HOAleader.com - Tip of the Week - February 12, 2016
Published: Fri, 02/12/16
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Manager Steals from HOA Clients (Allegedly); How to Avoid the Same Fate
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In this week’s tip, we put you on notice against a rare but devastating type of HOA manager—the one stealing from its clients.
In the most recent case, an Aurora, Colo., HOA manager surrendered his license after the state’s oversight body received numerous complaints he was siphoning off money from his clients’ accounts. The Colorado Division of Real Estate announced in December 2015 that PMG Enterprises Inc.’s owner and designated manager, David W. Martin, voluntarily surrendered his and the company’s license after complaints that he was diverting HOA funds for his personal benefit, according to the Denver Business Journal.
The CDRE’s December announcement said the company and its owner managed up to 13 HOAs. The CDRE received numerous complaints from board members asserting that Martin had added his name as a signor on the signature card of the HOA’s bank account without informing board members he’d done that. Then he allegedly wrote checks without their knowledge to his company or other payees.
According to the CDRE, board members alleged that Martin attempted to conceal his activities by providing altered bank and financial statements. For just one HOA, reports the CDRE, Martin allegedly wrote 62 unauthorized checks, 33 of which totaled $55,500 and were payable to PMG.
“It’s very rare to find managers who do this,” contends Joe Winkler, vice president of marketing at Keystone Pacific Property Management in Irvine, Calif., which manages associations ranging from two to 4,000 units—about 65,000 units in total in Southern California. “When we see it, it’s often smaller management companies or sole proprietors. The bigger the management company, the more controls there are. They’ve gotten big by doing their jobs well.”
Debra A. Warren, CMCA, CCAM, PCAM, senior vice president at Dallas-based Associa®, a community association management company with offices throughout the United States, Canada, and Mexico, agrees this is rare. “It doesn’t happen all that often, but sometimes when it does happen, it happens very big,” she notes. “And when it happens very big, it’s because the board hasn’t fully understood their oversight obligations, and they tend to develop a strong trust relationship with someone that’s misplaced.
But it can happen with any management company. Find out why, and get tips to prevent it from happening on your watch, in our new article: http://www.hoaleader.com/members/1324.cfm
Best regards,
Matt Humphrey
President
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Recent articles posted at HOAleader.com:
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Now's the Time to Tighten Your Financial Controls
Here's a twist in the too-common story of theft from an HOA: This time it was allegedly the manager.
A Colorado HOA manager surrendered his license after the state's oversight body received numerous complaints he was siphoning off money from his clients' accounts.
Click here to read full article:
http://www.hoaleader.com/members/Nows-Time-Tighten-Your-Financial-Controls.cfm
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HOA Board Member is a Felon and Ineligible to Serve. What Now?
An HOAleader.com reader asks: "We've discovered that the president has a felony conviction on his record. In Texas, the code governing qualifications seems clear that : '(b) If a board is presented with written, documented evidence from a database or other record maintained by a governmental law enforcement authority that a board member has been convicted of a felony or crime involving moral turpitude, the board member is immediately ineligible to serve on the board of the property owners' association, automatically considered removed from the board, and prohibited from future service on the board.'
Click here to read full article:
http://www.hoaleader.com/members/HOA-Board-Member-Felon-Ineligible-Serve-What-Now.cfm
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HOAs May Be Nonprofits But Not Tax-Exempt. Here's The Difference
Your HOA is tax-exempt, right? Or is it a nonprofit? They're the same, aren't they?
In this week's tip, we explain the difference in the context of a recent Internal Revenue Service ruling denying tax-exempt status to an under-24 unit condo association.
Click here to read full article:
http://www.hoaleader.com/public/HOAs-May-Be-Nonprofits-But-Not-Tax-Exempt-Heres-Difference.cfm
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HOA Board Members and Fiduciary Duties: What You Must Know to Fulfill Your Duty to Your Association and Protect Yourself from Personal Liability
When you volunteered to serve your community association as a board member, did you realize you were agreeing to set aside your own interests and act as a fiduciary on behalf of the entire association? Are you confident you know every scenario where you might trip up and expose yourself to personal liability by failing to live up to this important duty?
Set aside an hour of your time to learn what you need to know and ensure you're not risking your own financial security by making common--but easily avoidable--mistakes while volunteering as an HOA board member. Join us for in an in-depth webinar on February 25.
Click here to read full article: http://www.hoaleader.com/products/hoa-board-members-and-fiduciary-duties-webinar-a.cfm
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True Story: IRS Denies Condo Tax-Exempt Status
An under-24 unit condo association has been denied tax-exempt status by the Internal Revenue Service.
What? You're not tax-exempt? How could that be?
Here we explain the ruling and discuss whether it's an outlier or offers lessons for other community associations.
Click here to read full article:
http://www.hoaleader.com/members/True-Story-IRS-Denies-Condo-Tax-Exempt-Status.cfm
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