Judge Rules Against Costa del Mar HOA

Judge Rules Against Costa del Mar HOA

I have reported extensively on the Costa del Mar (CDM) home owners association (HOA).  Our last update on CDM was January of this year and can be read here. To say the least there has been plenty of controversy out there for quite some time. Problems in HOA’s are certainly not unique to Mexico and after some research it would appear you can find problematic HOA’s all over the United States as well. For this I would highly recommend a very well written piece by Professor Gary Solomon who professes to be a

“published author, tenured psychology professor at the College of Southern Nevada, psychotherapist, researcher, expert witness and human rights advocate. The focus of my ongoing research is the new and groundbreaking field of panspermia, quantum mechanics and nano-techonological Darwinism in evolutionary neuropsychology. Right now however, I am focused on defining a new psychiatric disorder: HOA syndrome.”

Professor Solomon’s web site can be found here and his experience while on hiatus in a community that overlooks Las Vegas called Calico Ridge is well worth a look. Especially anyone who belongs to an HOA and especially if you belong to the CDM HOA! The article may sound very familiar indeed to anyone who has participated in an HOA or been the victim of aggression from one.

Solomon writes,

“It would take me slightly over a year to understand what was happening around me. Ultimately, my awareness would become a spin-off of my current research. I learned that residents, primarily principal homeowners, were living in a war zone, not identifiable by bombs, guns and burning buildings. Rather, a war zone masterfully orchestrated by a few fellow homeowners attempting to control their companion neighbors while making a few bucks on the side and gaining sadistic pleasure from watching their neighbors live in pain.”

If there is anyone who has experienced that exact same feeling described above, i.e. HOA syndrome, then it would certainly be Francisco Velez Villa. Who just happens to be a current resident of CDM, an ex HOA dues payer and someone not coincidentally who also at the moment is winning a law suit against the HOA.  A little over three years ago I reported a story that was almost impossible to believe but goes right along Solomon’s description of a war zone like atmosphere. In this case Francisco was actually physically attacked by another member of the CDM community. For the full story you can go to the post I wrote called Costa del Mar (HOA), should they have done what they did?

In a nut shell what the board of directors of the CDM HOA did was try to stop a Mexican resident from driving his car onto the CDM property for lack of HOA dues. Something that anyone who has even the most basic concept of law and justice in Mexico would realize is a huge mistake. Francisco paid his HOA dues for 5 years then stopped when he smelled a rat. The rat started to rear its head right after hurricane Jimena but has most likely been lurking around the CDM for years before the hurricane struck. That set of events is what brings us to this latest installment on the CDM HOA soap opera that has now turned into a serious precedent setting law suit. A case that all HOA’s in San Carlos should stand up and take notice of.

Francisco has filed suit against the HOA and demanded that there be a full audit of accounting for the years starting in 2004 to 2014. The judge ruled that he was only entitled to the years of  2004 to 2010, the years he paid HOA fees. Francisco could appeal that decision but for the moment the CDM was obliged to turn over what it had to be audited. The papers were delivered for the audit right around Semana Santa and the actual audit took place with an accountant for Francisco present, lawyers representing both plaintiff and defendant a secretary for the judge and an accountant for the CDM. All in all about 7 people looked over the books for around 2 hours. CDM showed no accounting for the years of 2004 to 2006. The rest of the paper work at least according to Francisco was pretty light. In other words with no records from 2004 til 2006 how could CDM account for all the money it has spent during those years and more importantly to Francisco show how his part was spent. They certainly could not tell Francisco were all the money went and it would seem as if the judge has decided that as well.

The following is an email exchange between Francisco and someone at the CDM HOA. It is important to break this email exchange down and look closely at it.

 

Francisco wrote a bulk email on August 18th in English and Spanish to CDM residents stating the following.

Francisco:

Sentence to Costa del Mar.

Through the present document I want to inform to all the neighbors, that ASOCIACION DE PROPIETARIOS DEL FRACCIONAMIENTO RESIDENCIAL TURISTICO COSTA DEL MAR, A.C. has been sentenced by the Judge Lic. José Jesús Félix Félix, the sentence says that CDM, has to give detailed information about the money and the administration from July 2004 to today. Also has to inform about the reconstruction of the streets of the neighborhood which was made in 2007. 

