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account assumptions? refunds?

Started by JW5 • 47 replies • 2540 views

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JW5 (Maryland)
Posts: 20
Posted:
Our HOA was taken over from the developer nearly a year ago to date. Documents were recovered from the management co. and the management agreement terminated. It has been noted in our Board minutes that our treasurer reconstructed the HOA's financial history using incomplete records and that some degree of assumption was made. No HOA dues have been billed the previous 2 years.
Although no Board vote occurred to do so the treasurer believes some homeowners are in arrears, made it a personal agenda and publicly identified these homeowners as delinquent at our last meeting, again without previous board discussion. I do not believe any homeowner can be positively identified as owing without an independent audit of our books. As a fellow board member I have asked to review a backup copy our financials and was denied the opportunity repeatedly. It was said that was not possibly due to control issues and potential breech of account security?

Additionally, three of our 5 board members beleive the assn holds to much money and made a quick vote to refund 20K from our accounts. No reserve audit or final budget has been approved, we may or may not own and bear responsibility for 2 SWM ponds. A very fast review of the proposed disbursement took place immediately after the vote and indicates a differential refund by household, based upon settlement year.

Nothing from the above sits well with me as a director.
Thoughts and considerations please..
SusanW1 (Michigan)
Posts: 5,202
Posted:
I would think that there would be "fresh books" once your HOA took over from the developer. In other words, you would not be able to bill for another company's past due accounts.

I am never in favor of returning mon. IF you have an excess, then reduce the upcoming assessments. But of course you would not do that until there is a complete study done on your finanical picture, including the reserve fund.

How is it that you don't know if you have financial responsibility for the pools?

EverettC (Maryland)
Posts: 90
Posted:
SusanW, I think JW means storm water management ponds, not swimming pools.

JW, if you do have responsibility for them, you may be able able to turn them over to the county. We turned our SWP's over to the county several years ago, before I was elected to our board, so I'm not sure what the process is or whether it applies only to Montgomery County.

I would be very concerned about the treasurer identifying delinquent homeowners, even if their delinquency is crystal clear. Here, based on your description their liability seems to be questionable.

As a director, I believe that you have a right to review the financials. Does the treasurer believe that he alone can look at the financials? Is the treasurer bonded? How can you as aboard make intelligent decisions without info on the financial condition of the HOA? Under the Maryland Homeowners Association Act, all members of an HOA have the right to review books and records of the HOA. While there are some exceptions, none apply to the HOA's financials (I can understand the treasurer not wanting to provide everyone with access to the bank account numbers

I agree with Susan that I would not refund any moneys, especially in view of the newness of the association's control and unsettled nature of responsibility for SWP's, and if it is determined to be appropriate, I would reduce future year's fees rather than refund moneys.

Check your documents to see whether an audit is required.

Have you done a reserve study to determine what capital assets you have, and their useful life. You should be setting aside some moneys in a reserve account to cover their replacement when they need to be replaced.

Everett
RobertR1 (South Carolina)
Posts: 5,164
Posted:
Yikes,
This is a tough nut.

First, take that excess money and get an audit/Reserve study combined. Whereas you should have started at turnover, you now have to rebuild along with establishing order and management.

Even the selection of an auditor is going to be tough and I would talk to a few and see what there advice is on how far you are going to be able to go back and reconstruct financials. If you can get the Board to start this p;process, you can have the time to build Board responsibilities and assignments and start keeping proper records. Billing someone as Susan says from a past developers bills is going to be a huge problem. Of course you can send them a bill and hope they pay, but someone will object and demand you prove validity of the charge.

As always after turn over, problems keep coming up. The time these problems take to arise is proportional to the efficiency of the take over process. You really need to take small bites of the apple and little by little you can get straight. You probably will end up with the short end of the stick at times but, what is done is done.
As an observation you all seem to have the solidness to work together as a Board and dig yourselve out.
EllenS1 (Florida)
Posts: 1,148
Posted:
JW,

I'm glad I live in Florida where ANY member can review all records (with the exception of ongoing litigation) and this includes all financials including who owes what. Check to see what your state's statutes say on this point.

In addition it certainly sounds as if an audit is called for. Why would the board be adverse to that unless they had something to hide?
You might talk to various members to see if you can gather the required numbers for a petition to hold a special meeting to take a vote on this.

