We are From CAI, and We’re Here to Help!
07/20/2007
Once upon a time we believed the earth was flat. Then we got smart. Today we are told that associations protect property values.
Just what is the official CAI position regarding this particular story and all the other embezzlement stories from around the country? Maybe their position is that there are still plenty of management companies that have not yet been caught with their fingers in the cookie jar so this is “just an isolated incident.” Koger Management Group was one of CAI’s elite members at one time. So what now, CAI?
CAI has always opposed any kind of government oversight. The only way Koger Management Group was caught, and is now being investigated, is because they had a real estate license. Had it not been for that, it would be business as usual. We have been advocating for some much needed independent and objective adult supervision in HOAs to protect the homeowners in mandatory membership associations. If such a thing existed, how many other management companies would be under investigation today?
Kudos to Florida State Representative Julio Robaina for recognizing the need for this and for starting a pilot program in Miami-Dade to provide the oversight.
Here is the part of this story you are not likely to read in the papers. My association, Lake Braddock, was also managed by Koger. The official word is that “we” discovered that funds were missing BEFORE this story broke out and that “we” were able to recover monies that were allegedly embezzled from our coffers. The problem is, “we” only audited the financial records covering a much shorter period of time than the period that these transfers and embezzlements allegedly were to have taken place and “we” do not plan on doing anything else about it because the president does not want to testify in court. So much for protecting property values! – Shu
From the Washington Post
By Bill Turque
Friday, July 20, 2007
Losses Climb for Homeowner Groups
Accountant Says Management Official May Have Stolen $2 Million RICHMOND, July 19 — At least $2 million was stolen from Northern Virginia condominium and homeowner associations, probably by a top executive of the Fairfax City company hired to manage their finances, a forensic accountant told state regulators at a hearing Thursday.The losses sustained by customers of Koger Management Group between 2004 and 2006, described in a report to the Virginia Real Estate Board, far exceed earlier estimates of $800,000. The total may grow as more homeowner associations conduct audits, said Jeffrey D. Barsky, the accountant appointed by the board to investigate the matter. Read the Whole Story
Dude said,
July 21, 2007 @ 1:23 am
My HOA had Koger Management. This story doesn’t surprise me one bit. In fact, I think the Post is being too kind.
We started to notice that something was awry almost immediately after we retained their “management services.” After working with them for 6 months or so, we realized their incompetence wasn’t limited to financial matters. Fortunately, we started looking for a competent company elsewhere, so by the time the story about the alleged “financial improprieties” broke, we were pretty far down the line of finding a new management company.
I honestly feel bad for the many HOAs out there that were mismanaged by this company – and the consequences Koger’s management had on their property values. The financials were probably the best example of Koger’s incompetence, but if you were to look much further, you would find it in the community managers and nearly all others.
After we dissolved our relationship with Koger, they continued to cash checks from our residents. They forwarded the funds to us, but didn’t give us a breakdown of who paid what. So, we got a check for $5000 without any of idea of which homeowner’s had contributed to that sum.
Additionally, the outprocessing clerk simply dropped files into a box and never turned over a listing of individual account histories.
After our term with Koger, our community had nearly half of our annual budget uncollected and our community looked terrible. Koger did absolutely nothing to maintain good lists of owners (an essential element of “managing”), they failed to perform even one community inspection despite their contractual obligations, what work we did do to assist them with, they screwed up beyond belif, and then to top it all off, we still don’t have a clue whether they stole from us.
I hope for the sake of humanity that Koger and all its employees find a new career, one as far away from managing the important business of how our individual homes and communities are managed. If it wouldn’t insult the competent workers in the rock sorting field, I’d suggest Koger employees would be best suited sorting big rocks from little rocks. But, even then, I’d want someone with some level of competence to double check their work… perhaps a 5th grader.