Some potentially damaging info. Where do we go with it?

Started by SteveS8 • 7 replies • 1426 views

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SteveS8 (New York)
Posts: 128

Posted:

We are still controlled by the builder who has sold about 70% of the condo community.

Every year we get financials (I believe it is mandated by the State), and this time around we decided to ask a few of our CPA residents to go over them and see if they were accurate.

Several issues came up (one was a potential $260,000 over-payment spread over the last three years for natural gas by our homeowners) and rang bells, especially in light of the fact that the builder has not had to pick up any shortfall in the HOA budget for the last two years since there was, supposedly, enough money coming in from resident maintenance fees.

One of our CPA residents has presented a series of specific questions about the over-payment and 6 or 7 other issues which are of concern to the management company which totally ignored them and then to a representative of the builder, who stated several weeks ago that he was going to a meeting in two days and would get some answers. No answers. No word. Nothing.

Certainly there could be a logical explanation to all of these issues, but no answer at all is starting to lead us all to believe that there may be something to hide.

Clearly, we have a right to an explanation. What recourse do the homeowners have?

Thanks!!
Steve

TimB4 (Tennessee)
Posts: 21,047

Posted:

If it were me, I'd be looking up the number to the local district attorney's office

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Can anyone contact the natural gas company and ask where these expenses may have been? There could have been some installation costs, repairs, or some other undisclosed cost that the money was covering. They may not give you any answers but it's worth a try. It being a new subdivision area, the cost may have involved installing and hooking up the lines to the homes. I know in my area we had to pay some money up front to be able to be attached to the system. I believe a cost of over $500 to have my house hooked up to gas if I choose. Being your in HOA, the HOA may have been charged this instead of the individual owner. An option you may want to investigate before assuming mis-usage of funds...

Former HOA President

BradP (Kansas)
Posts: 2,640

Posted:

Steve:

Tim hit it on the head, if the developer wont and doesn't have a plausible explanation contact your local DA...that sum of money should be enough for them to get involved.

JonD1
Posts: 2,350

Posted:

Steve:

Are you single family homes or condos/townhouses?

Just how would the homeowners be paying for gas services? Don't they each have their own heating systems and individual accounts?

Just how were the details upon which your CPAs came to these possible issues come by?

From what you have provided tough to see just what you would ask any authority to look into. IMO you would need alot more evidence.

And IMO as this is not now a criminal matter I doubt your local DA would get involved. My suggestion you contact the NYS Attorney Generals Office as they do handle issues while the builder is still overseeing the operation of the development before turnover.

Good luck.

SteveS8 (New York)
Posts: 128

Posted:

We have condo buildings, 15 apartments in each, villas, and townhouses.

The villa and townhouse owners pay their bills directly to the gas company.

The Condo suite owners pay through the HOA. This is the focus of the issue.

According to the financials which we are required to receive once a year, the resident CPAs came up with the following...

In 2009, the HOA collected $346,960 in gas charges from, what we believe are, the condo suite owners.

The HOA paid out $236,842 in gas charges for the condo suites. That left a surplus of $110,118.

In 2010 we had what appears to be a surplus of $137,969.

For the year that just ended the surplus was $20,718.

The 3 year surplus was $268,805.

The builder has not contributed to HOA shortfall for two years.

Just about two months ago, we started asking questions of the management company, followed by the president of the HOA (who is sponsor assigned). Except for a single "I will look into it", we have received no answers.

Certainly there may be a logical explanation, but how long does it take to answer a question which involves hundreds of thousands of dollars of residents' money.

Looking for a way to get a response, which, I believe, we have every right to expect in a timely fashion.

Steve

TimB4 (Tennessee)
Posts: 21,047

Posted:

Another option would be to seek out a local attorney and petition the court to turn the Association over to the membership citing this info as the reason for the petition.

JonD1
Posts: 2,350

Posted:

It sounds to me like you need to get more facts before you can prove or suggest the builder is doing something questionable.

My suggestion still stands contact the AG office and see if they might assign an investigator to sit down with you and your CPAs to determine if there is in fact anything to look into.

Perhaps there is an explanation or misunderstanding which being given the numbers will provide.

Unlike a private attorney there would be no cost to you.

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