HOA malfeasance

La Mirage Homeowners Assn

From July 30, 2010 edition of Ridgecrest (CA) Daily Independent

Many of these properties [La Mirage] are now owned by an investment company named G8 Capital. In fact the company now owns 180 units in the complex, with 160 tenants.

"Our plan all along has been to get sufficient ownership to restore the HOA [home owners association] and get the project to a much better condition." commented G8 Vice President of Acquisitions Daryl Schwartz in a recent email, "Unfortunately, because of competing buyers, it took us longer than planned to acquire sufficient units to get full control."

Now Schwartz says the company is "very actively involved in restoring the HOA so we can improve the property. The restored HOA will collect funds from all of the owners (of which we are a majority) to begin the common area improvements."

Minutes from a community meeting from Aug 16, 2010: [.pdf]

From an Aug 25, 2010 homeowners' post:

I would also like to know what the costs are for other HOA's that you manage either for G8 or for others.   

I have yet to see what the benefits the HOA bring to the minority individual owners.  We give up control and 50% of our rent.  We get no insurance, most exterior maintenance and repair is our responsibility, we handle our own rentals so the office is of no benefit.  A neighbor and I have personally cleaned up a couple properties that we vacated by G8 tenants and the trash left outside.  G8 let most of the vegetation die on their units while the individual owners watered and maintained.  Now the HOA is supposed to pay to put it back in shape.  I see no plan to handle the upcoming IWV water increases (triple in the next three years).  The proposed "security patrol" is excessive and funding might better be shifted to the city/county police departments that have actual enforcement capability.  Many of the problems will disappear when the squatters are removed.  On the whole, mostly negatives.

I believe G8 has not done their area homework very well and envisions something that La Mirage is not.  This is not a high income complex and given the age and local reputation will not ever be.  It serves a service industry working class that do not have much flexibility in income.   There is much possibility of immediate rent growth.  While the incomes on the base make Ridgecrest average income seem high, the base employees tend to buy and there is a large inventory of homes to select from.  Single family homes in decent neighborhoods with 1300-1400 sq ft and 2 car garages rent at about $1000 - $1100/month and can be purchase well below $200K.  You can not push even the 4 bedroom units into that range.

Given the level of fraud in the initial formation and management (It made national news), I am considering looking into whether the existing HOA was legal and what the alternatives to the proposed HOA are.  Perhaps a co-op of some sort would be more equitable and cheaper.  I remain doubtful of the cost benefit of the proposed HOA and can not support its formation in the current structure.

Minutes from a board meeting held the next day [.pdf]:

From a La Mirage homeowner dated Sept 22, 2010

Thank you for the response.  I agree that we are all interested in creating value in our investment.  However, I do not believe we all see the same path to that end.  You say that this communication is not one sided and then you tell us what you and the board have decided.  The fact is that G8 and you, as their employee, are the board.  There is no other representation on the board and even if there was I do not see G8 giving up their majority control.  If they decide to give up the majority, please let me know.  

I appreciate that you are putting out the repairs for bid.  How did the bids go for the HOA management?  Just a little joke.  Kind of like asking for the vote totals at the office.  It did not happen and you won't get them.

It makes sense to start with the easiest repairs.  However, since you are not local perhaps you have not kept up on the future water issues of our town.  Our local water company has published a rate change schedule for the coming few years.  It indicates that water costs will triple.  It would seem that since G8 has let most of the vegetation die over the more than a year that they have had a majority holding, it would make better financial sense to invest in xerascaping instead of going back to what will turn out to be a very expensive maintenance cost.

The fact that you are determining the priority list for repairs is another example that contradicts the statement that it is not one sided.  Most of the units have lighting that is turned on automatically at night.  It is not clear, but I believe that the power for these units is on the individual's meter.  Is the common area lighting repair just bulbs?  More important than the lighting is the state of the electrical service to the units.  Much of the wiring is running over the roof in PVC schedule 40 piping that has degraded in the sun.  Soon the insulation will degrade and then we will have issues involving the fire department and ambulance service.  In addition, many of the units are cross wired.  You can test this by turning off the breakers on your unit and seeing if you have turned off that of the neighboring unit while sometimes leaving your own power on.

I also strongly disagree with the need for a patrol.  If you go through the Ridgecrest police reports that are published in the local paper - you do get the local paper, right? - you will find that there are no more frequent police calls in the development than there are in Ridgecrest in general.  We get city police patrols frequently and the sheriff department is only 2 blocks away.  This money would be better spent evicting the squatters in the development since more than likely they have no vested interest or responsibility for the dwellings.

