Problems with MD HOA

Started by SM4 • 7 replies • 1789 views

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SM4 (Maryland)
Posts: 4

Posted:

I contacted our President/Treasurer and one of the BODs the other day concerning how bad our community grounds were looking and that it needed to be addressed. I was told that as soon as the HOA dues are collected they can do something about it. Oh and by the way there's no money in the account. I asked where's the money that we've been paying to for the last four years? I was told that the 2007 dues (checks) were accidentally shredded and I have no clue what happened with 2008's dues that were paid. I checked my past invoices and our dues were paid. Yesterday, I received an invoice in the mail (in addition to the other community members) requesting $1,000 for 2007 and 2008 dues and that 2009 dues will be sent out in October... sorry for the inconvenience, blah blah blah. This totals $1,500 in two months, which I think is ridiculous. Another issue is annual meetings have not been taking place since the HOA started and the Treasurer has not been sending out annual budget/expenditures statements. I've looked at our Bylaws and MD HOA statute and the President/Treasure is violating just about everything under the sun. I've contacted the other property owners and I'm requesting a special meeting to discuss what happened to the money, the mismanagement of the books, accounts, and poor ground management. I'm looking for advise on where to go from here. Thanks.

MicheleD (Kentucky)
Posts: 4,491

Posted:

Yikes!

This sounds like mess.

I'm guessing that the HOA was only turned over to the residents in 2007?

And the board that was in place had no knowledge, background or experience in HOA functions/management?

At any rate, were your previous checks CASHED?

If so, then it's a HUGE problem.

If not, I have only one additional question, How could you let 2 years go by with two $500 checks outstanding in your account? And this question isn't just for you, but for every other resident whose checks were not cashed for over 2 years.

Okay, I lied. I have a few other questions:

1) How large is your association (number of homes/owners)?

2) How have people been voting on the board of directors for the past 2 to 3 years?

3) Have you read all of your governing documents?

That last question was to set up for you to find out how to recall your board and vote in a new cadre of directors.

Of course, when you do that, you'll need to make sure you are voting for people who can read the documents and understand how to work from them.

SM4 (Maryland)
Posts: 4

Posted:

The HOA was turned over to the homeowners in 2005

The President/Treasurer performed this function in her previous HOA. She was very excited to do this again when the builder/developer turned it over to the homeowners.

In reference to the previous checks... I have no clue. I'm having to go back to my statements and investigate, which is extremely annoying. Never paid a bill where the organization/company/bank that I wrote the check to didn't cash the check. This would be the first.

As for outstanding checks... to be honest, I rarely write checks. Most of my bills are paid through electronic fund transfers and show up on the statements.

The HOA has 8 homes in it.

In reference to the voting... not happening in addition to the annual meetings... I guess the BODs don't meet regularly either.

I've read the Bylaws for the community and the MD statute and have sent emails asking the BODs when meetings are going to take place, but have been blown off.

I'm considering filing a formal complaint.

MicheleD (Kentucky)
Posts: 4,491

Posted:

Well, my husband and I both pay most of our checks through online banking.

But.

We still reconcile our bank statements every month.

It would be really really obvious if such a large check (well, 2 of them actually) were floating out-of-balance month after month for 2 years.

I'm just saying, your board is clearly inept. But then, the 8 homeowner/members appear to have been Missing In Action over the last 2 or 3 years seem a little out of sync as well.

Unfortunately, in an association as small as yours, any amount of apathy and/or ineptitude appears larger than life.

By the way, it just boggles my mind that someone accidentally shredded the checks, and then DIDN'T contact all the check writers to ask for a replacement. I can understand being embarrassed about it, but, still . . . it's only 8 homeowners. It couldn't have been too difficult a feat.

SM4 (Maryland)
Posts: 4

Posted:

Quote:

Posted By MicheleD on 08/12/2009 7:29 PM
Well, my husband and I both pay most of our checks through online banking.

But.

We still reconcile our bank statements every month.

It would be really really obvious if such a large check (well, 2 of them actually) were floating out-of-balance month after month for 2 years.

I'm just saying, your board is clearly inept. But then, the 8 homeowner/members appear to have been Missing In Action over the last 2 or 3 years seem a little out of sync as well.

Unfortunately, in an association as small as yours, any amount of apathy and/or ineptitude appears larger than life.

By the way, it just boggles my mind that someone accidentally shredded the checks, and then DIDN'T contact all the check writers to ask for a replacement. I can understand being embarrassed about it, but, still . . . it's only 8 homeowners. It couldn't have been too difficult a feat.

Two checks in two years really doesn't stand out in our accounts, so I can see how they were missed. I agree that this community is lax in having the BOD's do their job. Like I said earlier, I feel like the bad guy constantly asking when are you (BODs) going to have meetings, fix the entryway landscaping/common grounds, etc. I didn't buy into this community to live here forever... this is a real estate investment to me and the boards lack of oversight and proper management is negatively impacting my property. That's my take on things.

