Local News

Raleigh HOA accused of spending $11K on parties, ignoring repairs

Posted February 11, 2011

— A Raleigh homeowner’s association is being criticized by some of its residents who claim that thousands of dollars have been spent on entertainment instead of much-needed repairs around the community.

“We’ve allocated in our budget so far $11,000 to throw parties, but the maintenance, repair and replacement for our common areas is not being addressed,” said Village Lakes resident Lolita Stevens.

Stevens contacted WRAL News and said the homeowner’s association holds closed door meetings, ignores residents’ requests and spends residents’ dues on foolish items, such as a brand new, large, flat-screen TV for the clubhouse.

Residents question HOA spending Residents question HOA spending

“The people who manage the clubhouse tossed the keys on the table and said, ‘Show them what you did with their money,’” Stevens said. “And when they opened the cabinet, we see this big Vizio TV, and we, whew, we had no idea.”

Meanwhile, some common areas in the community on Rogers Lane off U.S. Highway 64 East are in disrepair, according to Stevens. Her biggest concern is the centerpiece of the Village Lakes community – the pool.

“A lot of the lattice work over there is damaged,” she said. “The mold has been there for the last couple of years.”

Some of the wood is so rotten, Stevens said, that she can poke holes in it with her fingers. But it's not just the way the pool area looks; she said there are major safety and insurance issues as well.

Parts of the fence are broken, and a rail leading up to the clubhouse has sharp staples sticking out. The filter covering on the pool deck appears to be sticking up more than the quarter inch allowed by county regulations.

Stevens said the HOA board ignored her concerns, so she went to city and county inspectors to get things fixed.

“The HOA is a legal corporation with responsibilities. The board has fiduciary responsibility to protect and enhance the property within the community,” said Jim Laumann, who founded a local company that helps HOAs by encouraging education and participation by homeowners.

"Don’t stand on the sidelines and say that you didn’t know,” he added.

That approach did not work for Stevens when she confronted the HOA board president about the entertainment budget versus the upkeep of the neighborhood.

“I handed him 13 signed proxies. He told me, ‘I’m not going to take the proxies.’ I said, ‘You have to count these.’ He said, ‘I’m not going to count these votes. I’m going to throw them in the trash,’” Stevens recalled.

WRAL Investigates contacted Village Lakes’ board President Arthur Kelsie to get his side of the story.

“I don’t have anything I want to talk to WRAL about,” he said. “I just don’t. That’s homeowners’ association business between the homeowners’ association and homeowners.”

WRAL contacted Kelsie again Friday to give him another chance to respond. Citing HOA bylaws, he said he doesn't recognize Stevens because she's not a homeowner. She lives in the home and holds power of attorney.

WRAL spoke with various homeowners who shared Stevens’ views and recognized her as a vocal neighborhood advocate. Kelsie said homeowners can share their views at monthly meetings, but he won’t air grievances through the media.

Stevens said she and other homeowners just want to be heard.

“The biggest problem out here is our community is not being taken care of, not being cleaned up,” Stevens said. “Things are not being repaired as they should, and the money, the biggest thing we hear about it is, ‘We’re having a party.’”


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  • Vietnam Veteran Feb 21, 2011

    Stevens is an Agent for a member, and as an agent, has the same rights that the Member has given Stevens.

    Stevens is the agent for 13 members, and those members rights to appoint a proxy as an agent to vote for them has been denied.

    Board members are not volunteers, they are the elected servents of the members.

    If Steven's proxies were "thrown in the trash", isn't that is a violation of the NC GS about keeping records?

    I'll bet there is an article in the bylaws about keeping records also.

  • Vietnam Veteran Feb 21, 2011

    Perhaps WRAL should buy a unit at my HOA, and learn first hand what corruption by an HOA board means. Lots of people here desperate to sell since the clubhouse is closed, the roofs are leaking, the pools have been closed for over a decade, the dues get raised randomly, and the records are kept hidden from the members. As an Owner, you will have the right to inspect the records, if you can find them...

  • Vietnam Veteran Feb 21, 2011

    Corporate Acceptance of Proxies and votes, etc...


  • Vietnam Veteran Feb 21, 2011

    Important Links with regards to HOAs
    These are NC General statutes that are posted at the State
    Legislature web site.

    § 55A-16-02. Inspection of records by members.

    Agent's right to inspect records
    § 55A-16-03. Scope of inspection rights.

    Keeping records at the Principal Office
    § 55A-16-01. Corporate records. http://www.ncga.state.nc.us/enactedlegislation/statutes/pdf/bysection/chapter_55a/gs_55a-16-01.pdf

  • Vietnam Veteran Feb 21, 2011

    It is possible for the membership to sue the directors individually for violations of state law, the covenants, and the bylaws, if they have a financial claim because of this. A lawyer needs to be involved. It is difficult, but the more they violate the governing laws and bylaws and covenants, the more they put a rip in their veil of corporation protection.

  • Vietnam Veteran Feb 21, 2011

    As for not accepting Proxies, if a Proxy is Challenged, the Corporate Secretary has the final say as to if the proxies are valid, and should have a valid reason for not accepting any proxies.

  • Vietnam Veteran Feb 21, 2011

    The HOA can put a claim of lien on any home that is deliquent, and can foreclose on it.

  • Vietnam Veteran Feb 21, 2011

    Very strange! Their Registered Agent is in Chapel Hill, and they do not list an address of the Principal Office with the NC Secretary of State, and you cannot even look up their Articles of Incorporation with the Secretary of state.

    They are required to keep the last 3 years of their records at the Principal office.

    The agent of a Member has the same rights of inspection as a member of an HOA. So these folks are hiding something.

  • saturn5 Feb 11, 2011

    Get the residents together and eject the HOA board. It can be done. Read your bylaws and the CC&R very closely. The HOA board has a contractual obligation to do their job. If they aren't, the board can be removed by vote of the home owners.

  • james27613 Feb 11, 2011

    Hard not to avoid the HOA, banks want to lend money only if the development will be successful, so restrictive covenants are drawn up and included with the sale of the home. no avoiding them unless you move out to the country. Our HOA is pretty quiet, most of the time your project is approved quickly.

    They did require us to paint mailbox posts white instead of the color of trim paint on the homes. Proble m