If you become familiar with your state's statutes you will be better able to protect your HOA.
JW5 (Maryland)
Posts: 20
Posted:
I also thought a fresh look was the right way to go, but thats not what happened. I was a dissenter in the rush vote where this refund concept was hammered through. It is my opinion the decision was made before our meting and in the private session where the Pres, VP and Treasurer were observed.
JW5 (Maryland)
Posts: 20
Posted:
Quote:
Posted By RobertR1 on 07/27/2009 2:23 PM
Yikes,
This is a tough nut.

First, take that excess money and get an audit/Reserve study combined. Whereas you should have started at turnover, you now have to rebuild along with establishing order and management.

Even the selection of an auditor is going to be tough and I would talk to a few and see what there advice is on how far you are going to be able to go back and reconstruct financials. If you can get the Board to start this p;process, you can have the time to build Board responsibilities and assignments and start keeping proper records. Billing someone as Susan says from a past developers bills is going to be a huge problem. Of course you can send them a bill and hope they pay, but someone will object and demand you prove validity of the charge.
As always after turn over, problems keep coming up. The time these problems take to arise is proportional to the efficiency of the take over process. You really need to take small bites of the apple and little by little you can get straight. You probably will end up with the short end of the stick at times but, what is done is done.
As an observation you all seem to have the solidness to work together as a Board and dig yourselve out.

Well, this is a big can of worms but, Here it goes......
A finance committee was established however their meetings were for unknown reason closed and unannounced. No real minutes came back to the board, only brief discussion about incomplete information. Mainly the treasurer himself reconstructed the records. My largest issue with the list and its distribution stems from the fact the Board, as a whole never discussed it. The treasurer compiled and distributed without board agreement or authority. The only Board motion was to accept the amount of money we recovered from the management company as an accurate total figure.
Your observation of a cohesive and functional board is entirely incorrect. After several (the Pres, VP and occasionally the Treas.) were repeatedly called out for meting privately and publicly misrepresenting their own thoughts as those of the entire board our pres and VP resigned. Just prior to their resignation there was a 'special meeting' called to discuss the reimbursement issue. Apparently the former board members and presumably the treasurer designed the chaotic disgrace the 'special meeting' became.
JW5 (Maryland)
Posts: 20
Posted:
< If you become familiar with your state's statutes you will be better able to protect your HOA.

MD HOA law is pretty clear that the books are to be open to all members of the association for examination.
JW5 (Maryland)
Posts: 20
Posted:
<<Posted By EverettC on 07/27/2009 1:09 PM
SusanW, I think JW means storm water management ponds, not swimming pools.
JW, if you do have responsibility for them, you may be able able to turn them over to the county. We turned our SWP's over to the county several years ago, before I was elected to our board, so I'm not sure what the process is or whether it applies only to Montgomery County. >>

Yes, Storm Water Management Facilities are what I was referring to. We also have one vacant outlot in the community. The uncerainty stems from the lack of any formal conveyance or the facility design stats. We voted to take control of the HOA but never recieved reply or feedback from the previous board, the development company.

EllenS1 (Florida)
Posts: 1,148
Posted:

JW,

Our docs say if you put your request in writing the management company has ten days to let you have access and if they don't they can be charged $50 per day starting on the 11th day. I would send a letter specifying what you want to see and mail it by certified mail. If you get no response notify the appropriate authorities. Sorry I didn't go back to make certain you have a management company but if so report them to the licensing agency in your state and include a copy of your letter, etc. You get the picture. I wouldn't make any threats but would follow through until you get what you want. If you have no management company put in a claim with the insurance company that covers their D&O policy. Even if you are a director you can still make a claim.
RobertR1 (South Carolina)
Posts: 5,164
Posted:
JW5,
Observation. You are on the Board aren't you JW, somehow that happened, can't be all bad. You have a board that is operating after a fashion, you have some good state laws I believe, you have your documents intact, you are comparitively new, you all need to learn your job, it takes time. Baby steps, baby steps or use your documents for a recall but don't do this with an attitude the world has to change all of a sudden, it won't. Use your Board position as leverage, build up some support for you ideas, hold a town-hall meeting to gaither input from your members. Again use your documents, put out a Board Member Newsletters or information fact sheet written by you and supported by other owners. Us the process and take it slow and have patience.

