HOA abuse

[sincere]

Every homeowner living in our community must know what is happening with the HOA board. Let’s start with the most recent developments.
Many homeowners who are concerned about the management of the HOA demanded a full Audit of the HOA book. At the annual meeting held last January, the president of the board responded to their request. He claimed publicly that a full Audit of the HOA book was conducted and nothing wrong was found about their management, a copy thereof is available to any homeowner who wants to get one. It turns out that the HOA board ordered not an Audit but a Compilation which involves the preparation of the HOA financial statements without the CPA granting any assurance as to whether the statements are reasonably stated or whether the statements are prepared in accordance with Generally Accepted Accounting Standards.
Having lied to the public, the president of the board resigned (All the remaining board members should have done the same). But the damage was done; the rumors of mismanagement or even misappropriation of funds are increasing.
Therefore, to restore the confidence of the homeowners and put to rest the rumors, the HOA needs to order a full CPA Audit. It may be costly, but a good reputation is more precious than gold.
Another legitimate concern is the management of the community.
The HOA surrendered the management of the community to Snow Property Services, a company embedded with the law firm Maxwell & Morgan, P.C. To have a management company and a law firm to administer such a small association like Carter Ranch is burdensome. One must fear that their high cost of operation will necessitate an increase of the assessment fees and the implementation of new measures that will result in higher fines for the homeowners. Some homeowners are already experiencing the harshness of that oppressive management style. You may be next.
Another issue that should be brought to your attention is the election process.
The board is getting his power from you the homeowners. They were supposedly elected by you. Were they? Well, the last time the elections were held, the process was rigged.
Because many homeowners don’t attend the annual meeting, absentee ballots were sent by Snow Property Services to the homeowners for
the purpose of getting them in before the annual meeting. Some homeowners, who wanted to implement the needed changes in the management of the HOA, sent out a pre-filled ballot form and a letter explaining why the homeowners should vote for them. Having read the letter, the homeowners sent out those pre-filled ballots to Snow Property Services, which simply annulled those ballots in a show of complete disrespect for the will of the homeowners.
In order to maintain its ascendency and protect its privilege, the representative of Snow Property Services decided to reelect the HOA members through a manipulated process and thereby disregarding the will of the homeowners. In the future, there should be an electoral commission formed with five (more or less) homeowners in charge of overseeing the implementation of the election procedures.
In addition, the assessment collection process violates Article 3.12 of the CC& R’s which stipulates that the managing company cannot levy the assessment fees, designate signatories on the Association bank accounts or borrow money on behalf of the Association. Snow Property Services is collecting the money of the HOA, and has changed the collection mode from quarterly to monthly; although there was a recent change in the amount of the late fee, the monthly collection mode stays the same.

[Tom@CarterRanchHomeowners.com]

The main reason for requesting an in depth audit was not because the homeowners suspected any of the board members of improper fiduciary actions but the lack of HOA Board oversight of the flow of money in and out of the bank account. For one, we were concerned that the deposits and checks were being acted upon by either Brown in the past or Snow Property in the present without any oversight from any or all of the Board Members. With nearly $125,000 in our accounts, leaving that unguarded by the Board is tantamount to dereliction of duty. Should we discover that Brown and/or Snow Property has had this unbridled control of the Carter Ranch HOA funds, then I believe we, as homeowners, should recall this board. Four of the five members are the same as last year and those four should be recalled. All we need is corroboration that Snow Property and/or Brown had this sole control of our funds. We do know that when we pay our dues now with Snow Property in charge, we mail to THEIR headquarters in Nevada and, theoretically, the money comes back to our account in full? However, without the in depth audit it is a total unknown.

What should be the procedure would be for Snow Property, if they are in charge of the bills each month, to prepare the bills and checks for payment and then give them to the treasurer for signature. To be totally honest, with that much money available, the checks should require two signatures. The treasurer and a second member of the board. That is totally in order with a business of our size. Secondly, we should have a Lock Box set up with our bank to receive the payments for deposit directly to our account without any intervention from Snow Property or any other future management company. With deposits of over $25,000 monthly, I am sure our bank would be willing to work with us on the deposits.

