A Maryland property management company is in trouble with the state over how it spent homeowner and condo fees. The Maryland Attorney General Consumer Protection Division filed charges against Evergreen Management, LLC for misappropriating assessments paid to homeowner associations and condominium associations. The owners of Evergreen, Jason Barry Oseroff and his late father Ivan Oseroff, are accused of taking nearly $2.5 million in funds and using the money for their own benefit over the years. Evergreen was hired to manage the books and records of HOAs, arrange and pay for contractors such as landscapers, prepare tax returns, attend meetings, and perform other functions. The company was hired by 13 associations in Maryland. Instead of providing the services for which they were hired, Oseroff withdrew unauthorized cash amounts, paid thousands for charges on his wife’s credit card, made payments to himself, and funneled money from other HOAs to cover the bills of another. Evergreen also failed to provide bank records and invoices to homeowners when requested. The company is also accused of providing homeowners with false balance, expense, and income reports.

Amazingly, HOA management companies are completely unregulated and do not need any license. They can accumulate and manager millions of dollars in assessments and reserve funds without any state oversight. In Utah, there are fewer qualifications for managing HOAs than there are to do nails in a nail salon. The Utah CAI Legislative Action Committee tried for multiple years to introduce legislation that would require minimal training and bonding requirements for HOA managers. But, the Utah legislature stymied those efforts and would not allow the legislation to advance.

Thefts like that above have occurred in Utah HOAs multiple times. The lesson for Utah HOAs is simple. Carefully vet and hire experienced and reputable managers. Even then, someone in the Association must keep an eye on the money. Association boards should insist that their HOA funds are kept in distinct accounts in the name of the HOA and that bank statements for those accounts are provided each month. They should insist that only board members have signing authority for any significant transfers or checks and that they should have exclusive signing authority on reserve accounts. Ocassionally, a call should be made to the bank to verify that the funds represented on bank statements are really in the accounts. With minimal oversight, it can be very difficult for a management company to steal HOA funds. Without oversight, it can be extremely easy.