JW, none of us can wave a wand and fix your assopciation or any other association. If you notice the regulars here post statement and ask questions about their own associations. We don't always agree but we just try to make things better. There is no magic bullet and I don't think you are looking for one, you know it is going to be a long hard road, but you can probably make a difference.
EllenS1 (Florida)
Posts: 1,148
Posted:
Robert,

I couldn't disagree with you more. It shouldn't take baby steps or being slow and having patience. The OP said assessments have not been billed for TWO years. This board should insist on having all financials info available TODAY and perhaps an audit of the same. It doesn't take a lot of learning when you suspect you are being ripped off. A townhall meeting is a good idea AFTER the board has received all the information they have requested. Going into a townhall meeting would accomplish nothing without the facts.
GloriaM (North Carolina)
Posts: 829
Posted:
JW5:

As a board member you have every right to see all records and yes even these so called security financials; which I have never heard such a bunch of $#@*!

Tell this Treasurer to put up, show you and be done with it.
JohnK3 (Pennsylvania)
Posts: 967
Posted:
Bobby writes:

>>>JW, none of us can wave a wand and fix your assopciation or any other association.<<<

Oh? I've sometimes done this, with great success, as to our HOA. I own a pair - one 8", the other about 20". Did I mention I'm a member of the IBM? True story.
RobertR1 (South Carolina)
Posts: 5,164
Posted:
Ellen,
Whether you disagree with me or not, I really don't care. You base your conclusion that after TWO (your caps, not mine)years no assessments have been billed so you want this OP and (whoever), you conclude to be the Board, to jump it there and start demanding this and that from some one that didn't provide it for two years.

Does any member have the right to know? Of course they do. Does the Board have the responsibility to find out? Of course they do. But know what you are talking about before you start trying to make your world a better place. Do you have any reason to think that this OP has all the information they need? Other than what was posted, and that is just words, do you advise that if these financials are provided, their world would turn rosy? They have a deeper problem than lack of financial data, and they would be well served to be prepared for the job ahead.

I am confident that my advice to take it slow and easy and learn all you can and build support is the best way to effect change, given the information that we have received.

As I said, members have the right to information, boards have the responsibility to provide it, and manage the association and protect that association. Best they do it from strength, than jumping into the pool unprepared.

You agree the town-hall meeting is where you want to go if you have information you can use. Do you think this information will be dropped in your lap. I doubt it. The Board (hopefully), must consolidate and present a united front. For over two years this apparently has not been the case. You better fix this. One step at a time.

No, I don't expect you to agree, which is fine also.
JW5 (Maryland)
Posts: 20
Posted:
I think it might help to reread the thread. I have attempted to leave my personal opinions out of this to avoid influencing the opinion and commentary I seek.

important points:
1- I am a board member.
2- The treasurer has refused to allow even me to review our complete financials.
3- our board is disfuntional to the point that 2 recently resigned. These 2 along with the Treasurer regularly met privately, were repeateldy confronted about the practice and asked to stop. When they finally resigned it was with predjudice.
3- Prior to resignation these three moved and approved a refund of HOA funds prior to establishment of a budget, reserves study, etc. The proposed refund amounts are based on 1-settlement date and 2-assumed homeowner status. In other words; If one settled in 05 vs 08, the 05 homeowner refund would be significantly larger than that of the 08 settlement and, if the tresurer assumes one to be in arrears (this has been done and published without a board vote or discussion based his sole opinion) the amount owing would be deducted from the homeowners refund.
-Recall there has been no reserve study, no approved budget, no audit of our reconstructed books. Meeting minutes clearly state the records recieved from the former management co (now closed) were incomplete and assumptions were made in the reconstruction process.

Now, I mentioned none of this sat well with me as a director whos wishes are to make decisions that best benefit the community at large. I do not favor a differntial reimbursemnt and based on our incomplete records do not believe any member can reasonably be considered in arrears without a hard independant audit. I simply seek your opinions on the same.
Thanks in advance....

JW5 (Maryland)
Posts: 20
Posted:
No one asked for or expected a magic wand fix, just outside opinions from intelligent folks?!?!?