As for the use of the office, I find that a one time fee of $450 is indeed a bargain.  Please thank G8 for this.  ;>)  However,since it is not available for anything other than dropping off our check to the HOA. it does seem to give the appearance of using HOA funds to G8's advantage.  Unless, of course, G8 is moving their rental management out of the building.  They are doing that, right?

It is interesting how easily Tracy moved from G8 rental manager to HOA part-time manager.  Is the HOA paying her benefits too?  I am certainly glad that she will be there to collect my check.  I promise to wait if she is in the middle of handling a G8 rental agreement.  Which of the two nice G8 maintenance guys will now be working for the HOA?  Will they have to punch out from the HOA clock and into the G8 clock or just change hats?

Finally, it is my understanding that your company has not been in the HOA management business very long.  Perhaps you should look around and see what it is that other HOA's do for their home owners.  They almost all do the exterior maintenance.  Even the fraudulent HOA (the earlier one) painted the outsides and repaired the roadside fences.  The interior fences are largely a complete wreck.  Most HOA's insure the exterior and leave the interior to the owner  thereby significantly reducing the insurance cost to the owners.  By having the HOA maintain the exterior, there is assurance that there will be uniform exterior maintenance.  It also allows the HOA to share the expenses for repairs to shared units rather than having to fight with your neighbor to share the expense.  Since G8 owns the majority of the units, they more than likely share a fence or power problem with one of my units.  Can I assume that when I have a shared problem repaired that I will only need to send G8 the bill for their half and it will be paid?  Given the statement, "Each homeowner will be responsible for there own tenants and the interior/exterior maintenance of their property", just what is an, "HOA related service"?

Now that I am completely reassured that there are "no sides" in this HOA and we all represented by the HOA, I promise I will work on looking on the bright side of handing G8 half my rent.  Perhaps I am just viewing my wallet as half empty instead of half full?  From a logical and mathematical perspective, if you don't spend your money foolishly, you will reach your goal sooner.  Of course, if you have access to other people's money that rule does not apply.

Reply from the property management company the next day:

Let me start by saying, it is a pleasure to have so many different points of view from the homeowners in the La Mirage HOA. This diversity will strengthen the community and can only enhance the final outcome. Although we may not see eye to eye and it may not feel that we are on the same path, we actually are. I do not believe that there is any homeowner looking to make La Mirage a less desirable place to live or looking to devalue their investment. So, if we can first agree that we all have the best interest of the community and our investments in mind, I believe we CAN start to move down the same path. Now, I will attempt to answer all of your questions in as much detail as I can.Please keep in mind this is a daily work in progress and none of the answers are perfect or final.

Regarding the water issues of Ridgcrest, I am aware of al discussions that are taking place. I read the Daily Independent regularly and have considered the effect of an Xeriscape design. Although, this may be an option in the future it does not seem to be a practical consideration for the moment. Today, the cost of repairs to the existing irrigation are minor. On the other hand, I received some advice from a local landscape company, that to simply remove all of the current grass areas to start re-landscaping would extremely costly. I believe that replacing all of the landscape to begin with is considerably more expensive than working with what we have. Again, I want to remind everyone that there are no funds collected as of today and no reserves in place. Any decisions we make today have to be decisions that are made considering what we have to work with.

Your concern regarding the making of decisions and prioritizing efforts is a valid question. Turning back to the first paragraph of this email, it is important to remember that from the beginning The Board has the best interest of the owners, the property, the community and the City of Ridgecrest in mind while discussing all repairs and considering all improvements. The exterior electrical is one item to consider. As you mentioned in your email, it may be as simple as light bulbs. On the other hand, as you furhter pointed out in your email, some things were not done properly at La Mirage in the past and the repairs to the exterior electrical may be more involved. As of today, we don't know. It does make sense, however, to consider such safety items as exterior lighting right away, even if it is just light bulbs.

