The Proposed Budget you received is a sham
The budget proposal provided to you has two big flaws.
Another $20,000 has been earmarked for Legal Fees and there is not one cent allocated for Seawall Repairs.
The wasteful spending on legal fees is epidemic under this board. The manager put this budget together, which originally called for a significant increase in dues, and only Mark D'Angelo and I demanded that expenses be reduced. I submitted line item recommendations for spending cuts. Many were adopted but not legal fees. [???]
There are two entries for legal fees. One for $10,000 for foreclosures/collections and another $10,000 for who knows what? We don't use a lawyer for foreclosures anymore and we have never used a lawyer for collections.
Money is going to be spent on work that has been done on the seawall, is being done on the seawall, and will be done on the seawall in the coming fiscal year.
When Mark D'Angelo and I pointed this out and informed the board that this cannot be concealed from the owners, we received an email from JoAnn Rother stating:
"This is just a draft proposed budget. I believe it can be changed in the final budget meeting. It really needs to get out. I believe it is close enough to send and over the next month fine tune."
This statement illustrates the lack of knowledge of the budgeting process.
Under Florida Law, the board is required to create a budget and propose it to the members of the Association for approval. The proposed budget is not a draft once it has been voted on by the board. By Resolution, it then becomes the budget the Reef Club will run on for the next year starting May 1st.
Candidate Rother advocates getting it out and changing it over the next month without the owners' knowledge.
This is not right.
Mark D'Angelo and Paul Koyak voted "no" on this budget.
Why did JoAnn Rother get to put 3 pages in the annual meeting packet promoting herself for re-election?
The rest of the candidates only got a single page.
Stop Reef Club corruption once and for all. Please vote.
March 2014
Operational Investigation in Regards to Potential Illicit Activity by Walter Siggers and George Dirner.
Compiled by Hanson Akerman
CAM#41648
Abstract
The discovery of a file folder in the Jupiter Reef Club Condominium Owners Association office raised questions of misconduct and/or illegal activity that required myself, Hanson Akerman, to investigate on the basis of my fiduciary duty prescribed to me via my licensure as a community association manager in the State of Florida.
After a cursory investigation, it became clear that more thorough fact finding would be required. The potential for items such as misappropriation of association property, collusion with staff, unlicensed activity, and material lack of disclosure required that I seek guidance from a higher authority.
I have compiled the following facts in good faith, and to the best of my knowledge and belief, all are presented fairly and in accordance with supporting documentation.
Table of Contents
I. Circumstances
II. Relevant Policies
III. Material Damages
IV. Material Lack of Disclosure and Potential for Collusion
V. Ownership and Rights-of-Use
VI. Closing Statement
Circumstances
On March 25th, 2014 a file folder was discovered in the Jupiter Reef Club Condominium office. This particular file folder contained several documents detailing two stays in units at the condominium by Walter Siggers. Once in unit D-12 week 31, 2010 and once in D11 week 44, 2011. Mr. George Dirner accompanied Mr. Siggers in unit D-12 week 31 2010. No monies were received in connection with these stays.
The exact producer of the file folder is not certain, but clearly it was compiled by someone with administrative access to the condominium’s records, and had some level of dealings with the condominium’s rental inventory. Included with these papers was a report generated for the purpose of detailing stays of Board members at the Reef Club.
Both Walter Siggers and George Dirner were serving on the Board at the time of the stays. Walter Siggers was serving as president during both stays.
Relevant Policies
There is no standing policy at the Jupiter Reef Club allowing for the use of any unit by the Board of Directors without compensation. Clarification can be found in the minutes of the February 5th, 2013 meeting and the February 15th, 2012 meeting. During both meetings, it was stated that the compensation for out of town Directors is “two nights in a hotel at a maximum of $150/night per meeting”. George Dirner and Walter Siggers were present at both these meetings.
Material Damages
The record indicates that D-12 week 31 has a flawless record of being rented consistently for at least a decade. The second unit D-11 week 44, only involving Mr. Siggers, had not been delinquent long enough to establish a clear rental history. Unit D-11 week 44 was sold recently, and all arrears were charged to bad debt. Rental monies received would have been applied to the account of the unit owner and would have been direct and immediate income to the association.
