I really do thank my lucky stars that I don’t own a home were there is a home owners association (HOA) to deal with. In my last post on the Costa del Mar HOA I mentioned a new urban disease called HOA syndrome. I highly recommend checking out the well written description of HOA syndrome at the above link. It is entertaining and informative. If there is one complaint that has been constant in the several people I have interviewed who have issues with their HOA it would be the subject of bullying. Board members do get a great chance to bully residents. But the other thing that is far worse than bullying is the mis information and lies that can be dispatched to the residents by the board of directors.
I was invited to attend the annual CDM HOA home owners meeting last Saturday. It was a painful experience indeed and I have to admit, to the great delight I am sure of the board of directors, that I don’t think I will ever go to another. When I walked in I was immediately greeted by last years president, Rod Sainsbury. I think Rod is V.P. this year, forgive me if I have it wrong. Rod immediately told me that the meeting was for members only but he would allow me to stay if I sat in the back kept my mouth shut and did not video tape anything! I hadn’t planed actually on video taping anything but I had to wonder why they would not want video of the meeting. I mean they are perfectly transparent out there at the CDM right? Going to these meeting is almost as fun as a poke in the eye with a hot stick. After about 10 minutes there I was looking for a stick and a match.
I was out there to see how they were going to handle informing people of the law suit that they recently lost and are currently appealing. I have to think the real reason they did not want any video of the meeting has to do with that law suit they lost. I like to keep mentioning the fact that they lost a law suit because many of the residents out there don’t really understand that they actually did in fact loose a law suit. For the sake of clarity the CDM HOA was sued by a resident who believed there was mismanagement of HOA funds. The plaintiff convinced a judge that CDM needed to come up with all of its accounting records for the years between 2004 to 2010. You can click here for the link to that post.
The CDM was found by a judge to be in non compliance of its order to hand over HOA accounting. What they handed over to the accounts was essentially a joke. They could not account for the amount of money taken in from HOA monthy dues during the years between 2004 and 2010. CDM lost the law suit because of this reason and this reason alone and they are appealing the loss, which will cost them more money in attorney’s fees of course. If they should loose the appeal, which is highly likely they will then owe even more money to the plaintiffs attorney. This appeal is about saving face really since current HOA board of directors will never admit that the board every did anything wrong past or present. Yet as many who have followed this blog know, there is no doubt the board of directors have improperly spent HOA funds.
Now when I spoke with one resident out there about the law suit I was pretty surprised to see that they were completely misinformed about what had happened. This resident told me that he understood that CDM had taken care of everything and that they were in compliance with judges order and that the accounting records that were missing had been miraculously found and were to be delivered to the Judge. That is not the case. That ship has sailed a long time ago and CDM had months to come up with the requested paper work. When asked by a Mexican resident at this HOA meeting why CDM was appealing, David Peralta, the CDM lawyers present at the meeting stated they were appealing the decision of the judge because they did not want to have to pay lawyers fees for the plaintiff. It was immediately brought up by Juan Carlos Gonzales, a lot owner at the CDM that this was a blatantly false statement. Juan Carlos was pretty much immediately silenced by the treasurer Ken Unrein. Clearly the board of directors so not want CDM residents to understand the nature of this law suit. I have read the appeal and there is no mention of paying plaintiff lawyers fees as the reason for the appeal. Basically CDM is appealing because they are terrified that if they truly loose this case, which they already have since it is highly unlikely they will win their appeal, then it can open a pandoras box of problems for them. This case sets a precedent by proving that there was mismanagement of the books and almost certainly mismanagement of HOA funds. This means that the plaintiff after winning this case can then file another law suit against the HOA and possibly demand all the money he paid in to the HOA be refunded. This is a civil suit at the moment but that could change to. Several members of the board actually could theoretically face penal charges some where down the road.
At the end of the meeting Scott Elliot, a past HOA president, made some comments that were pretty typical of HOA Syndrome bullys. He stated that the reality is that those who have not paid their HOA dues are just a bunch of dead beats. Scott was allowed to speak for as long as he wanted on the subject. When Juan Carlos Gonzales tried to re-butt that statement by saying that there was a clear difference between those who, like himself suspended their payment due to a lack of transparency by the HOA board compared to those who simply don’t want to pay, he was promptly cut off by the Ken Unrein the treasurer.
In the end all that will most likely happen is that CDM will continue to loose law suits because of their past inability to properly account for millions of pesos they have taken in from HOA monthly dues. These lost law suits will cost the HOA money, and plenty of it. But money is not really an issue since from what I understand that HOA has well over 3 million pesos in reserves out there. Why a supposed non profit like an HOA would want to have so much money in reserve is beyond me actually. It would seem the more money they have in the bank the more chance it could be misused, misappropriated or embezzled. It has definitely happened in the past and history has a tendency to repeat itself here.
