to the directors, but have not been given any contact information to reach the Board of Directors. When asked about next meetings, we are told there are none scheduled for 2023. Letters we have written go unanswered, because we beleive the directors never see them. And doing autopay would still not get our assessment payments applied to the due assessment. That is the issue. They dont apply our assessment payment to the due assessments then charge late fees. They cant charge late fees on fines. So they use the funds on fines even thoough we told them to apply it to the assessment. Then charge late fees. Shady unethical liars.

JohnT38 (South Carolina)
Posts: 1,631

Posted:

Quote:

Posted By SusanA9 on 01/13/2023 11:26 AM
we would LOVE to speak to the directors, but have not been given any contact information to reach the Board of Directors. When asked about next meetings, we are told there are none scheduled for 2023. Letters we have written go unanswered, because we beleive the directors never see them. And doing autopay would still not get our assessment payments applied to the due assessment. That is the issue. They dont apply our assessment payment to the due assessments then charge late fees. They cant charge late fees on fines. So they use the funds on fines even thoough we told them to apply it to the assessment. Then charge late fees. Shady unethical liars.

I am normally not one to get lawyers involved but in this case, I strongly advice it. The management company and the Board have closed ranks and you cannot find a way to contact them. In the mean time, you keep sending checks that are not being applied and your late fees and fines continue to pile up. You are at an impasse and need to get a lawyer involved. As a brilliant person once said, "The Definition Of Insanity Is Doing The Same Thing Over And Over And Expecting Different Results." You are spinning your wheels. At some point I would not be surprised if a lien is filed on your property.

You need to lawyer up if you want to continue this fight.

KerryL1 (California)
Posts: 14,550

Posted:

JohnT makes total sense, Susan.

TimB4 (Tennessee)
Posts: 21,062

Posted:

Susan,

I may have offered this resource before, if not, I offer it now:

Homeowners Association Dispute Process from Arizona Government

Since the MC is an agent of the Association, your complaint would be against the Association.
Stick to the simple, provable, complaint that they are not accepting nor applying payments as outlined in AZ statutes.

Hope this helps,

Tim

JeffT2 (Iowa)
Posts: 880

Posted:

Based on your previous thread I looked up your community. The names of all five of your board members are listed under your community name at this website: https://ecorp.azcc.gov/EntitySearch/Index

It's easy to look up the names on the internet and find telephone numbers or addresses.

I would contact your board members as the next step.

KerryL1 (California)
Posts: 14,550

Posted:

If you're saying, suns, that no board meetings are schedule for 2023, there may be some kind of error. Your bylaws will tell you the minimum number of meeting the board must have in a year. If it see does not, AZ Corporate Code will tell you re: nonprofits. Board meetings must be open to owners in AZ.

along with Jeff's approach to get directors contact info, AZ most likely requires that HOAs give owners the addresses of all owners. So ask in writing for owners addresses.

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