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Subject: Gifts from vendors not in financials
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RaeL
(Florida)

Posts:8


02/08/2020 7:34 AM  
Each year our Vendors give large cash donations for the holidays and I noticed they are not shown on the financials. The board also sells raffle tickets for prizes, run concession stands at events (no tax is charged) charge admission to some events and that money doesn't show as deposited either. The financials do show that we paid our landscape company 500K last year yet our contract is for 275K per year. All we see are typed financial reports not actual documents. I sent 2 certified mail records requests to the board, our attorney and management company and ignored. The attorney said he doesnt respond because he works for the board and management company not owners. They only charge children for food and drinks, The Adult only events are always free, When I started asking questions they adopted new rules. I was removed from serving on committees with no explanation. I have never yelled, been rude, or acted in anyway not appropriate. I now get violation letters (not fines). The HOA and management company charges $25 to send the letter. The $25 is added to your HOA dues which are already $390 per month! The violation notices are for thinks not in our covenants. "your Uber driver was speeding, Your guess was seen with a float in the pool" No date or time or who reported it. Now if you want to request records there is a fee, $26 for an electronic file a neighbor needed to refinance. I was told I needed to pay $800 for records. Should we go to the police. They told us if we contact an attorney they are no longer allowed to communicate with us. They also disbanded our financial committee saying they arent needed.
MarkW18


Posts:1290


02/08/2020 9:27 AM  
Sounds familiar to an HOA I once belonged to.
CathyA3
(Ohio)

Posts:1243


02/08/2020 10:04 AM  
Each year our Vendors give large cash donations for the holidays and I noticed they are not shown on the financials. The board also sells raffle tickets for prizes, run concession stands at events (no tax is charged) charge admission to some events and that money doesn't show as deposited either. The financials do show that we paid our landscape company 500K last year yet our contract is for 275K per year. All we see are typed financial reports not actual documents. I sent 2 certified mail records requests to the board, our attorney and management company and ignored. The attorney said he doesnt respond because he works for the board and management company not owners. They only charge children for food and drinks, The Adult only events are always free, When I started asking questions they adopted new rules. I was removed from serving on committees with no explanation. I have never yelled, been rude, or acted in anyway not appropriate. I now get violation letters (not fines). The HOA and management company charges $25 to send the letter. The $25 is added to your HOA dues which are already $390 per month! The violation notices are for thinks not in our covenants. "your Uber driver was speeding, Your guess was seen with a float in the pool" No date or time or who reported it. Now if you want to request records there is a fee, $26 for an electronic file a neighbor needed to refinance. I was told I needed to pay $800 for records. Should we go to the police. They told us if we contact an attorney they are no longer allowed to communicate with us. They also disbanded our financial committee saying they arent needed.

As you're probably aware, there's a lot here that's a lawsuit waiting to happen:

* Board members ad the PM should never accept or donations from vendors. It looks like bribes or kickbacks. (My association's PM won't even accept little plastic tchotchkes worth less than a buck.)

* Financials should show all income.

* Adults Only events are Fair Housing violations.

* Charging someone for a violation letter is bull****.

* The HOA lawyer does not work for the Board or management - he works for the HOA, which is a corporation. His interactions will generally be limited to the board members, but that does not mean he works for them personally. It is true that an HOA will not represent homeowners in the communities he represents. If you're looking for an attorney, you'll have to look elsewhere.

So... what are you going to do about it?

Assuming your account is accurate, it appears that your board doesn't know what it's doing and has no intention of changing course. You have two options: replace the board, or hire a lawyer if you believe that they are guilty of something prosecutable. The first is a lot of work, the second means a lot of money. If you're not up for this, or you're not convinced your home is so nice that it justifies all the work and additional expense, consider moving.

In all cases, you should be documenting all of this. The board may force you into court with their violation nonsense, and you want to be prepared. You may want to scout for an attorney n, and it may be worth buying an hour or two of the person's time upfront to see if this is worth fighting.
MelissaP1
(Alabama)

Posts:9543


02/08/2020 1:12 PM  
Sometimes have to try to read between the lines in some posts. This one I see a few lines missing or not observed by the OP. They are saying gifts are being given by vendors. They don't say if it's going to the HOA or the MC. The MC could be the one receiving end of the "gifts".

