HOA money mismangement

I am a concerned home owner. The HOA that I live in has spent all money in the accounts and reserves. Which at the time the new Pres took over 2 to 3 yrs ago there was about $8000.00 in the account and $4000.00 in reserves. Now they are asking for every home owner to pay $159 now or by may 2010 (on top of the monthly fees). This money is because the funds are out and they have special projects they want to do. I am upset because of the mismanagement of money, not to mention other issues I have with the HOA board. I feel powerless to do anything because the board has in the last meeting stopped any home owner from addressing any concerns or issues. It feels like a dictatorship. I was wondering if anyone could give advice as to what I can do to be proactive in this situation.

I'm with Susan on this one.

"Mismanagement" may be in the eye of the beholder. $8000.00 and $4000.00 isn't a lot of dough and wouldn't go far in my HOA.

They probably should have raised assessments sometime or another during the last 2 or 3 years and didn't. So that might be bad management, but not necessarily mismanagement.

It might help to know what the funds were spent on, and what the special projects might be.

I know in our HOA, even though we post a monthly statement and an annual report, with pretty graphs and in color, it never fails that people act like it's the very first time they are seeing things and had no idea we spent X or Y amount on property maintenance or security. . . .

Plus, oddball things happen. And when they happen, especially in THIS economy, HOA accounts can take a bizarre hit.

In ours, for example, we are really in a deep hole right now due to a bizarre and totally unexpected hit.

Sometime ago, when the development was first laid out, and the roads and street lights were put in, the utility company neglected to include 2 streets worth of street lights in the monthly bill.

That was over 10 years ago.

We, the HOA, had no way of knowing that we were not being billed for those 2 sets of street lights.

We also have the utility bills coming out on an automatic payment to the utility company from our bank.

I opened the bill (which is basically sent to us as a courtesy AFTER the money has already been taken) and was shocked to find over $10,000.00 on what is typically a $900.00 bill!

They went back as many years as they could legally go and pulled it all out at once!

I don't need to tell you how short that left us in the middle of the year!

If we had received a notice ahead of time or if we had not had autopay, we probably could have worked out a reasonable payment plan.

But that didn't happen so we were left with the shock of trying to fund the rest of the year!

Mismanagement on our part? No. BAD management? One could probably argue yes (two of us board members have been trying to increase the annual assessments for the last 5 years. Had we been able to do that, we would probably have had a bit of a buffer for such a bizarre hit.)

The previous HOA board and pres had all their ducks in a row. All reports were sent to the home owners in a timely manner etc.. When they passed the file and paper work to the current board and Pres, mysteriously documents went missing. We rarely see paper work unless it is to inform us of meetings or changes that they have made (without a vote) or if its money they need. The money that I spoke of goes a long way in our community when managed correctly. Not much has changed in our community. There is nothing that stands out that could have drained on the community. You will have to admit that there are those in the world that can't manage money. I understand the mismanagement is in the eye of the beholder, but this goes deeper than that. For example $400 was allotted to the pres for his personal cel phone bill. Why did $400 go to his personal phone bill. When questioned there is no response. There is something that is not right in our current board and Pres. Like I said above in the last HOA meeting the home owners were forbidden to talk and bring concerns to the floor. We were told anyone who had something to say would be escorted out of the meeting. Basically we had to sit and listen to what they were going to do and we had no say so in the matter. Also we were not permitted to make movements while in meetings to suggest for new board members. What can I do? Something is not right. I am a rational person and have a college education. I understand the things you have been addressing. Something is off with ours. I have been researching on line and have not found any information as to the processes or laws that could help in this situation. What can I do?

You also have the right to inspect all financial paperwork AND minutes of the meeting, which should inlcude the monthly treasurer's reports.

Request an appointment with the treasurer. Take a group of 3 to see an AUDITED final end of the year report , with all itemized dept. showing a breakout of expenses.

If there has not been an audit, audit review, compilation, or some other kind of independent overseeing of the finances, then it's time for the membership to demand it.

Hold a special meeting for the purpose of a complete financial review of the HOA.

You also have the right to inspect all financial paperwork AND minutes of the meeting, which should inlcude the monthly treasurer's reports.

Request an appointment with the treasurer. Take a group of 3 to see an AUDITED final end of the year report , with all itemized dept. showing a breakout of expenses.

If there has not been an audit, audit review, compilation, or some other kind of independent overseeing of the finances, then it's time for the membership to demand it.

Hold a special meeting for the purpose of a complete financial review of the HOA.

Christina,
How large is your HOA, how many Board members, do you have open board meetings? How active is your membership.

In SC that is very little as far as state statutes you can turn to. You need to establish you are registered with the state and licensed as a non-profit. This will give you more latitude.

Now, normally your documents are cookie cutter for the most part. That being the case they will be detailed and difficult to understand, but you must know what they say in order to make changes in your governance. The AG of SC seems to be of the opinion that HOA's should self manage. I am sure you are aware of the political situation in SC at this time. Little HOA problems are not going to make the radar screen.

But you are asking what you can do. Frankly, not much. But if you as an individual still have concerns, do yourself a favor and sit for a minute and write down what is really bugging you. Get your head together and see how committed you are. If you suspect criminal activity, you will need evidence.

Now, do you want to rock the Boat, sink the Boat or get a new Boat? I suspect you have some deep seated convictions that go beyond your explanations here. Therefore, for change you need support, to get support you need to work hard and muster the troops. If you can't communicate to the Board...........make sure you can't, really make an effort, try talking to individual Board members for starters. None of this satisfies you, have a few friends in for coffee have a little open discussion. This is how you start building support you NEED to effect change. Think about a website to communicate, start building e-mail addresses, assign responsibilities as your group grows. DO NOT hide anything, everything you do must be transparent. Do not allow your group to be just exactly what you claim the other group is. It might take several years to do this but as you move along , the operation of your association continues, one hot point replaces another, your group must stay focused and viable.

The last paragraph is hard hard hard.

A better way is to work with your leadership and change it from within. Raise your support and use it to influence the BOD you have no confidence in. Use the system. You must understand you are not doing something evil or against your fellow owners. You will have to convince your fellow owners you speak for them also. And you must convince yourselve your motives are to make your association better.