Written by Sheyna “The Law Diva” Burt
Dear Law Diva:
My homeowners association recently received in the mail a document titled “2014-Annual Records Solicitation Form” from the Virginia Council for Corporations. It mentions the Virginia Code’s requirements about corporate records and annual meetings and indicates that it will take care of us for a $125 fee. Is this legit?
Doing the Right Thing in Dale City
You are right to be suspicious. Virginia’s State Corporation Commission (“SCC”) posted on its website a letter dated November 25, 2014, in which it specifically disavows any relationship to Virginia Council for Corporations and reminds the reader that the SCC neither requires nor accepts the form delivered by this mysterious Council. See https://www.scc.virginia.gov/clk/files/corprec3.pdf. The SCC also points out that a search of its records “revealed no information about a company with the name “Virginia Council for Corporations”. Send your Association’s money to this “company” only if you like risk and disappointment, DRTDC.
Your question got me thinking, though. Are community associations regularly being targeted by scammers? As it turns out, the answer is yes. Consider the following examples.
- In July of this year an attorney blogged about owners that have been receiving mailings suggesting that the association’s assessment remittance instructions have changed. The scam goes on to provide an alternate address for payments. See http://www.hindmansanchez.com/blog/community-associations-miscellaneous/dont-be-caught-scam.
- A manager advised her association’s counsel that she received a bill from the Secretary of State for $225. It caught the manager’s attention because it was higher than the $10 annual fee with which she was familiar, but she placed it among the association’s “to be paid” invoices anyway. See http://www.cohoalaw.com/community-association-news-scam-targets-associations-and-nonprofits.html.
- Condominiums that rent to vacationers have their own special risks. One association described having parties arrive ready for check-in, only to discover that other renters already occupied the units. A company called “Sand n Sea” created fraudulent online listings for those units, collecting and pocketing the rents and fees, leaving the would-be vacationers homeless. See http://www.windsorhillsmaster.com/doku.php/news/scam_at_windsor_hills.
DRTDC, a deeper examination of the letter you received does include language acknowledging that it is “a private company” and that the correspondence is “NOT A GOVERNMENT DOCUMENT” (the letter’s emphasis). Maybe it’s a full blown scam, maybe it’s just misleading, either way, it’s bad news.
Community associations may not be able to avoid being targeted, but as the stewards of other people’s money, association boards have a fiduciary duty to be informed and careful. Here are practical tips to avoid being the victim of a scam:
- Don’t come for me if I didn’t send for you. If your association hasn’t requested information or contact from a vendor or service provider, be suspicious of unsolicited outreach.
- Trust, but verify. If you are contacted by a company that appears to be one that you do know, be cautious anyway. Avoid clicking on links embedded in unsolicited emails and instead manually plug the URL with which you are familiar into your browser.
- Don’t suspend your common sense. If an invoice contains fees that seem higher than normal, is rife with misspellings, describes unexpected and dramatic process changes, or includes other things that make your spidey senses tingle, investigate. Call (you know … with a telephone) your contact and have him or her confirm and explain the change.
- Licensed to build. If someone claims to be licensed or even provides you with a license number, contact the licensing agency directly to confirm its validity.
- Reading is fundamental. Read the materials you receive – all of it. Be on the lookout for superfine print that grudgingly acknowledges that the document is an advertisement or “not affiliated with any government agency”.
If you have reason to believe that you have received something fraudulent, contact your friendly neighborhood law enforcement agency. The police, sheriff, consumer protection agency, or even Secret Service may be waiting to hear from you as the build a case against someone shady.
You kids be careful out there.
In addition to being a contributor to Prince William Living, Sheyna “The Law Diva” Burt is an attorney serving community associations, charitable nonprofits, and families in Virginia and DC. Have a question for the Law Diva? Sheyna can be reached at firstname.lastname@example.org or www.burtlaw.co.