Posted By JohnK3 on 07/31/2009 10:25 AM
Bobby writes:

>>>JW, none of us can wave a wand and fix your assopciation or any other association.<<<

RobertR1 (South Carolina)
Posts: 5,164
Posted:
JW,
What part of everyone replying and saying you have great cause for concern and whoever is running the show should mend their ways or be replaced, don't you understand.
You may have simply asked our opinions but as you can see there are no simple opinions and no simple solutions. Can you go to court sure.
Can you sue the Board sure. Can you contact TV, etc, etc. sure. Can you drag a couple of them out and beat the crap out of them sure. But JW, you are a new kid on the block, better you get some evidence and support before you come to blows and I see no where else to go except confrontation.......somehow.
JW5 (Maryland)
Posts: 20
Posted:
The negatve views shared here of our tresurer are obvious Robert. How about your thougts and feelings (and those of the others here) in regard to the proposed reimbursement plan? I will have to engage this issue shortly. Solid input would greatly assist in my establisment of argument against.

Thanks in advance.
MaryA1 (Arizona)
Posts: 7,043
Posted:
Quote:
Posted By JW5 on 07/27/2009 9:06 AM
Our HOA was taken over from the developer nearly a year ago to date. Documents were recovered from the management co. and the management agreement terminated. It has been noted in our Board minutes that our treasurer reconstructed the HOA's financial history using incomplete records and that some degree of assumption was made. No HOA dues have been billed the previous 2 years.
Although no Board vote occurred to do so the treasurer believes some homeowners are in arrears, made it a personal agenda and publicly identified these homeowners as delinquent at our last meeting, again without previous board discussion. I do not believe any homeowner can be positively identified as owing without an independent audit of our books. As a fellow board member I have asked to review a backup copy our financials and was denied the opportunity repeatedly. It was said that was not possibly due to control issues and potential breech of account security?

Additionally, three of our 5 board members beleive the assn holds to much money and made a quick vote to refund 20K from our accounts. No reserve audit or final budget has been approved, we may or may not own and bear responsibility for 2 SWM ponds. A very fast review of the proposed disbursement took place immediately after the vote and indicates a differential refund by household, based upon settlement year.

Nothing from the above sits well with me as a director.
Thoughts and considerations please..

John,

I don't know how any board member could possibly propose to reimb the members $20K when:

1) HOA dues have not been billed for 2 years,
2) A budget has not been prepared,
3) A complete and accurate accounting of the HOAs finances cannot be accomplished because of incomplete records
RogerB (Colorado)
Posts: 5,067
Posted:
JW5, you stated " I do not believe any homeowner can be positively identified as owing without an independent audit of our books." Then do it OR ELSE:
Your Board can review the controlling documents to determine what is required regarding payment of assessments. Then have the Treasurer document how much each owner was in arrears by (1) getting copies of bank statements; (2) determining when each unit was sold; and (3) how much the developer was responsible to pay prior to each unit's sale. Then I would bill the owners in arrears, including the developer, and include a letter explaining why the payment is due. I would suggest forgiving any late charges and interest if paid by a specified date.

Regarding refunding I would not. This should only be done is after developing a long range reserve plan and determining that there are sufficient funds in reserve for the next 20 years. If the reserve fund is adequate then the annual assessment could be decreased so that annual reserve additions are not needed or could be decreased.
JW5 (Maryland)
Posts: 20
Posted:
ahh... and this is a part of my issue.
Complete bank records are not something we have. The accounts were moved when we let the management co. go, they closed their doors shortly after due to accounting and tax issues as well as some other reasons. The former mgmt co owner left the area when she closed up shop and is no where to be found.
JW5 (Maryland)
Posts: 20
Posted:
re: Refunding, I also prefer to not do this believeing it to be both irresponsible and ignorant but the board vote resulted, 3/2 in favor. My thinking is the only fair move would be in adapting the 'fresh books' approach suggesting all property owners are in good standing. An equal share of refund or preferrably repackaged as credit against next assessment to all owners. In turn all are sharing an equal responsibility should this reimbursement create a need for future sepcial assessment.
RobertR1 (South Carolina)
Posts: 5,164
Posted:
JW,
I will post my views then I will scroll down and read what others say.
Regards reimbursement or whatever they are calling it is just another bad idea they have come up with. Maybe they are trying to buy good will. I suspect they will need it as from what you say they are playing a game that will bite them in the butt. Maybe they sense they should get their act together since you are asking questions.

