$98,000 missing from reserves and board refuses to disclose how much was paid to settle a lawsuit that Peters & Freedman lost?

May 02, 2006

By Sheila Holm (View author info)

Peters & Freedman, Menas Property Management and the board members without getting the majority vote of the owners have recorded invalid CCRs for Encinitas Village Homeowners Association, that give board members many more powers and owners less oversight. Our reserves are being emptied, our dues keep skyrocketing and legal expenses hidden from owners.

Here is the history of activities of the Encinitas Village Homeowners Association Board Members, Peters & Freedman lawyers and the management

• 2001 September - Vote regarding proposed changes to CC&R's not successful.

• 2001 - December newsletter to homeowners states "... still need 4 votes for majority vote on CC&R's ... call the management company if you will vote FOR the changes ..."

The law requires them to start over when they do not receive sufficient votes. They are required to announce the request, allow discussion and input and ask all the owners to vote on changes they propose.

• 2002 - June - Lindsey Management company fired without notifying owners. They had been managers since the development was built in 1987. Per statements provided 'after the fact' - Lindsey requested a raise. ( The board paid the new management company, Menas Realty,- who they hired to replace Lindsey, and who the owners dismissed in 2005,- more than what Lindsey was requesting.)

• 2002 - July - Board hired Menas Realty management company without providing a 30 day notice of the change to owners of the HOA.

• 2002 - August - New CC&R's copies "at the door" of the units - distributed by Menas management company. ( We have 71 owners and about 1/3 of the owners live "off site". When I contacted the off-site owners in 2004, most were still unaware of the CCRs changes.)

• 2002 - Owners questioned the board's ability to issue new CC&R's without a majority vote, and with invalid notary signatures on the CCRs amendment recorded with the San Diego County recorder.

i. The amendment falsely stated that "67% of the owners approved ...". We have verified that not even 51% of the owners signed this amendment.

ii. CCR amendments require the signature of the Secretary and counter-signature of the president of the association. The notarized page recorded with the County shows Vice President Marcie Ann Little signed where the secretary should have and there is line striking out "Secretary" and "Vice President" written in. This also makes the 2002 CC&R's invalid.

• 2002 - October annual meeting - Owners not allowed to talk at the meeting controlled by Menas Property Management and Michael Kim from Peters & Freedman.

• 2003 - March fiscal year end - Within nine months of having the new management company, Menas Realty, $98,000 from reserves are spent as "Misc. Expenses". Owners were not allowed to receive the breakdown of the spending from reserves.

Former board president Robert Sievert told some owners that monies from the reserves were used to pay for a lawsuit settlement. Peters & Freedman had ssued Pro-tec and lost. The figures do not appear within the legal category in the budget total. Details are concealed from the owners who are paying for these losses.


Facts about litigation and settlement are not being disclosed to current owners or new buyers - as required by law. We pointed this out to Peters & Freedman , Menas Property Management and the board members in 2005.

IT APPEARS that the reason Peters & Freedman rushed the issuance of the new CC&R's in 2002 - was to give the authority to the board to enter into lawsuits without disclosing it to the owners.

• 2003 - October - Owners attended the annual meeting but are not allowed to talk. Menas Realty and Michael Kim from Peters & Freedman controlled the meeting.

Kurt Stradsklev was appointed President again. We inform the board and Menas Property Management that our bylaws do not allow officers to occupy the same position on the board for more than one term. Other positions were assigned to the same people, again a violation of our bylaws.

Letters to the management company for the board were ignored.

• 2004 - January - the board and Steven R. Napolis from Peters & Freedman amended the CCR&'s for "no breeding of pets" without notifying owners. CC&R's changed from one pet under 30 pounds to help board members with multiple pets and two dogs over 30 pounds. They REMOVED the pound limit and stated 2 pets.

Our former CCRs had restrictions on the size of pets because of the minimal landscaping we have. We have 2-3 connected patio homes. This is the issue that kept owners battling the vote for the change - a discussion of the changes was NOT held!

Without notice, the board issued an amendment - no such animal is being kept, bred, or maintained for any commercial purpose whatsoever. Attached copy of Amendment - page 1 and page 2 - with the same notary confirming different dates and signatures.

• 2004 - March year end - MISC EXP spending again - minimum balance required by law was not available - owners unaware of financial status ...

Letter/email to board members - ignored.

• 2004 - late May - Five owners provided letters to the Board "in mass" Owners requested FIRING the management company; Board asked the owners to form a committee - owners formed a committee - and each owner was contacted and asked for their input. Board said they would check on the financial questions.

NOTE: Board meeting minutes - board asked management company to check and report back to the board - if the HOA could possibly be running out of money.

• 2004 - June - Steven Napoles of Peters & Freedman issued a letter to me, threating to sue me if I harass the board. I responded within 24 hours and provided the facts and a list of owners (majority had signed a petition) supporting the request to FIRE the management company and if the board did not - the owners requested a Special Meeting to RECALL the board.

At this time, we found out that Menas management company was hired without a competitive bid - and with ONLY one signature of one board member - Jean Kelleher, vice president. That made their contract invalid.

Owners supported a NOTICE letter to the HOA asking that Menas Management company be FIRED ... majority of owners were notifying the company their contract was NOT going to be renewed as of July 2004.

• 2004 - late June - board meeting - nearly 40 owners attended the meeting. Steven Napoles from Peters & Freedman attended and informed owners I was wrong. Before I said anything he sent another letter to me, threatening me with a lawsuit.

• 2004 - late July - board meeting - owners were informed a new management company was not considered, yet - since I only provided a couple of proposals and I needed to supply 3 proposals. Our bylaws require a competitive bid before a contract can be issued but does not state that three is required! Peters & Freedman insisted upon 3 bids so we provided 3 bids within 48 hours.

Steven Napoles sends me another "Cease and Desist" letter threatening to sue me for contacting vendors when I was not a board member ... this after the lawfirm insisted on the status at the July meeting.

• 2004 August - the board met, ignored all bids and informed us that Menas management company would continue to be our management company for another year. They informed the owners that the Menas contract required 60 days notice prior to July 1 or they are automatically renewed for 12 months.

i. We inform the board that this put them in a 14 months renewal status when our CC&R's state they are not able to renew for a period of more than 12 months.

ii. The owners inform the board, Menas Menas Realty and Peters & Freedman that the contract only has one board members signature, the Vice President's. Then, the board stated they were all in agreement and they signed a consent type of letter - and since all board members signed ... the contract was valid ... so, a retroactive document was prepared.

We contacted Attorney Richard Ackerman - and he assisted "pro bono" to help us proceed to a Special Meeting for RECALL of the Board.

Menas Realty agreed to leave in July 2005. After the board agreed to hire N. N. Jaeske and their maintenence team, they hired Pilot Property Management.

The saga continues: Peters & Freedman - per the most current newsletter of the Encinitas Village Homeowners Association - is reviewing the CC&R's to update them, again!

RELATED LINK:
• We have been forced to pay Peters & Freedman through our homeowner association dues - The homeowners right to arbitrate is being stopped by this lawfirm

• Letter to Encinitas Village Board Members, Manager and Onwers: Filing Invalid CCRs for Encinitas Village Homeowner Association and skyrocketing legal expenses