On the other hand, I inform you that an Audit was made about the accounting and administration of CDM, which shows the lack of documents and prove the bad administration. Likewise it was found that the documentation was incomplete, that incomes and the expenses doesn’t match.  And the administration also found a very bad situation. The documentation is very little, and incomplete, that is why the judge gave the verdict to the demanding party. According to this CDM, has to show the documentation to the court to show the names of those responsible of this fraud.

In the case of the responsible are foreigner the Immigration office will be informed of this, and these people has to leave the country immediately, because they are undesirable residents. According to this, they would lose theirs residence and properties. Of the other hand, the dissolution of the association will be required.

The sentence is attached.

SENTENCIAN A COSTA DE MAR.

A través del presente conducto me permito informarles que la ASOCIACION DE PROPIETARIOS DEL FRACCIONAMIENTO RESIDENCIAL TURISTICO COSTA DEL MAR, A.C. ha sido sentenciada por el C. Juez segundo de primera instancia civil del distrito judicial de Guaymas,  Lic. José Jesús Félix Félix. Dicha sentencia resuelve la rendición de cuentas, de fecha 05 de julio de 2004 hasta la actualidad. También condenándose a los demandados a la rendición de cuentas en relación con la obra, de reparación o rehabilitación  de las calles de dicho fraccionamiento,  realizadas durante el 2007.

Por otra parte, se informa que se realizó a CDM un peritaje contable y administrativo, el cual arrojó como resultado la ausencia y carencia de documentos que reflejen el adecuado manejo financiero y administrativo del recurso económico de la presente asociación. Asimismo se encontró que la documentación que se analizó está muy incompleta, no coinciden las entradas y salidas de dinero, y en lo administrativo la situación es aun peor. La documentación con que se cuenta no es suficiente, esta inconclusa, por ello, el juez dio el fallo a favor del demandante.   Debido a lo anterior, CDM tendrá que exhibir esta documentación ante un tribunal para nombrar a los responsables de este fraude.

En caso de que los responsables resulten ser extranjeros se notificará a inmigración y tendrán que abandonar el país de inmediato, por ser visitantes indeseables, por ello, perderían su residencia en el país así como sus casas y cualquier  fideicomiso con que cuenten.   Además se procederá a solicitar la disolución de la presente asociación.

A continuación se anexa copia de los puntos resolutivos de la presente sentencia.

 

Costa del Mar Response:

Dear Assembly Members,
The recent bulk email that was sent by the email user “Panchito Velez” is referring to a demanda that was filed against the association for records of income and expenses for the years 2004 through 2010.  This demanda was filed by a member of our assembly that is significantly behind in his association dues. Lic.David Peralta, CDM attorney, is handling the case and every effort is being made to satisfy the requests of this owner. It is unfortunate that this Board must dedicate so much time, energy and expense to providing documentation from past
years and past board decisions instead of focusing on the future of CDM. The accusation that the foreigners involved at that time are undesirable residents untrue.  Any present or past member of the Board has given unselfishly of their time and served in a capacity to benefit our community as a whole. 
“please help our community with any thoughts or recommendations how we should proceed”.. Get involved…

 

It is important to note that the CDM refers to Francisco as being “significantly behind in his association dues” as if to insinuate that he simply does not wish to pay dues and that this law suit is simply about getting out of paying HOA fees. It is also of note to see who the lawyer is. David Peralta is apparently the new lawyer since it was Salas Castro who had been working on this suit before and with the latest decision of the judge against CDM it would appear Castro was fired and another lawyer was hired.

The most important statement in this reply from CDM might be this one;

