Attention Cedar Run homeowners, We now have of a copy of the report presented by the receiver in court yesterday (3/10/15).
The report can be found by clicking HERE.
There is a lot of interesting material in this report. It shows what a real mess Sher had left at the time of his ouster. It also shows that he may be hiding certain financial information from the receiver and accountants. (item 17)
We will post a thorough summary later, but for now we'd like to point out some issues that Phase V owners should know prior to tonight's meeting at the clubhouse.
We strongly encourage all homeowners in Phase V to attend this meeting. Given the above information, we believe that the directors who called this meeting, are probably making a good-faith effort to inform homeowners.
The report can be found by clicking HERE.
There is a lot of interesting material in this report. It shows what a real mess Sher had left at the time of his ouster. It also shows that he may be hiding certain financial information from the receiver and accountants. (item 17)
We will post a thorough summary later, but for now we'd like to point out some issues that Phase V owners should know prior to tonight's meeting at the clubhouse.
- Phase V financial and legal documents have been kept secret from the phase directors since the Sher takeover (item 8)
- Phase V has not filed tax returns since the Sher takeover (item 8)
- Phase V has no Director's & Officer's (aka D&O) insurance policy, meaning that if the board members were sued, they would have to pay for their own defense (item 11-b)
- Phase V's building insurance only covers $66 per square foot, when it should cover about $200 per square foot (item 11-c)
- The way Phase V's insurance policy is written, it may NOT COVER ANYTHING on the residential buildings and only cover the clubhouse (?!) (item 11-e)
We strongly encourage all homeowners in Phase V to attend this meeting. Given the above information, we believe that the directors who called this meeting, are probably making a good-faith effort to inform homeowners.
If this is the case, then we applaud them for making this effort.
Please stay tuned for our full summary of the receiver's report. For the time being, we encourage you to read it in its entirety. We will also post the court transcripts once they are available.
Please stay tuned for our full summary of the receiver's report. For the time being, we encourage you to read it in its entirety. We will also post the court transcripts once they are available.
Thank you for the update! Happy to read the receiver's report and see that all is finally being done by the book. There is still a long road ahead, but this is a great start! Cedar Run will shine...we all need to stay united and focused...by going to meetings and being herd.
ReplyDeleteThanks for the updates on the goings-on of this case - we appreciate it. Also, can someone let the Receiver & the people performing the financial audit know about certain practices at the CR Clubhouse? I suspect Sher was using it to rent out to OUTSIDE groups for personal profit. The auditors need to pay close attention to record books for the Clubhouse rental. I can't prove it, but I have my suspicions - a large amount of funds were spent refurbishing the Clubhouse, and we residents were never asked to vote on whether & how to spend those funds. At one point, about $60,000 had been spent refurbing it at the same time we were being told there weren't enough funds to repair & re-open the pool, which was closed for 1/2 of one season & almost the entire following Summer. Then after some of the rehabs took place, there were parties going on almost every night of the week. This issue was brought up at one of the meetings, and the answer was, "Yes, we DO rent to non-residents for parties, etc. during the week, but we reserve the weekends for CR residents". I don't know what the By-Laws say, but I suspect the Clubhouse is intended for CR resident use only. I would have no objection to renting to outside parties - IF the fees go into CR's coffers - but what if only SOME of these parties & fees were reported on the books & the rest were NOT, and the unreported fees were simply pocketed by Sher & co? It would be easy enough to do - just list the weekend & SOME of the weeknight parties but don't put anything in the Ledger for others & BINGO - keep the unreported money for yourself! Maybe that's the reason Sher's group was so hell-bent on spending money to refurb the Clubhouse - as a money-making business for themselves. If this proves not true, then I apologize, but the question needs to be asked. Please let the Receiver & Auditors know they need to pay special attention to the Ledger (or whatever it's called) that shows Clubhouse rental. If it's only showing relatively infrequent use (say, once or twice a week over the last year or so), then something's wrong, because it was in use MUCH more than that. As I said, there were weeks when the Clubhouse was in use just about every single night, during the week & on weekends, even many times on Sunday nights. ALL those "uses" or rentals should be shown there - if they aren't, something's very wrong...
ReplyDeleteBy the way - and this may be related to my point - I find it very interesting & quite suspicious that the CR financial records on the Google Account in Sher's name suddenly disappeared ! What are they hiding??
All good points. Do keep in mind that such a scheme could just as easily have happened when a homeowner rented the clubhouse. It would not necessarily have been only with outside renters.
DeleteWe can only speculate about this type of issue. If the auditors find any records of clubhouse rental income, they will classify and itemize it appropriately. If they don't find any records for clubhouse rental, then your theory might be true because we know it was occasionally rented.
The Google docs issue is much more of a concern. What is Sher trying to conceal? or What changes does he want to make to the expense records before he is willing to let the receiver and auditor see it? The expression 'cooking the books' comes to mind.
today is march 23rd 3-5 '' inches of snow is on the ground ,any idea WHY nothing is being done?no side walk nor the streets are plowed no matter whos running the show we need snow removel service as our contract with our monthly assessment payment
ReplyDeleteI had to shovel myself out and put salt down on the driveway yesterday...... Did not get plowed or shoveled out till after 4 pm...I ask why also?
DeleteOur understanding of the situation is this:
DeleteThe receiver had found out that the business that was handling our snow removal (and landscaping), Zac's Landscaping, has no insurance. After learning of this, the receiver terminated the contract with Zac's, and set out to hire a new landscaper.
Unfortunately, when they hired a landscaper, they did not make provisions for snow removal and assumed that there will be no more significant snowfalls this year....obviously an incorrect assumption.
After it began snowing, they made calls to local snow removal companies and found one who agreed to come out, but only after it took care of its other clients, which is why they arrived in the late afternoon.
It's good that the snow was eventually removed, but we all would have liked it to happen sooner.
you mention ZACS LANDSCAPING &SNOWREMOVEL NO INSURANCE WHY IS zACS AQUIPMENT AT CLUB HOUSE ? DOWN THE STREET IS A STORAGE FACILITY !
ReplyDeleteThat is correct. In the receiver's report, he mentions that Zac's was not able to produce a certificate of insurance when asked. (There is more in the court transcript, please stay tuned).
DeleteThe contract that Robert Sher had with Zac's did require Zac's to be insured. But simply putting it in the contract without demanding proof is not enough.
Properly managed associations will always demand a current certificate of insurance (preferably one that specifically names and indemnifies the association) from all contractors before letting them perform work on the property. Again, this is another stark difference between the Sher/Shaw management style and bona fide, professional management.
As for what will happen to the equipment at the clubhouse, we are still looking into that. It is unclear, at this point, which equipment belongs to Zac's and which were actually purchased by the HOC under Sher/Shaw. Presumably, any equipment owned by Zac's will be removed in the near future.