Anyway I do thank the CDM residents, those who pay their monthly dues and those who don’t because they think they have been screwed, as well as the board of directors for allowing me access. It was truly interesting to really see what goes on between dissident residents and an ever changing board of directors. What I have taken away from this experience is valuable.
I will update on the current law suit going on out there and if history be our judge there may be more to come.
Here is an interesting link to the HOA “Hall of Horror Stories”. For you see HOA syndrome is everywhere.
Comments section is turned on for this post and I recently received a comment via face book private message and then realized I had the comments button off here so I have rectified that and would ask people to comment. The more comments we get the closer to the truth we might come!! Thanks again to all those who allowed me to interview them over the years on the CDM HOA. Board members and residents, dissidents and monthly payers. In the end I believe the board should have hired a professional arbitrator to deal with Pancho. If they had done that then I suspect the law suit that was just lost out there would have never been filed. I know many of the board members certainly don’t like this post and feel it is one sided so go ahead and tell your story here!! Saludos
(Vince asked me to put this on the blog for public consumption. I am not interested in getting into an internet fight, but I think it would be good to hear other sides of the story)
HOA’s are sometimes a necessary evil. No matter what, it’s impossible to make everyone happy, and in any group, you are going to have disgruntled characters. You have to realize you are talking about volunteers who are simply trying to get the neighborhood together to agree on and pay for the upkeep and management of our community. No one got into it for the money or power. Those of us who understand that we have to contribute to the expenses that were democratically agreed upon feel it’s unfair that others refuse to chip in. Then, when the association has to finally resort to legal action, they dig their heels in and try to build a case of corruption against the executive committee. Suing for historical records is simply a delay and distract tactic, and yes, the only ones that win are the lawyers. (The physical assault was the actions of a lone wolf who was not on the board or acting in an official capacity) This is not a “David and Goliath” story.
Vince, I respect you as a fearless muckraker who goes after the real rampant and pervasive corruption that exists in Mexico, so it surprises me that you would care about the insignificant issues of a small vacation neighborhood. There is good and bad in everything and HOA’s will always have contrarian actors. Are you planning on writing about all the great things that the CDM HOA has done since it was revamped 10 years ago? CDM has beautiful new roads that were selected carefully, new tennis courts, a renovated clubhouse with a new pool, an attractive security entrance and a maintenance crew that keeps the common grounds trimmed and clean. It really is a slice of paradise and not as bad as the image you’re painting. Then again, good news doesn’t sell, so I understand your motives.
Thanks for the comment! I hope others will weigh in on their perception. What you have to understand is that the reason I looked into the CDM HOA is that I was asked to by one of our readers. I actually found it pretty fascinating and very far from insignificant what was going on over there. An HOA trying to lock someone out of their property for lack of payment and then having it escalate in to what it is now is very interesting. What goes on at some of these HOA’s is actually a microcosm of what is going on in San Carlos and Guaymas.
Take for example the issue of who owns the road at the CDM. If you talk to the board of directors they say that CDM owns the road. If you talk to the city of Guaymas, and I have, they will tell you that they own the roads. If the city owns the roads that means that anybody should be able to drive into CDM anytime they want. The roads are public. Just like the Caracol roads. The Gate at the Caracol has to remain open during the day because of the beach. I don’t see how the CDM is any different than the Caracol on that matter. Yet it is the posture of the CDM to tell everyone that they own the roads. If that is not mis information then I don’t know what is.
Just the other day I tried to drive out to La Manga to go to our old windsurfing launch site. Lo and behold someone has now gated the turn off to get there. You can still get to the beach I am told but you have to drive all the way to La Manga and then make a u turn onto the coast and drive back towards the Paradiso to get to the place we launch from for Kiting and Windsurfing. The issue of access is a serious issue. Another pretty bogus thing that has happened out there is the way someone from CDM, perhaps someone on the board of directors, decided to put a bunch of steel rails in the water and on the beach. These extremely dangerous steel rails have already caused at least one accident that I know of, probably more. I can not believe that what was done out there on the beach was legal but yet it was done none the less.
So I don’t believe in the least that the shit that goes on out there is insignificant.
By the way I don’t sell anything on this blog. It is not monetized in any way so I am not trying to sell anyone anything what so ever. My motive for telling the story is not monetary. I am glad though that I was asked to look into the CDM. I have acquired a tremendous amount of valuable information on what is legal and what is not while researching the subject.
I appreciate the comment and hope others will join in the conversation.