February 15th, 2020
You may be wondering why your first quarter assessment invoice has not arrived or why when you sign on to the Cedar Management portal, there is no information. Well, you are not alone!
The start up with the new community management company Cedar Management Group has not progressed as expected (under statement). In fact, it has been so bad that to get their attention we have made a complaint to the Better Business Bureau. At this time we feel there is no reasonable alternative but to allow Cedar to complete the transition. However, in the meanwhile, the board is researching possible alternatives.
Here is a log of all the dates and activities between the board and Cedar.
|July 12th, 2019||Contacted Cedar regarding HOA management transition from CMS. Signed contract to take effect 1/1/2020.|
|Dec 2019||Received a transition “schedule” with due dates including Welcome Packets due to be distributed on December 18th with account information on them for members to pay their 1st quarter dues January 1st.|
|Dec 27th||No Welcome packets received and members begin inquiring when the information and their first assessment invoice would be sent?|
|Dec 27th||Discovered Cedar “shutdown” and would not reopen until January 2nd.|
|Dec 28th||Email sent to Dana, the transition manager, requesting an explanation of the missing welcome packet and first quarter assessment invoice.|
|Jan 3rd||The email response from Dana essentially said – No idea why information was not sent. Will send a “generic” welcome letter. (Not useful since it had no portal or account information on it.)|
|Jan 6th||Email from the BOA president to Cedar stating first quarter dues required by 1/1/2020 but no invoices were received. No generic welcome letter was sent as stated 1/3. Requested results by Friday 1/10.|
|Jan 7th||No email, phone call or any response to the BOA president. Members began to receive generic “Welcome Packet”. (with no portal or account information)|
|Jan 7th 4PM||Email from Dana the transition manager, said waiting on BOA approval to send generic “Welcome Packet”. Bank accounts opened and waiting on CSM beginning opening balances and December financials. Expect financial information mid month.|
|Jan 8th||Cedar requests confirmation/correction of member email addresses.|
|Jan 9th||Member address and email corrections sent to Cedar.|
|Jan 10th||Received updated transition schedule – welcome kits listed as sent 1/8. States the rest of the financial information cannot be completed until late to end of January. Welcome kits stated transition could take up to 30 days (assumed 30 days from January 1st, the start of the contract). The board was not aware of a 30 day delay before signing the Cedar contract.|
|Jan 13th||Some members received welcome packets in the mail.|
|Jan 15th||Members asking how to pay their assessments since they have not received their account number or an invoice.|
|Jan 16th||BOA president received “Welcome Packet”, still no account number or assessment invoice or statement.|
|Jan 17th||BOA president requested packets be sent again by email – Cedar not able to comply.|
|Jan 17th||BOA sent out information on how to find account # in the portal and how to pay online for those who are traveling. First quarter assessments amounts included.|
|Jan 23rd||Treasurer requested November & December financials from CSM. (still not received as of February 15th)|
|Jan 24th||Received email from account manager Jason. Been out of the office for previous week. Server is under going maintenance.|
|Jan 27th||Another inquiry and response is – server still undergoing maintenance.|
|Feb 3rd||BOA meeting – Still no financials, no invoices for 1st quarter assessments|
|Feb 5th||Complaint filed with the Better Business Bureau. (Note: The contract with Cedar states the only action for which they are not indemnified is gross negligence and/or breach of contract)|
The Carefree Cove Association brings complaint against Cedar Management Group for reason of gross negligence and breach of contract. The BOA contacted and negotiated a contract with Cedar Management July 12th, 2019 to take over basic accounting services of the HOA. Cedar Management was paid $300 for the transition of data from a previous community management company to Cedar Management with accounting services to begin January 1st, 2020. A transition schedule was received with welcome packets due to be sent to members on December 18th, 2019 with portal and account information. The BOA was led to believe Cedar Management would be ready to take over all necessary services to collect assessments and pay invoices beginning January 1st.
On December 27th, the members reported that no one had received welcome packets. Cedar was shut down until January 2nd, so no explanation was available for why welcome packets had not been sent out. The welcome packet stated that transition would not be complete for 30 days (assumed to be the end of January). This was not conveyed to the BOA before signing the services contract.
The treasurer requested access to financial information on January 23rd. Received notice from the account manager that he had been off for the last week and the server was down for maintenance. Another inquiry was sent January 27th, but the server was still undergoing maintenance. Received notice from the supervisor that transition would now take 60 to 90 days to complete even though member account balances had been received from the previous community management company. As of the date of this complaint February 5th, the HOA has no access to their funds, members have not received a statement/invoice and cannot pay their 1st quarter assessments and no contractor invoices can be paid. We are being assured that everything is “normal”.
Cedar Management was contracted and paid to provide services beginning January 1st. They were paid $300 to prepare to begin services and they will charge $300 for both January and February and yet we have not received any accounting services to date. The HOA cannot perform its normal functions which is an embarrassment to the board. Members are confused and angry. Community management companies hold all the funds of the HOA and even pay themselves from our accounts, but we can no longer trust them. We claim gross negligence and breach of contract on the following grounds:
*Duty – It is the duty of Cedar Management to provide accounting services which include the collection and processing of 1st quarter assessments. They have not performed those duties.
