Category: Property MISmanagement

Homeowners received an email that 2021 financials had been audited by an independent CPA and a copy of the report was attached to the message.

It looks like there is an account with over $2M dollars at Berkley Court, as of December 2020.

Why has this account not been audited? Why are owners being subjected to an illegal rate increase when there seems to be a fund in place that is intended to replace common area elements?

The self-appointed directors and the association management company are completely unaware of what this references. If the auditor that completed the report highlighted this in yellow, how is it that no one thought to look into it as the report itself is over 7 months old?

Owners beware, these are the folks managing your money and your investments!!!

In a previous post in February, we mentioned that it looks like the self-appointed board members have steered benefits using home owner funds for themselves. We put in a picture of Lisa Hernandez’s fence, which looked like this at the time:

Lo and behold, it was surprising to see the same fence being torn out and redone again in July 2022 by LED contractors.

Meanwhile, we have home owners who have been asking for YEARS to get their fence repaired as it has fallen on them, it is rotting, or it is being held together with band-aids. In some cases, it’s all of the above:

When looking at the finances that was sent out to all home owners on 11/12/2022 by Houston HOA, it seems that Berkley Court home owners have paid an amazing $3674 for LED to change lightbulbs during the 2022 calendar year.

This is especially remarkable, considering that light bulbs were generally changed by previous porters, in addition to picking up trash and other duties.

Is this no longer part of the porters responsibilities, because the porter is now a self-appointed board members’ child?

Pretty sure we all have some relatives who would change light bulbs and invoice for a porter role for less!

 In section 5.4 of the Declaration for our community, it states: 

Based on this, a number of concerns emerge with the recent communication regarding the 2023 maintenance increase announced by the board in September 2022: 

1. Elementary school math teaches us 110% of X = 10% more than the whole. Not 2X. So, for example, 110% of 200 = 220, not 420.  X, in our case, is the current monthly assessment.   For convenience, here is a Google search result of the same so you can check multiple sources. 

2. Any assessment that covers any special project like reconstruction is not a usual maintenance fee. For capital projects, there is a separate assessment involved, and usually includes the specific scope, cost, timeline, etc. in order for it to be passed. None of this has been put forward and voted by the home owners, as per Section 5.6 of the Declaration. 

Instead, as usual, the current self-appointed directors are breaching the contractual obligations of the association at home owner expense. 

3. The majority of the self-appointed home owners have been on the board for at least 3-5 years.  The first requirement of a board member is to understand the governance structure and the legal requirements of an association. It is VERY concerning, disturbing that after all these years, the self-appointed directors still do not have a grasp of what is allowed or not allowed in the Declaration.  What else are they mismanaging due to a lack of understanding or willful misunderstanding?

4. The property management company, Houston HOA Management, is perpetuating this breach of the declaration. A property management company’s basic requirement is to understand the governance structure and the legal requirements of an association so that it can enforce it as needed – it is EXTREMELY alarming that Houston HOA is enabling violations of governing documents, rather than advising the board to abide by it and distancing themselves with any association’s directors that is determined to break the law.

Have you wondered why some of the fences in our community look very different from the others seen in the community? Unit A’s fence is painted and standing up straight, Unit B is not.  Is it because the owner of Unit A is paying more? Could it be that the owner of Unit B does not want his or her fence in good condition to withstand the elements?

Or, may I suggest, it might be because Unit A’s owner is on or has a friend on the Board, who has steered that benefit to him or herself?   

You may wonder why the owner of Unit B doesn’t speak up about this disparity. In fact, many residents have brought this up and unless they are on personal good terms with a board member, the repair request is ignored or worse.

If you think owners of Unit A and B both should be treated alike, and that the unequal treatment of community members should stop, please join us in our movement to improve our community. After all:

In February 2021, Texas suffered from “Snovid” – i.e., a temperatures suddenly dipping below freezing, leading to lack of power and utilities such as water and electricity. Harris County, where Berkley Court is located, was most affected, and Berkley Court residents were not spared.

During this difficult time, many residents of Berkley Court were without power and asked the association for help, as folks were without water for days, which turned into weeks. Some home owners begged for assistance, as the solution to restore services required fixing pipes in the common element areas of the property.

While this state of emergency was going on, multiple home owners independently reported that they saw the supplier utilized by Rise AMG to fix plumbing issues ignore their requests for days, and instead work during that period in the current Board Secretary’s unit on non-emergency repairs (e.g., replacing sheetrock, painting walls, etc.).

So while many home owners had to fend for themselves in getting water restored, and other owners are still living with damage caused by the unlicensed personnel and waiting for critical services to be restored over 6 months later, the Board Secretary apparently used her position to get an updated apartment at a discounted price.

Don’t know about you but this sounds like one of the classic condo association corruption schemes to me…

And frankly, condos are very vulnerable to corruption… There are three main schemes: using HOA funds to repair an owner’s unit, having the vendor pad an invoice and give a kickback to the board/manager or just plain creating fake companies that do imaginary work on the property.

Source.

We have also heard rumors of kickbacks to board members for work steered toward certain vendors – please send any evidence that can substantiate this information to berkleycourtneighbor@gmail.com or let us know anything else we may have missed in the comments below.

