Corruption Basics defined by Florida Law Apply to Florida Property Management Group

There are quite a few head-shaking moments for this writer upon hearing or reading narratives of clownish antics by Javier “Jay” Lopez and his associates and FPMG. Clownish is meant in the same way that Milan Kundera wrote of politicians all being clowns good for brief moments of entertainment while taking themselves far too seriously for their qualifications and achievements.

What harm can these clowns do?

It appears to be quite a bit. Take a look at recent images of Devon-Aire Villas #3 as representative of the “professional management” services rendered at nearly twice a fair market price.

Left for two weeks + in Devon-Aire Villas #3

And this image of a doggies-doo bin that was left full for a couple of weeks before the contracted service responded to complaints of residents. FPMG is earning those exorbitant fees, right?

Doggies' Deposits sit for up to three weeks

These are the same people that became preoccupied with a rumored recall motion to the extent that they became personally involved in slander and interference with the “democratic” process of members of Devon-Aire Villas HOA #3 to elect their own representation. By the words and actions of David Briel, Jay Lopez and staff at FPMG it would seem that they had a mandate to determine who serves as a director and who does not.

As an outside contractor, that must have been inclusive in the contract, right?

There's not a chance this is true.

Even though FPMG and the HOA board president Jose Hoyos have thus far refused to let anyone see, read or photocopy that assumed contract with FPMG, I'm willing to bet that there is no provision that allows FPMG to participate in selection of a board of directors. At least, not in the exceedingly biased way that Briel, Lopez and company have done.

Specific Documents requested this date but never provided

This is to say, there is a way that FPMG should have been assisting in board selection. But they did not. FPMG should have followed the governing documents and ensured that Devon-Aire Villas HOA #3 had a Nominating Committee seated to fill vacancies. That did not happen.

Florida Statutes define governing documents as pertinent sections of Florida Statues, Articles of Incorporation and adopted Bylaws. It's simple. Florida Statutes also define limits of Community Association Management (CAM) Firms. Briefly, it sums as adhere to the contract. Statutes also prohibit CAM managers and firms from exceeding the contract. By actions of Briel, Lopez and others at FPMG you wouldn't think so.

Look at the picture below. Yes, that announcement of the “next scheduled” annual meeting at Devon-Aire HOA #3 was posted as “October 14, 2008.” The photo was taken in October 2015. No kidding.

Notice of Annual Meeting left posted for seven years & three months

At that time concerned members were beginning to question a few things around the community, like uncollected piles of trash, poor quality lawn maintenance and sudden “enforcement” of long-dormant towing rules. Asking questions led to the beginning of the recall movement. After Jay Lopez confirmed through numerous phone calls that a recall campaign was indeed under way, among other countermeasures another annual meeting was scheduled for January 14, 2016. It was the first in seven years and three months. That's the gap in time between annual meetings scheduled by FPMG for Devon-Aire Villas HOA #3. 

Oh, those pesky governing documents! It's in writing: annual meetings are supposed to take place every year. Even more of a nuisance for FPMG, the board is supposed to produce an annual audit report, a statement of income and expenses and a proposed budget for the coming year. By all appearances, not one of these exists because none was produced over those previous six years.

It is easy to see that if FPMG were a sports team coach, they would have been fired after the third year of zero wins and countless losses. But no, not on behalf of Devon-Aire Villas HOA #3 members. Even after having an empty pretense of an annual meeting at which virtually no business was conducted, except for the FPMG lawyer who apparently racked up a few billing hours for attending, FPMG non-performance continues.

How to get offered a Board position by unscrupulous CAM managers

But again, not entirely. Jay Lopez was overheard at a non-meeting with two members on December 24, 2015, offering to refund towing charges to one David P. Or at least that is what he appeared to be doing during a phone call with the towing company; "I have to give a refund," he said. Can anyone be sure that there was another person on the phone, or was he faking that conversation? It happens to be the case that David Briel, owner of FPMG and by that fact he must hold a CAM license, promised David P., during the annual meeting of January 14, 2016, a position on the HOA board of directors. Although that promise was conditional upon FPMG being successful in smashing the ongoing recall effort and David P. steps away from supporting a recall. Whose money would be refunded to David P. for a towing fee that never should have been incurred over the holidays in late 2015? Is FPMG committed to paying for its over-zealousness in selectively enforcing towing of vehicles? Probably not. Payment of towing refunds, if it ever comes, will come from Association funds? It appears so.

After making that promise, however, Jay opted to block David P. from reaching him by phone. So much for trust.

