There is little pleasure in saying I told you so. But I would be remiss if I did not say flat out that I do feel a small amount of pleasure in the fact that I did indeed in my first article I ever wrote regarding the HOA at Costa del Mar say at the end of the article that the HOA should negotiate some kind of settlement with Francisco Velez Villa.
The HOA has lost the lawsuit Francisco brought against them and the appeal as well so here in a nut shell is what that loss means.
- The HOA must turn over all accounting records in detail to the Judge. Everything that Costa del Mar HOA has must now be turned over to a Judge. Invoices, receipts, you name it and the HOA has to turn it over. It is Francisco’s believe that this is the real reason that the HOA appealed the case since there was no way in hell they could win the appeal. The reason for appeal was not simply about paying lawyers fees, the HOA did not want to have to turn over all of its incomplete records to a Judge. They have lost and they must now do so.
- The HOA has no right to an Amparo or injunction in this case.
- The HOA will have to pay all lawyers expenses plus audit fees. This amount is still being calculated by attorneys but will certainly be some where between 200,000 and 300,000 pesos.
- Because there is evidence of fraud the Judge will turn this case over to the Ministerio Publico who will then be looking at who was in charge of the HOA at the time. Criminal charges could be brought against former members of the board. These former members of the board could be deported from Mexico and their properties forfeited.
- Mexico’s IRS, Hacienda can now be informed of the problems that the HOA has with their accounting and the fact that according to Mexican law a non profit can not hold money in saving’s accounts or CD’s and must return money that is not spend by the end of the year back to the residents in one form or another. Whether that be in the form or cash or credit on HOA fees. It seems clear that this has never been done in the history of the HOA. From what I recall the HOA has tens of thousands of dollars in their accounts. This may be legal in the U.S. but according to the lawyer for the plaintiff, who just kicked CDM’s ass, it is not legal.
- The HOA could be dissolved at some point. This would mean that another HOA would have to be formed and then of course residents who live there can opt out of being involved in any form of HOA.
Maybe the board of directors at the CDM should have perhaps thought to take our advise of arbitration back in May of 2013. This might all of have been behind them if they had. I wonder if the home owners out there will start paying a bit more attention to this law suit now?