Despite what film noir and gritty nocturnal crime dramas would have us believe,  sunny venues and beach vistas are as fertile grounds for criminal activity as  dark alleys and deserted piers—especially those typically referred to as “white collar” crimes, like embezzlement and kickbacks. The tendency in Florida for condominium and clustered communities to be governed  by property management firms, HOAs, and Community Development Districts (CDDs)—often with multiple and overlapping layers of administration—can set the stage for criminal activities.  

 Depending on the size of the property, tracking who does what, when, and where  could keep a firm of certified public accountants up at night. Of course there  are Florida statutes in place governing how associations should be run, but  even so, there are ample opportunities for honest confusion and not so honest  manipulation.  

 The Florida Sunshine Law, section 286.011 of the Florida Statutes, provides  guidelines on how to keep information flowing correctly, honestly and openly  (hence the 'Sunshine' of the law's title.) For example, all meetings must be  posted in advance, open to the public and minutes must be taken and available  for public inspection. CDDs must adhere strictly to this statute but, HOAs and  COAs can often take a more flexible interpretation.  

 Violation of The Sunshine Law is a second degree misdemeanor which carries  fines, attorney’s fees, removal from office and possible jail time.  

 It goes without saying that working closely with an experienced and reputable  property management firm is a board's first line of defense in preventing  criminal activity. Such a firm will have excellent recommendations and  experience on how to identify and prevent any unsavory activity.  

 The Self-Managed Association

 If hiring a property management firm is not in the budget—or if your association is a small one with just a few units—there is still help available. David Weis is the general manager at HOA Property  Solutions LLC in Wesley Chapel, just a few miles north of Tampa. A former licensed Community Association Manager (CAM), Weis has also served on  the boards of several communities while living in those communities. “I know this business from both sides,” he says, “from a resident’s perspective and a property management perspective.”  

 The questionable activity Weis has most often observed has been associated with  preferential treatment shown to vendors. “The hiring of contractors, handymen, or lawn maintenance crews based on family  or friendship rather than performance or fee structure is the most prevalent  questionable activity,” Weis explains. “While kickbacks may be hard to prove, this favoritism is always uncovered.”  

 On at least one occasion Weis uncovered a case of preferential treatment when he  became president of his neighborhood HOA. As he reviewed the records, the  bottom line on the lawn crew revealed the company was more expensive and  inferior. “Why did they get this bid?” he asked. A quick check on the Internet answered his question. The former HOA  president was related to the lawn business owner!  

 Weis thinks it is wise to encourage and involve homeowners in community meetings  as often as possible. He also relies on the local sheriff or police for  information in his own zip code and the surrounding area, whether it is his  personal property or a property he is assisting. Weis uses www.sunbiz.org for additional detailed information to research  properties in his county.  

 A full 60 percent of properties in his area are self-managed, and companies like  Weis’s provide support for all-volunteer boards. “The biggest need is usually enforcement of deed restrictions,” he explains. As he tours the property, it is also easy to spot if things are  amiss; however Weis recommends any criminal activities be reported to law  enforcement rather than taking them on personally. He also recommends a full  risk management assessment for any property he consults with. “If you know what and where the risks are, you can be prepared to prevent or  minimize problems.”  

 The Risk Management Assessment

 Jeff Hanneken, vice president with Paragon Risk Management, Inc., provides the  type of risk assessments Weis is referring to. Hanneken is frequently called in  to evaluate the physical layout of condo properties and to determine trouble  spots to head off any criminal activity before it happens. His inspections  reveal risk and/or exposures with a bend towards education and prevention, and  he leaves his clients with a detailed checklist for both the internal and  external exposures to risk.  

 Hanneken also encourages boards to review who comes on the property and for what  reason. Vendors, construction workers and groundskeepers are pretty much a  given but volunteers, party planners, and annual garage sale  organizers/shoppers may also be part of the regular community traffic.  