Now lets talk about the need for a security patrol. Although all the information regarding the frequent police patrols and the station being so close are relevant in the discussion, they are not evidence that a patrol is not necessary. As you pointed out in your email, there are many "squatters" or trespassers that have forcibly entered into private property that need to be removed. In addition to these multiple violation of the safety of our residents and the preservation of the homeowners property there are other incidents that may have been avoided with a security patrol enhancing the police presence. For example, the pool fence was ripped down, there is constant graffiti on the exterior walls, there is reported and suspected drug dealing coming from multiple units, there have been drug manufacturing facilities discovered in abandoned units, there have been many fights, cars have been broken into and vandalized, fire hydrants have been broken, windows have been broken and the list could go on and on. More important than the actual crime that continues to go on in the presence of the police patrols, is the current and past reputation of La Mirage. In the past the more desirable tenants did not want to live in our community because of the crime. We need to make every effort to change this. I agree that a patrol will not stop the crime immediately and it will not likely stop the crime completely ever. However, I do know that making it inconvenient for criminals to do their business will make them move to another place other than La Mirage.

Next, you expressed your concern with using the G8 office and sharing the manager. This offer from G8 to allow the HOA to use their office and resources for a monthly fee is a fantastic opportunity for the homeowners. The office can be so much more than just a place to drop off your check. Most importantly, this is an on-site presence, a place for homeowners and residents to make a service request, a place for the many of the repair vendors to come to when making repairs on the property and other possible uses. This generous arrangement is being made for the benefit of the community. Perhaps this service is more than a similar HOA in Ridgecrest would have to offer, but remember our goal is to improve the community and change the reputation. To accomplish this we need to take immediate and noticeable action by creating a professional environment and supporting a community of homeowners.

Lastly, you make a comment about my company and how we should take on certain responsibilities of maintenance in the HOA. Let say this, the limitations of the maintenance given to the community are not decided by me or my company. These limits are created by the CCR's of the community. One of the objectives of The Board, now that the HOA has been formed, is to review the CCR's and amend them where necessary. This too will take time to resolve but please know The Board is working on these items too.

The current CCR's, the condition of the community, the lack of funding and all the negative experiences any homeowner may have or are experiencing right now are not the fault of any of us. Pointing fingers, accusing each other of bad faith decisions and general discontent toward the progress being made will not help anything move forward. As I stated in the beginning, we ALL have the same goal and we ALL need to continue to work toward that goal. Communication and involvment are the keys. Please continue to provide your feedback, it helps me and The Board make decisions that we all can be happy with.

A post from a homeowner dated Oct 5, 2010

1. Common Area Questions.

1.1 Does Jeff Green own all the La Mirage HOA common areas or just part of those areas? If Jeff Green owns just the pool and tennis court area, maybe we should not buy this area and save on costs.

1.2 Has Jeff Green offered a selling price for the common areas that he does own? If so, how much?

1.3 Has the La Mirage HOA offered a buying price for the above common areas? If so, how much?

2. Reserve Study Questions.

2.1 Has the reserve study been completed?

2.2 What is the name of the company involved with this study?

2.3 What are the reserve breakdown costs to this HOA?

3. Who is the lawyer or lawyers (name and telephone number) working for (getting paid by) this HOA?

4. Please send me the current La Mirage budget spreadsheet.

And response that same day from the property management company:

1.1 - Jeff Green does control some of the common areas. We are not looking to buy them we are simply working on completing the transfer the way they should have been done initially with the formation of the HOA.

1.2 - No

1.3 - No

2.1 - The draft has been completed and we are working on the final.

2.2 & 2.3 - We will post the entire reserve study once the final is complete.

3.0 - There is not attorney yet retained by the HOA. We will likely select an attorney and put them on retainer at the next board meeting.

4.0 - The current Budget is the same budget that was presented at the election. We will post a new 2011 budget once it is complete. ETA December 2010.

On Dec 7, 2010, the property manager sent out a budget for 2011 [.xls]

A Jan 28, 2011 message from the property management company:

I am please to report some excellent news regarding the La Mirage HOA. We have reduced your fee's to $150 per month! Effective 2/1/11 the monthly dues are now $150, that is 50% reduction from the first dues in October 2011. This will improve the value of your home and help with your bank account too.

In other news, the courtesy patrol will start February 1. This service will help with loitering, parking, vandalism, graffiti, noise and so much more. Please keep in mind that this service is NOT an armed security service and does not replace the need for the police department. If you or your tenant are experiencing an emergency please call 911 first.

Thank you again for your continued support in making La Mirage a place where people will love to live. If you have any questions feel free to contact me or Tracy in the office.

And a homeowner's reply the same day:

I was wondering what the status is of the following:

 1.       What is happening with the units that did not pay all the HOA fees?  Many of us have paid our share from the start, but I would guess a number did not pay at all.