This is what the State of Florida has to say about rules that Jay Lopez is bound by:

468.4334 Professional practice standards; liability.—

(1) A community association manager or a community association management firm is deemed to act as agent on behalf of a community association as principal within the scope of authority authorized by a written contract or under this chapter. A community association manager and a community association management firm shall discharge duties performed on behalf of the association as authorized by this chapter loyally, skillfully, and diligently; dealing honestly and fairly; in good faith; with care and full disclosure to the community association; accounting for all funds; and not charging unreasonable or excessive fees.

This is one statement that could be read from the last clause to the first; not charging unreasonable or excessive fees is enough to send Lopez to detention. Accounting for all funds? Full disclosure to the community association? Dealing honestly and fairly, in good faith? Keep in mind that it was Jay Lopez who demanded that he be held to these standards when he ran his mouth, talking over but not listening to two concerned HOA members in their home on December 24, 2015.

No audits, no financial statement, no projected budgets and no annual meeting for six years and counting. 

This is what the State of Florida says about this:

468.4334

(b) Indemnification under paragraph (a) may not cover any act or omission that violates a criminal law; derives an improper personal benefit, either directly or indirectly; is grossly negligent; or is reckless, is in bad faith, is with malicious purpose, or is in a manner exhibiting wanton and willful disregard of human rights, safety, or property.

This is to say, Jay Lopez and FPMG is financially responsible to pay for their mistakes and violations of contractual requirements. There is more.

455.227 Grounds for discipline; penalties; enforcement.—

(1) The following acts shall constitute grounds for which the disciplinary actions specified in subsection (2) may be taken:(a) Making misleading, deceptive, or fraudulent representations in or related to the practice of the licensee’s profession.(b) Intentionally violating any rule adopted by the board or the department, as appropriate.(g) Having been found liable in a civil proceeding for knowingly filing a false report or complaint with the department against another licensee.(k) Failing to perform any statutory or legal obligation placed upon a licensee.(m) Making deceptive, untrue, or fraudulent representations in or related to the practice of a profession or employing a trick or scheme in or related to the practice of a profession.(n) Exercising influence on the patient or client for the purpose of financial gain of the licensee or a third party.

Instead of interfering in a recall campaign, Lopez and FPMG should have resigned because as professionals they know beyond any doubt that their own violations of law and contractual fiduciary responsibilities disqualify the firm and its individuals from continuing.

As this story continues we will demonstrate this specifically.

Corruption Basics: Devon-Aire Villas HOA #3

Imagine taking your clothes to a dry cleaner who charges twice what a competitor down the street charges while making you wonder if your clothes are cleaned with embalming fluid instead of a decent, appropriate solvent. Then picture yourself trying to take your clothes out so that you can find someone professional who knows how to do the job and who appreciates your business, but that clothing-embalmer won't let you have your suits unless you leave more of your wardrobe to be embalmed. Yeah, you'd think that it would be easy to change cleaners, but the overpriced clothing-embalmer tells you that he's a professional because he has all the right equipment in the back, and he's a member of the International Fabric Institute. So what; he still can't clean your clothes.

This is the equivalent of what happens to people who want to change their board of directors in an HOA when they find that something is definitely amiss with management of community assets and money. This is analogous to what concerned members of Devon-Aire Villas HOA #3 are being put through presently.

When word got out that a recall of several unelected board directors was underway during the last quarter of 2015, both the management company, FPMG, and the long-term board president began to interfere. A reliable source reports that Javier Lopez, the self-esteemed CAM-licensed property manager at FPMG was active in resisting the recall. Why exactly that “contracted” manager would be so concerned with who is on the board of directors, or who is not, remains to be explained. It is exceedingly unusual.

Perhaps a look at fundamentals will help.

Corruption is defined in Wikipedia as:

a form of dishonest or unethical conduct by a person entrusted with a position of authority, often to acquire personal benefit. Corruption may include many activities including bribery and embezzlement, though it may also involve practices that are legal in many countries.

That is rather basic.

In the circumstance reported earlier by Patrick Anonymous regarding HOA president Jose Hoyos taking a kickback of $75 per installed light, it is easy to see that this was embezzlement of HOA funds. It follows logically that Hoyos is corrupt.

Because FPMG managers also took part in those transactions by accepting inflated invoices for each light and paying those at face value, apparently part to Patrick Anonymous and the second part to Hoyos, it is clear that FPMG is also corrupt.

