Red Flags for HOAs

Here are several consistent red flags and MOs performed by a management company that HOA members have observed throughout numerous HOAs in the Gallatin Valley.

Annual Meeting Notices

• The Property Manager will send an initial Annual Meeting Notice to membership but omit either the time, date, location, or multiple key details which would prevent membership from attending the Annual Meeting.

• The Property Manager will then resend an amended Annual Meeting Notice and charge the HOA for a second mailing to ownership a few weeks/days before the meeting with the rest of the details.

• There are required notice periods in By-Laws for Annual Meeting notices that this practice explicitly violates.

• The perceived intent is to minimize the number of potential HOA members who attend the meeting to ensure there is no quorum.

Where is your HOA Bank Account?

• Does your board know where your HOA bank account is?

• Does your board have direct access to your HOA bank account?

• In recent years, according to information provided by local banks, a Property Management Company has closed the bank accounts of numerous HOAs and moved those funds to different accounts.

• When homeowners inquired directly with the banks, the banks admitted that those HOA accounts were closed.

Board or Property Manager

• Who is running your Annual Meetings and your HOA - the Board or the Property Manager? In this instance, the Property Manager takes control of all meetings, communications, and decisions and the board members allow them to do so do for ease. The perceived intent is to control all aspects and actions of the HOA in the favor of the Property Manager.

Questionable Accounting Practices

• Have you ever been charged a “balance forward” on your HOA dues invoice? When asked about strange “balance forwards” on fully paid invoices, the Property Manager will claim that they have a new system or the system was set up to automatically charge “late fees” and “will remove it from the system.”

• These late fees can be and in the case of Harvest Creek are in violation of HOA by-laws regarding late fees for dues.

• It is in the Property Manager’s best interest to continue to automatically charge “late fees” or add unexplained “balance forwards” as a portion or all of these monies are kept by the Property Manager.

Missing Contracts

• Every HOA should have executed contracts with all of their vendors and the Board should follow the HOA By-Laws regarding entering into contracts.

• Does your HOA have the following contracts in writing, approved by duly elected Board Members?

  • Property Manager Contract

  • HOA Attorney Contract or Retainer

  • Lawn Services Contract

  • Snow Removal Contract

Forged or Falsified Contracts

• Evidence suggests that contracts that the HOAs have entered into may have been forged or falsified and were not approved by the HOA Board in any documented meeting or meeting minutes.

Falsified Documentation

• Evidence shows that the Property Manager has created falsified documents with the names of alleged board members. These individuals either were no longer on the board or no longer owned property/lived in the HOA and yet were still mentioned in documentation and meeting minutes that they did not attend or meetings that no one recalls occurring or attending.

Does the CIty of Bozeman service parkland in your HOA?

• It has been discovered that the Property Manager has convinced HOAs to hire a lawn care service to take care of sections of HOAs that are allegedly not covered by the City of Bozeman’s parkland mowing services, allowing the lawn service to double charge for areas.

Snow Plow Services

• Does your HOA receive additional snow plowing services?

• The Property Manager has hired a snow plow service to plow city streets in the HOA as a benefit to the HOA.

• The Property Manager refused to name the snow plow company or provide any details regarding this company.

• The snow plows do not have company names or logos on them.

• There is no contract for this unnamed snow plow company.

• There is no proof that this snow plow company is licensed and insured or a business registered to do business in the City of Bozeman.

• The City of Bozeman requires companies plowing city streets to meet certain standards of:

1. Snow must be evenly distributed to both sides of the street.

2. You cannot block driveways, mailboxes, fire hydrants or pedestrian crossings.

3. You will be responsible for any boulevard tree damage.

4. The City is not responsible for any damage to your vehicle or equipment.

5. You will be responsible for damage to manholes and water valve boxes.

6. No equipment can be used with down pressure. Must operate in float.

7. Snow from alleys cannot be deposited in the street.

• There is no evidence that this unnamed snow plow company meets these standards and that puts your HOA in a dangerous position of liability if the snow plow company damages city streets, personal vehicles, personal property, etc.

Board Members

• Do you know who your HOA Board Members are?

• Were your Board Members duly elected in accordance with your HOA By-Laws?

• Which positions do your Board Members hold in compliance with your By-Laws?

• The Property Manager will act as the main point of contact thereby preventing the Board of Directors from communicating directly with the HOA owners.

• The Property Manager will place individuals of their choice on the board when there is a vacant seat.

• The Property Manager will create and charge for elections and election mailings of Board Members. Documents will be sent to ownership for a vote. Then nothing is heard about the results of the election. There is no evidence that the Board Members were duly elected.

HOA Attorney

• Who is your HOA’s Attorney?

• Does your attorney also represent your property manager thereby creating a potential conflict of interest?