2.      What is the status of units that are occupied by squatters?  I know of several that still have non-owner, non-paying occupants.  They are often the problem units and the sooner all are legally rented, the sooner there will be no need for a security patrol

3.      What is the status of the common area?

4.      What is the status of the landscaping?  From what I can tell we are all paying HOA to support landscaping since little else is covered by the HOA?

From a homeowner Jan 10, 2012:

Jim realized that our dues checks for December were never cashed.  Then, he e-mailed Adrian to find out what was going on.  Adrian replied he was no longer the manager for the LaMirage HOA or the G8 rentals.  We called the rental office, but the phone had been disconnected.  Stacy's line was still in operation;  however Angela Dhanens returned our calls instead of Stacy.

Angela sounds knowledgeable about Association procedures, but we'll have to wait and see if the Company actually follows the state guidelines.

She said the list of homeowners they received from Infinity only contained about 40 names and would appreciate  homeowners getting in touch with her to insure she has the properties/ owners listed correctly.  There were some errors in regard to ours.

Adrian gave the impression that everything was in order when the new management company took over.  Obviously, that is not the case when the trash invoices had not been paid for months nor the Commons area contractor.  There are probably other outstanding bills as well.

We sent Angela a copy of the letter from Infinity pertaining to the trash collection as she didn't think the Association was responsible to cover the costs.  She said they are raising the G8 rentals by $25 a month to cover the trash expense.  I don't know where that leaves the homeowners.  Angela asked that we be patient until they can get things sorted out.  Infinity did not keep good records.  Surprise!

That's how we found out about the new company.  You should be getting a letter in the mail in the next day or so from M.D. Atkinson Management informing you of the change in management companies.

Here are the minutes to a board meeting just two and a half years later. The meeting was held three hours away from La Mirage at the office of G8. All the board members are G8 employees or executives, none of whom actually lived at La Mirage. The two homeowners who did attend, did so by telephone:

LA MIRAGE HOMEOWNERS ASSOCIATION

ANNUAL MEMBERS MEETING

 

DATE: December 5, 2012

 

TIME: 9:00am

 

PLACE: G8 Capital or held by telephone conference

CALL TO ORDER: The meeting was called to order by Victoria Ecceleston at 9:02am.

 

ROLL CALL: Directors in attendance included Evan Gentry, Aaron Murray, Kurt Mullen and PJ Mitchell. Also present were Homeowners James McGrath and John Ellis, Property Manager Victoria Eccleston and Administrative Assistant Marinna Delgado of M.D. Atkinson Co., Inc and Ben Beckstead of G8 Capital

 

BUSINESS:

  1. Trash Enclosures – MDA to get cost to remove doors rather than repair, costs should include labor to remove & haul off.
  2. Clubhouse – Aaron Murray stated there was a church group that approached La Mirage to do repair roof in exchange to use it for various classes & studying. Aaron Murray has a concern that the church group are not residents and the use of the clubhouse should be resident only. Evan Gentry is not opposed to the idea, just as long as there are boundaries as to when the church group can use the clubhouse, also not indefinite, only for a certain period of time. Aaron Murray will handle the communication between the church group regarding the clubhouse.

 

MEMBER COMMENTS:

  1. James McGrath requested cumulative voting for the next election.
  2. James McGrath asked to set up a website to include all information regarding the HOA.
  3. James McGrath suggested pursuing non-payers of dues, Evan Gentry agreed to start the lien process on non-payers.
  4. John Ellis said the squatting in some of the units is not favorable to the HOA. Victoria replied that is was up to the individual homeowner to evict squatters, not the HOA’s responsibility.
  5. John Ellis commented that the landscaping is looking good, as well as the dumpsters. There is a lot of trash in the backyards of some units, Victoria stated that the HOA does not have responsibility over the backyards.
  6. James McGrath asked if security can look over fences to inform of which backyards are trashed, Victoria advised that would probably be more costly to the normal monthly fee and the HOA does not have extra funds.
  7. James McGrath stated that there are cars parked illegally. Victoria indicated that the HOA must notify the owner of the unit and they are not able to tow without permission.
  8. John Ellis stated the eastern edge of La Mirage is filled with trash. Evan Gentry advised to let The Ridge know to get it cleaned up if it is their property.
  9. James McGrath stated that some units have extra rooms/buildings built that are seen from a rooftop. MDA to follow up.

 

CLOSED SESSION: The board would like to pursue the lien process of non-payers.