There is another basic definition of corruption that applies: Merriam-Webster offers:

impairment of integrity, virtue, or moral principle

We are taking the position that corruption is bad. This is to say, we have no interest in being politically correct. Being politically correct is accepting a student's answer on a test that says, “2 + 2 = 5.” It happens. In today's world a teacher who tells a student with that test answer that the answer is wrong can be disciplined by the school board. Everyone knows that telling a student that he or she has given a wrong answer on a math question might hurt the student's feelings, and to hurt the student's feelings is politically incorrect. Teachers these days should consult an insurance actuary before taking the job; it's important to know the odds of actually teaching in the volatile environment in which protecting a student's feelings is more important than discerning truth from falsehood.

Actually, this writer doesn't give a rat's ass about being politically correct regarding hurt feelings of those identified here as being corrupt. Truth hurts? Live with it. Consequences follow.

By the time a student reaches Eighth Grade, chances are that given the above information a large majority of students will understand and agree that those named are corrupt. However, because those students and many others who grow up to buy houses “managed” by HOAs are schooled in being “politically correct” such corruption is often met with an apathetic, “So What?”

This indifferent view seems not to be shared by HOA president Hoyos and CAM Jay Lopez. Obviously, because they were motivated to stop a pending recall by desperate measures.

A recall process is defined by Florida Statutes. Most Eighth Graders would also be able to discern that interference with processes defined by law would in most cases become obstruction of due process.

Because this tendency to interfere with the vested interests of so many people in Florida far beyond the population of Devon-Aire Villas HOA #3, I'm including the following quote regarding Florida Statutes:

Until recently, the first part of section 1503 targeted obstructive efforts aimed at witnesses, parties, jurors, or court officers and officials. The Victim and Witness Protection Act of 1982, however, removed the references to witnesses and parties; created new provisions to protect such individuals, and left the initial parts of section 1503 to focus only on jurors and court officers and officials. The 1982 act, however, did not eliminate section 1503's broad "omnibus clause," which focuses on no particular victim and reaches "[w]hoever . . . endeavors to influence, obstruct, or impede, the due administration of justice." The "due administration of justice" is defined to include grand jury proceedings, criminal prosecutions, and civil proceedings.

Emphasis added. A recall is a civil proceeding, and it is vitally important to interrupt corruption as soon as possible when that is detected, especially in an HOA. Overwhelming odds are that someone is stealing money from member homeowners.

Of course, everyone with a CAM license knows this, including Jay Lopez of FPMG.

It would seem that Hoyos and Lopez are overreacting excessively to a simple recall of board members at the Devon-Aire Villas HOA #3. After all, it is a position that is voluntary by law, and offers no monetary or in-kind compensation. So, what's the big deal if members of the HOA want one or more people off the board, to be replaced by other volunteers? You would think that Hoyos especially would be relieved not to have to commute from Georgia, where he now lives, to conduct affairs as the HOA resident. Newer board members assert that it was news to them that they are on the board; it isn't a position that was sought. Suddenly and indirectly, the story goes, Joseph learned after the fact that he was a board member. So, a large number of membership wants to nominate and elect a board of directors? Let them.

Instead, Hoyos, Lopez, and others at FPMG, are adamantly resisting a recall or any change in leadership. They are acting like that clothing-embalmer pretending to be a professional dry-cleaner in the above analogy. They won't let go. Instead, in addition to interference with civil procedure, they have resorted to slander as well.

In visiting a pair of members on Christmas Eve 2015, Jay Lopez resorted to slandering another property management company to turn two well-intentioned members against a competitive company. Lopez asserted that the other company would “go down hard” and that it is in everyone's best interest to distance themselves from a debacle that is coming upon his competitor. It just so happens that the other management company provides five times the service that FPMG does for little more than half the cost confiscated by FPMG. And that slandered competitor keeps records, has regular meetings and follows laws pertinent to governing documents.

In turn, a team of persons from FPMG, including but not limited to FPMG owner David Briel, property manager Lillium and assistant Nery took to slandering members who initiated a recall to get rid of Hoyos. On Saturday, December 26, 2015 they went to confiscate recall petitions at members' homes, asserting that those initiating the recall were “bad people” who would inevitably raise HOA fees and resort to special assessments of an ambiguous nature as soon as they seized power in the HOA. At a minimum, everyone should anticipate an assessment for resurfacing streets within their community. Threatening special assessments to a member of an HOA is like guaranteeing that the IRS is targeting a taxpayer with an audit. You just don't want to be there.

Of course, neither alarm was sounded for good reason, except that these were desperate measures of desperate people.

