Preston Tower Sued Again: Resident Calls HOA “Fortress” Blocking Communication

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The headline could have easily said “again and again” as there are two similar suits a year apart.

In December 2018, Preston Tower resident Leonard Wennmohs sued Preston Tower’s HOA and management company Intercity Investments (ICI). He claimed that when he was Treasurer from 2015-2017, financial ledgers, updated monthly, had been made available to residents. Wennmohs alleged that under a new building manager (Rob Kennehan) the records became restricted. The suit alleged that not only were the books not available, but written requests were also required to see them (that were often ignored) and that he’d been told he’d be charged a fee to view the records.

HOA Bylaws Largely Ignored

The suit calls out the HOA bylaws that state the building is required to make available for owners’ review a monthly ledger, monthly receipts and expenditures, annual statement, and a common expense budget. The suit alleges the HOA and ICI are also required to publish a “set of dates and times that the Association or ICI will make the above-listed records available for review to all owners”

Preston Tower HOA and ICI answered that suit essentially saying everything was made available with the exception of legal bills, whose contents would expose private issues with other residents. Wennmohs could view them any business day. The reason for the appointment was to ensure someone was in the office. They say that the request form Wennmohs had an issue with was instituted while he was on the board, stating “He had no qualms with the form until he himself was asked to utilize it.”

Wennmohs’ response was to ratchet things up with a six-count indictment dredging up the building’s handling of the 2016 catastrophic flood and the lawsuit it generated (that they eventually lost). I’m not sure I see the connection except in behavioral trends.

The building answered again, reiterating their prior statements.

In July 2019, both parties agreed to settle. It’s unknown if any monies changed hands, but likely an agreement was struck to make documents more accessible was agreed upon. (Docs here, here, here, here, here.)

That’s a heck of a preamble…

On June 15, a similar suit was filed by resident Greg Gutman that states:

“Association management has turned into a fortress ignoring and stonewalling communications from those seeking answers or explanations, or having the temerity to express dissatisfaction with the manner in which Association facility is being operated.”  

Gutman believes, “…in the past several years the association’s board of directors and its manager, Rob Kennehan … have failed in their duties to operate the association with due regard to prudent money management, the existence of nepotism, self-dealing, absentee management, transparency of their conduct, management of the Associations’ facilities and common areas and their duty of good faith and fiduciary obligations.”

In addition, and perhaps more troubling financially, Guzman accuses Association management of turning every “dispute or owner complaint” over to its lawyers to deal with “at a very high per hour price.”

Finally, he says board elections have been postponed (due to COVID-19?) but could have been handled. One assumes he means distributing and collecting paper ballots which could be left for an appropriate period of time before opening to ensure any virus was dead.

Echoing back to Wennmohs, Gutman argues that, “Association management has made it near impossible for owners to exercise their rights to examine the books and records of the Association to inform themselves on the issues that would impact on their votes in the board election process.”

As evidence, Gutman states he requested access to association records on May 31, which went unanswered even after “a number of reminders, inquiries directed to the association’s counsel, as well as repeated telephone calls and visits to the management office.”

He says a number of other residents received the same treatment.

The reason we find out about Wennmohs’ suit is because part of the discovery of this suit asks to see Wennmohs’ settlement to prove HOA and management have not abided by that settlement.

I have to say that I’m all for transparency and open records for those residents of an HOA who pay attention (the vast majority are on remote control unless there’s a special assessment or dues hike). As this was filed days ago, there has been no reply from the HOA/management.

On a separate note, the suit also claims damages resulting from the closure of the pool, conference room, and community room due to COVID-19. I suspect we will see more of these suits, but I wonder how many will be successful. My guess is that resident wins will be slim.

Anyway, two suits, two years, similar claims of financial record secrecy and inaccessibility. One settled out of court and the other has yet to have their day. Given reports, this appears to be Preston Tower’s seventh suit in seven years.

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Jon Anderson

Jon Anderson is CandysDirt.com's condo/HOA and developer columnist, but also covers second home trends on SecondShelters.com. An award-winning columnist, Jon has earned silver and bronze awards for his columns from the National Association of Real Estate Editors in both 2016, 2017 and 2018. When he isn't in Hawaii, Jon enjoys life in the sky in Dallas.

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Comments

  1. CRITIC says

    If there has been 7 suits in 7 years at Preston Towers future buyers beware.
    Obtain a new management company or work it out. Your HOA fees are likely not being effectively used with litigation costs.

  2. Steven Gabriel says

    HOAs should be BANNED! Why these Housing Units chooses HOAs is beyond me. People want to Police themselves, and so People should be able to manage themselves. I’ll admit, there are ALOT of People that need SUPERVISION, otherwise, they do what they want.

    • mmJon Anderson says

      HOAs are a necessary evil in places where there are shared elements and thus shared responsibility for maintenance. That said, single-family communities run by HOAs should be banned. What can’t be banned are HOAs filled with incompetent busy-bodies whose only joy in life is to be a pain in someone else’s butt.

  3. A Preston Tower concerned howmeowner says

    Hi Jon – I was going to send the below email to the board but am not sure if it would get anywhere and I am not litigious. The idiots on the board/management paid to a have a 3 page legal agreement that must be signed if a homeowner wants to go sit around or use the pool – ridiculous. I am pretty sure this is illegal. I can get you a copy if you want. It signs your life away. A lot of people complain about stupid things here and sue. I just sit quiet and accept everything – but $26.50 an hour to have someone sit all day at the pool when only a few people even use it??? DUMB Especially given that the front desk security guard is literally 5 feet away on the other side of the glass door, and you need a fob to even get out into the pool area. I don’t mind if you post this. I wonder if the litigious people know about this – you mention the pool being closed at one time so I don’t know. Hopefully my info can dribble out without me having to go in anyone’s face. Thanks

    Dear Board Members,

    We hereby express our total disagreement how you are incurring superfluous expenses to the homeowners of Preston Towers forcing us to pay $26.50/hour (wow these must be college graduates with multiple degrees you are hiring) to have someone sit in the pool area in case a couple of people decide to use the pool. What is wrong with the front desk staff watching who goes in and out of the pool area and just reminding them to stay socially distanced?? They are sitting there anyways!!! Why even say anything to anyone using the pool area?! This is the stupidest waste of money we have ever seen – the board needs to be limited in their power to unnecessarily spend the owners’ money on stupid things. You all should be held personally liable to reimburse the homeowners for all costs, including legal fees, to make a ridiculous over generalized agreement that you are demanding people to sign if they want to use their common area which they own, and to hire someone to sit outside right next to our front desk security people that we already pay. Wow DUMB. You do not even have the right to force people to sign this ridiculous agreement and should be ashamed you have wasted our money even having it made and printed up. We hereby request an emergency homeowner meeting be called to immediately revoke this stupid arrangement, and that an email be immediately sent to all homeowners advising them what you are doing. The homeowners have not been informed that you have done this and they have the right to know. The office staff stating that there is a sign on the door to the pool is not sufficient. Most people go nowhere near this door. Don’t hide it like you did. And this definitely should have been brought to a vote of the homeowners before you entered into a stupid contract. Please let us know by return email when the emergency meeting with a vote of the homeowners will be held.

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