Nothing wrong with having certain activities. Taxes may not be charged. They may later be paid from any profits made. Now one can have an event that spends as much money as it collects. Like having a raffle doesn't mean the money raised doesn't cover the expense of the purchase of those prizes. It may be just a way to have a neighborhood/HOA gathering to encourage communications.

Sometimes people look for the wrong but not another angle. Not saying the HOA isn't understanding how to collect/spend money correctly. If you don't like it, then gather enough support to get rid of the board or run for Treasurer/board position.

Former HOA President
RaeL
(Florida)

Posts:8


02/08/2020 3:38 PM  
Thanks for your input. The amount of money taken in far exceeds the costs. The "gifts" were on the form of Visa gift cards. One from an insurance agent the board voted to go with even though the quote was higher than others. Everything that is sold at the concession stands is donated by residents. It wasn't until I saw the financials that I realized none of that money is accounted for. Never mentioned in the audit. Many people are upset but afraid to speak out because they get hit with bogus violations and don't have the money to pay an attorney. One of the owner "experts" they use to gets bids has a conviction for financial fraud. One of the board members uses a fictitious name in all official records. I feel like if they have nothing to hide then why not produce the records requested.
PaulJ6


Posts:0


02/08/2020 4:13 PM  
There should be a "no gift" policy. The vendors should know better than to do something like that. I send some of my customers bottles of wine or the like at Christmas, but would never give cash.

I would check your state's law and your HOA's governing documents. There is likely a procedure for demanding records, and you may be required to pay costs of them, but clearly your HOA is retaliating.

The police won't do anything (in my experience).

Vote them off the board. That's cheaper than a lawsuit.
MelissaP1
(Alabama)

Posts:9543


02/09/2020 5:08 AM  
Just because it was a higher bid doesn't indicate anything. You do NOT always go with the lowest bid. There are other factors other than costs. Maybe a better benefit with going with a different insurance at all. I wouldn't judge that as any wrong doing. It took a group to approve and vote.

Is your HOA a non-profit? There are some that are not. They usually have some kind of business attached like a golf course etc... Is your HOA one of those?

How do you know they are getting these gift cards? I still don't see anything wrong with the party set up. You said the owners contribute the drinks etc... It sounds just like a pot luck. Which nothing wrong with having a pot luck. The prized could be donated too. The money of the raffle tickets and other money charged to cover the costs of having the event. It's not necessariy free to have a pot luck or neighborhood block party even if donated too.

Maybe I see a bit of "witch hunting" here. Find out what you really want to happen with the results. If you have a problem, have a solution in mind on how to resolve it. Otherwise your just wagging your tongue in the air.

Former HOA President
AugustinD


Posts:3931


02/09/2020 8:06 AM  
RaeL, is your community a condominium (covered by Florida statute 718)? Or is your community not a condominium, and so covered by Florida statute 720?
RaeL
(Florida)

Posts:8


02/09/2020 9:24 AM  
We are not a non profit.
I was on the social committee and when we had our meeting a board member had thousands of dollars in gift cards from vendors. They used some of the money to purchase 6 gift baskets of alcohol to raffle off at the Christmas party. However we only had 10 rsvps for the party in a community 500 homes. They board members are very anti-children so most didn't want to attend being that it was an adult only party. Raffle tickets were sold. The baskets were only around $500. My question to them was were is the rest of the money?

We didn't have any other costs because as you said it was pot luck. My best estimate from working every event is that they took in in access of 5K and was surprised when I didn't see it in the financials.

They refuse to answer any questions.

I guess I will have to wait for elections and try to get them out.
AugustinD


Posts:3931


02/09/2020 9:30 AM  
Posted By RaeL on 02/09/2020 9:24 AM
We are not a non profit.
Are you a corporation? Are you a condominium? Are you a group of stand-alone homes? Does your community have a declaration of covenants?

I am asking you questions whose answers go directly to what statutes you can use to cause some change there. If you do not answer as exactly as you can, then helping is difficult.

Please try to answer the questions from the people here. Address the person who is asking the questions by name, so people can tell to whom you are responding. It is not always obvious.
CathyA3
(Ohio)

Posts:1243


02/09/2020 12:14 PM  
Posted By RaeL on 02/09/2020 9:24 AM
We are not a non profit.
.... They board members are very anti-children so most didn't want to attend being that it was an adult only party. Raffle tickets were sold. The baskets were only around $500. My question to them was were is the rest of the money? [snipped for bevity]
...




