Illegal activity by President; failure to divulge financial information

Started by JeanineO • 6 replies • 253 views

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JeanineO (Texas)
Posts: 1

Posted:

We have been trying to connect with fellow board members, speaking up at meetings, and trying to avoid paying out-of-pocket for a lawyer. Our president and his wife took our HOA dues ($1000) and placed it in their personal bank account. They also did not pay their dues for the two years (2021, 2022) for which their property was annexed into the HOA, which their lawyer drew up. They are also the subdivision developers. They have spent funds from several members without approval, voting, etc. There is no budget, no ledger, no receipts, etc. HELP!

SheliaH (Indiana)
Posts: 6,964

Posted:

I know you'd prefer not to pay for an attorney, but there are times where you have no choice. Since they were the developers, that could make things a little complicated - are you still under developer control? If so, they run the show until the homeowners take over - if some (most?) of this happened while you were under developer control, there may be little you can do.

If you want to make this right, you're going to have to cough up the money to hire an attorney with fangs who can sue the snot out of these people. You can ask that the attorney fees and other legal expenses be reimbursed if you win. Wish I had a better suggestion, but we haven't seen your documents and most of us aren't attorneys anyway. What's true in my state or someone else's may not be the same in yours. Have a come to Jesus meeting with your neighbors so they know what's at stake and why this may get pricey and ugly. Good luck to you.

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

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Jean

Is your association owner controlled or developer controlled?

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Unfortunately not seeing anything really "illegal" IF you are stating the President/Wife are the developers of the HOA. They own the HOA. The money would be going to them the HOA collects. Plus they may not be paying HOA dues on lots that have not been developed. Usually lots do not pay dues until there is an actual home on the property.

So without more details can't declare this situation as "illegal". It may be perfectly normal but it's the view that changes it.

Former HOA President

TimB4 (Tennessee)
Posts: 21,059

Posted:

commingling the money would certainly be an issue for me.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

I agree that comingling of the funds is a concern. However, knowing that they are also the Developer we don't know what the name of their corporation is. If they named their company "Dick and Carol", then it may look like personal funds were comingled.

Right now I don't have enough details on the situation to fully jump on the "Guilty wagon".

Former HOA President

LynneV1 (South Carolina)
Posts: 211

Posted:

From my recollection, when the builder was selling our lots, they owned the unsold lots under the builder's corporation name and there were no HOA dues on any unsold lot. The lots were sold in phases.
He was also building condos across from our homes and as people bought them, then people would have to pay HOA fees. But as far as the unsold condos, there was no HOA fees due.
Once the last unit was sold the ownership was transferred to the Homeowners Association from the builder.
Of course, if the man and his wife purchased a lot and owned it in their names, they would be in arrears and owe that money to your association plus late fees. If you have a property manager or accountant, separate from these two people, maybe they can assess the fees.
Check the first page of your covenants.

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