Not sure why 5 people ran for office to run the HOA and summarily hired a management company and turned it completely over to them with no control of the funds??? An HOA our size probably sends out 10 checks a month to pay bills. If that is too many checks for a treasurer to sign, resign.

[Tom@CarterRanchHomeowners.com]

Well, it appears that our worst fears are correct. Snow Property Services not only collects our dues and other payments but also solely writes and signs all checks. This puts all of our funds in the hands of a third party. HOW DUMB IS THIS? They even write checks to themselves.

We need this stopped and our HOA Board needs to take over the signing of ALL checks. If the board is too lazy to sign a half dozen checks a month, why the hell did they run for the office and fight so hard to keep it? Money under the table? I'm not accusing anyone but WE REALLY NEED THAT FULL AUDIT. The current board is wasting our funds on nonsense crap with lawyers instead of taking their fiduciary responsibilities seriously.

[Tom@CarterRanchHomeowners.com]

Well, I do not know the outcome of this but I have sent them an email and asked for further info on how this was resolved. However, it does show why I have concern about all of our payments going to a drop box in Nevada (which has different banking laws than Arizona) and all deposits are made by Snow Property Services with only their accounting of what was deposited. Then Snow Property Services write all of the checks including checks to themselves WITHOUT NEED OF A SIGNATURE FROM AT LEAST ONE BOARD MEMBER. Evidently the following HOA finally woke up and had issues with that practice. I am not saying that Snow Property Services is doing anything wrong, it is just that the Carter Ranch Homeowners don't know one way or the other and the lazy Carter Ranch Board of Directors doesn't appear to care how our money is spent.

Bruce H. 05.05.2016

Below is a complaint we filed against Snow property Services on behalf of the HOA.

Dear Sir/Madam:

I am on the Board of Directors of the HOA ***** ***** *******. I was appointed by the Board at a membership meeting to file a complaint against our former property manager Snow Property Management LLC The facts are as follows:

Snow property has made payments to themselves from ***** ***** ******* HOA bank account without Board authorization. Myself and other Directors have requested accountings for these funds and funds paid to third parties without Board authorization and we have received NO response from Snow. We need detailed billings and invoices as to why these monies were paid. Myself and another Board Member have asked for these accountings by phone and emails. I can send you a copy of those emails if you want. After numerous emails requesting accountings I requested those documents in a special meeting of the Directors that was taped and I was told I would not receive any documents by Snow. I can play you an excerpt from that taped meeting if you want to listen to it. At that meeting the other Board members did not object to me receiving the requested documents.

Snow sent out materials for a land purchase that was NOT Board Authorized and incurred expenses for the same that was NOT Board authorized. It was later found out the brother of the owner of Snow Properties was the realtor pressing members of the HOA to purchase this land. This is a clear conflict of interest. The HOA incurred substantial expense and legal fees from Snow's action that was not authorized at a Board Meeting. In fact the legal fees that Snow incurred without Board authorization was paid by Snow without any advance notice to the full Board or authorization at any Board meeting. Snow also violated the open meeting law as this was not discussed at a noticed membership meeting.

Delinquent accounts to the HOA were not collected on at closing when the title was transferred even though Snow was informed of same closing and was asked for any charges on the owner transferring title. We as directors of the Board have requested accountings for these transfers in writing and have received NO response from Snow. now paid themselves at those transfers but failed and neglected to collect the fees due the HOA.

Snow has paid third parties without ANY competing bids. Snow throws parties for Vendors in exchange for "favors" from those Vendors without notice to HOAs they manage. Snow picks certain Board members to contact and conduct business and make purchases and make decisions without the FULL Board being notified. Snow counsels their favorite Board member to make decisions on major purchases without notifying the membership in violation of the Bylaws and open meeting laws. Their favorite Board member Jim got a reduced charge for pest control when he was the Board member requesting that pest control services for the HOA. A clear conflict of interest and/or a kickback. Then we find out that the pest control company failed to do any pest control for the HOA for at least 18 months while receiving payments from Snow!!!

We need those accounting documents so that we can do our fiduciary duty as Directors and to determine how much unauthorized monies Snow unlawfully took from our treasury.
We ask you to order Snow to provide us those documents and order them to pay back all monies they took and paid to third parties without Board authorization at a legal noticed meeting

***** * Board Member