From where I sit they must get their house in order, and I doubt this will happen. What needs to happen is for the light to shine on the whole operation. Transparency and communication must come before giving money out. I would also be very surprised if your state statute or documents allow and provide how to distribute give aways of someone else's money. Our Board has the authority to set assessments, etc, etc, but as far as I know, can not give money away.
RogerB (Colorado)
Posts: 5,067
Posted:
JW5, you can get copies of the homeowners' checks and the HOA's checks and bank statements from the HOA's bank. We had a similar problem when we took over management of an HOA and the previous MC would not release any of the associations records. Get these records was going to require legal action which would take way too long. We developed the names and addressess of the owners and their current HOA financial status from scratch. It was done, was accurate, and documentation was provided.
RobertR1 (South Carolina)
Posts: 5,164
Posted:
JW,

I echo Mary and Roger.

You are about to be tested and see how good a statesman you are, how smart you are, how smooth you are and how honest you are. On top of that, right now you are paying into a stacked deck. You have to voice your objection, make known you have strong reservations about the whole association, demand your objections are noted in minutes and also tape record the entire meeting. Then go around the board, don't hide, and drum up support for your conclusions. All this and don't piss anyone off.
JW5 (Maryland)
Posts: 20
Posted:
Roger, The problem lies in the fact complete records can not be obtained, please read the post.

Quote:
Posted By RogerB on 08/03/2009 12:06 PM
JW5, you can get copies of the homeowners' checks and the HOA's checks and bank statements from the HOA's bank. We had a similar problem when we took over management of an HOA and the previous MC would not release any of the associations records. Get these records was going to require legal action which would take way too long. We developed the names and addressess of the owners and their current HOA financial status from scratch. It was done, was accurate, and documentation was provided.

RogerB (Colorado)
Posts: 5,067
Posted:
Quote:
Posted By JW5 on 08/04/2009 6:31 AM
Roger, The problem lies in the fact complete records can not be obtained, please read the post.

Posted By RogerB on 08/03/2009 12:06 PM
JW5, you can get copies of the homeowners' checks and the HOA's checks and bank statements from the HOA's bank. We had a similar problem when we took over management of an HOA and the previous MC would not release any of the associations records. Get these records was going to require legal action which would take way too long. We developed the names and addressess of the owners and their current HOA financial status from scratch. It was done, was accurate, and documentation was provided.

I did read you posts before responding. The posts say nothing about contacting the HOA's bank and being told by the bank that they can not produce copies of the homeowners checks which were deposited; the HOA's checks which were written; and the HOA's bank statements. Have you requested those and been told they are not available? Without them you will not be able to reconstruct the complete financial history. In which case you have a very serious problem which will require documents from each homeowner's personal records for proof of payments of assessments. Just because billings were not made does not mean the homeowner is not obligated to pay their assessments.
JW5 (Maryland)
Posts: 20
Posted:
ahh... and this is a part of my issue.
Complete bank records are not something we have. The accounts were moved when we let the management co. go, they closed their doors shortly after due to accounting and tax issues as well as some other reasons. The former mgmt co owner left the area when she closed up shop and is no where to be found.

Quote:
Posted By RogerB on 08/04/2009 6:51 AM
Posted By JW5 on 08/04/2009 6:31 AM
Roger, The problem lies in the fact complete records can not be obtained, please read the post.

Posted By RogerB on 08/03/2009 12:06 PM
JW5, you can get copies of the homeowners' checks and the HOA's checks and bank statements from the HOA's bank. We had a similar problem when we took over management of an HOA and the previous MC would not release any of the associations records. Get these records was going to require legal action which would take way too long. We developed the names and addressess of the owners and their current HOA financial status from scratch. It was done, was accurate, and documentation was provided.


I did read you posts before responding. The posts say nothing about contacting the HOA's bank and being told by the bank that they can not produce copies of the homeowners checks which were deposited; the HOA's checks which were written; and the HOA's bank statements. Have you requested those and been told they are not available? Without them you will not be able to reconstruct the complete financial history. In which case you have a very serious problem which will require documents from each homeowner's personal records for proof of payments of assessments. Just because billings were not made does not mean the homeowner is not obligated to pay their assessments.

