ROYDEN ANNUAL MEETING TO FOCUS ON CORRUPTION ISSUES
Dear Fellow Royden Neighbors and blog readers, in preparation for the upcoming Royden Annual Meeting and payment of the 2017-2018 Annual Assessment, there are several By-Laws and Covenant issues, as well as prior and pending legal actions, that you need to be aware of, to make an informed decision. A long read, but covers 10 years!
We are writing you to advise you that YOU SHOULD NOT PAY THE 2017-2018 ANNUAL ASSESSMENT, AS FIXED, AND DO NOT VOTE TO CHANGE THE FISCAL YEAR PERIOD. Here’s why!
1) CHECK OUT THE ATTACHED ARTICLE IV-COVENANT FOR ANNUAL ASSESSMENTS-CREATION OF THE LIEN AND PERSONAL OBLIGATION FOR ASSESSMENTS -An HOA is a legal, quasi governmental, legal entity, with the most immediate power/control over a citizen. Failure to pay annual assessments, can lead to foreclosure. This rather long letter, will conclusively prove to you that Article IV has not been followed, by past Royden Boards for over 10 years. The Article IV covenant is attached, and can be found in the Phase III, IV individual subdivision documents on the Royden Website. Article IV is a result of the merger of Phase I/II in 1994. I served as President for 5 years, 1988-91, 2003-4,Treasurer 1 year and was VP serving on the Royden founding Board -1988. I was involved in all amendments and changed the fiscal year to the present June 1-May 31…..acceptable for over 30 years!!!!!!
2)ROYDEN ARTICLE IV LAWSUIT-Between 2012 and 2016, I spent over 300 hours preparing for and filing litigation, in district court, against the Royden Board, relating to over 10 years of violations to the Article IV covenant. The case was not adjudicated, as the Director’s and Officers Liability attorneys got the case dismissed. However, new legal action is pending. The Royden Board has been stonewalling my efforts by not providing a Certificate of Payment of Annual Assessments, invoicing for past due assessments, review of books and records minutes, as specified in Article IV. Basically the Board refuses to document confirmation that all Annual Assessments meet Article IV. I have paid NO Annual Assessment in over 3 years. The RHA has not invoiced me, has refused certified mail and refuses to allow me access to Books and records. They also have refused a settlement offer. For more on the history of the dispute with the Royden HOA, visit my blog associationbusters.com and Facebook page and my Counterpoint newsletter/
Now here is why you shouldn’t pay the 2018-19 Annual Assessment that, again, does not meet Article IV.
3) BALLOT VOTING IS OBSOLETE, WAS INCORPORATED IN 1987, BY THE FOUNDING PHASE I/11 BOARD (I SERVED AS V.P.)- Ballot voting and was obsoleted by Article IV in the 1994 Merger Agreement.. The Annual Assessment is set at a Fixed number ($210.00) and can only be changed at a Special meeting called for that purpose. Article IV has never been amended…NEVER. The maximum annual assessment therefore is legally is set at $210.00. After any Fiscal Reserve Credit. So what is a FISCAL RESERVE???
4) FISCAL RESERVES WERE DELIBERATELY CONCEALED IN THE FINANCIAL DETAILS-Here’s some background info. A limit to the Royden year end Cash position, called fiscal reserves, was voted on at a 1994 annual Board meeting that amended the By-Laws as noted as the amendment of April 14, 1994, Article VI, Section (c) (iv). I was President when the Amendment was made.The membership,at an annual meeting, voted to limit all year end cash and cash equivalents (CD’s), to “no more that $15,000. However, in 1994, the Royden Subdivisions of Phase III and Phase IV were merged with Phase I/II. Article IV, which was part of the III and IV covenants, changed the year end total Cash position requirement by dictating an “equal to” 10% Contingency Reserve, as outlined in Section 2 (b). The 10% Contingency reserve clause would have the year end Fiscal Reserve, Cash and Cash equivalents (CD), equal to only $2,898.00. Obviously much less than the “no more than” fiscal reserve $15,000.00 limit in the Phase I/II By-Laws.
