Palisades homeowners are fighting back against a Homeowners Association Board they hold responsible for the disappearance of hundreds of thousands of dollars of their assessments. This email is circulating among Palisades residents:
Good evening,
Some of you may have received an email from the Palisades HOA Board of Directors last night. The Board email begins “As you may know, Ridgway Lane, a local property management company, has provided property services management to Palisades Homeowners Association for well over 15 years.”
Contracting with a third party to provide property service management is not improper. Turning the bank account over to the third-party contractor without any checks and balances concerning the money is improper and is in clear violation of the bylaws. The members have a right to expect that its association is being operated under the existing bylaws especially paragraph 7 on page 10 which is posted on the Palisades website and reads “ 7. Treasurer. The treasurer shall be the Chief Financial Officer and shall have custody of all the funds and securities of the association and shall keep regular books of account. He shall receive and disperse all funds of the association...”
This was not done. We have heard the rumors of this being industry standard which are not accurate and even if it was the standard to turn over total responsibility to someone else, that does not mean never checking or looking back to ensure that the third party is not committing fraud. As early as this spring the board was asked by the homeowners if they looked at the bank statements themselves and that question went unanswered.
Our accounts were turned over to David Lane, Jr. who is the close friend of our HOA Board Treasurer. This has resulted in the theft of a significant amount of money. The losses exceed $89,000 with another $200,000 being investigated. The fact that over $200,000 was moving in and out of our association bank accounts is an indication that the money is likely gone forever since it appears that Ridgway Lane and others were robbing Peter to pay Paul. It also indicates either neglect or complicity by our current Board of Directors. In addition, there is no transparency to the membership of what is actually happening.
It is not likely that the board will voluntarily replace the lost money. It is also not likely that the Board will sue themselves on our behalves to recover the lost money. It is unlikely that the current lawsuit will find enough assets to repay all of the homeowners associations involved in this fraud unless there is some type of insurance coverage.
Review of the financials posted on the Palisades website indicate there is a director and officers' insurance policy. We are informed that director Lanny Pace, Esq. has put the D&O insurance coverage on notice. The policy is with Boyles Moak Insurance.
All residents should be informed of what is occurring and what our rights are independently of the HOA Board regarding the mishandling and theft of our money. We believe you should know the relationship between the Palisades treasurer and Ridgway Lane as well as the fact that the money that is currently in our accounts may not even be ours. It may be owed all or in part to someone else since there were not only fraudulent withdrawals/expenses but also numerous irregular deposits when there would be insufficent funds in the account. There are multiple insufficient funds notices on the bank statements. Though early on, the Board reported to all of you that they had assembled a committee chaired by an experienced financial professional and three other neighbors who are financial professionals, the Board did not elaborate in its "update" last night that they outright rejected the future financial safeguards as recommended by this same finance committee.
The current directors should be requested to hold a special meeting for removal of all directors and the election of replacement directors since it is obvious from their communications they do not intend to resign. The bylaws should then be followed, and a new treasurer should have the custody of the funds with appropriate checks and balances put in place.
Please respond affirmatively if you will support moving forward with a special meeting to remove and replace the Palisades HOA Board. Unless we have the support of 50% plus one vote, we will not attempt to pursue this matter. Thank you for your concern.
The Board appointed a committee and a finance professional to investigate the Ridgway Lane embezzlement and determine the losses. However, the Board would not disclose the names of committee members. The secrecy angered more than a residents. The Board issued this statement Wednesday:
- AS you may know, Ridgway Lane, a local property management company, has provided property service management to Palisades Homeowners Association for well over 15 years. Recently the Palisades Board made the decision to terminate Ridgway Lane’s services immediately, due to the Board and appointed Finance Committee discovery of irregularities in financial statements and bank statements and significant losses of approximately $89,000 due to transfers out of our accounts to third party entities and David Lane.
- The board acted immediately to cancel the operating and reserve accounts at Community Bank held by Ridgway Lane and transfer our remaining funds of $25,342.63 into a new operating account and
- $ 10,993.39 in to a new reserve account. The Board is continuing the pay our outstanding and upcoming bills through these accounts, and maintain all services currently in place. We have enough money in our accounts to cover expenses for the remainder of 2019. As we normally do, we will send out semi- annual assessments and begin collecting those assessments for 2020 at the end of this year.
- With the collection of these assessments, we will be able to move forward with paying our monthly bills in 2020 and begin to build up our reserves again as finances allow, as we wait to see what restitution may come from civil and criminal actions.
- The Board has made the decision to begin legal proceedings against Ridgway Lane and David Lane in order to recover our losses. We have engaged the services of Roy Liddell with Wells, Marble and Hurst PLLC to guide us through this process.
- The Board is also moving quickly to interview and engage a replacement property manager which we feel will suit our needs and has a proven record of integrity and success. We will also ensure that all the appropriate checks and balances are in place.
- We realize that some homeowners have become frustrated with the lack of information since first being notified of the problem, but have just recently been able to provide what we feel is accurate information regarding finances and our plan for moving forward. As we learn more details and obtain further information, we will provide them to you.
