OT: Fraud Advice
 

Okay, sorry I have had such an eventful day. But I was just hoping that maybe someone here has experience with the following problem, or something similar...

As most of you know, my husband and I bought our home back in September of last year. The subdivision is still pretty new, and only about 35-40% full. The developer, who is in control of the HOA for now, hired an outside company to run things for him. There has been a lot of drama involving the HOA, regarding fees and such, but it has all come to a head here, and I will not bore you with any of the other details leading up to this, as I could write a book about these people at this point (and also to remain anonymous, in the rare event that somoene from this company is on this site).

My husband is on the newly-formed AdHoc board for the HOA, which means they are the residents' voice in the decision making process... he, and the other board members, make recommendations to the management company, who forwards them to the developer.

Well, hubby felt that the accounting books made certain expenses look inflated. He demanded that the company send copies of actual bills, contracts, etc, to back things up.

Only 1/2 of the bills were there.

Hubby called the power company today, who faxed him copies of the last year's electric bills. Surprise surprise- this company is lying about the power bill to the tune of $200-300 a month!!!

And this is the first of many companies we are contacting to verify expenditures. Who knows what else we'll find...

So, where do we go from here? Thoughts??? I don't want to be pegged for ostrization within the community somehow, but I cannot sit by idly and be a victim of this. They are obviously pocketing the money themselves... but I don't know what to do about it.

wow, I don't know but sending you hugs and prayers. Hopefully, someone else will come along with some experience.

Hugs and prayers!

Amy

You are probably going to have to talk to an attorney that is versed in Condominum and Housing Association laws for your state.

Each state is different.

Sounds like typical developer tactics until they pull out and then the Association is left with NIL in the treasury and has to start over.

J M H O

Love and hugs,

Sounds great, except that one of the members of the board may not be trustworthy, as her head is way too far up the management company's a**es...

ugh.

I am not sure what an HOA is, but if it is a home owner's association, I know that in my state (Washington) the home owner's association rules and laws are actually stronger than state law... isn't that a hoot? In one case, a home owner was charged for repainting her home PLUS home owner association lawyer fees (about $11,000) because she painted her home "eggplant" and the association called for "neutral" colors. Interesting, eh?

So, does the home owners association charge the residents for electricity? Is this for the clubhouse or recreation area or something? I am not quite understanding who is getting billed for the electricity, but I do agree, this sounds like something a lawyer would need to handle. And something that they might be able to handle on contingency.

Best of luck in this.

There is no way to tell, at this point, if it's the builder or the management company cookin the books, if that is indeed what they are doing. The difference in billing rates could be the difference between a calendar and fiscal year end, in other words, an accounting methodology, not fraud. Or it might be the difference between budgeted and actual amounts, which should then leave an excess in reserve.

There is a mutual dependency between the developer and current owners. It's common for potential buyers to talk to existing homeowners about the HOA and it's in the developers best interests to maintain good relations.

The last thing you want is for the developer to fold and not finish building and selling out the sub division.

Someone has to be Columbo and do the " there is just one more thing that's bothering me" routine. Good luck.