5) ILLEGAL AMENDMENTS- The By-Laws and Article IV have never been legally changed. For over 30 years, Royden has never needed ANY Fiscal Reserves1!!
Past Board’s, for over 10 years, have deliberately refused to abide by the Article IV Covenant of 1994 because of the limited, yes very limited authority it gives to the Board. The Board refuses to only provide Common area maintenance and Architectural Control…Oh, have their actions on Architectural control shown any transparency…., they have totally manipulated the membership by illegal amendments and now a fiscal year change. They are intentionally incorporating deceptive accounting maneuvers to bastardize an otherwise simple checkbook accounting system…I know, I issued quarterly statements when I was treasurer…Here’s what you need to know about Royden accounting and the Financial Reports you have been receiving for years…ALL WRONG! and ILLEGAL!!!!!
6)THE ROYDEN FINANCIAL REPORTING CONVENTION ONLY INCLUDES AN INCOME STATEMENT AND CASH FLOW STATEMENT, ..and MUST MEET GAAP *GENERAL ACCOUNTING PRINCIPLES) AND NC STATE LAW -GENERAL STATUTE GS 55A- Basically, one sheet can provide the required reporting. The 2017-2018 Financial statements, presented by Mr. Ben Pleune, do not meet these requirements. In fact, they have not been met for over five years. Why….Firstly, There is no Income statement showing Profit/(Loss,,,, THE 2017 INCOME STATEMENT, IF DONE CORRECTLY, WOULD HAVE SHOWN RECEIPTS OF $33,484.14 (AN AVERAGE ASSESSMENT OF $242), AND EXPENSES AT $34,809.07 FOR A (LOSS) OF $1324.93.-Pleune had NO INCOME STATEMENT! Or explanation of income sources??Check again!!!!! More importantly, Mr. Pleune had NO CASH FLOW STATEMENT !!!! Fiscal Reserves appear here!
Here is the Cash Flow statement Pleune should have provided if he followed GAAP and NC Law
2016-2017 Fiscal Reserves-$32,119.66…( Reconciled to actual Bank Statements as of 5/31/17!)
2017-2018 Profit/(Loss) $(1324.93)…Pro-forma or actual?????
2017-2018 Fiscal Reserves $30,794.73.(Actuals,reconciled to Bank Records.)
Note, either thru incompetence or deceptive behavior, no where can you find these terms or figures. Instead of a one page report, Pleune, a lawyer no less, attempted to obfuscate a simple checking book accounting system with a balance sheet….there is no balance sheet in Royden Financials..Net Assets?????….Now, all of our bankers take note….He closed the fiscal year on June 1…….The Fiscal year ends on May 31!!! …….apparently to show his total transparency????? He included a Check Registry!!!!!!!! Who needs it…And excessive actual vs. Budget detail……BUT…No Bank Reconciliations of Cash or CD Balances on a pro-forma or actual basis….Recall one year he casually stated that he had _”unrecorded checks”..but never changed his financials???? Fraud and mis-appropriation of Cash potential abounds in the Pleune method. Past years have shown possible unreported fraud of from $4,000 to $10,000.00has. An external audit is long overdue!