“It is unfortunate that this Board must dedicate so much time, energy and expense to providing documentation from past
years and past board decisions instead of focusing on the future of CDM.
What that person who responded for the CDM really means to say is that it really sucks that someone is claiming that a CDM board member might have actually done something that they shouldn’t have done with money from the HOA and that now that person might actually have to fess up. What they really mean to say is that maybe a CDM board member might have profited from CDM money when they clearly should not have. What this really means is that there is three years of accounting files missing and it really sucks that someone demanded some transparency and accountability from the CDM HOA. Basically the current CDM HOA board of directors would like to have everyone forget about the past bully’s and possible mishandling of money from CDM and focus on the future. Neither the plaintiff nor the judge is buying into that.
Did past board members some how profit from lucrative contracts to upgrade things at the CDM or perhaps bully lot owners who were not current on HOA payments into selling their lots to friends for less than market value?  Was money mismanaged and illegally spent from CDM coffers? There is no doubt that money was mismanaged in 2013.  Our report from that case provides proof beyond any reasonable doubt. If it happened in 2013 it seems plausible it has happened before. Could CDM residents be suffering from this new HOA syndrome and are there lessons to be learned from this by other HOA’s in San Carlos? It appears this is one of the first cases of a law suit against an HOA by a resident and hence it may just set a precedent in Sonora.
The CDM has no documents left to give to the judge regarding accounting. The CDM had its opportunity to produce the paper work it had and a judge has ruled the paper work that has been produced is lacking and insufficient to properly account for the dues that Francisco paid into the HOA between the years of 2004 and 2010. If by some stroke of luck, or other chicanery,  the CDM all of a sudden found more accounting and more documentation the judge would most likely refuse to accept the documentation. The CDM will appeal this of course and that appeal will last several months and waste more HOA money on lawyers fees. It would seem that it is highly unlikely that the CDM would win their appeal and an appeal will only drag out the final outcome. It might be time for the CDM to negotiate with the plaintiff? Why is the plaintiff litigating in the first place you might ask? Perhaps professional arbitration is in order? The board of directors of the CDM HOA have always painted those who do not pay the HOA fees as dead beats and low life. They have always refused to publicly admit that those who have refused to pay their dues may have a legitimate argument for refusal to pay HOA fees. Now a Sonoran Judge has finally ruled that at least Francisco Velez Villa had a legitimate reason for stopping payment to the HOA.
At the moment it seem things just keep getting worse for the CDM HOA.

 

6 Responses to Judge Rules Against Costa del Mar HOA

  1. My reasons for demanding CDM HOA.
    In 2003 I bought my first property in CDM (a lot), and in 2004 I bought my current house.
    From the very beginning I went to the HOA meetings, and since the first time I realized that thing weren’t going well. I wanted to give my opinion at these meetings but I wasn’t heard and the board members didn’t take on count my opinions. These meeting and the decisions that the board took were illegals, because many time the quorum wasn’t enough to take the decisions that they did. I was disagreeing in many things, but the projects were made without the majority approval. Actually, up to date non project has been made correctly done; the streets project, the entrance, the club house, the pool, etc., etc. All of these projects are full of irregularities.
    One very important and shaming incident occurred when a President of the board lend money from the HOA to a friend and resident to clean his lot after Jimena storm. That money never was given back. In another strong incident happened when the husband of the Vice-president on charge at that time, came and got into my house and attacked me. He caused damaged to my private property and myself, I presented charges against him, but the HOA board paid the lawyers with HOA’s money to defend this man, against me (with my own money). I had to move to Mexico to face this situation, and I lost my job in the USA. After this I stopped to pay my fees.
    What I want is justice prevails, transparency exists, and of course I really want CDM be a better place to live.

  2. I am a San Carlos’s resident, and it is a shame this kind of situations are happening here in San Carlos. I think it is important to learn about the situation in CDM. It is so unfair that people that have a charge use it to affect somebody else, and besides gain some benefits. This kind of things SHOULDN’T happen; we need to stop this kind of things.

  3. Good for the plaintiff and good for the judge who have the courage to change the status-quo. It is time for CDM to have a clear management and open-books policy to show that they are really representing the best interest of the owners. Not the interest of those few corrupts trying to make a quick profit from someone else’s money. And by the way, in Mexico like in any other part of the world, corrupts need to be placed in jail and have them pay for their wrongdoing. Including but not limited to being banned from similar activities in their future.
    I hope the rule will stand after the appeal and I look forward to a new association to do the job right and fair.

  4. Buenos días
    en México hay un dicho que dice ,en lo poco se ve lo mucho .

    si , es triste, pero cierto, esto que esta pasando en costa del mar es un pequeña muestra de lo que esta pasando a nivel nacional,

    un pequeño grupito de abusivos se a amañado y se a adueñado de la administración para perpetuarse en el poder y control del dinero y obligan a los demás a no preguntar solo a pagar lo que ellos dictan
    costa del mar es solo eso un ejemplo de la presumible corrupción que nos afecta a todos por igual
    los vecinos están bien dormidos, extranjeros y mexicanos,
    solo unos pocos pero valientes y fieros están despiertos haciendo valer sus derechos ,
    Bravo Sr Velez nos muestra con ejemplo de valentía y dignidad el camino honorable de saberse dar a respetar bravo sr Velez BRAVO¡

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