HOAleader.com - Tip of the Week - April 18, 2014
Published: Fri, 04/18/14
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Court Says, "No Foreclosure for You!" How Poor Accounting Can Hamstring Your HOA
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In this week's tip, you'll learn about a Florida lawsuit that doesn't even
involve HOAs. But trust me-there are lessons for your homeowner
association.
The lawsuit, Jenkins v. Plaza 3000 Inc., involved a nonprofit corporation
that operated a shopping center. Shareholders owned lots, and the
corporation collected assessments, just like associations do, to
maintain common areas. Scherry Jenkins owned three lots in the center.
Jenkins' husband handled the payment of assessments, and he wasn't very
good at it. According to the court, he habitually paid late, paying on time
only twice in 15 years. The corporation generally accepted his late
payments and applied them toward his delinquent assessments. There was
always a balance due, the court noted, and that balance was frequently in
dispute because Mr. Jenkins several times provided proof that he'd paid but
that the corporation hadn't credited the payment to the account.
On July 21, 2008, Plaza sent Jenkins a demand letter for $26,456. Jenkins
sent a check for $4,651 marked "paid in full to date" and "paid under
protest." Plaza returned the check and after further wrangling,
eventually filed a foreclosure action. Jenkins' defenses included
allegations that Plaza had wrongfully refused tendered checks, hadn't
maintained proper accounting records, and had incorrectly charged
interest.
At trial, Plaza's accountant testified about two charts entered into
evidence. One had been attached to the original demand letter. The second he
prepared to update the information through 2012. The second chart also
attempted to correct errors in the first chart by crediting Jenkins with
payments the accountant admitted Plaza had credited late and interest
Plaza had charged on those payments. The accountant admitted Jenkins had
been given inaccurate information regarding the amount of assessments
owed as well as the interest accrued. The judge's response: "This case is a
mess. The accounting was a mess." Admitting an inability to determine the
actual amount due, the judge denied foreclosure but entered judgment in
favor of Plaza for $10,037.
Jenkins appealed, and the appellate court reversed the trial court's
judgment. The appellate court, in so many words, agreed Plaza's accounting
was indeed a mess and that the company's accountant admittedly couldn't
explain some of the calculations. But because a judgment must be based on
competent evidence, and not conjecture, the court wiped out the amount
awarded the plaintiff.
"Jenkins doesn't involve an association," notes Jed L. Frankel, a partner
at Eisinger, Brown, Lewis, Frankel & Chaiet PA in Hollywood, Fla., who
advises community associations. "It's a commercial shopping plaza that
people own a store in, and its articles of incorporation, bylaws, and
covenants give the plaza the ability to file a lien and seek to foreclose. To
me it's a very different setting than condos."
But Frankel does think Jenkins should be a wakeup call for boards. Find out
why in our new article: http://www.hoaleader.com/members/992.cfm
Best regards,
Matt Humphrey
President
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Brand-New Special Report!
50 Tips for HOA and Condo Boards, Volume 2:
Homeowners Association Management Best Practices
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Members (and trial members) can download the report for free now.
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Recent articles posted at HOAleader.com:
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Would Your HOA's Accounting Stand Up To a Judge's Scrutiny? Mistakes to Avoid
In a recent case, a Florida court of appeals denied a foreclosure action
because of sloppy and unreliable accounting of assessments and
collections. Here we explain the details of Jenkins v. Plaza 3000 Inc. and
talk about its lesson for associations nationwide.
Click here to read full article:
http://www.hoaleader.com/members/Would-Your-HOAs-Accounting-Stand-Up-To-a-Judges-Scrutiny-Mistakes-to-Avoid.cfm
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This Just In: How to Prevent Reporters from Crashing Your HOA Meetings
In this week's tip, we lend a hand to a reader who wants to know if her board can
punish two residents who, without notice or permission, invited a reporter
to an HOA meeting expected to be contentious. (Read the original post on our
discussion forum.)
Click here to read full article:
http://www.hoaleader.com/members/This-Just-In-How-to-Prevent-Reporters-from-Crashing-Your-HOA-Meetings.cfm
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Reporters at Your HOA Meetings: Film at 11!
An HOAleader.com reader posts, "Two residents in our community of 200
decided to invite a reporter to a possibly agitated meeting. They did not
inform anyone until the meeting was over and the reporter was trying to
interview residents. This was an official members-only open meeting. Was
this a proper move by these two individuals? Please advise; can the board
fine them for this?"
Click here to read full article:
http://www.hoaleader.com/members/Reporters-at-Your-HOA-Meetings-Film-at-11.cfm
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Is This HOA Board Being Reasonable? Lawn-Care Regs During Droughts
In January, California's governor issued a statewide drought emergency
and called for residents to ration their water use. Still, some boards are
reportedly still enforcing HOA rules requiring owners to keep up lawn
maintenance. Here our experts discuss wither these boards' actions are
reasonable and if boards should take alternative measures.
Click here to read full article:
http://www.hoaleader.com/members/Is-This-HOA-Board-Being-Reasonable-LawnCare-Regs-During-Droughts.cfm
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How to Simplify the Tracking of Your HOA's Rentals
In this week's tip, we offer groundwork that will help you track and monitor
your HOA's rental restrictions. Rental caps are hotly debated but perhaps
less common than the debate level suggests.
Click here to read full article:
http://www.hoaleader.com/members/How-to-Simplify-the-Tracking-of-Your-HOAs-Rentals.cfm
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