 

ELECTION OF DIRECTORS:

  1. Tabulation of Ballots
  2. Announcement of Results: Evan Gentry – 41 votes, Aaron Murray – 41 votes, PJ Mitchell – 41 votes, Kurt Mullen – 41 votes, Ben Beckstead – 41 votes
  3. New Directors: Evan Gentry, Aaron Murray, PJ Mitchell, Kurt Mullen and Ben Beckstead [all G8 employees]

 

ADJOURNMENT: There being no further business to be conducted, it was moved by Aaron Murray, seconded by Kurt Mullen to adjourn the meeting. All in favor; meeting was adjourned at 10:15 am.

 

NEXT BOARD MEETING:

Date: March, 2013 (Date To Be Determined)

Time: 9:00am

Place: G8 Capital and held by telephone conference.

 

From a post by a G8 homeowner Feb 15, 2015

I was wondering when the water leak in the courtyard in front of 240 Oasis will be fixed. It has been running down the street for about 1 month now and was reported several weeks ago. Water is a significant portion of our HOA expenses so I would think it would be a high priority to fix. An IWV water company guy happened by about 2 weeks ago and I asked him to take a look. He concluded it was the sprinkler main, but he did not dig it up to confirm it. I suppose we will be getting fined soon since letting this run down the street is a violation.

I am not sure you know what you have gotten into with taking over the management, but I hope you can succeed where the past two companies have failed. The overriding issue is that G-8 refuses to invest in their units so it continues its downward spiral. As a local, you know the reputation of La Mirage is not very good. It is frequently referred to as "Criminal Gardens". When I invested, G-8 had gone to the city with their PR people and issued a press release about how great it was going to be for the citizens of Ridgecrest to have such a wonderful company invest in this development. That has turned out to be anything but the truth.  

Here are some general comments on ongoing issues that never seem to change. I have addressed them for over two years and will continue to address them until we do something. My persistence caused your predecessor to call me negative. I am by nature an optimist, but I must admit that after a few years of no action by our HOA, it is getting hard to keep a positive outlook. Most of these items could be easily fixed by action enforcing HOA rules and by appropriate expenditures of HOA dues by the board.

1. The "community" building roof is missing a significant portion of its shingles. Since the last three rainfalls, I would suspect the ceiling damage can be added to the problems. This has not been fixed in well over a year. For a while, G-8 was storing appliances in it without paying the HOA any rent. I have not checked lately, but they should not be doing that since it is not their asset. There was interest in renting it out for parties and gatherings, but at this time it may be too damaged. If the interior has water damage, it would seem to me that the board has been negligent in their duties.

2. Dumpsters are still sitting in the street. It gives it a nice "slum" appearance, don't you think? It is particularly photogenic when the trash is overflowing into the street. Once upon a time, they built some block enclosures. The enclosures had some nice heavy doors that were hung on hollow cement blocks so they eventually began to fall off. So far, no kids have been hurt playing in the enclosures, but several of them are used as "forts" so I am expecting it is only a matter of time. Those enclosures that are not "forts" have become storage areas for old mattresses and sofas. I took two trailer loads of mattresses and sofas to the dump from the 5 enclosures near my units since they were beginning to stink after the rainfall. The second problem with the enclosures is they put little narrow steep sloped concrete ramps up to them. The maintenance guys used to roll them out each pick up day and then roll them back. They stopped after one of them was hurt and we now have them parked in the street full time. These enclosures should have been set up so all they had to do was open the doors and the truck could access the dumpster. Poor planning and execution. One suggestion to solve this problem is to require each unit to get their own garbage pickup. This did not work as many of the residents simply tossed their trash into their backyards in plastic bags. You are from here so you know what that was like in the summer.

3.  The lawn service folks that started last summer are great. They have tried to get things into shape and done pretty well. We had a couple of terrible ones previously and I was glad to see them gone. However, the lawn sprinkler system has been an on-going problem. Many of the units get no water and have not for the past year. I have two units (332 Palm and 232 Oasis) that have not had a functional system for a year or more. Previously I ran them manually when I was in the area. However, now the water is shut off and that does not work. I had suggested we convert the smaller grass areas to Xeriscape to reduce water cost and maintenance, but got no response. One of the problems we have with the system is that people continue to drive on the lawns. This kills the grass and breaks the sprinklers. I suggested we start fining the owners of the units until the problem is resolved, but that also went nowhere. I also suggested we place barrier rocks to prevent driving on the lawns and having to fix the sprinklers, but that too went nowhere.