If you're thinking it makes no sense to interfere with civil procedures, the recall effort, in order to continue to serve a distant community of homeowners who have absolutely no appreciation of the sacrifice you make on their behalf … you are right of course.

And if you're thinking that these desperate measures have a hidden motive …

One thing that resisting a recall does is postpone “outsider” member access to financial records of the HOA. Already we know that both the president and newly appointed board members, and the management company, FPMG, have flagrantly violated Florida Statutes regarding access to financial and other records of Devon-Aire Villas HOA #3. What could be in those hidden records?

Could it be that Hoyos and Lopez, and others, are hiding evidence of financial crimes?

Even an Eighth-Grader who isn't particularly good at math would likely say that it looks like a murky canal that those fish are swimming in.

How bad could it be?

Considering that tens of thousands of dollars of Devon-Aire HOA money is, well, mysteriously unaccounted for because FPMG and Hoyos have refused to produce audit reports or statements if income and expenditures, we could be looking at major felonies in that murky canal. If so, and this writer in inclined to believe it is so, then interference with a simple recall could well be a desperate attempt to avoid a serious felony investigation by state or federal agencies.

It has happened before in other jurisdictions. It will happen again.

To be continued ...

Introduction: Devon-Aire Homeowners Association #3

Millions of people live in communities managed by homeowners associations across this country. More than one million of those live in Florida. For many, a thought lingers in the back of their minds; “Who's the homeowner here, me or that so-called “management” Gestapo?”

For good reason.

In recent years in Nevada more than one hundred HOAs came under federal investigation for corrupt practices. In Clark County, Nevada, nearly ninety percent (90%) of land converted from Bureau of Land Management (BLM) desert to “livable” neighborhoods is then managed by an HOA. Since investigations began two prominent journalists, one police lieutenant and another HOA officer were murdered under circumstances directly or indirectly related to HOA investigations.

The problem is money.

Giving money to an HOA is comparable to a classroom of third-graders dropping their lunch money into a box on their teacher's desk. The expectation, that when lunch time comes they'll have their meal. But there are no assurances they'll get what they pay for, as the teacher leaves that lunch-money box unattended and takes her break in a teachers' lounge. Some or all of the students' money can disappear, yet that teacher will not be held accountable.

You would think that there are rules in place to protect money put into an HOA. There are. But who pays close attention to assure that those rules are followed?

Homeowners in this economy of recent decades are busy. Mostly they have been two working adults, or one single adult working long hours away from home, or retired people who hope to squeeze as much enjoyment out of remaining years as possible. This is a recipe for apathy, especially for those who opt to live in HOA communities. Hands-off maintenance is a strong appeal. Before signing a contract to buy a place they are sold on the idea of worry-free management. “Don't worry about your lawn, we take care of that for you.” And they are told, “Don't concern yourself with replacing your roof or keeping your streets maintained; we do that for you too.” It's music to their ears.

Then, after settling in, weird things begin to happen; some of these go unnoticed for years. Perhaps they have an overnight guest from out of town. When he or she, perhaps a daughter visiting from college, goes out to take a drive in the morning the car that got her there is gone. Oops! No one mentioned that after many years of dormancy the HOA board or the management company acting on its own decided to enforce parking regulations through a new towing contract. The car has been towed. It happens.

Now an irate homeowner has reason to question, “why was that other car parked down the street or around the corner not towed?” It happened to be owned by a friend of a board member, but who knew? It happens.

And yes, there are rules in place to prevent this sort of thing from occurring, but rules require that people pay attention, and that people get involved in order to make them work. Yeah, rules; this is what a whimsical or corrupt management agent relies on to justify towing a car or company van one day but not the previous week. It's called “selective enforcement” and it happens every day of the year in the HOA world.

It matters, and not just to a few who end up either docilely paying hundreds, even thousands, of dollars in unconscionable fees, sometimes to avoid being tossed out of their homes. Unfair fee assessments should be a concern of every homeowner or resident in an HOA community. One reason is that management can change, and an owner who seemed exempt from enforcement one day could find him or her suddenly assessed a bundle of fines that they had no warning were coming. No warning, no risk, right? But sudden enforcement happens to residents in HOAs without even a slight change in lifestyle. 

Then, an Association can be sued for selective enforcement, and lose. It happens. The HOA can be fined in court. Unfortunately when this happens management seeks to pass the hat; all the owner-members are expected to pay for mistakes made by management. If financial reserves are not adequate to pay the penalty a special assessment is made, passing the financial responsibility over to each member.

