The CotoBuzz Journal : Open Letter to Arizona Elected Officials RE: HOA Problems

Sunday, June 05, 2016

Open Letter to Arizona Elected Officials RE: HOA Problems

To: Council members of Flagstaff, Prescott, Prescott Valley and Sedona, Supervisors of Yavapai County

Dear Elected officials

You cannot fail to be aware of some of the serious problems occurring in Arizona Homeowners Associations. Even though legislators have tried, problems and much misery and suffering abounds.

Over 100 petitions have been filed with the Dept. of Fire Building Life and Safety and the Office of Administrative Hearings (“OAH”) over HOA violations. Yet according to our, yet to be completed research, almost 7 times that number of cases have been filed in Superior Court, very painful financially.

The recently formed Arizona Homeowners Forum (“AHF”) intends to correct that by mobilizing homeowners who, to date, have been forced to operate in very fragmented fashion faced by some well-organized “HOA Attorneys” and some Management Companies. And without strong effective Board leadership, these players essentially run HOA’s and the substantial cash they control. One relatively obscure fact is that when the First National Bank of Arizona went belly up in 2008, it cost the taxpayers $862mm. This was a bank which attracted over $1bn in deposits from Homeowners Associations in a very short space of time under the leadership of a President whose only credentials were running nightclubs in Las Vegas (and membership of the Community Associations Institute). Both insured and uninsured depositors had to be bailed out. Closer to home in Northern Arizona, Desert Hills was a smaller but still large microcosm of that. But that still cost taxpayers $106mm and, to date, no one has been held accountable for any of this.

AZ HOA Problems: C3 $107mm Bailout of Desert Hills by FDIC March 2010

AHF is organized around an electronic plat form at www.arizonahoa.blogspot.com

You can comment, enter your email address, which even we don’t see, to see further postings. We’d encourage you to visit it for the following reasons:

Your constituents are signing up. We already have almost 4,000 electronic contacts of all types, including homeowners, industry players and politicians.
Organization is key and we plan to use that. Some contacts are fully public, some are not.
There is the scope for substantial change, one of which appears to be that the Dept. of Real Estate is stepping into the Dept. of Fire Building and Life Safety’s shoes for dispute regulation. New legislation could easily follow and homeowners have already registered some very intelligent proposals for sensible regulation, but not overregulation, of an industry that controls the daily lives of 40% of Arizonans.
As feedback continues from financially distraught, intimidated, and in some cases suicidal homeowners, we also want to highlight the behavior of certain industry players.
This will be done through the AHF Annual RICO awards. In this regards, a company which directly impacts your constituents is the first nominee – HOAMCO.

Why?

HOAMCO as Management Co and Developer

Justin Scott, as the owner of HOAMCO, also built houses in the Crossings at Willow Creek in Prescott, as well as managing the subdivision, before he “resigned” in 2008. In particular 697 Driftwood Court. Click on A1 for a copy of the building permit and A2 for details of Benchmark Properties as his chosen vehicle. He then sold the property to the “Enrico’s” as can be seen in the Warranty Deed to be found in A3 Concurrently upon sale, an Affidavit of Value to be found in A4was recorded. Amongst other things, this states there is no relationship between the buyer and seller. Additional evidence we’re happy to provide to any government agency, and Mr. Scott for rebuttal, suggests strongly that that representation of no relationship is not true.

AZ HOA Problems: A1 Building Permits for Lot 70 Owner Justin Scott

AZ HOA Problems: A2 Benchmark Companies Per ACC

AZ HOA Problems: A3 Sale by Benchmark to Enricos Lot 70 697 Driftwood Court by "Buzz" Aguirre

AZ HOA Problems: A4 Affidavit of Value for Sale of Lot 70

Financial Mis-management in The Crossings in 2007

The Crossings was almost rendered insolvent at year end 2007 by a HOAMCO/Ekmark & Ekmark led frivolous defense, and attempts at appeal, of a records request judgement at the OAH over a stupid violation notice. Total legal costs estimated in excess of $40,000. Pending insurance reimbursement however, the email in B1 shows discussions taking place between Ekmark and Ekmark and HOAMCO over how to deal with this looming financial crisis caused by the December 2007 invoice in B2 On information, and belief both Ekmark and Ekmark were involved in the La Barranca fire lawsuit discussed below, which we believe had identical insurers for both claims. We also believe invoice juggling was taking place.

AZ HOA Problems: B1 Nov 8th e mail

AZ HOA Problems: B2 Ekmark Dec 2007 Invoice

Potential conflicts of interest via Desert Hills Bank

As First National Bank of Arizona (CAB) was steering its way into the abyss, HOAMCO was also gathering deposits from the HOA’s it managed and steering them towards Desert Hills Bank. The year-end account balances of $6mm shown in C1 many over the $100,000 FDIC limit at the time, were obtainable by virtue of the reporting requirements at that time, since discontinued by the Corporations Commission. Conveniently however, Mr. Scott, via his Company dba HOAMCO, is borrowing substantially similar sums from the same bank, coincidently located in the Crossings at that time, as can be seen in C2 Whether these loans were ever paid off without cost to the taxpayer is not known. But the cost to the taxpayer was, and can be seen in the FDIC press release in C3

AZ HOA Problems: C1 Hoamco Managed Desert Hills Cash Balances

AZ HOA Problems: C2 Desert Hills Deed of Trust With NAZ Justin Scott

AZ HOA Problems: C3 $107mm Bailout of Desert Hills by FDIC March 2010

Endangering Public Safety

HOAMCO was, and may still be, the Management Company for La Barranca in Sedona as D1evidences. It’s our understanding a substantial fire occurred when workmen contracted by HOAMCO were using chain saws at the height of the fire season. This resulted in a major lawsuit with, coincidentally, our own insurers Farmers, as plaintiff See D2 Representing HOAMCO coincidentally at the same time was Curtis Ekmark, one of the leading protagonists in item 1 above per D3 Was anyone held accountable for this?

AZ HOA Problems: D1 La Barranca Board Meeting

AZ HOA Problems: D2 Arizona Judicial Branch - Public Access

AZ HOA Problems: D3 Farmers Insurance vs NAZ DBA Hoamco

We’d welcome any comments on the above, either by email or on the blog. In particular your thoughts on the RICO nomination plus any suggestions you would make for improving the current system of HOA (non)-regulation and a better cost effective way of resolving disputes

The above statements are believed to be true. If not, we’ll correct them, but they are in any case protected by the “right to petition” under the First Amendment to the US Constitution and Arizona anti-SLAPP statutes

Regards

On behalf of the Arizona Homeowners Forum