RogerB (Colorado)
Posts: 5,067
Posted:
JW5, as I have posted twice before "CONTACT THE BANK. And as I posted before - based on our previous experience of not getting anything from the previous management company we reconstructed the financial records with no information from the management company.
TracieS (Colorado)
Posts: 460
Posted:
JW5

Are you saying you don't know the bank used by either the HOA or the management company?
JW5 (Maryland)
Posts: 20
Posted:
I know the bank used by the HOA. The past acct from the mgmt co. at another bank has been closed for approx. 1 yr. Out tresurer refuses open access to the books, even to myself as a fellow BOD director.
RobertR1 (South Carolina)
Posts: 5,164
Posted:
JW,
I, and probably others keeping up with this post just wish you would be open in what you are saying. Your current post seems to say, you know one bank that was involved, an account of the management company is not available because they closed their doors 1 year ago.
Your treasurer refuses to open the Books to you, a fellow BOD.

Roger, a Top Gun around here, has tried to ask you questions that seem reasonable and relevant to all that is going on. Others have tried to communicate also.

Have you requested in a Board meeting to view the bank statements?
You stand up and say to the president, "I wish to make a formal request to the Board that I be given access to what ever it is you want to look at. Record your request, record the reply. If you request is denied by the Board , (not the Treasurer), record that and record asking for a written reply.

You as an individual, BOD or not is not going to be able to move the immovable, whatever it is, unless you can:
1. Get the power of the owners behind you.
2. Get enough support in the association to force the Board/management to the table.
3. Hire a lawyer and take them to court.

I believe Roger is saying if you all get your act together, you can reconstruct your financial picture. But as he said, I believe, you all have other problems apparently and they must be solved before you can move on this Bank thing. Suppose you could view the treasurers information? What do you intend to do with this information and suppose it turns out to as damning as possible. You are in the same position you are in now. The Board to allow the Treasurer to take such a position, and the President to allow this happen is just wrong and probably illegal. Legality is not determined on this site, opinions are expressed....that's it.

I hope I have started you to think from a little different point of view. Not that it is terribly important at this time but what do you expect to gain by reviewing the records of the treasurer? Do you suspect there are no records or the records are not accurate?

JW5 (Maryland)
Posts: 20
Posted:
Again, the pres. resigned, the vp resigned, not yet replaced.

My intentions in reviewing the treasury are to get a glimpse at just what was/is missing, to read journal entries and understand what we have as a baord. I would likely move for a formal audit as it is not just to declare owners as owing. Additonally to move that the proposed refund methodology is equally unjust, that refund shall be equal to all current owners as all share equally in risk posed.
MaryA1 (Arizona)
Posts: 7,043
Posted:
Quote:
Posted By JW5 on 08/04/2009 12:18 PM
Again, the pres. resigned, the vp resigned, not yet replaced.

My intentions in reviewing the treasury are to get a glimpse at just what was/is missing, to read journal entries and understand what we have as a baord. I would likely move for a formal audit as it is not just to declare owners as owing. Additonally to move that the proposed refund methodology is equally unjust, that refund shall be equal to all current owners as all share equally in risk posed.

JW,

It may be a good idea to have a meeting with a CPA to find out if the books can be audited with the limited amount of records on hand. Also ask him how the Treas should go about trying to reconstruct the member accounts. This meeting would include all the board members, not just the treas.

Regarding the refund, I hope you can convince the Board members to table this at least until the financial records are straightened out. Frankly, I don't think it's a good idea to reimb. the members. Instead any excess funds could be deposited into a reserve account. In fact, does the assn even have a reserve account? That may be another thing to discuss with the BOD!
JW5 (Maryland)
Posts: 20
Posted:
There is no way I can see to avoid this reimbursement. The 2 of us who dissented, for what see mto be very valid reasons, asked to hold a special meeting for further discussion. The meeting was held but it got railroaded by the treas and the 2 who resigned. To sum it up this meting was so out of control I felt like I was sitting on top of a banna pile in frint of a primate cage.
EverettC (Maryland)
Posts: 90
Posted:
JW,

Who is left on the board? You indicated in your OP that there were 5 board members, but that 2 of them have since resigned. Do you and the other dissenter now control the board?

