Associa turns over audit for police investigation of one of its own managers

By Deborah Goonan, Independent American Communities

 

Because these incidents are so common in association-governed common interest communities, I usually group multiple reports of HOA fraud and theft into a single post each month.

But the case of Sun City Shadow Hills is somewhat unique.

As reported in the Desert Sun, management company giant, Associa, is engaging in damage control by investigating one of its own employees. An internal audit uncovered financial discrepancies, resulting in the termination of a former Associa Manager for Sun City Shadow Hills.

Note that, at this time, the HOA and Associa have not identified the former manager under investigation by name.

 

Indio police investigating $110K in ‘financial discrepancies’ at Sun City retirement community

Amy DiPierro and Alena Maschke, The Desert Sun Published 6:00 a.m. PT Oct. 25, 2017 | Updated 9:39 a.m. PT Oct. 26, 2017

The Indio Police Department is investigating a tip from a massive Indio retirement community after its management company found “financial discrepancies” of $110,000 that they said were connected to a former employee.

Sun City Shadow Hills in Indio is a 3,450-home development for people ages 55 and over, known for its golf courses, fitness facilities and clubs. It has a volunteer board of directors that runs its homeowners association, a nonprofit organization that residents join when they buy property in the community. But the complex is operated day-to-day by Associa, a for-profit management company that oversees 9,000 properties in North America.

In August, Associa informed the Sun City complex’s board of directors that an internal audit had turned up a “financial discrepancy” in accounting records. Theboard turned over the final report to Indio police earlier this month, according to an email the board sent to homeowners on Oct. 18.

“At this point, the criminal case is now in the hands of Indio Police and they will contact us if they need additional information,” the email said. “It is the intention of both the HOA and Associa to prosecute all staff of Associa that participated in the fraud against Sun City Shadow Hills HOA.”

Read more:

http://www.desertsun.com/story/marketplace/real-estate/2017/10/25/indio-police-investigating-110-k-financial-discrepancies-sun-city-retirement-community/796295001/

There’s no mention of potential embezzlement or fraud on Sun City’s official website. But the discussion is alive and well on a homeowner-managed website. (https://www.scshneighbors.com)

Homeowners are also discussing an upcoming board election, and membership vote on proposed amendments to the CC&Rs (Covenants, Conditions and Restrictions).

One of the interesting trends I have noticed in the industry is that management companies strongly encourage HOA boards to revise governing documents following turnover of control from the developer to a homeowner-controlled association. According to a SCSHCA official promotional video, the Del Webb community began construction in 2003, and was completed in 2016.

Commentary on the homeowner website confirms that Association residents have been deeply concerned about a lack of transparency from the HOA and Associa for years.

Among other concerns at Sun City Shadow Hills: one of the three pools has been closed without notice, complaints about poor landscape maintenance, dissatisfaction with recent road sealing services, homeowner allegations of intimidation and unwarranted fines, a desire to replace the HOA attorney and a desire to shift to self-management.

Clearly, this group of “common sense” homeowners is NOT apathetic, and they are keeping a watchful eye on the HOA board, as well as their management company.

Residents of Sun City HOA might also take advantage of recently enacted California legislation.

In September, California Governor Jerry Brown recently signed into law SB 407, which adds protections for First Amendment rights of residents in common interest communities.

Under the new state law, Sun City residents cannot be prohibited from peaceful assembly, political canvassing, and using common facilities to meet and freely discuss important association issues.

Furthermore, if the Association creates obstacles to the civil liberties spelled out in the law, an aggrieved resident can file a complaint in civil or small claims court, where “The court may assess a civil penalty of not more than five hundred dollars ($500) for each violation,” and overrule any Association rule or restriction to the contrary.

It will be interesting to see how the upcoming election plays out, and whether or not new legislative efforts offer ample protection of rights for owners and residents of Sun City Shadow Hills HOA.

 

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