Money missing from Austin HOAs, attorney says

Investigations

AUSTIN (KXAN) – Mason Weems was celebrating with family and getting ready for the new year last December when he heard a knock on his door.

It was about 7 p.m. and he remembered being greeted by a contractor who he had been in touch with about some water damage at his place.

Weems explained the contractor gave him an estimate earlier in the year, but the water damage was never fixed.

He said when he would see the contractor around Riverside Grove or RG Townhomes in southeast Austin, he would tell him to talk to the property management company.

But on that December night, Weems explained that the contractor shared something else.

“He’s like, ‘Hey, I don’t know if you know, but I haven’t been paid and some of the other vendors haven’t been paid,'” Weems said. “After that, like my whole life changed.”

$7.75 left in HOA account

Weems said that he learned from their HOA attorney that Plateau Property Management Corporation had mismanaged their HOA money.

According to a letter to several HOAs from Plateau’s attorney, the company collects regular and special assessments from the membership and deposits those funds into the association’s designated checking and money market bank accounts, which are managed by Plateau.

“We had about $120,000 on paper in our reserve fund. And when we looked instead of $120,000 or so… we had $7.75. So, there just never was $120,000 in our bank account,” Weems said. “I was able to get access to the bank records and see just lots of movement of money in and out of our account to other accounts that we didn’t understand.”

Overnight, Weems became the treasurer of the RG Townhomes Owners Association and then most recently the president. 

“We had vendors who hadn’t been paid in three months, they needed to be paid. We had the landscapers that hadn’t been paid… no one had been paid,” Weems explained. 

Riverside Grove Townhomes and the Boulevard Condominiums share a fence and trees in southeast Austin. (KXAN Photo/Chris Nelson)

A similar discovery was made by a neighboring property at the Boulevard Condominiums.

They not only share a fence and trees with RG Townhomes but up until last year they shared services from Plateau too.

“$100,000 of our HOA money. Yeah, I mean, wiped out,” said Lisa Novak Hopkins. “We were all very surprised.” 

She was notified by the Boulevard Condominium Association that money had also been missing from their HOA account.

“We pay those every month in good faith that it’s going into the right hands and to have it just wiped out so we can pay our bills – you know – we have to have landscaping, pool maintenance, all kinds of stuff,” Novak Hopkins explained. “Then the freeze happened in Austin, so pipes burst, there was all these unexpected other things.”

Treasurer terminated

A letter that both HOAs received and homeowners shared with KXAN investigators detailed what happened. 

The letter said that it has come to Plateau’s attention that its treasurer mismanaged the accounts, which has substantially depleted the association’s funds. 

The attorney for the management company continued to explain that the treasurer was terminated, and that Plateau is trying to find out exactly how much of the association’s funds are unaccounted for and if those funds can be located. 

KXAN investigators requested to talk to the owners of Plateau, but their attorney said because this is an ongoing legal matter, Plateau has no comment at this time. 

Both HOAs had to have special assessments and one raised fees to cover costs that were piling up. 

“So, it’s been a pretty big shock on everybody financially, I believe, to have to kind of recover some of these expenses and funds,” Weems said. “There are some people here on fixed incomes and things like that. And we haven’t had an HOA raise, in a while, so, it’s, it’s been pretty low.”

Police investigation 

Almost a year later, Austin police are investigating but said there is no information available right now.

The Boulevard Condominium Association alerted homeowners in December of 2020 that money had been missing from its HOA account. (KXAN Photo/Chris Nelson) 

“I think everyone just wants to see someone pay for it to be you know, have some consequences,” said Novak Hopkins. “It’s affected a lot, a lot of people.”

The Boulevard Condominium Association didn’t have a comment since there’s an ongoing investigation by the Austin Police Department. 

The attorney representing the association told homeowners in a letter that seven associations that were managed by Plateau in Austin have been impacted and they all received the same letter from Plateau’s attorney.

Those impacted say anyone in an HOA should ask their board about insurance and if mismanagement of money would be covered. They also explained that HOAs should always get an outside auditor to flag anything suspicious.

Weems said he’s making sure protections are in place, so this doesn’t happen again. He said this should be a warning to all HOAs and homeowners. 

“It does show also that we’re resilient, like a lot of people stepped up to help and volunteer,” Weems said. “And, you know, we had, like the dog run…someone responsible for the dog run, and someone responsible for the weight room and the pool. And the front gate always breaks. So, someone figured out that. And, you know, one of the guys is out, you know, a tree falls. So, he’s out there with the chainsaw, like, you know, like just doing it. And so yeah, it’s just, it’s been good in that sense.”

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