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Updated: Friday, 29 Jun 2012, 8:26 AM CDT
Published : Thursday, 28 Jun 2012, 6:39 PM CDT
AUSTIN (KXAN) - An escalating fight between homeowners at the Sunchase Condominiums in North Austin and their homeowners association has turned into a move to oust the HOA board members -- and a civil lawsuit.
KXAN first told you about this battle in May.
People living at Sunchase said they’ve paid their HOA dues for years. But their HOA board members refuse to show them exactly where their money has gone. Now, a group of homeowners is meeting to consider voting out their board and firing their property manager, Nancy Thompson.
Homeowners say the board and Thompson have rebuffed requests to show homeowners their financial records, and have not had an audit completed in five years. That's close to $1 million in unaudited expenses. People who live at the Sunchase Condominiums in North Austin say they're at the end of their rope.
A history of controversy
An examination of Nancy Thompson's property management history at other condominiums in Austin led KXAN to the Travis County Courthouse.
“This is just not right, something is wrong,” said Karen Neyland, who lives at Sunchase and pays HOA dues.
That "something," homeowners say, is Thompson and the Sunchase board members. And the parties are now blaming each other for not having an independent audit done, as required by state law.
“It was just the same song, different verse, only bigger,” said Nona Blanchard. She lives at the Highland Park West Condominiums, a property managed by Nancy Thompson in late 2007. Blanchard said Thompson went through thousands of dollars of their homeowners association funds and spent money without authorization on things unrelated to the homeowners association.
“Our utilities were about to be cut off for non-payment, and then of course we got notices of the insurance being turned-off for not being paid,” said Blanchard.
Highland Park West fired Nancy Thompson in January 2008, and then sued her to get their money back. Highland Park won. Thompson didn’t even show up for court.
To this day, records show, Thompson hasn’t paid any of the judgment of more than $4,000 against her, which is accruing 5 percent interest per year.
Thompson disputes the criticism
Thompson told KXAN in an interview Thursday that she has done nothing improper in her role as a property manager. The decisions she has made in that capacity, Thompson said, have been made under HOA board supervision.
But that's not the way Blanchard saw it.
“It was discovered that she was paying her cronies for work that they didn't do,” Blanchard told KXAN.
By "paying her cronies", Blanchard means Thompson paid her friends and family with Highland Park West HOA money. Blanchard specifically lists Thompson’s husband, who was paid for "contracting" work, along with Thompson’s son, who was paid for "porter" work and her daughter in law, who was paid for "contracting" and writing a newsletter.
And that seems to be a similar concern at the Sunchase Condos under Thompson’s management now.
A deeper look at the expenditures
A KXAN investigation found checks totaling more than $20,000 for "reimbursements" and "bonuses" written to Thompson's husband, who works as the maintenance staffer. We also found checks totaling nearly $10,000 to her son for "yard work" and "security” and more than $1,000 in checks written to a woman who was her daughter-in-law at the time.
Because homeowners have been denied the opportunity to see the invoices and receipts for the work done, they now question the legitimacy of those expenses.
Sunchase HOA board members are responsible for the HOA dues and how that money is spent.
The Sunchase bylaws state the board shall "keep sufficient books and records with a detailed account of the receipts and expenditures... specifying the maintenance and repair expenses."
Those bylaws also state that "the books, vouchers and other records regarding these transactions shall be available for examination by unit owners within five days of their request."
So far, homeowners say they've been denied access to the HOA’s financial records, as required by their own bylaws and Texas law. They also say the board has failed to act on numerous calls to fire Thompson.
Thompson finally granted KXAN's interview request later Thursday afternoon in a conference call with her lawyer.
She said she is not authorized to provide financial information to the homeowners or write checks on the Sunchase bank account. Thompson also said any alleged mismanagement of money rests with the HOA board members who sign the checks.
As for the audits, Thompson said that according to the HOA bylaws, audits are the responsibility of the HOA board, specifically the treasurer.
As for paying her husband, Thompson said the board members hired him, not her.
“Three years ago we had an emergency out on the property," she said. "I called several people, I mean lots of people. It was a big-time water leak. We couldn’t find anyone.
The board president at the time told Thompson
to call her husband, she said.
“He ended up helping and everyone in the community loved him, thinks he’s a great guy," Thompson said. "And I didn’t have anything to do with it.
"It started out with one job and then it started out with a homeowner asking him to do something for him. And then another home owner. And then the HOA started asking him to do some things and it really didn’t have anything to do with me," said Thompson.
She also said there is so much animosity that the Sunchase HOA board is in fear of putting anything out, and that’s why she believes the board hasn’t released financial information.
KXAN attended a recent Sunchase HOA board meeting as invited guests of several homeowners, but the board members didn’t want reporters and cameras there.
“Either you leave or we just close the meeting,” said Sunchase board member Lisa Mims to KXAN. Mims has been on the Sunchase HOA board longer than any other member. “You want there to be a meeting? You need to leave."
A majority of hands shown by homeowners was in favor of KXAN staying. Meanwhile, Thompson was allowed to have a guest at the meeting. She was flanked by her attorney.
“The press is not allowed to be here,” said Mims. “In fact, I'm about to call law enforcement,” Mims continued before storming out of the room of a public library.
Later in the meeting, more tension was evident between homeowners and the second-longest serving board member, Kate Benson.
“I'm talking right now. Just be quiet for just one second,” Benson told homeowners.
Later, Sunchase homeowner Phyllis Watts, said, ”You can’t get anything from the board members now. They don’t want to give anything out, any information at all.”
But that could change. Both Mims and Benson, along with the rest of the Sunchase HOA board are now defendants in a lawsuit . The suit claims Mims and Benson have breached their fiduciary duties to the Sunchase Homeowners, and as a result homeowners’, money is “unaccounted for, has been misspent, and potentially misappropriated.”
KXAN asked Mims for an interview.
"Not only no, but hell no!" she replied in an email.
Meeting with no vote
The Sunchase Homeowners called a special meeting Thursday night to consider removing Lisa Mims, Kate Benson and the rest of the Sunchase Board Members. While Mims did resign, no vote happened, however, regarding the rest of the board because homeowners were reportedly disregarded.
"We wanted to [vote], but everybody was quashed," said condo owner Susan Sinclair. "The whole board said that they would resign tonight if that's what we voted on, but they never let us vote."
Had homeowners been successful in removing the board, they said they would have immediately fired Nancy Thompson as their property manager.
What happens now?
As for the rest of the board members -- with their attorney's guidance -- they did allow another meeting, set to happen in three weeks. At that time, a special election may happen to potentially replace the board.
Still, homeowners coming out of Thursday night's meeting said they won't be holding their breath.
Meanwhile, Austin police continue their investigation into Thompson and the Sunchase HOA board members.
Austin police continue their investigation into Thompson and the Sunchase HOA board members.
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