Berkley Court’s current porter is the current, unelected board member and HOA Vice President’s, Ceceilia Carrizales (nee Thompson), adult child, Valencia Thompson.

There is no contract posted to cover what is in the details of this engagement, because, despite repeated request – the managing agent, Rise AMG, has only made its own, expired agreement available to home owners.

Based on a former occupant of the job, the primary responsibilities for the role are to:

• Pick up the trash
• Change out lightbulbs around the property that are burnt out
• Dismantle heavy trash to put it in dumpster for removal

Essentially, the current, unelected board Vice President’s child is being paid $725+ a month to pick up trash.

Some observations related to this “service” that is being provided to the Berkley Court community with this vendor:

• Most residents and visitors remark on how dirty this community is, and how things never used to be this when the prior porter, Mr. Lee, was employed.

• This porter is hardly ever seen on the grounds of Berkley Court Condominiums. How a person can do this role without being on the ground on a regular basis is beyond us. Especially as all evidence points to the job not being done.

As a home owner, some immediate question and concerns come to mind:

1. Why wasn’t this vendor selected as part of an open bid? How come the board has never held discussions to evaluate whether to renew this service, what other choices are available, etc.?
2. How competent is a property management company or board if these entities don’t specify a schedule, required amount of hours, or a definition of done for this job? Do we trust these folks to negotiate any contract if they do not require these basics in a service provider?
3. Can the Board provide adequate oversight of this vendor? Even if the one board member recuses herself from decisions, there are only 2 other directors and any divisions in decision-making cannot be made without third member weighing in. And what other horse trades have occurred for each director to turn a blind eye to clear misconduct, so that they can each personally profit from their time on the board?
4. Shouldn’t a managing agent, such as Rise AMG, advise against hiring a board member’s relative as a vendor, due to the conflicts of interest? Can it oversee the vendor/relative without bias, knowing that it can put its own contract and paychecks in jeopardy, if it doesn’t go along with the scheme put forward by the members of the board?
5. Could Berkley Court have a better porter (or retained the previous one) at lower cost and superior service, saving home owners money and providing residents a safer environment?

What do you think? Is this is a clear case of:

a) Nepotism

b) Conflict of interest

c) Willful misconduct

d) All of the above

e) None of the above

Let us know your response in the comments!

In our last post, we discussed home owners confusion as to where all the money collected from our community is being spent and some of the charges made by the (unelected) Board Secretary/Treasurer during one randomly-selected month.

While the (unelected) Secretary/Treasurer is spending money at Cajun Kitchen, the managing agent (Rise AMG) has approved the following invoice that apparently pays another unelected Board member – the Vice President, Ceceilia Carrizales.

This description of providing a dumpster pick-up is surprising, as the association already paid an established company over $1500 for the same services during the same period:

The disbursement report shows a different description than the invoice – one that implies that the VP is being paid to remove trash from the dumpster.

There is also no mention in any of the meeting minutes made available to home owners that this is a decision that was approved by the board or home owners, that there was any sort of open bid for this work, or any controls in place to check potential abuse.

When asked by home owners as to how it validates invoices/charges to ensure it is appropriate, Rise AMG does not respond and the unelected Board does not reply, though both have a fiduciary duty to home owners.

How would you want your managing agent to act if an unelected Board member asks you to approve and pay questionable invoices where there is no contract, no strict controls, and no communication to home owners that this is happening? Would you risk your reputation as a property manager or as a legal entity by acquiescing to these requests and supporting them by not providing any further information to questions home owners raise about these charges?

Property managers owe a fiduciary duty to the communities or buildings they represent. A fiduciary duty is the highest duty owed at law, and requires the property manager to always act in the best interests of their clients. This means avoiding conflicts of interest and opportunities for self-gain that would work to the detriment of the client. This duty is owed to the community as a whole, though, not to each individual resident within the community.

-Property Management Law, as seen on https://www.hg.org/property-management.html

Many Berkley Court home owners have the same question – where is our money going? Assessments have increased, residents are being fined and billed in unprecedented manner, and yet – the property isn’t being maintained and continues to deteriorate, making it increasingly unsafe to all living here.

One home owner asked the property management company (Rise AMG) to furnish the documents supporting the June 2021 financial statement. Rise AMG did not furnish a complete set, and provided no response when asked about it, as seen below:

As seen in the above email, our current (unelected) Board does not lift a finger to ensure it’s agents are responding to home owner requests in compliance with current Texas law, even when concerns are escalated to its attention.

Why not?

One may suspect it is because the current, unelected Board members are spending home owner funds intended for maintenance of the property on personal or frivolous expenses.

For example, part of the June HOA expenses included reimbursements to the (unelected) Board Secretary, including an Amazon purchase and a $100+ meal from Cajun Kitchen.

When looking at where this spend is seen in the financial statement for June 2021, it is classed by the managing agent as a “meeting expense”, as seen below:

This expense looks like it was incurred on 6/14/2021. Yet, it is classed as a meeting expense by RISE, although the (unannounced) Board meeting was held only on 6/23/2021, as seen below:

Is this an example of willful misconduct by the current, unelected Board? Is the managing agent complicit with fraud since they are the ones misclassifying these statements and processing questionable reimbursements? Do you have more examples of the same? Share your view in the comments!