Most of the folks with serious complaints about their HOA or Condo Boards have a difficult time getting traction with the authorities.
Why are they being ignored?
The answer is simple. The complaints need to be articulated and shared with the proper authority having jurisdiction for each matter.
The police deal with crimes.
The state entities mostly deal with administrative and procedural violations.
Your neighbors need to understand, in plain english, what the suspected issues are.
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As a consultant for community associations, I get calls quite often for suspicions of Fraud and Theft at their community. It’s almost inevitable that these accusations will eventually occur at most community associations. The rising costs of assessments, construction, and insurance coverage get homeowners in a frenzy over who’s to blame. Many times however, the suspicions are legitimate and in line with red flags that pop up in the operations of the association. While I believe that most board members volunteer with good intentions and make well-informed decisions, there are a few out there that prey upon the ignorance of others.
Here are four red flags that may cause you to believe you have a legitimate claim that points to Fraud or Theft in your community:
Improper Behavior by Director(s)
• Dictator-like attitude, rude, mean, and will not listen to owners’ concerns.
• President or Director that hides information from other board members.
Is this attitude an old behavior pattern that can be improved or is it deceptive governance?
Can education help them? Board certification courses?
Lack of Transparency
• Not adhering to state laws for posting documents online (state laws will differ)
• Board refuses to share financials, contracts, bids, proposals, and other important documents.
• Not providing owners with access to documents when formally requested (state laws will differ)
Resistance to using Professional Resources
• Not going to legal counsel for advice or legal opinions
• Not going to the accountant for advice / performing audits
• The board claims the expenses for professionals are too high or not necessary.
• Management services are contracted at a minimum or not at all.
• Will not listen to management’s advice on procedures.
Small Management Companies
• Usually overwhelmed with too much to handle for their business model.
• Reports are usually inadequate.
• Many smaller companies lack experienced managers and leaders.
• Small companies may not have the capital to invest in the best software for their clients.
Note: Some larger companies may also be so busy they cannot hold their managers accountable.
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