The Board told us that the dollar value of delinquent accounts is concentrated in a handful of properties. Purchases of these distressed properties result in TIPOA recovering these accounts and replaces the accounts with paying home owners, thus purchases of distressed properties should be encouraged. Purchases of these distressed accounts also gives the buyer a potential for higher-than-normal return on investment. That is, it is a win-win.
Unfortunately, information regarding these properties is available only to the Board. Furthermore, the Board is typically the first contact prior to a distressed property being listed on the open market. These facts, coupled with purchases by board members has led some to wonder if board members "may" be profiting from their unique position. For example, one board member purchased (either in their name or through LLCs registered in their name) 6 properties over a 4-year period. The county listed 1 of these purchases as not being fair market value and 2 as being estates. A second board member purchased 2 properties, one of which was listed as not being fair market value.
I will repeat, I am not saying that the board members who purchased theses properties did anything wrong. I am saying that since the membership does not have access to the same information as board members, this does not look good.
The question, how do we encourage purchases of distressed properties while removing any appearance of impropriety—how do we level the playing field? What we can't do. Georgia Properties Owners' Association Act (GPOAA) does permit the Board to publicize a list of outstanding assessments. Furthermore, nothing in the governing documents or GOPAA places restrictions on Board member purchases and I don't think we should restrict their purchases. What we can do? GPOAA does permit members to submit a written request for such information. Most members are not aware of this.
Could we include a note to accounts receivable in our financial statements specifying the number of accounts more than 2 years in arrears or with more than $2k in outstanding assessments? Maybe include in the note a listing of the amounts "without" any identifying information? As part of the note, we could say that additional information is available upon request?
Could we set a policy that no Board member may make an offer on any property to be listed for sale until such time as the sale is listed on the open market?
Other ideas?