4. Backyard fences are in terrible shape. Many of us have replaced them at our own cost, but there needs to be a better approach. The HOA board should address this issue. Currently, it is up to the individual owner to find the other owners and plead with them to share the cost or just pay it themselves.

5. Backyard trash is a related issue. While working on swamp coolers you can see into a large number of the backyards. Many are in filled with trash. This causes rat and roach infestations. Especially when it is compounded by an accumulation of dog feces. Again this should be addressed by the HOA board.

6. Broken windows on several units have not been fixed. There is a unit across the street from 324 Oasis that has had a broken front window for over a year. They have managed to cover it inside with a nice piece of cardboard.

7. Trash piled in front and around the garages. There is a unit on the south end of Palm (last unit on the west side) that is full of trash around the front and side. There are several units with old tables and trash leaning up against their fronts. When I am in the area with my trailer and it is empty I have hauled a bunch of it away. However, I am not in the trash hauling business.

8. Rotting front eves and peeling paint on the eves.  The problem is caused by the rolled roofing material having come loose from the roof. When we get any water from rain or leaking swamp coolers, it runs to the front edge and under the roofing. It then comes down the front wooden eve and starts to rot it out. If you drive north along road to the high school and look at the back side of the units along the road you may see some units that have had their roofing material blown off. You will also see the general bad appearance of the back porch sun roof covers. They are beginning to look like they should be torn down before they fall down. It is due to a lack of general maintenance.

9. Dead trees visible from the road along the west edge. The dead trees have been there for several years. That combined with the general lack of maintenance that is observable from that road does not give a very good first impression to potential renters.

10. Cross wiring of units. Any of the duplex units with three garages connected to them have cross wired electrical service to the garages. I discovered this two years ago when a drunk driver went through the wall of one of my units. In the process, he took out the electrical meters for mine and the adjoining unit. We both had a new meter and a significant rewiring job done. Once it was completed, it was found that the third garage no longer has power. Neither the adjoining owner nor I am willing to pay to have the third garage rewired and then ask our tenant to pay their neighbors power bill. In fact, my insurance company did not want to pay to fix the wall inside of that garage, but had to in order to pass the occupancy permit. The owners have never fixed either the side or main garage door.   

11. Squatters are still occupying a number of units. I know of two units that are currently occupied. One unit is now rented out by the guy who was squatting in it. Nice income if you can get it. I am not certain if they are paying the HOA dues but they should be. At one point the board stated that non-payment of dues would result in foreclosure and the HOA would take possession of the unit. I have not seen any action on this.   

The La Mirage community has a lot of potential if managed correctly. My eight units rent quickly and my tenants are long term good tenants. My units also rent higher than those owned by G-8. ( $850 4bdrm, $750 3Bdrm 2 bath, $700 3bdrm, $585 1bdrm)   I also know that I am not alone in this. Many of the private owners have taken the time to make the necessary significant repairs needed. Their rents are higher and their renters are better. G-8 has not taken a long term approach to their investment and instead have by their inaction chosen to drag us all down. As an HOA member I pay $120 per unit for lawn maintenance, garbage, and road maintenance.  This seems like a lot especially in light of the fact that some of my units don't even get water. We do not seem to be able to get a detailed financial report and I do not know if it has ever been audited. I really would not mind paying if I could see that the community was improving and my investment was likely to appreciate. However, I am not seeing any changes. I know that G-8 has failed to quickly flip the property as they expected. Now they are struggling to try to sell the place and are unwilling to invest additional dollars in any of their units. With somewhere between 60 and 70 empty units they are bleeding cash each month. It is not clear to me where we are spending our HOA dues or even if they are being collected.

Since G-8 is the majority owner, all the board members are G-8 employees. They do not respond to owners so we are basically stuck addressing issues with our HOA management company that also always happens to be the G-8 rental management company. Of course, there is no conflict of interest there. None of the board members are actually owners, but are only representatives of G-8. While I am not certain this is even legal, it is what we are stuck with until they can sell out. We held one board meeting last summer in which several owners called in and our entire board "forgot" the meeting. The management company representative had to call and remind our board that there was a meeting starting. Of course our board was well prepared for that. I wonder how much they get paid for being on our HOA board. Who knows if the next owner will be better?

Please do not take any of this as criticism of you or your company. I sincerely hope that you have more success at getting things done than the previous two companies. However, I know they were both limited by an HOA board that lacks vision, interest, and skill in managing this community.  

