November 19, 1996 in Nation/World

Homeowners Find Coffers Bare Group Gets Court Order For Records, Then Claims They Are Incomplete

By The Spokesman-Review
 

After waging a two-year revolt, residents of Riverside Harbor have taken the fort. But once inside, they say, they found its coffers empty.

Many living in the subdivision fought a battle of petitions and lawsuits against their own homeowners association, which they claimed was controlled by the developer, Dennis Swartout.

Residents complained that maintenance was poor, grassy swales had become swamps, sprinklers were in disarray and attempts to hold meetings were stifled.

Last month, the revolutionaries won.

Members of the old board resigned. Residents elected a new board. And after a court ordered it to, the old board turned over all its records.

But after going through the paperwork, residents have a new set of complaints: They claim the records are incomplete and that thousands of association dollars were spent improperly.

Swartout, members of the previous board and their attorney deny any wrongdoing.

“I feel confident there aren’t any irregularities there,” said attorney Craig Wise. “And if there are, they should tell us. … It’s news to me.”

“I can tell you every penny spent on that association was properly spent,” Swartout said.

John Harns, vice president of the new board, said he was shocked the association had only $562 left. Last year, it collected more than $30,000 in maintenance fees.

Some of the funds were used to pay the previous board’s legal bills, meaning residents were paying both to sue and defend the association.

“We pay a maintenance fee, and that’s strictly what it’s to be used for,” Harns said. “It hit us between the eyeballs.”

Members of the old board said legal bills count as a maintenance expense. “They (residents) are the ones who created the legal bills,” said former board member Kim Riley, a Post Falls builder who put up homes in Riverside Harbor.

The homeowners still have a lawsuit pending against previous board members, seeking to have them legally removed - even though they already have stepped down.

Charles Clock, one of the new board members, said that’s to ensure the issue stays in the legal system for now. “We’re not out of the woods yet,” he said.

Clock even claims someone was making money from the non-profit group.

“There was a management fee that was imposed last year, and it does appear there was some profit and overhead taken by the old directors,” he said.

Clock said he isn’t sure how much money he believes was wrongly spent, but that “there does appear to be a significant amount of money used improperly.”

Swartout denies the allegation. “No director was paid one penny for doing anything,” he said. A telephone call from a reporter, he said, was the first he had heard of that claim.

The homeowner’s attorney, John Redal, said one of the directors continued to write checks after resigning, which he said is inappropriate even if the money was used for legitimate reasons. “If you resign, how can you continue to write checks?”

Some residents, although plenty suspicious of the old board, are tired of the brouhaha.

The subdivision of about 400 homes, with prices ranging from $100,000 to riverside estates worth more than $1 million, is considered even by the rebels to be a great place to roost.

“It is frustrating, thinking you bought into a wonderful neighborhood, then you have all these battles you have to face,” Patti O’Reilly said.

Wise, who still represents the old board, said he has trouble keeping up with the upset neighbors.

“It seems a lot of them have nothing better to do with their time,” Wise said.

, DataTimes ILLUSTRATION: Map: Riverside Harbor


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