What

You Need to Know about the Westbury Park Transition

James N. Richardson, Jr. (J.R. Richardson), by and through an entity called Plantation Properties, LLC (PPL) started the Westbury Park community in the 1990s. PPL sold numerous lots to developer/builder D.R. Horton early on in the development, and D.R. Horton built numerous homes in Westbury Park. Westbury Parks declarant is PPL, whose managing member is Richardson. Although the community was built out in the mid 2000s, the developer still appoints three members of a five member Board of Directors, and retains considerable authority, including veto power. Until a little over a year ago, Board meetings were not held regularly or noticed to homeowners. Board members were inexplicably reluctant to homeowner attendance or participation. Homeowners were allowed to attend highly orchestrated annual meetings. At one point, the management company since inception, Property Administrators, Inc., (PAI), would not even provide the names of Board members upon request. A small group of homeowners clamored for more transparency, and in the fall of 2011, the community selected its two elected member representatives, Ward Borden and Jason Watts, to represent the homeowners interests; at the insistence of the new homeowner-elected Board members, monthly Board meetings since then have been open to homeowners. When the new Board came into existence September 2011, the developer, Richardson, resigned as a director, a position he had held for the entire existence of the Board. The new homeowner elected Board president, under the authority of the bylaws, created committees. Upon best knowledge, no such committees had been created in the 12 years prior. PPL now wants to transition the development to the homeowners with a reserve fund of unknown adequacy, and aged infrastructure. The management company has not furnished requested records to the Finance Committee. In reviewing what contract documentation PAI reluctantly provided the Finance Committee, there appear to be many questions:
1. In twelve years, the Association has not had an audit. 2. In twelve years, the Association has not had a reserve study.

3. Annual Reports submitted to the SC Department of Revenue for 4. The Association files Federal and state tax returns; the copies PAI

multiple years did not identify directors and officers.

furnished the Finance Committee have been skeletal, with unexpected contents. 5. Association bank accounts have been, for a number of years, at Coastal States Bank where Richardson is a director. In 2011, the FDIC placed restrictions on Coastal States bank. Neither the then constituted Board or the management company notified the members of the banks status. 6. At the December 2011 Board meeting, the new Board president, in trying to figure out where Association money is, asked the management company representative if the Association had any bank accounts at any other institutions besides Coastal. The PAI representative responded: Nnnnot to my knowledge, um unless something's . . . no. No, I don't, I don't think so. The only other possibility that would be something anything different is if anything's moved over to the um, um Community Association Banc . . . but I don't think that you've ever -- I don't think you've done that, at this point in time. About 10 days after the meeting, the newly elected Board president and treasurer, along with homeowners, learned of the existence of accounts at Community Association Banc/Mutual of Omaha Bank via the mailing of 2012 membership dues information. Subsequently, the Finance Committee obtained evidence of Association accounts existing at this bank since August 2011. The Finance Committee later requested a list of all former and existing bank accounts and has yet to receive the information and there is no any indication they will. 7. The Association apparently has at least five accounts at Coastal States Bank and apparently also has three accounts at Mutual of Omaha. The general ledgers reveal excessive bank fees, confusing accounting and a lot of to and from, back and forth, transactions. 8. In reviewing information, the Finance Committee had questions about expenses. For example, the Association had paid excessive South Carolina DHEC pool permit fees. It turns out that fees were paid on behalf of another association from the Westbury Park account. Homeowners can draw their own conclusions about the effectiveness of property management. 9. The debt write-offs practices have been a source of confusion to some new board members. PAI contracted with a collection company. However, the general ledger shows the Westbury Park Association paying fees to the collection company.

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10. The developer still maintains ownership of common area property

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throughout the community such as multiple parks, a swimming pool, exercise center and pavilion. The Homeowners Association paid thousands of dollars in property taxes on this developer owned property for, as of yet, an unverified period consisting of years. If Richardson had deeded the property to the Association, County property taxes could have been calculated at a much lower "Community Association" rate. For example, the Association's annual tax liability for one of the parcels could have been closer to $200 rather than $12,000. Attorney Mr. Robert (Bob) Deeb, who represented, upon best information, the Association during the summer of 2011, is now representing the management company. The Association was/is in negotiation with the developer for transition of the community to the homeowners. A developer designee Board member has objected to records requested by the Treasurer being produced in full to the Treasurer. Lists of Westbury Capital Improvements provided by PAI for 2010 and 2011 show expenditures for improvements that appear to be maintenance. Vendor contracts appear not to have been properly executed in some instances. There is some question if unlicensed/uninsured contractors were hired to work at Westbury Park. Competitive bids were not sought for many years. In reviewing the Associations contract with Hargray, the local cable, phone and Internet service provider, the Association had numerous separate accounts, lapsed from a contact status in 2008; homeowners were overpaying. Additionally, the Association was paying for services the community was not receiving; e.g., paying for 10 Mbps of Internet service and receiving one Mbps. An exclusive license agreement for a period of 15 years grants licensor (Richardson) a percentage of the gross subscriber service revenues earned by Hargray cable for services provided within the development. Westbury Park homeowners have had the ability to use the services of only one cable TV company. In 2010, the prior Board contracted to significantly expand a playground in one of the common area parks. After construction, unanswered questions existed. When the new Board came into existence in September 2011, and a Finance Committee was created, the Committee in their review of the general liability insurance policy for the Association realized that the expanded playground was not insured. The new Board president, Ward Borden, followed up to make certain insurance coverage was in place. The management company owner has an American Express card that management company staff used to make purchases, allegedly on behalf of our homeowner Association. There is evidence of payment

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 Additionally: 1. At annual meetings from the early-2000s on, homeowners advocated being able to install new wells for irrigation purposes instead of leasing from PPL at what seems a rapacious rate of return to the developer after initial cost. The developers initial cost to install the wells was around $25,000. With PPL charging the Association $33,600 a year for the irrigation water, homeowners have paid about $400,000 for the non- potable water. The Association pays all of the costs of electricity for these wells; the developer is selling the Association water from the aquifer. 2. At the September 2011 annual meeting, the new Board president informed all members present that the declarant deeded ingress/egress rights to the main entry street in the development to what is now The Estate of Westbury. In exchange, the declarant receives a yearly perpetual fee paid by the complex to Plantation Properties, LLC. Then, PPL pays approximately one third ($36,000) annually to Westbury Park Residential Association. The portion paid to PPL is calculated annually and is tied to inflation. The portion paid to Westbury Park remains stagnant. The very next day after PPL deeded this easement for the above-described fee, PPL deeded the underlying road to the Westbury Park Residential Association. Accordingly, the wear and tear of this road, drastically increased by the easement given to the apartments, has occurred during the Associations ownership. The $36,000 has not been earmarked and escrowed for the road upkeep and maintenance. 3. Upon closing, owners pay a $250 - $500 capital reserve fee along with a $35 fee to PAI. We lack an accounting of these funds. 4. At the February 16, 2012 Board meeting, the developers attorney, Mr. John (Jack) Qualey, showed up without notice. The developers attorney, and the developer designees interacted. Director Ward Borden questioned the appropriateness of these interactions.

from the Association checking account to the credit card company. It is for owners to decide whether this is appropriate.

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