The fiduciary responsibility of every Board member is mandated by state law. The willful breach of this responsibility or any regulation, rule, or law can cause irreparable harm to the association including its reputation, well-being, and culture.
Material Lack of Disclosure and Potential for Collusion
An e-mail by a Board member on September 4, 2012 indicates a clear line of questioning into unit stays for Board members. Facts indicate that, although information was compiled by administrative staff for the October 27th, 2012 Board meeting in this regard, such facts as they should have been made available were not disclosed.
The fact that the report was never made public and the fact that hand-written notes on the official record indicate attempts by staff to obscure records of the stay in unit D-11 week 44 lead to the potential for collusion.
The potential for material lack of disclosure and collusion is compounded by the fact that multiple Board members at the time, week 44 2011, stayed on the property legitimately: either through RCI exchanging, renting, or owning. One very particular point of concern is that Mr. Vincent Augello, a Board member at the time, was required to pay rental fees for a “lockout” rental, while Mr. Siggers and Mr. Dirner were not. Mr. Vincent Augello is an out of town Board member who travels from Cape Coral to attend meetings. Cape Coral is 150 miles from Jupiter.
Ownership and Rights-of-Use
It was the case in both stays that the units in question were available as “lockout” rentals pursuant to Florida State Statute 721.13(6). The association holds no ownership in the units. The intent of this statute is to allow for the rental of an owner’s timeshare interest due to delinquent assessments. It is a statutorily permitted means by which to recover the association’s bad debt. State Statutes 721.13(5) and provisions of 721.13(6) define the requirements of transferring or renting such inventory of a timeshare. Respectively they require that no member of the association, management, or any agents thereof may misappropriate property or funds of the association, and that a commensurate rental rate must reasonably be sought by the management entity for such inventory.
During the time at which both these stays occurred, no Licensed Community Association Manager (CAM) was employed by the Jupiter Reef Club. Florida State Statute 721.13(1) details the requirements of timeshare management entities. A CAM license is required by any employee controlling the funds or property of an association, or one whom has the authority to do so. There were no authorized personnel to handle these affairs besides the Board of Directors.
Closing Statement
I am required to investigate any potential of fraud or theft at the association, and subsequently disclose my findings to the appropriate authorities. The facts, as presented, sustain a strong and reasonable suspicion that wrong-doing occurred. My fiduciary duty requires me to take whatever action is necessary to protect the Jupiter Reef Club and the best interests of the owners. It is not up to me to determine whether criminal or civil charges are filed.
Hanson Akerman
Another letter has been posted on the Reef Club website. This one from Ahmed Kassoo. He's with the Department of Business & Professional Regulation. Below is a communication from him which is public record. Contradictory to what he was talked into stating in the letter on the website.
Kassoo, Ahmed <Ahmed.Kassoo@myfloridalicense.com>
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6/2/14
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Good Afternoon, Paul:
Per your request, I am forwarding a copy of the e-mail
sent to Ms. Valencia
last week. As we discussed, the following section of the law applies to
delinquent owners’ weeks:
Provided that the managing entity has properly
and timely given notice to a delinquent purchaser pursuant to paragraph (b) and
to any affiliated exchange program pursuant to paragraph (c), the managing
entity may give further notice to the delinquent purchaser that it may rent the
delinquent purchaser’s timeshare period, or any use rights appurtenant thereto,
and will apply the proceeds of such rental, net of any rental commissions,
cleaning charges, travel agent commissions, or any other commercially
reasonable charges reasonably and usually incurred by the managing entity in
securing rentals, to the delinquent purchaser’s account. Such further notice of
intent to rent must be given at least 30 days prior to the first day of the
purchaser’s use period, and must be delivered to the purchaser in the manner
required for notices under paragraph (b). A managing entity may make a
reasonable determination regarding the priority of rentals of timeshare periods
to be rented pursuant to this paragraph and, in the event that the delinquent
purchaser of a timeshare period rented pursuant to this paragraph cannot be
specifically determined due to the structure of the timeshare plan, may
allocate such net rental proceeds by the managing entity in any reasonable
manner. 721.13(6)(f)1.