The Palisades still hasn't filed a lawsuit although six other homeowners associations have done so.
Here is the list of affected HOA's that have sued Ridgeway Lane.
Bridgewater
Bridgewater at Old Agency
The Barrington
Lakebend
Dinsmor
Bruenburg
Discovered but not yet taken action.
Palisades
Stonebridge
JJ knows of at least three more Ridgway Lane-managed HOA's that have probably suffered
Earlier Ridgway Lane posts
St. Ives Escapes
Add Stonebridge to Ridgway Lane List
King Kenny Rulz, Bridgewaters get freeze.
Lawsuit: Lane Confessed
Dinsmor losses over $200,000
On deck: Bruenberg
Up next: The Barrington.
Bridgewater goes for freeze, Bridgewater at Old Agency says RL embezzled over $340,000
Palisades plundered.
Dinsmor HOA discoveres "irregularitites."
Bridgewater accuses HOA manager of embezzlement.
26 comments:
The lack of regulation and oversight of these HOA's and related operations, as well as the utter absence of transparent-ness regarding records and bank statements, is an issue that the Legislature should address this session, especially in light of Senator Walter Michel's bill last session (which became law) giving them the pathway to tax residents, even those who don't choose to participate.
In this particular case, it's good to see HOA members (who are probably forced to pay dues and be members whether they want to be or not) finally rise up and grab pitchforks. It is amazing what sheep most HOA homeowners are. Until these recent impossible-to-ignore incidents, most of them just paid their dues each year/month and didn't ask questions. My mother had the audacity to ask to see the by-laws for her neighborhood HOA before she paid her dues a couple of years ago. To this day, she hasn't received any response after repeated requests.
Most of these HOAs are modern day Gestapos run by anal neighborhood busy-bodies. They get a kick out of being little dictators.
A number of common sense state laws could bring them in line.
Wait, I have responsibilities??? I thought I joined to HOA board to get my neighbor to take down those gaudy decorations.
Signed
HOA Board Member.
Good luck everyone suing your HOA. Natchez Trace Village is a perfect example. The HOA board in Natchez Trace Village used their money to sue certain homeowners that didn’t agree with the board. The HOA lost every law suit but was not liable to pay the money back. There really aren’t any laws on the books protecting home owners from rogue use or mismanagement of funds by their HOA’s. Now, if you can find there was a kick back, then you have a shot at redemption.
Another way to mitigate exposure is to have an operating acct with a set limit of $5000-$10,000 max. Each time the management company needs to write a check, it is out of there. Every time the operating acct needs money, there is a system to document why that money is needed. These people on the board have control issues. They want to be in control, but don't want to actually do any work other than telling others what they can and cant do. No one wants to take responsibility anymore and for that, they should be forced to step down and be shamed. There is a lot of arrogance in Palisades though.
Sue the HOA board members, they have clearly not been taking care of their responsibilities, and they should pay a penalty. It's very surprising to me that so many let these sums run up so high, and apparently nobody noticed until it started becoming public knowledge. Every one of these accounts should be completely reconciled on a regular basis, quarterly would be nice. It would clearly show what anyone is made of that was on one of these boards and hasn't already offered their resignation, which would be "not much".
11:24, most of them inherited wealth or married wealth and they have no idea what responsibilities come with board membership. And unless board members lied or intentionally misled the residents, there is no liability individually. They were elected by the residents, and the residents elected people who haven't the faintest idea how to run an organization. Shame on the residents for putting them in that position. Maybe it won't be a popularity contest next time.
The only David Lane debacle-involved HOA board member who should not be forced to resign in the metro area is Cindy Dunbar at Bridgewater I. All other HOA board members whose neighborhoods were negatively affected by the David Lane scam should resign today. Cindy Dunbar was the only one who took notice and tipped off all the HOAs, not just her own. Thank you, Cindy!
How long before Richard gets drug into this mess?
@12:03 Actually, the board members in Palisades wrote themselves into invincible power. The families are not able to vote them out without removing them and electing new directors. The families who elected them have long since moved which is the reason that the move to overthrow them is occurring. When four families ran against them this spring the board directly campaigned to get proxies to keep them off and then celebrated shaming them that they did not appreciate the board enough. All of the boards are fully liable. The letter is spot on. Good for these families for stepping up! I applaud them! Hopefully they will all follow Palisades and hold people accountable. Real money. Real responsibility.
Does anyone have any idea how long the pilfering has been taking place?
KF loves stirring up the lynch mob. Gonna get somebody killed one day and the blood will be on your tiny hands sir.
It troubles me to hear these accusations against RL because I personally know David and his son and they are both decent people. And I do sympathize with the HOA members if these accusations are correct. But everyone please take a minute and put yourselves in the Lane’s shoes. Their family is devastated right now and David is having serious health issues because of everything. Maybe we should follow Jesus’s example and temper our anger with a little sympathy, understanding and forgiveness. David and his son may or may not have made some poor decisions for whatever reason but stirring up the lynch mob is the wrong answer Mr. KF.