I'm going to repeat something I said earlier: this is a Fair Housing complaint waiting to happen. HOAs on the losing side of such complaints discover that it can be very, very expensive.
MelissaP1
(Alabama)

Posts:9543


02/09/2020 12:23 PM  
What do you mean by not being a non-profit? You are a For-Profit corporation? Then not seeing the issue here still. Your allowed to get money. If they are gift cards they may not be on the books. It's not cash or a check.

So what is your issue overall? You think board members are pocketing money? What do you want to happen?

Former HOA President
AugustinD


Posts:3931


02/09/2020 12:56 PM  
Posted By CathyA3 on 02/09/2020 12:14 PM
Posted By RaeL on 02/09/2020 9:24 AM
We are not a non profit.
.... They board members are very anti-children so most didn't want to attend being that it was an adult only party. Raffle tickets were sold. The baskets were only around $500. My question to them was were is the rest of the money? [snipped for bevity]
...


I'm going to repeat something I said earlier: this is a Fair Housing complaint waiting to happen. HOAs on the losing side of such complaints discover that it can be very, very expensive.
I recall that adult only HOA gatherings are seen by HUD as discriminating against families with children. I agree with CathyA3.
RaeL
(Florida)

Posts:8


02/17/2020 8:19 AM  
I agree about the FHA. A report was made. If nothing is done we just need to wait until the next election and try to vote them out.

We are a townhome community and our docs follow the 720 statute.
AugustinD


Posts:3931


02/17/2020 8:29 AM  
Posted By RaeL on 02/08/2020 7:34 AM
I sent 2 certified mail records requests to the board, our attorney and management company and ignored. ... Now if you want to request records there is a fee, $26 for an electronic file a neighbor needed to refinance. I was told I needed to pay $800 for records. Should we go to the police. They told us if we contact an attorney they are no longer allowed to communicate with us. They also disbanded our financial committee saying they arent needed.
Are you aware of what FS 720 says about records inspections?

From http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0700-0799/0720/0720.html --
FS 720.303
(5) INSPECTION AND COPYING OF RECORDS.—The official records shall be maintained within the state for at least 7 years and shall be made available to a parcel owner for inspection or photocopying within 45 miles of the community or within the county in which the association is located within 10 business days after receipt by the board or its designee of a written request. This subsection may be complied with by having a copy of the official records available for inspection or copying in the community or, at the option of the association, by making the records available to a parcel owner electronically via the Internet or by allowing the records to be viewed in electronic format on a computer screen and printed upon request. If the association has a photocopy machine available where the records are maintained, it must provide parcel owners with copies on request during the inspection if the entire request is limited to no more than 25 pages. An association shall allow a member or his or her authorized representative to use a portable device, including a smartphone, tablet, portable scanner, or any other technology capable of scanning or taking photographs, to make an electronic copy of the official records in lieu of the association’s providing the member or his or her authorized representative with a copy of such records. The association may not charge a fee to a member or his or her authorized representative for the use of a portable device.
(a) The failure of an association to provide access to the records within 10 business days after receipt of a written request submitted by certified mail, return receipt requested, creates a rebuttable presumption that the association willfully failed to comply with this subsection.
(b) A member who is denied access to official records is entitled to the actual damages or minimum damages for the association’s willful failure to comply with this subsection. The minimum damages are to be $50 per calendar day up to 10 days, the calculation to begin on the 11th business day after receipt of the written request.
(c) The association may adopt reasonable written rules governing the frequency, time, location, notice, records to be inspected, and manner of inspections, but may not require a parcel owner to demonstrate any proper purpose for the inspection, state any reason for the inspection, or limit a parcel owner’s right to inspect records to less than one 8-hour business day per month. The association may impose fees to cover the costs of providing copies of the official records, including the costs of copying and the costs required for personnel to retrieve and copy the records if the time spent retrieving and copying the records exceeds one-half hour and if the personnel costs do not exceed $20 per hour. Personnel costs may not be charged for records requests that result in the copying of 25 or fewer pages. The association may charge up to 25 cents per page for copies made on the association’s photocopier. If the association does not have a photocopy machine available where the records are kept, or if the records requested to be copied exceed 25 pages in length, the association may have copies made by an outside duplicating service and may charge the actual cost of copying, as supported by the vendor invoice. The association shall maintain an adequate number of copies of the recorded governing documents, to ensure their availability to members and prospective members. Notwithstanding this paragraph, the following records are not accessible to members or parcel owners:
[more at site linked above]
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