If you have any other questions or concerns, please feel free to
call us. Thank you for giving us the opportunity to address your concerns.
The undersigned is not an attorney and is
not qualified or authorized to provide any legal opinion. The explanation
provided in this correspondence is regarding the application of the law to a
specific situation and should not be construed as the legal opinion or the
Division’s position or policy with respect to issues being addressed related to
this matter.
Sincerely,
Ahmed Y. Kassoo
Investigation Specialist II
Bureau of Compliance
Division of Florida
Condominiums, Timeshares,
& Mobile Homes
400 W. Robinson
Street, Suite N-908
Orlando, FL
32801
CONFIDENTIALITY
NOTICE: This E-Mail, including attachments, is intended only for the use of the
individual or entity to which it is addressed and may contain information that
is privileged, confidential and exempt from disclosure under applicable law. Any
unauthorized review, use, disclosure, or distribution is prohibited. If you
have received this communication in error, please do not distribute it. Please
notify the sender by E-Mail at the address shown and delete the original
message. Thank you.
From: Kassoo, Ahmed
Sent: Thursday, May 29,
2014 12:29 PM
To: 'spc1776@bellsouth.net'
Subject: Jupiter Reef Club
Importance: High
Good Afternoon, Ms. Valencia:
It was a pleasure speaking with you this morning regarding the
application of the law to the situation described by you with respect to the
use of delinquent owners’ unit-weeks by the board members which are
classified as “Blue Units” by the association. As we discussed, the following
sections of the law, 721.13, F.S., seem to apply to that situation:
(2)(a)The managing
entity shall act in the
capacity of a fiduciary to
the purchasers of the timeshare plan. No penalty imposed by the division
pursuant to s. 721.26 against any managing entity for breach
of fiduciary duty shall be assessed as a common expense of any timeshare plan.
(5)Any managing entity,
or individual officer, director, employee, or agent thereof, who willfully misappropriates
the property or funds of
a timeshare plan commits a felony of the third degree, punishable as provided
in s. 775.082, s.775.083, or s. 775.084, or the
successor thereof.
Generally, we find that when the associations and individuals
are not in compliance they cite the existing practices, that were in place for
years to justify certain acts, and lack of knowledge of the applicable laws
that may have resulted in a violation. Please note that board members and
managers are expected to follow the law an seek guidance when necessary which
may involve consulting with an attorney when needed.
As we discussed, and based on the information provided to us,
there appears to be a potential violation of the Act. The law authorizes
the association to rent the delinquent owners’ unit-weeks to offset the unpaid
assessments. These unit-weeks should not be used by anyone without compensating
the association. Traveling board members may be authorized to stay in the
units for official meetings only in lieu of staying in a hotel and receiving
the reimbursement, provided that such arrangements are approved by the board
pursuant to the bylaws of the association.
Please note that as part of Division’s outreach program we are
prepared to meet with the board and management staff to review the process and
procedures to ensure compliance. You may request an educational session
by contacting the Division in writing at the following address.
Division of Florida
Condominiums, Timeshares, and Mobile Homes
1940 North Monroe Street
Tallahassee, FL
32399
Phone: 850.488.1122
Fax: 850.921.5446
Thank you for giving us the opportunity to address your
concerns.
The undersigned is not an attorney and is
not qualified or authorized to provide any legal opinion. The explanation
provided in this correspondence is regarding the application of the law to a
specific situation and should not be construed as the legal opinion or the
Division’s position or policy with respect to issues being addressed related to
this matter.
Sincerely,
Ahmed Y. Kassoo
Investigation Specialist II
Bureau of Compliance
Division of Florida
Condominiums, Timeshares,
& Mobile Homes
400 W. Robinson
Street, Suite N-908
Orlando, FL
32801
CONFIDENTIALITY
NOTICE: This E-Mail, including attachments, is intended only for the use of the
individual or entity to which it is addressed and may contain information that
is privileged, confidential and exempt from disclosure under applicable law.
Any unauthorized review, use, disclosure, or distribution is prohibited. If you
have received this communication in error, please do not distribute it. Please
notify the sender by E-Mail at the address shown and delete the original
message. Thank you.
