Rampant mismanagement plagues condo boards, report finds
You can just imagine how shocked I was--shocked, I tell you--to read this. Thanks to Fred Pilot for the link.
Did I mention that I was shocked?
Most of the 4,000 queries received by the state's new condo ombudsman between April 1 and June 30 involved directors of associations, according to a newly released report. Half concerned mismanagement and about a quarter alleged abuse of residents by directors. "The major problem continues to be the incapability and inability of boards' members to properly manage the operation of the association," said Dr. Virgil Rizzo of Fort Lauderdale, who was appointed in December and who released the quarterly report this week. "Many directors lack the knowledge to effectively and successfully operate a corporation of residential units."
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"Half concerned mismanagement and about a quarter alleged abuse of residents by directors. 'The major problem continues to be the incapability and inability of boards' members to properly manage the operation of the association,' said Dr. Virgil Rizzo of Fort Lauderdale, who was appointed in December and who released the quarterly report this week. 'Many directors lack the knowledge to effectively and successfully operate a corporation of residential units.' "
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That's an HOA service vendor-type statement. Next caring attitude impostors will claim that board members need the vendors to train them to "effectively and successfully operate a corporation," for a price.
The flaw in this logic is that board members are already doing what these service vendors tell them to do, because of their "lack [of] knowledge."
According to Privatopia, "The reality, too often, was an undemocratic oligarchy in which an apathetic body of residents was governed by a few dedicated or overly zealous neighbors who were for the most part told what to do by property managers and lawyers." [p 121, emph. added]
Note that Rizzo doesn't even acknowledge the existence of board oligarchs that couldn't care less about "effectively and successfully" -- (whatever that means)-- operating their associations, because they're not there for that reason. They would rather award a contract to their brother-in-law -- with no real competitive bidding -- for twice the rate the market bears, in exchange for a kickback. Many board oligarchs don't "properly manage," because their seemingly careless "mismanagement" is deliberate, not because they're not capable!
Finally, but perhaps most importantly, he refers to this as "the" major problem, as if there's just one "major" problem. However, if "a quarter alleged abuse of residents by directors," that reveals a major "undeniable lack of accountability" problem! (Justice Arabian, emph. add.)
This becomes all the more important when a certain fraction of the mismanagement is recognized as willful, and therefore also falls under the category of abuse. (It's abusive to take people's money by force, under threat of foreclosure, and then keep part of the money via kickbacks or work done to your property that is billed to the association.)
If half of the mismanagement is recognized as abusive to the homeowners, then at least half of the queries alleged abuse by directors. Keep in mind, homeowners have an incentive to be conservative and refer to things like graft as "mismanagement", so that they're treated with respect, and also to make it harder for the board oligarchs to sue them for defamation.
According to the article, "15 percent [of the queries] were related to elections and recalls." This probably included board oligarchs (and managers) perpetrating election fraud, wrongdoing during recalls, or outright refusals to accept the results of legitimate recalls. This abuses residents, too, because it subjects them to tyranny and removes their rights. Whether or not you agree, the more important issue is that this also comes under the unmentioned "major problem" of the "undeniable lack of accountability."
Fortunately, Rizzo states "Officer and director abuse is a serious problem that perhaps may only be rectified by legislative intervention."
I don't know if he realizes that, if Florida is like California, the legislature has legislated much of the lack of accountability.
Also according to the article, "10 percent cited abuse by association managers and management companies." This is understated, because a large fraction of the abuse board oligarchs meet out is with the advice of these managers. More importantly, it illustrates the need for the managers to be held accountable too.
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