These comments of mine never get posted but...
There goes Cindy again taking credit for her husbands work!
In my humble opinion the last thing in the world we need is new laws allowing or restricting the operation of HOA. No one is forced to purchase a home in a neighborhood with restricting covenants and management of those covenants by a HOA. Grow up people and quit complaining about a decision you made. I live in a community with restrictive covenants and a HOA with officers and a board of directors that manages the affairs of our community. I read the covenants and the past minutes of the HOA before purchasing my home. If I have a problem I call the board president. So, all of a sudden we have homeowners complaining that they were fleeced. All I can say is you share the blame and should be expectant to share the financial loss.
Say the word and my cousin Guido will take care of business. He has a horse head in his freezer for just this occasion.
Capice?
Its simple check and balances all of these HOAs should own up that they were not looking after there own stuff even though there was corruption. Who gives someone control of all there cash and does't check on it?
@1:20- No one is stirring up the lynch mob. If the Lanes didn’t want to deal with the consequences, they should NOT have taken the money. Given the number of HOA’s affected and the amounts of money in play, there’s no WAY they are innocent... it’s a question of how far the illegal activity stretches. If they were such upstanding, good people they would apologize ASAP and await their criminal fate. Instead, they are using pop’s illness for sympathy. My mom is sick, too, but if she had done what they have done, I wouldn’t be expecting sympathy from anyone!! I hate the man is sick, but the reality is he wasn’t too sick to steal.
@1:20 PM - David, did you finally crawl out from under your rock along the banks of the Pearl River to post here? It's tough getting the stink off, isn't it, slime ball?
There will be sympathy when you are on the gallows, you friggin' thief, but not before!
HOA board members are not immune. They have a fidicuary responsibility to protect their association's funds. It would appear that in most cases, they did not.
I have a strong suspicion that some of these board members at a minimum knew what was going on, and covered it up. In some cases they may be co-conspirators.
Follow the money!
Nailed it!!!
“ the Board did not elaborate in its "update" last night that they outright rejected the future financial safeguards as recommended by this same finance committee.
The current directors should be requested to hold a special meeting for removal of all directors and the election of replacement directors since it is obvious from their communications they do not intend to resign. The bylaws should then be followed, and a new treasurer should have the custody of the funds with appropriate checks and balances put in place”
I have a significant background in real estate and have never understood why some homeowners that live in HOA communities just let these idiots do whatever they want. Raise hell, ask questions, bug the crap out of them every single day until you get answers’
In the case of Natchez Trace Village, the Board may be required to pay back all funds spent on the lawsuit. The suit had no merit, they had no standing and the taking of others property to which they had no right is not part of the boards mission. No different than they used it to take themselves to dinner to decide where everyone else should be required to eat. I hope the coming suit ties up those mean morons to keep them from further mischief.
The other board members should also be liable for allowing the funds to be embezzled as they did no due diligence.
Shoot the messenger - Or, in the case at hand, string-up the correspondent who has dug up and revealed all this dishonest shit.
1:20 drug Jesus into the conversation. If Jesus had been a consideration earlier, none of this crap would have happened. A scoundrel will typically invoke the name of Christ when his pockets are out of chips and his name is tacked to the steps of the gallows.
I don't understand why the Lanes are not in jail.
They should be in jail. Does it suck for the Lane's wife and children? yes The only people I really fell sorry far are the people who worked for Ridgeway and now do not have a job, the vendors who have not gotten paid and have bills and employees to pay, I'm more worried about how they will feed there families and pay bills and hope they find employment not the Lanes.
November 22 @ 10:19 - You seem to have left out the original victims, all ten or twelve groups of them. Is it your feeling that they probably have enough money to not be bothered by a theft of their funds? After all, they live in nice areas with manicured lawns and sidewalks and a fake gate-house.
While you're busy assessing collateral damage and giving us your opinion of 'real victims', you don't even mention the original victims. Screw them, right?
"It troubles me to hear these accusations against RL because I personally know David and his son and they are both decent people. And I do sympathize with the HOA members if these accusations are correct. But everyone please take a minute and put yourselves in the Lane’s shoes. Their family is devastated right now and David is having serious health issues because of everything. Maybe we should follow Jesus’s example and temper our anger with a little sympathy, understanding and forgiveness. David and his son may or may not have made some poor decisions for whatever reason but stirring up the lynch mob is the wrong answer Mr. KF. "
Wasn't it Shakespeare who said: "So fuckin' what?"
If they stole the money - string 'em up. After a fair trial, of course ;-)
@1:20 Really, the thieves got caught and you worry about what they are going through? How in the hell can you think like that, you sanctimonious twit? Sr has health issues? Oh, that makes it all right. His life and jr's, too, are really going to change. Thieves for yrs living the good life. Yeah, I'm really worried about what they are going through. Funny how when crooks get caught, they,or some do gooder on their behalf, invokes Jesus.
There is no honor anymore.
There should be no question of their resignation.
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