The millions of dollars embezzled from local homeowner associations ought to elicit examination. Why fiduciaries in prosperous neighborhoods exhibited no greater vigilance than elementary school students is incomprehensible.
My homeowners association’s directors never apologized, refusing recognition that over one half million dollars could not have disappeared absent bamboozlement. Filing a lawsuit hardly absolves dereliction of fiduciary duties.
David Lane admitted letting down people. The board never did. The homeowners’ board president lambasted inquiry insinuating that repeated failure to scrutinize financial statements is hardly innocent inaction:
“Regarding your claim that ‘people …undertook fiduciary duties and proceeded to insulate themselves against information that they were being bamboozled by a confidence man…’ May I ask exactly what you are referring to? Just how is it that I or any other board member ‘insulated ourselves against information that we were being bamboozled…’?
A board’s first duty is safeguarding finances. This could only happen if fiduciaries failed to examine bank statements. Common sense compels concern after requests for financial reports are repeatedly rejected. Banks cannot deny disclosure to directors and officers should intermediaries refuse.
Fiduciaries apparently place self-interest above common interest. Homeowners tend to be treated as serfs on an estate: Instead of accessing premises properly to perform work, over time, property managers have cut down a fence with a chainsaw, thrown a bench from a balcony damaging it, ignored workmen destroying a large ceramic urn, allowed a sprinkler to rot a window frame — expensive to replace, removed items from a porch and refused to require workmen return them whence they came, and blown trash into garages while cleaning driveways. Lily Tomlin’s Ernestine the Operator aptly anticipated the attitude: “We don't care; we don't have to.”
Boards of directors and management companies expect homeowners to excuse errors and omissions, catalyzing codependence. They ignore those underwriting substantial fees, seemingly indulging incompetence and indifference and inhibiting insights intended to improve performance.
Board members who are indifferent to duties, reading financial reports, and requesting them until scrutinized should be recalled and replaced. If the best and the brightest provide pathos, Mississippi should reexamine its educational system.
COVID-19 has become basis to avoid an annual meeting — evading examination of embezzlement — notwithstanding requirement that one be held — even virtually.
Incisive insight and assertive action are discouraged notwithstanding the fact that functional communities encourage interaction. Anarchy reigns. Points of no return hasten.
Litigation is foreseeable if homeowners associations operate in this manner. Caselaw would delineate the duties owed and performance expected.
Jay Wiener is a Northsider.