 Internally, Hanneken instructs boards of directors how to recognize “fraud and illegitimate behavior” and how to protect records from a breach of data or unscrupulous activity. He  provides valuable information on liability coverage in all areas up to and  including the directors and officers on the board.  

 Externally, Hanneken states, “I am amazed at what a directional sign or proper lighting can do to minimize  risk and improve safety. “Video cameras are also an option properties may want to consider.”  

 Take The Money … and Run

 A risk assessment could have saved a small condominium community north of  Clearwater, a still-unspecified amount of community funds. The current HOA president and property is not identified since the matter is  under investigation, but the problem appears to have developed when the past  HOA president allowed the property manager to sign his name on association  checks. At some point, the property manager began to write himself monthly  checks. No one was watching until the former president moved off the property  and the new president reviewed the records. A “Miscellaneous Administration Charge” appeared monthly and could not be accounted for. When pressed for details, the  property manager disappeared and the property management company went out of  business. The entire community has paid the price for sloppy and fraudulent  management. Any “miscellaneous charge” should be a red flag warranting investigation.  

 The Dedicated Volunteer

 Not far from the red-flagged property is another small gated community with a  very different story. While the news is good in this neighborhood, the HOA  president asked to remain anonymous in order to protect the privacy of the  residents. The president retired and moved to his newly developed community  nearly a decade ago. He immediately became involved in community government.  His neighborhood is one of several, all separately gated and managed by  separate HOAs. The neighborhoods together form a large development that has an  overall HOA and a CDD. He has maintained the presidency for his own community,  and also served as vice president for the development HOA. He resigned the VP  position to take a director’s seat on the CDD and other administrative positions, and attends monthly  meetings and workshops to support his various positions.  

 His dedication is matched by his continuity of service; Every evening, he drives  around his community and notes any potential problems or violations. One  evening he recently encountered a group of young men, all dressed in black and  wearing hooded sweatshirts. When they realize he had spotted them, they  scattered. The police were notified, but no one fitting the description was  found. However this regular routine of diligence probably prevented an  incidence of vandalism or theft. Two years ago, an unlocked car was burglarized  when the garage door was accidentally left open; part of the stolen loot was a  firearm.  

 Residents are encouraged to keep garage doors down at all times, and to keep any  vehicles in their driveways locked, and if they see problems to call the police  immediately. Monthly community newsletters and a community website remind  residents to be good citizens. This dedicated volunteer receives no salary for  his efforts, but his community is attractive, crime is low, and property values  remain better than average.  

 Professional Property Management

 In Hollywood, Florida, Bill Worrall manages property for The Continental Group.  He advises HOAs to focus on the basics and review records monthly to prevent  being blindsided by errors or fraud. Maintenance and security logs should  always be part of that review. “Determine who has access to the property and for what reason.” Databases must be kept up to date and in synch to include residents, guests and  visitors as well as vendors and contractors. If the community is gated and there is a separate emergency or visitor’s gate code, Worrall recommends it be changed monthly, or at least periodically  with monthly reviews.  

 He followed his own advice, and used the above approach to expose a recent brush  with true crime. The Continental Group took over a property that was bank-owned, and Worrall  began the process of reviewing records and logs. The property was gated, with a  guard on duty. Anyone visiting the garden style condos had to check in.  

 As previously stated, hiring an experienced and reputable property management  firm is the first recommended course of action towards preventing criminal  activity. Worrall recognized several red flags, and soon discovered an active  prostitution ring operating on the property. This cyber-savvy bunch of  criminals had even set up their own website. He tightened security on his end and again followed his own  recommendations. “Always call the police and never confront anyone,” he insists, “you just don’t know who you are approaching.” If in doubt as to whether it is a police matter, then call your property  management company.”  

 Worrall’s final bit of advice is this. “Attend your community meetings and learn the trends and issues that may affect  your area.”  

 The bottom line is to always keep a sharp eye on the goings-on in your community  but leave the enforcement to the experts. Great advice for everyone.  

 Anne Childers is a freelance writer and a frequent contributor to The South  Florida Cooperator.