HOA President Profiting From Laundry Room

Started by JR6 • 10 replies • 380 views

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JR6 (California)
Posts: 2

Posted:

It's been years since I posted on here. When I first posted I spoke about our Out Of Control HOA President. The harassment, the constant fines, the selective rule enforcement, the illegal voting, and soooo much more.

Well years later we still have the same President, many owners (almost all) that were here back then have sold and moved out. I however have just learned to live with it. After writing county officials, congressmen, mayors and many others, I came to the realization that no one was going to help with the situation.

Back then the President owned 5 units, as of today he now owns 22 units. yes 22 units. If your looking to buy in our HOA, it would have to be a cash deal, no banks will provide loans with one owner owning 22 units, it's too much of a risk. Also by him owning 22 units the percentage of owner occupied is extremely low. He forced owners to sell or walk away from their units, usually by imposing large fines on their tenants to where the tenants would move out, leaving the owners struggling to pay the morgage with no tenants. Then he steps in and buys the unit cheap before it even hits the market.

We have no Property Management Company, he let them go years ago and runs everything himself. One of his tenants was hired as grounds manager, and receives a yearly income, but at the same time does all repairs and maintenance on the Presidents units. So he basically gets all his units remodeled and repaired for free, and the homeowners pay for it by paying the grounds managers salary.

What brings me here today is to ask a question. We for years have had a laundry room that was serviced by an outside company, the washers and dryers belonged to them, and owners and tenants used laundry cards to use the laundry room. Then out of no where, last week all the outside company's washers and dryers were removed, and the HOA president replaced them with his own washers and dryers (he had a garage full he would rent them out monthly to tenants), they are not coin operated, the installed a new lock on laundry room and every owner or tenant has their own code to get in. After doing your laundry you let him know how many loads you did (which he can verify by reviewing the many cameras in the laundry room) then you have to Zelle him the amount you owe. It does not take a genius to figure out what he is doing. The entire profits from the laundry room are going in his pockets. My question is, is this legal? What can be done about it?

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Well there is always 2 sides to every story. So I can't immediately jump to the same conclusions for the entire situation. Does not mean not happening but perspective will be different from the posters here.

What I can tell you is that you may want to find out if that person has a business license. This is something would need to go to the city to inquire about. Take pictures or video. Be careful of making any comments in your videos. Limit it to the FACTS. Here is the dryer/washer. Cameras. Pay system. Lock on door. The things you feel represent them as running a business. Be careful of being caught on camera doing it. May want to bring a friend with you or better yet a city inspector to pretend taking video of doing laundry.

There may be certain codes they have to follow. The Code officer in the City you may inquired with them. They can't do anything unless they see it themselves. Having the lock on the door can be a fire risk. The Fire Marshall may need to review. They may be happy to escort you in next time you do laundry...

However, do realize there may be nothing in violation. It may be all above board. Also you may also lose ability to do laundry. Have a back up laundry plan. If there is wrong doing, going to shut it down.

A little tid bit... How are fines assessed in your HOA? Do your dues go toward the payment of fines before dues? If not, then fines most likely can't be used for the basis of liens or foreclosures. This would be something to consult a lawyer about and your state laws. Something to think about if there is no fine schedule in place etc..,

Former HOA President

WendyM5 (North Carolina)
Posts: 1,522

Posted:

after years of this abuse no one has the guts to run against him???

vis ta vie

SheliaH (Indiana)
Posts: 6,964

Posted:

Wendy asked a good question - and your second paragraph explains why things haven't changed. Most of the original owners have sold out and moved on, and the new ones either don't know the history or don't care. If he owns the majority of the units and no one else is on the "board" to outvoted him, this is the result. Essentially, the man has a private community and can do whatever, whether it's changing out the laundry services or anything else.

What to do about it? Normally, I'd say check your documents to see what they say about special meetings, then rally together your neighbors to do a recall, but if he owns the majority of the units and you have one vote per unit, that won't happen. You may end up having to hire a private attorney and go after him for not following the documents (e.g. there should be X number of people on the board, but he's thrown dozens of roadblocks in the way). OF course, that will take time and money, and it's easy for people to say the hell with it and figure out a way to live with it.