If so, I suggest that you call a special meeting of the board and rescind the motion authorizing the refund.

If not, maybe you can recruit some other new directors of like mind, or maybe you can take the approach of wait and see - let's reconstruct the books and if it then appears appropriate let's refund the moneys [knowing full well that it will not be appropriate to do so, but just buying time].

You may have to try to recall the treasurer, if you have the votes to do so - check your by-laws. Generally, they say that an officer can be recalled at any time with or without cause. If you and the other dissenter now control the board (2 of 3 current members on the board), you should be able to direct the treasurer to share the records with you.

Everett
RobertR1 (South Carolina)
Posts: 5,164
Posted:
JW,
So now we know there are only three members. You never said they resigned from the Board or from their Pres and VP. But now they are gone and you feel you can't do anything about the rebate.

Sure you can, call a special meeting of the Board, you don't care if the Treasuer comes or not, if there you all out vote him two to one. Open the meeting and give notice that with consent of the Board you are going to assume the Presidency of the association until you can get a full Board to elect and vote one. Get your friend BOD to second motion. Call for discussion and hopefully an owner or two will be there. Then call for vote to stop rebate, vote and pass the motion. Type it all up as meetings and record all. If you run into a problem with the bank, show them your approved minutes. If the treasuerer is the only one with authority to sign checks, at your meeting, motion and vote to rescind his authority and assign it to you and other board member.

Call the Bank and as President of your association tell the Bank not to issue any checks with out the majority of the Board signing checks.

But first, let's hear more about your M/C.

I see Everett has signed in also, listen also to what he says.

I am sure more to come.
EverettC (Maryland)
Posts: 90
Posted:
Robert,

You went into more detail but we are on the same wave length.

Everet
EllenS1 (Florida)
Posts: 1,148
Posted:
JW,

I don't see how anyone could vote to refund money when no one seems to have an accurate financial picture.
EllenS1 (Florida)
Posts: 1,148
Posted:
Is this the same Robert who recommended "baby steps, baby steps"? It looks like we may be agreeing. Activism is not a bad thing if done with knowledge. If you snooze, you lose. Lots of good advice in this post.
RobertR1 (South Carolina)
Posts: 5,164
Posted:
Ellen,
Fat chance on agreeing. And to solve this problem is going to take baby steps, either you take them voluntarily or something jumps up and bites you.

Your problem is you don't realize they (JW) don't have enough knowledge yet. That knowledge will come in bits and pieces and the more you get (steps) the better off you are to make a change by overt action.
JW5 (Maryland)
Posts: 20
Posted:
Robert, this is why I keep suggesting everyone read the thread. I have appreciated what yourself and others are posting for the most part. Some comments, however, lie outside of the scope of interest from
skimming the post.

"JW,
So now we know there are only three members. You never said they resigned from the Board or from their Pres and VP. But now they are gone and you feel you can't do anything about the rebate. "

I was against the refund 100% but, after taking in the public outcry with $$ in their eyes clearly see a number of folks have been tainted by the treasurer and former officers politicing their agenda in the neighborhood. To recall the refund entirely would potentially create a degree of chaos I have no interest in. I am personally leaning toward a redsign that does not discriminate against even the newest homeowner. My thinking is to go along with the rfund, but to employ the 'fresh books' apporach allowing each lot owner an equal share. All homeowners are exposed to a degree of risk for special assessment, should all homeowners not benefit from the refund? 'Fresh books' will inevitably piss off this guy but again, the only way I see to fairly accusse anyone of being in arrears, when our patched up records are considered, would be to pay for a full independant audit. I seriously doubt the differential appraoch proposed by the tres is legal anyway. He is still unresponsive to my request to view the books, although MD law requires they are open at homeowner request. To deny me access to the financial records as a fellow baord member spells out cover up in my mind. Should resistance come from the 'fresh books' proposal a written complaint to The MD Attroeny General cc'd to our local press should rectify? Any potential cover up would wash as the amount in the books is undisputable, it is simply the reconstruction of the financial trail that is highly quetionalbe.