…Liken Royden/Pleune accounting to giving your check book to a high school kid, giving him money, but never asking that they verify the ending bank balance….No detail on the Income side either showing how many folks paid there dues (I didn’t). All this incompetent, deceptive reporting is aimed at one issue….The Boards refusal to meet Article IV Annual Maintenance Assessment procedures and the 10% Contingency Fiscal Reserve requirements…FULL STOP…
..But why?????? Here comes the POWER THING AGAIN!!! The Board, per Art. IV, has to have a vote on repairing the antiquated STUCCO WALLS. Read ‘STUCK WITH STUCCO” our blog. WHY REPAIR in 2018-19???? Why not replace with a new design…OH…They can’t….Owensby lost the HOA’s ability to modify the front entrances in the failed easement lawsuit!!!!! Legal fees cost the community over $300,000.00. AND.Check recent Real Estate transactions..We have the data..Royden has not seen ANY increase in values!!! Are the Stucco walls the Royden BRAND we want!!!! I offered a proposal to go to Stone…$25,000,00…The Hodis Board went with repainting..We all know how that turned out…
Back to Fiscal Reserves….Once the Fiscal Reserve exceeds the 10% Contingency Reserve, per Art.IV, a credit is applied to each member…The credit this year approximates nearly $200.00/member….See now why you should not pay the $320.00 assessment…And for heaven sakes…Don’t let them change the Fiscal Year…..
Think about it, they are asking for over $40,000.00 in new funds, on top of the over $30,000.00 they have in reserve, have butchered the existing simple accounting system and now want to utilize a NEW FISCAL YEAR END….Check…NC State Law…..Changes to historical accounting reporting conventions are strictly prohibited….BY NC LAW-Just ask them WHY???? and VOTE NO, JUST FOLLOW THE LAW..ART. 1V——–.There’s more…
7)TRANSPARENCY-VIOLATIONS OF ARTICLE IV HAVE BEEN THE SUBJECT OF TWO LAWSUITS, BY ME, OVER A THREE YEAR PERIOD, COSTING THE ROYDEN D&O CARRIER AN ESTIMATED $30,000.00. Never reported to members by Mr. Petchel. Violations to Article IV are part of what the associationbusters.com blog calls, THE ROYDEN SCANDAL AND COVER_UP…Petchel and the Royden Board did not reveal the extensive legal maneuvering that they were engaged in over a 3 year period. Similarly to the easement painting lawsuit fiasco, which Royden lost, causing the Royden community over $300,000.00 in legal fees, the Membership remains in the dark. A closed society Board and an apathetic membership allows this “corruption” to flourish..Petchel, is complicit with Pleune in the COVER_UP and failed to report that the Royden Attorney’s did not defend their position with a jury, but used a legal technicality to have the claims (2) dismissed. The current Board filed sanctions against me and collected $6,300.00, WHICH WE WILL GET BACK. Filing sanctions against a member is in violation to another By-Laws covenant amendment made during my watch, also not reported and not shown on the financials Now you can see why the Royden Board has limited Board participation and continues rigging elections…3 openings….3 nominees….All former Board members…By the way??? Who is on the current Board??? Who replaced NANCE…????? Will a write in get to be on the board if an opening occurs..per a former resolution??? I don;t think so, otherwise Peter Mihaltian would be on the Board.
More STONEWALLING! The defunct website has no useful information, board meetings are secret events and the community is fed the same sour pablum that the Board knows they will eat with regularity….. Constructive Fraud-breach of fiduciary duty, is a legal term for this deceptive behavior with complicit concurrence by a legal entity….Constructive Fraud is the driver of all the collusion and financial chicanery!
8) A PENDING CONSTRUCTIVE FRAUD-BREACH OF FIDUCIARY RESPONSIBILITY LAWSUIT is in process to be executed, absent any settlement…..What will be the trigger???-Consider the long delayed project called…Consolidation of Covenants…..In 2004, Consolidation of the covenants to one document and less than 20 pages was completed. By me! See it on the blog, associationbusters.com. Primarily to reduce the 2 inch thick documents that exist now. However, prior and current Royden Board will not issue the consolidate covenants, because of the legal exposure for past violations. The 1994Royden Board flat out blew it, by not immediately implementing the consolidated covenants after the merger.. To issue them, now, in a Special Meeting, they would have to admit to violating Article IV for over 10 years. This revelation would expose all of the Board members to a significant Directors and Officers violations claim!!!!!! Consequently, the rigged Boards, from Woolfe, Owensby to Brechnitz, Nance and now Arrington, have to figure out a way to get rid of Article IV-Covenant for Maintenance Assessments….The simple solution is to settle, issue the consolidated covenants and the heartburn stops!!!!….OH…and pay back the sanction monies!!!!