MicheleD (Kentucky)
Posts: 4,491

Posted:

I'm sorry, I'm not trying to sound harsh or anything, but two checks of maybe $10 probably wouldn't stand out, but of several hundred should.

If this is an investment to you, then it particularly would have stood out. I don't know very many people who can have $1000 floating around in their checking account unaccounted for.

Earlier attention to such detail by ALL parties (board AND paying membership) would have helped your association tremendously.

So, yes, I guess I am saying that, to some degree, the lack of oversight rests with the eight of you, as well, and not just on the backs of the incompetent board.

In two years time, as close a proximity as you guys live and as few members as you have ( 8 ), I'm at a loss to understand how the membership has not woken up 18 months ago, or even a year ago.

No matter, the point is, the assessments were never paid (since the board "lost" them), and now must be covered by the membership before any other expenses for maintenance, etc, can be done.

Certainly, with only 8 members, you can garner enough support to replace the board. Heck, the board would probably be more than willing to step down since they haven't been actually doing their job for the last 2 years any way.

At that point, your "investment" will literally be in your own hands to manage.

But since your goal now is apparently to punish them instead of taking charge of the association, to which you also have a fiduciary responsibility, I'm guessing my advice will not fall on receptive ears. Also, I have no idea if there is any HOA regulatory agency or mechanism in Maryland, so I have no idea who you can contact to punish the board. Just keep in mind, even if you succeed in finding such a mechanism, the fact remains that you all (the membership) still need to take control of the organization and install competent leadership.

SM4 (Maryland)
Posts: 4

Posted:

Quote:

Posted By MicheleD on 08/13/2009 5:45 AM
I'm sorry, I'm not trying to sound harsh or anything, but two checks of maybe $10 probably wouldn't stand out, but of several hundred should.

If this is an investment to you, then it particularly would have stood out. I don't know very many people who can have $1000 floating around in their checking account unaccounted for.

Earlier attention to such detail by ALL parties (board AND paying membership) would have helped your association tremendously.

So, yes, I guess I am saying that, to some degree, the lack of oversight rests with the eight of you, as well, and not just on the backs of the incompetent board.

In two years time, as close a proximity as you guys live and as few members as you have ( 8 ), I'm at a loss to understand how the membership has not woken up 18 months ago, or even a year ago.

No matter, the point is, the assessments were never paid (since the board "lost" them), and now must be covered by the membership before any other expenses for maintenance, etc, can be done.

Certainly, with only 8 members, you can garner enough support to replace the board. Heck, the board would probably be more than willing to step down since they haven't been actually doing their job for the last 2 years any way.

At that point, your "investment" will literally be in your own hands to manage.

But since your goal now is apparently to punish them instead of taking charge of the association, to which you also have a fiduciary responsibility, I'm guessing my advice will not fall on receptive ears. Also, I have no idea if there is any HOA regulatory agency or mechanism in Maryland, so I have no idea who you can contact to punish the board. Just keep in mind, even if you succeed in finding such a mechanism, the fact remains that you all (the membership) still need to take control of the organization and install competent leadership.

I don't know very many people who can have $1000 floating around in their checking account unaccounted for.

I need to introduce you to my wife...Several hundred... that's like my wife's Starbucks coffee bill for the month.

I see your point and completely understand. My concern leans more to how the books were handled, the lack of annual budget statements/expenditures being sent out by the Treasurer and the lack of meetings taking place. With our community, I fell like no one really cares, which is irritating. Now, if checks were shredded and dues never deposited, the independent public accountant that is supposed to be auditing our books yearly per the Bylaws should have caught this and brought it to the attention of the board or is this even taking place. For me, HOA invoices come in, the wife or I write a check and it goes out... don't think about it until the next year when the next invoice shows up in the mailbox. This is somewhat of a wake up call for me as I'm now going back to the check books and invoices to see what cleared and what was paid. I did hear from the Treasurer and she indicated that 2008 invoices never went out. I can't confirm this to be factual until I check our records. Could have happened. Also, there seems to be no outstanding balances (lawn maintenance, insurance, etc.), which is good to know. However, the common grounds have seen better days.

JeanneK3 (Maryland)
Posts: 562

Posted:

MD HOA law is very specific that each homeowner should have access to most records. If this material is not forthcoming, you should file a complaint with the Maryland Office of Consumer Affairs, Office of the Attorney General. Make sure you have reviewed MD HOA law and your documents before you do this so you know you are in the right. This office will attempt to mediate your complaint and this is many times a wake-up call for a board. If this doesn't work, see www.marylandhomeownersassociation.info, for other suggestions.
Jeanne

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