From a homeowner post on Jan 11, 2014:

The end of the week arrived and we have not received a walk through schedule. We need to be able to plan for this time and some folks need to travel to attend. I have also not received any of the requested documents or any response to my list of questions.

It has been past the 30 legal response time and I am wondering if I need to proceed to small claims court. I really do not want to do this since it will end up costing the HOA several hundred dollars.

There are several California cases that clearly indicate the precedence. I would be glad to send the references to you if you are unfamiliar with the case law. However, I would have expected that you and our board would be aware of the law.

Also, be aware that California small claims court does not allow an attorney to represent you so you will be pretty much on your own in court. All this seems silly since what I have requested should be freely available to every member of the HOA and should be part of the HOA records.

Our HOA generates close to $30,000 per month and will soon be generating more. We have both a need and a right to know if this is being collected and how it is being spent as well as what is planned for the future.

I am sure that G-8 expects the same details. I would hope that this information has not been unfairly distributed to the majority holder and not to those of us that are minority owners. Lack of communication means we are left to make assumptions and it is not possible to run any business based on unconfirmed assumptions.  

From a homeowner posted Jan 30, 2014

I recently asked my insurance company why my policy was twice as high in La Mirage than it was in La Jolla even though the condo in La Jolla is conservatively worth 7 times more. I was told that the reason is that our La Mirage HOA does not maintain any exterior items. I am OK with that since I have already fixed my roof and painted the trim and eves. Now I hear rumors that this is planned with the HOA dollars. It sounds a lot like a way for G-8 to get me to pay for their poor maintenance. I thought the HOA would enforce the standard and see that the owners did the work. I don't believe having the HOA do exterior maintenance is in the CCRs. Please point me to the correct section.  

From a homeowner posted June 10, 2014:

It is not surprising that only one person called in to the last meeting. It is hard to plan when the board meeting is not officially announced until the day before. This is just another example of how poorly managed our HOA is.

I would like to see a detailed breakdown of expenses. It has been over a month since any landscaping has been done the weeds are knee high or dead, the water system is in such bad shape that the management has turned it off most places to avoid a city citation, and now I hear the security patrol has been dropped a while back.

I can get garbage pickup for a lot less than $120 per month and the HOA is currently bringing in $36,000 PER month so just what am I paying for? I want proof that I am not paying for maintenance on privately owned units.

Nothing has changed for the better. I have copied part of your note from 16 January below and think that it is a good place to start the board conversation since none of it has happened and the place really looks a lot worse every day. 

Posted on May 8, 2014 by a homeowner:

I drove through La Mirage today and I did not see any sign of improvements. In fact, it looked worse.

The dumpsters are still parked in the street with the few remaining doors hanging partially on.

The road that had caved in was flooded with irrigation runoff.

The "club house" roof is still missing shingles.

There are units visible from the entrance road with their roof covering blown off and plywood exposed.

There are still dead trees throughout the place.

The lawn was past due for mowing were it had been watered, but many places are not getting water and have gone to dirt or dead grass.

There are a large number of "trashy" units with blown down fences and junk sitting out up front.

Many empty and abandoned looking units.

Paint and trim wood looking very sad.

Several units with the front screens sliced off after an attempted break-in.

A few vehicles that have been up on blocks for months.

Overall it is looking pretty bad.

I would like to know how the HOA fees are split between G-8 and the HOA. I see the same crews working unsuccessfully on the sprinklers as I see remodeling the empty G-8 units. How are the funds segregated and payments for HOA services tracked?

If G-8 is trying to drive out the private owners, they are not going to succeed since the units cannot be sold for even $40K. There are no buyers interested given the current state of the development. I understand the banks won't lend unless there is an adequate reserve. What is the status of the reserve?

Please send me the list of scheduled improvements and when we should expect to see any changes. 

The property manager's response:

Please note that all of the concerns we discussed during our last meeting (that which are included in your email as well) were brought to the attention of G8. I've asked a few times to schedule the next board meeting with the directors and still have not had success. I personally scheduled one for owners to join....and only one person joined my call. I'm really trying....

Regarding the reserve account. There is no reserve account. Nothing was transferred when we took over management. [where did all that money go they've been collecting for the reserve account?]

I'm at a standstill on obtaining bids for capital needs items around the community until we can have a board meeting/call. As you can imagine, once bids are collected, the time clock starts as bids expire in 30/60 days. I'm afraid to get this going without everyone on board.