* Breach – They have not fulfilled their responsibilities as designated in the services contract that started January 1st, 2020. No exemption was included in the contract that services would not be performed for 90 days and the board was not informed prior to signing the services contract.
*Causation – By not performing services at the designated time, Cedar Management has caused the HOA to not be able to collect income or to conduct their normal responsibilities. The members have lost all confidence and trust which has caused irreparable damage to the relationship between the board and the HOA members.
*Damages – Loss of income from collected assessments as well as payment for services that have not been rendered in a timely manner. The board has had to handle numerous inquiries and complaints for their members as well as the time and effort trying to contact Cedar Management for explanations of their failure to perform their duties.
|Feb 10th||Email from Vernon Kline, VP at Cedar – Thank you for your time today. Per our discussion, we are generating and mailing the first quarter statements today. In addition, we have successfully restored the file to our software, which now allows us to enter all of the data and transactions from the last few weeks. We anticipate having reports available for distribution to the board very soon.|
Please pass the details of our conversation to the board. Per our call, I will follow up with you around 3 regarding the BBB complaint, which we would like to be retracted if possible.
|Feb 10th||Special BOA meeting called – Kaaryn reported a very good call with Vernon Kline VP at Cedar. Very apologetic and agreed to not charge the transition ($300), January ($300) and February ($300) when service was not available and to eliminate the termination fee if we decide to move on. Strongly requested the BBB complaint be rescinded. Board voted to stay with Cedar (no other reasonable choice at this time) and to reassess by the July member’s meeting and to NOT rescind the BBB complaint. (See special BOA meeting minutes)|
|Feb 10th||Response to the BBB complaint from Cedar Management|
There are many factually misleading statements made in the complaint and while there have been some delays in some aspects of the transition, the allegation that nothing has been done is simply incorrect and rises to the level of being defamatory and libel.
Since early January and into February, we have kept the board apprised of the transition process and its successes, as well as any delay.
The Board was presented with a draft of the welcome kit well in advance prior to it being mailed which clearly spells out that some information needed in the transition may take up to 30 days to receive, compile and load into the system.
As of the date of the complaint the HOA does indeed have access to funds, there have been accounting services rendered and finally, the HOA is capable of receiving funds, and paying vendors and service providers as we have been doing in the last many weeks.
As indicated above, we feel the formal complaint to be undeserved as we have been communicating almost daily with the Board over the course of the transition and this afternoon the Board President indicates that they do wish to remain a client and finally that once the transition is complete, they will vote to have the complainant rescind the complaint in its entirety.
|Feb 11th||The statements were reviewed before sending them out and it was found that over a quarter of the statements were incorrect. The board offered to send a list of corrections to Cedar.|
|Feb 13th||Donna from Cedar acknowledged the previous email and asked for corrections to be sent to the account manager Jason. Corrections were sent with explanations and instructions.|
|Feb 15th||Final response to BBB had to be made by February 16th. The goal of the BBB complaint and this response is to use the only leverage we have – public opinion. The BBB will mark the complaint closed, but the possibility of future references from Carefree Cove will hopefully provide an incentive to resolve issues. The following is the response made by Carefree Cove to the Better Business Bureau in response to Cedar;|
The response from Cedar indicates again, that everything is “normal” and transition may take up to 30 days to complete. Yet 45 days after the start of the contract the 1st quarter assessment invoice/statement has not been sent and the board has no visibility to financials. If vendors are being paid, the board is not aware of it. Members can now sign on to the portal, but there is no information to see. Cedar indicated they were ready to send out the January 1st invoice/statement, but upon previewing them, we found over a quarter of the statements were incorrect. Yes, Cedar has been in contact periodically, but so far all we have are verbal promises with no visible result.
The board feels that at this time we have no choice but to wait for Cedar to complete the transition. Corrections for the statements were sent to Cedar just two days ago and we are hopeful that progress is being made, although we have no confirmation of that. We feel the complaint is completely justified and will not be rescinded regardless of future performance. For those who may wish to know how this issue is resolved, contact Carefree Cove of North Carolina at their website.
|Feb 20th||Treasurer found that Blue Ridge Electric was overdue and electricity would be shut off on the 25th. Bill was paid with a personal credit card.|
|Feb 20th||Account manager responded with bank account balances and the receivables list. All receivable balances were incorrect.|
|Feb 21st||Received proposal from local CPA Cindy Randolph. Board considers pulling the plug on Cedar and moving to a recommended, qualified accountant.|
|Feb 21st||President calls supervisor at Cedar for progress update. No response.|
|Cedar provides the BOA with access to online financials. All reports and receivables are incorrect.|
|Feb 26th||Board president requests corrections by the end of the week.|
|Feb 27th||New receivables list, dues and beginning balances list received from Cedar supervisor. Every account in the receivables list was still incorrect.|
|Mar 2nd||BOA votes to terminate services with Cedar Management Group|
|Checks from Cedar received by CPA and local bank accounts opened|