No one likes special assessments any more than you like a flat tire on a highway.

Getting back to that teacher with the box full of lunch money, homeowners typically are like third-graders when it comes to HOA fees. They grudgingly pay, grumble about it from time to time as they do when thinking of the IRS and a tax bill, then forget it until reminded again. Perhaps they look at their budget and say, “Oh, yeah … those damned fees. At least I don't have to mow the grass … no time for that.” But there is an enormous difference between taxes paid to government and HOA fees. We have no input into how a government spends money, but a dues-paying homeowner has a right to know exactly where his or her dues are spent.

You might think that lawn service spread over a large number of properties would bring an economy of scale; prices for each should be lower. Not when a corrupt board or management company approves a three-year contract for twice a competitive market rate. Who benefits? It could be a board member or two receiving kickbacks from the lawn service provider. It could be a management company agent getting a kickback, and it could be both the management company and a board member. It happens.

In the case of Devon-Aire Homeowners Association #3, the president of the board of directors held an unscheduled, clandestine meeting with an electrical contractor, Patrick A. The contractor was told that in order to keep his scheduled jobs, he had to increase the price of each installed light by $75. Patrick didn't want to do it, but thinking that this was to be a one-time deal, he consented. He needed the work. But the job expanded from a few lamps to over a hundred, and the inflated invoices increased by more than $8,000. But Patrick didn't keep a dime of that extra $8,000. He was paid according to his original bid amount. The management company then paid the difference to the Devon-Aire HOA #3 president, Jose Hoyos, whose scheme this was, with cooperation of Florida Property Management Group, FPMG.

Although it's impossible to say whether or not FPMG kept any of that excess money taken from the Association members, because FPMG refuses, as of the date of this writing, to release financial records, there are other ways that FPMG stands to benefit from corrupt practices like this.

It has been rumored that FPMG had received a management fee of “$14 per home” in Devon-Aire HOA #3 to manage common areas. How exactly FPMG was awarded a contract in this amount is unclear. It is not even certain that FPMG ever had a contract with Devon-Aire HOA #3 before a clandestine, unscheduled meeting occurred at the home of a board member. One story goes that one FPMG manager, Nery, visited a board member's home unannounced one evening, along with Jose Hoyos and Ligia Cortez, also a mystery board member, to coerce that board member to sign a contract he had not read. Extraordinarily, that contract was to be between FPMG and Devon-Aire HOA #3. This stealth meeting was like a home invasion to the board member who later said he had not heard from nor seen another board member, especially the HOA president Hoyos, during the previous two years. Now they demanded his immediate endorsement on an unread contract. 

Currently, although formally requested, no one in the membership interested in its details has a copy of that management contract. The principle FPMG manager, Javier, who goes by “Jay,” told two very interested HOA members late in 2015 that the rate paid to FPMG is $11 per home. The exceedingly skeptical board member whose home was invaded for that stealth contract meeting asserts that FPMG stills receives $14 per unit in 2016. Without access to financial records there is no way to verify this. But Jay and FPMG play exceedingly elusive games when it comes to providing financial records for Devon-Aire HOA #3. Six weeks after a formal request by multiple members, and a ten-day mandatory compliance deadline, Jay and Nery  have not turned over a single record. You would think Jay, Nery and FPMG are hiding something.

A contract is a CONTRACT. It specifies terms. Two weeks after a formal request for records, Jay turned up a the door of a couple of members who happened to have requested documents from his company, FPMG. It was Christmas Eve, 2015. He wasn't expected. His office is about 25 miles away, not an easy drive in Christmas Eve traffic. For all that trouble, you would think he was there to provide documents. But he wasn't.

Rather than meet his legal and fiduciary responsibilities, Jay was visiting members to talk about his expertise as a property manager. He is, after all, a CAM – Certified Association Manager. He's a professional. He knows what his fiduciary responsibilities are. But he won't turn over documents. Instead, Jay was very concerned that that pair of curious members distance themselves from an outside property manager who might be giving them advice. And, Jay said in his ever-elusive manner, the exact fee per house is flexible; it could be $6 per unit, it could be $8 per unit. Jay's latest demand was to keep a contract with Devon-Aire HOA #3 by asserting that he would beat any other bid by one dollar per unit, no matter the price. In other words, Jay will say whatever is music to members' ears as long as they stop asking for hard information about contracts, bank records, meetings and methods of management. Essentially, whatever it takes to make questions go away.    

To be continued ...