JW5 (Maryland)
Posts: 20
Posted:
Ellen, I could not agree more and honestly do not know why this was pushed through. It has been in my mind the tres's entire motivation for participating on the BOD. I see no issue with a refund credit toward future dues if the reserve study, etc were completed and it were fully known our cash on hand exceeds projected needs.

Quote:
Posted By EllenS1 on 08/04/2009 3:07 PM
JW,

I don't see how anyone could vote to refund money when no one seems to have an accurate financial picture.

RobertR1 (South Carolina)
Posts: 5,164
Posted:
JW,
Now of course you have to do what you think is right. I am sure you have given this great thought and your plans are clear to you.
I speak from a homeowner as position and many speak from a board position and a few speak as legal council, and a few had other web sites they maintain about HOA, speaking of who posts on this site.

Roger speaks from a Management Co position. He is accurate and knows his job. When he is telling you of the need to reconstruct your financial he speaks from experience and speaks to the legal side of your situation. I can say I doubt that he would involve his company in a situation where they just jump into the management position of any HOA that didn't have some substantiation of past records and finances, without some kind of protection from legal action. I think he is pointing out to you that in order to go forward you must go back and reconstruct. Now you have said time after time that you can not do that and now are willing to approve what remains of your Board deciding to rebate money that you, as a Board member, have no knowledge that records exist showing the evidence of this money. How "legal" is that?

Now you are going to rebate the money and if that doesn't right the ship you are going to take this to the state for arbitration. Are you sure you have your priorities correct?

I will just add that you are in for an Audit. Whether the state demands it or whether you all reach a spot in the road that you will be forced to have one. I do not think it is wise to cover up some mess with a plan that is conceived by a single member or even a majority of the Board if you had a Board. I serious believe this kind of action requires a special meeting of the members and, following your document requirements, a vote would have to be taken, and recorded and entered into the minutes and available to the members.
JW5 (Maryland)
Posts: 20
Posted:
Robert, you seriously need to slow down and read.

1- The amount we hold is not disputable short of tracking down the old mgmt co owner and entering into a lengthy legal battle. Costs for this could easily exceed the porposed distribution.

2- State Arbitration is suggested should an equitable distribution get shot down, and the books remain closed, otherwise not needed.

3- An audit would be welcomed by me, however, an audit could not conclusively determine anything beyond what we already know, how much cash we hold, unless the audit suggests #1 above would be cost effective and beneficial to the community. I seriously doubt the cost incurred would benefit anyone.

4- We held a special meeting that went totally out of control due to those infavor politicing this issue.

5- Again , an equal credit to all members is the ONLY way I would favor of this distribution. All are kept whole, all are exposed to the exact same benfit both in credit recieved and risk presented for possbile future SA.

6- Holding off or recalling the entire issue will only continue to destroy any remaining fabric in this community. Why encourage further placement of neighbors at odds with one another?
RogerB (Colorado)
Posts: 5,067
Posted:
JW5, you appear to have your own agenda and you are not paying attention to the posters who are trying to help you.
Let me try one last time-
1) Do not refund any money from the association's accounts unless you have more than enough to cover the next 20 years of reserve fund needs. You mentioned $20,000, that is not sufficient. One law suit could end up costing more!

2) The previous vote of the Board needs to be changed and this can easily be done by a vote of 2 out of the 3 current Board members approving.

3) The Board has a fiduciary duty to try to collect all assessments (including those in arrears) - to treat all homeowners equally in regard to payment of assessments. Under your senario that can not be done without reconstructing the financials. You have posted nothing which indicates to me that this can not be done. And as I stated in my first post we have already done this without getting any information from the previous management company. A condition exactly like you presented to this board.

4) You stated "Why encourage further placement of neighbors at odds with one another?" This may or may not be the case but nevertheless you, as a board member, are responsible to use good business judgement and act in good faith. Not documenting 'who has paid what' may create much greater problems for the Board than neighbors at odds.

Please stop trying to justify (right fighting) and try to pay attention to the advise given here. If you do you can determine an equitable solution. IMO your current solution is poor at best and does not seem justifiable.

JW5 (Maryland)
Posts: 20
Posted:
Its not my agenda, there is no way to actually stop it? Given the two options whats best?

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