The landscaping company previously servicing the community ran into some legal trouble and is no longer with. We're currently going through the contract process to obtain a new servicer....that which should be in place by month end. Unfortunately one of our staff members allowed for a company to begin servicing the site without the proper documentation. I had to put an end to that for liability purposes...I'm sure you would understand.

I won't expect to see any change until the next board meeting is scheduled. It would not be an efficient or effective use of our time otherwise.

Again, I appreciate your email and understand the depth of concern here. Know that we are fully aware and acknowledge the concerns and will work diligently to show improvements.

From homeowner posted June 24, 2014

I will be interested in hearing the explanation.  I wonder why we are spending every penny that comes in and not setting some amount aside for the reserve.  I was told that without a reserve buyers cannot get bank financing.  Probably they want to spend it all trying to do whatever they can to make it easier for them to sell out. I do not trust their accounting of the expenses, but I do not think they would ever have an independent audit or even an assessment of how they spend the funds.  A decent comparison to other similar properties would be interesting.

In my mind, one of the biggest problems is that we have no local representation that assesses the use of the funds.  No board member is local and the HOA management company is out of Bakersfield.  The office people all wear  "Michaels" T-Shirts, but do not work for the HOA.  They are G-8 employees.  Is there enough detail to the documents to really understand what they are paying for vs what they are getting in services?

 From a homeowner posted Oct 11, 2014

Is it legal to have an HOA board that members cannot contact directly?  I would think not.  As an owner,  I am formally requesting you to send me the direct contact information for each of our board members.  I expect this information in less than 30 days.

I never heard anything back on these comments or suggestions.

Nothing much has changed since 2 September.

1.        Dumpsters – the same

2.       Water system – still not working a lot of places.  Including in front of my unit at 232 Oasis and 304 Palm.  I would like a refund for not watering the past 6 months.  I have had to operate it manually when I am nearby and I should get paid for my labor as well.  Meanwhile, the water system still leaks into the road in front of 428 Palm.

3.       No announcement of maintenance enforcement and the backyards are just as terrible as ever.  So are the fronts on many units.  Broken windows, fascia, etc.

4.       Dead trees still there.

5.       I have not been down the road to the damage, but I would bet it is still there.

6.       Etc……..

When will we see an HOA management plan that improves our property values?  

When will G-8 give up and do what is right for the complex so we can all make money?

It is time for new thinking  - or maybe just some thinking - and perhaps a new HOA management company.

 From a homeowner posted Feb 15, 2015:

The La Mirage community has a lot of potential if managed correctly.  My eight units rent quickly and my tenants are long term good tenants.  My units also rent higher than those owned by G-8. ( $850 4bdrm, $750 3Bdrm 2 bath, $700 3bdrm, $585 1bdrm)   I also know that I am not alone in this.  Many of the private owners have taken the time to make the necessary significant repairs needed.  Their rents are higher and their renters are better.  G-8 has not taken a long term approach to their investment and instead have by their inaction chosen to drag us all down. As an HOA member I pay $120 per unit for lawn maintenance, garbage, and road maintenance.  This seems like a lot especially in light of the fact that some of my units don't even get water.  We do not seem to be able to get a detailed financial report and I do not know if it has ever been audited.  I really would not mind paying if I could see that the community was improving and my investment was likely to appreciate.  However, I am not seeing any changes. I know that G-8 has failed to quickly flip the property as they expected.  Now they are struggling to try to sell the place and are unwilling to invest additional dollars in any of their units.  With somewhere between 60 and 70 empty units they are bleeding cash each month.  It is not clear to me where we are spending our HOA dues or even if they are being collected.

 

Since G-8 is the majority owner, all the board members are G-8 employees.  They do not respond to owners so we are basically stuck addressing issues with our HOA management company that also always happens to be the G-8 rental management company.  Of course, there is no conflict of interest there.  None of the board members are actually owners, but are only representatives of G-8.  While I am not certain this is even legal, it is what we are stuck with until they can sell out.  We held one board meeting last summer in which several owners called in and our entire board "forgot" the meeting.  The management company representative had to call and remind our board that there was a meeting starting.  Of course our board was well prepared for that.  I wonder how much they get paid for being on our HOA board. Who knows if the next owner will be better? 

Posted from a homeowner Mar 6, 2015

I would like to see if there has been an independent audit of the payment and expense records.  I have trouble seeing where the $37500 in monthly dues are making any impact.  It is certainly not in garbage pickup or water bills and there isn't much else the HOA takes responsibility for.

The last post, July 24, 2015 was from a homeowner wondering whether anyone knew of any litigation against G8.