I, along with others, have noticed disturbing illicit activities of the Association and its management company, Spectrum AM, relative to Key Allegro property sales.
From my research of the governing documents I believe the Association has no licit involvement in Key Allegro sales. The KA Canal & Property OA is primarily a counterfeit property owners association (POA) masquerading as a legitimate association. In reality, its only licit role is in maintaining the canals. By definition it has no role in property sales.
That said, let’s accept it as a given that title companies, lenders and most owners have accepted the Association’s scam that it has a measure of authority over the subdivision. Part of that scam includes the assumption that the Association is rightly involved in the sale of properties. The Association has been deceiving owners for so long there’s a presumption of its legitimacy.
As a result buyers, lenders, insurers, title companies and attorneys wrongly engage the Association in two ways regarding property sales. The first relates to the spurious idea that the Association is in effect the official registrar of Key Allegro property ownership. Thus, when a property changes hands, the “transfer” is noted in the Association records. The Association currently charges $200 to change names on each sale. Stewart Title lists this as “HOA Transfer Fee to Spectrum Association Management.”
The second way buyers, lenders, insurers, title companies and attorneys wrongly engage the Association in property sales is by failing to realize that the Association’s extensive claims of rights and authority over the subdivision are legitimate, when in fact its legitimate role is only in canal maintenance.
Under that false assumption parties related to property sales look to the Association for answers to various questions. Is the seller in good standing with the Association? Are there outstanding unpaid fees, fines or assessments? Are there any associated Association generated liens? Does the Association itself represent a financial or other risk to owners? Are there any lawsuits against the Association that might impact owners?
These answers are provided in two main ways by the Association. The first is a “Statement of Account,” for which the Association charges a minimum of $120 to print off, and a “Resale Package,” which includes a Statement of Account, for $375.
Included within the Resale Package is a TREC Form 37-5. The purpose of Form 37-5 is to provide information relative to properties subject to mandatory POA membership. It includes thirteen declarations.
One of the declarations relates to whether or not the Association has any outstanding lawsuits. This is of interest to buyers, lenders, insurers, title companies and attorneys because they don’t want to be blind-sided by any lawsuits that may impact property values or serve as an encumbrance against individual properties.
Except for a month or two the Association has had a pending lawsuit(s) for the past two years. Regardless, the Association, through Spectrum AM, has lied on the form, denying the existence of such suits. The Association doesn’t just take the illicit money and run, it uses the opportunity to provide false information.
The irony is rich here, as not only is the Association being sued, but it’s asked the court, with President Lynn Powers as a witness in support, to force the suing of all owners for the illegal actions of the Board.
That is, the Association is not only lying on the Form 37-5 but is demanding that the very risk to owners that the lawsuit declaration is meant to address, possible legal liability for individual owners, become reality. In my opinion this is despicable action on the part of Ms. Powers and her fellow Board members, Brink Brinkerhoff, John Schwartz, Steve Portner, Keitha Spiekerman, Jim Martin and Myatt Hancock.
It would be bad enough if the Association was doing nothing more than taking between $320 and $575 dollars it wasn’t entitled to for every property sale and throwing in a lie to hide the fact that it’s being sued and demanding that all owners be sued for the Board’s illegal actions. But, there are other troubling aspects to this scenario that may portend something more is amiss. It’s the accounting, or more specifically, the lack thereof, and lack of transparency, of the funds received.
After laying an illicit governing document foundation between 2016 and 2017, under Board Presidents Brink Brinkerhoff and Dave Foster, the Board began aggressively increasing Association income through fees, fines, assessments, penalties and the like. This included the demand for “transfer fees.” From a base of zero in 2018, the Association reported $9,500 in transfer fees in 2018. Oddly, it reported only $2,250 in transfer fees for 2019, $450 for 2020, and has reported only $900 for 2021 through July. This begs the question: Where are those fees going?
The demand for $120-$375 for a “Statement of Account” and/or a “Resale Package” is a relatively new scam. None of that income is being reported on the Association’s financial documents. In an email I asked the Association’s Spectrum AM representative about accounting for both the resale package and transfer fees. He responded: “The income from the resales goes to the third party that handles them and is not reflected in our financials.” Notice he didn’t offer any information regarding the missing transfer fees.
None of this makes sense. We could be looking at tens of thousands of dollars a year being illicitly collected and unaccounted for. Is the Board just giving Spectrum AM, at our expense, a hidden bonus in addition to the $125,000 they’re paid in reported management fees? Or, is something else afoot? Regardless, it’s wrong.
Again, where are those fees going? And, is it too much to ask the Association to stop lying on the TREC Form 37-5?