Homeowners ask "where's our HOA money?" Developer won't share details
Homeowners in an Alabaster subdivision claim they're being "rooked" paying hundreds of dollars every year with no details on where it's going. No meetings, no detailed budgets, no communication from their Homeowners Association. They brought their complaints to our Fighting For You team.
The group of residents in Wynlake Subdivision in Alabaster say they've had enough. They have a laundry list of complaints against developer J. Michael White. "All the laws are in the favor of the developer," says homeowner Roy Campbell. They told us they hadn't seen White in more than a decade. White appointed himself and his daughter on the Board of Directors which he is entitled to do under the residential incorporation papers. They make all the major decisions for the subdivision. Homeowners say they have no input. There are no annual meetings which are customary in HOAs. Annual homeowner dues were hiked from 300 to 360 dollars this year.
"We need to see income/ expenses where the money is going," explains homeowner Jim Lobretto. Of particular interest $35,000 for gounds/commons/lakes. They tell us the grass is mowed maybe 3-4 times a year. And now they're told they're buying a lake at the entrance of the subdivision. It's something they thought was part of their common area. "Coming to us saying we have to buy the lakes is a farce to keep the money coming in," complains Ben Glass.
Monday we went looking for White to get some answers. Why would he not provide details on how the $60,000 collected each year in dues was being spent? Why were there no annual meetings for homeowner input?
We could not find any address for a number of businesses he is connected to including Wynlake, Tannehill Sewer Services, Serma Holdings and others. The only thing we could find is a few P.O. Boxes in Leeds at the post office.
Tuesday he did give us a call back. He says he is following the rules laid out in the HOA Bylaws, which homeowners say they've requested and and have not received. Unlike the Articles of Incorporation and the Covenants we could not find the bylaws on file at probate court in Shelby County.
White says he's not required to share with homeowners details of how he's spending their money. But that's not so, according to three Birmingham attorneys ABC3340 News talked to including Griffin Tyndall.
"Under Alabama law members of a non-profit organization are entitled to inspect, look at books and records of an HOA," explains Tyndall. That includes contracts for things like landscaping and tax returns.
"You would hope a developer would want to cooperate," remarks Tyndall. He says a nasty court fight could hurt the value of the subdivision. Tyndall says homeowners should look into sending a demand letter for information from an attorney. And as a last resort if they can't get a response, they may have to pool resources and file a lawsuit.
HOAs formed after 2016, have to meet new state guidelines giving homeowners more of a say in running the organization. Attorneys advise before you buy a home make sure you really read covenants and bylaws carefully. Many of the documents can be found online through Probate Court in your county. Don't wait until your closing date when you may not have time to read the papers thoroughly.
It's also a good idea to find out if residents, a management company or a developer runs the HOA. Ask to see their budget. And by all means talk to neighbors, for their insight before you buy.
As long as a developer owns even one lot, he or she usually holds on to the right to run the HOA.