In fact, you said you just learned to live with it because everyone else left, so why are you surprised at current events, let alone complaining about it now? The guy essentially has an apartment complex disguised as a HOA, and unless he sells some of those units to reduce his power (which he probably won't), you will have what you have - the laundry room is the least of your concerns.
I think it may be time for you to cut your losses and get out of there. In the meantime, you can follow Melissa's suggestions and perhaps the city can put the brakes on the man running a private business. Good luck in whatever you choose to do.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

JohnT38 (South Carolina)
Posts: 1,631

Posted:

Quote:

Posted By SheliaH on 01/27/2023 6:15 AM
Wendy asked a good question - and your second paragraph explains why things haven't changed. Most of the original owners have sold out and moved on, and the new ones either don't know the history or don't care. If he owns the majority of the units and no one else is on the "board" to outvoted him, this is the result. Essentially, the man has a private community and can do whatever, whether it's changing out the laundry services or anything else.

What to do about it? Normally, I'd say check your documents to see what they say about special meetings, then rally together your neighbors to do a recall, but if he owns the majority of the units and you have one vote per unit, that won't happen. You may end up having to hire a private attorney and go after him for not following the documents (e.g. there should be X number of people on the board, but he's thrown dozens of roadblocks in the way). OF course, that will take time and money, and it's easy for people to say the hell with it and figure out a way to live with it.

In fact, you said you just learned to live with it because everyone else left, so why are you surprised at current events, let alone complaining about it now? The guy essentially has an apartment complex disguised as a HOA, and unless he sells some of those units to reduce his power (which he probably won't), you will have what you have - the laundry room is the least of your concerns.
I think it may be time for you to cut your losses and get out of there. In the meantime, you can follow Melissa's suggestions and perhaps the city can put the brakes on the man running a private business. Good luck in whatever you choose to do.

Good advice but I would keep in mind that if the city shuts down the laundry room then those who use it will not be happy and if he is vindictive there is no telling how long it will be before it is back up and running. Tough situation.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Yes that may be the results JohnT. It may not just be the President who is mad. Fellow members will be too. If there is such a big problem then more than one person needs to be involved in the action taken. Others will be given a different story by the President why they have no laundry access right or wrong.

I am not fully on either side of this situation. Do not know the whole story. Knowing how some human nature works. I can not tell 100% if it is not a perception issue by the OP. Not saying this President is not doing these things. Just there are avenues that can be taken if they are via city laws.

The Real Estate market was primed for many people to buy houses for cold cash to set up for rental property. I can not fault the President person for doing this. It is a business opportunity. However, there may be some consequences for doing business in such a way. One being the perception of others. Which can make some people critical of everything.

So if this person is a crooked business operator then taking the right business steps to correct it should be in play. That is if one needs a license to operate certain aspects like the laundry room

Former HOA President

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By JR6 on 01/27/2023 2:24 AM
My question is, is this legal? What can be done about it?

If the Board approved it, then your chances of finding anything illegal about this, and then fighting the supposed illegality and prevailing, are small.

You posted that this President has effectively controlled the place for years. This means that most owners by far are happy enough with the status quo. You can try finding owners who feel as you do. Then all of you can run for the board. Replacing the board will be a hard and long battle, that you are not guaranteed to win, but it's probably easier than lawyering up. Serving on a board is a thankless, time-intensive, conflict-ridden chore.

This is the legal reality of the situation. Pick your poison.

LetA (Nevada)
Posts: 2,679

Posted:

Quote:

Posted By WendyM5 on 01/27/2023 5:47 AM
after years of this abuse no one has the guts to run against him???

How can anyone tun against him when the vote count will immediately be 23-1?

KerryL1 (California)
Posts: 14,550

Posted:

How many units are in your HOA, JR6? sorry if I missed that #.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

JR

You say a "laundry room". Is this room part of a larger building or is it a standalone structure? Regardless, ownership is the question. Who owns this room?

CathyA3 (Ohio)
Posts: 6,299

Posted:

What this HOA president is doing is no different from other investors who have targeted condo communities and bought up distressed units. Once the investors owned enough units, they voted to dissolve the association and convert the entire property to rentals. The remaining owners were given the option to either sell their units to the investors or else to rent their units from the new owners - any stubborn folks were evicted if necessary. This is 100% legal.

I think that the laundry room and Zelle are the least of the OP's problems. The writing is on the wall, and if I were advising them, I'd tell them to bail before things get worse. This situation will not improve.

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