The Royden Scandal and Cover-up is all about POWER…Article IV gives all the power to the MEMBERS.-Article IV-Covenant for Maintenance Assessments has more provisions besides the annual assessment and fiscal reserve implications. The framework of Article IV limits spending to just common area maintenance, ONLY….Repairs require a Special Assessment…Not adhered to this year, thus the over $9,000.00 increase in “maintenance” spending from last year. Social Expenses are not part of the annual assessment and must be on a pay as you go basis (sorry). Assessment Fixing timetables have not been followed and no special meetings have been called as required. Voting is required by Phase (I/II, III IV), Amendments must follow strict NC law in terms of their language construction and adherence to Article, Section and Item number referencing and receive a 2/3 approval by Phase..Check out the past attempts…They not following Robert’s Rules of Order or NC Law. In legal terms they can only be viewed as approved motions to amend. Royden lawyer like Michael Hunter will tell that. Mr. Pleune should know that…He’s a lawyer, not an accountant!
SO, Royden, having successfully dismissed the Article IV lawsuit, by “the vexatious litigant”, they continue the inept financial reporting, ad nausea….waiting to bait the apathetic membership to a new set of LAWS!!!!! and make no mistake…The Royden By-Laws and Covenants, Controls and Restrictions are LAWS!!!!!!
Again, the triggering future action by this board will be any attempt to change Article IV. All members should know that, I personally completed a Covenant Consolidation project in 2004. Just check it out on associationbusters.com. If any needless, future attempt is made, to change Article IV-Covenant for Maintenance Assessments, the initiative will be met with the Constructive Fraud -breach of fiduciary responsibility legal claim. With this letter as notice, we hope to have many more members joining us in this effort.
Unfortunately, that’s the sordid tale that is Royden. Check out associationbusters,com for the many blog entries, with thousand of hits, to date, spotlighting the litany of violations by the present and past Royden Boards.
In conclusion, we hope our letter has been informative…if you agree with the overwhelming evidence we have presented to you, we recommend you:
DO NOT PAY THE $320.00 Assessment ( It does not meet Article IV).
Demand a new fixing of the Annual Assessment per Article IV. Heck, they have over $30,000.00 which can last a year.
Do not approve of entrance repairs..Special Assessment Required
Do demand a redesign of the Front Entrances!!!
Demand accounting of Sanctions action!
Demand Books and records review be allowed
Demand minutes put on redesigned wedsite.
Do not accept assessments by Email (NC LAW)
Demand the Board fire the current attorneys. Horrack, Talley et al.
Demand a real estate summary of Royden Home sales.
Demand Consolidated Covenants be issued ASAP…
Demand- NO NEW COVENANTS These actions will cause a “constitutional crisis” (sound familiar)
Demand improper Amendments withdrawn
Demand an Audit of past Financial reporting to uncover potential Cash Shortfalls!
Do not complete the Ballot, it is not a legal document and
Do not vote to change the Fiscal Year timing……
Do not vote for a continuation of prior Directors…Select 3 new write-ins, Royden needs a fresh start
BTW…Who is on the Board????5.6.7….Rotation not being followed? Where’s Owensby????
Do read Article IV attached, see that what we have stated is fact…and
Do attend the Annual Meeting to voice your concern, with the direction these neighbors are taking the Royden Community.
ASK ONE SIMPLE QUESTION……….CAN THE BOARD CONFIRM AND CERTIFY, THAT THE FIXING OF THE ANNUAL ASSESSMENT, FOR THE FY2018-2019, MEETS THE ROYDEN COVENANT LABELED ARTICLE IV-COVENANT FOR MAINTENANCE ASSESSMENTS ….LET ME KNOW WHAT THEY SAY!
Thirty year Royden Resident
Past President, VP Treasurer
The Vexatious Litigant