If there was a single theme running through news stories and articles about condo and homeowner associations in 2011, it was the shortage of money to carry out their responsibilities.

First, the trend of owners not paying their association assessments due to a weak economy continued strong, which meant that associations had less money to carry out their required operations. Then, the foreclosure crisis also continued strong, again leaving associations short, as owners in foreclosure usually stopped paying assessments. Those associations in states that gave them six months of assessments in a foreclosure process may have been a little better off than those in states without the lien priority, but they still found it was tough to collect.

Then, the mortgage banking industry started piling on, by slowing down foreclosures, so that they would not be responsible for a home’s assessments until the last possible minute. This dragged out the time frame when associations were receiving no income from a unit, placing a tough burden on the owners who were paying, and on boards to struggle with reduced revenue.  Some states tried to help out associations, and some attorneys got creative in forcing foreclosures, but that was only in a few states.

The following news story leads from 2011 show a growing trend that is entirely preventable, but sadly, is often ignored (Note: not all of Mr. West's story leads are listed here due to space constraints):

• FL: President of homeowners association accused of embezzlement

• OH: Prosecutor’s filing indicates women may plead guilty to stealing $1.6M

• NC: Parkwood president: Embezzler took at least $150K from HOA

• WA: Former HOA president is headed to trial

• IA: Muscatine woman gets probation for theft from homeowners’ association

• FL: The former manager of a luxury Aventura condo building, accused of embezzling hundreds of thousands of dollars, turned herself in to jail officials.

• LA: Former president of Montz associations pleads guilty to theft

• TX: HOA dues disappear in elaborate scam

• CO: Embezzler involved with HOA in Aspen called a “habitual criminal” by DA

• CA: Neighborhood association embezzler is sentenced

• ME: Convicted condo embezzler arrested

• WA: Prosecutors: Issaquah HOA president bilked organization

• FL: Charge: President bilked own homeowner association

• WI: Franklin police probe suspected condo association fraud

• WA: Former Olympia-area homeowners association worker guilty of theft

• NJ: Former property manager accused of embezzling $75K

• GA: Former HOA treasurer arrested

• CA: Former association admin accused of embezzling $65K

• GA: Manager gets 3 years probation for fraud

• NJ: Three charged with thefts from Aberdeen condo association

• OH: Woman gets prison for bilking condo associations

• Toronto condo owners allege massive fraud

• WI: Treasurer of homeowner’s association reportedly forged checks

• FL: HOA bookkeeper confesses to embezzling

• CA: Manager steals $70K from neighborhood group

• SC: Woman charged with embezzling $14K in HOA funds

When times are tough, people who need money will justify taking it from others. Every community association-related blog and website wrote articles about how to prevent theft, but, as with anything, there have to be people in place who will actually do the checks to see that everything is as it should be.

The result of all of this was, all too often, delayed or ignored maintenance, assessments increasing to cover revenue shortfalls, a lot of hard feelings and a lot of litigation, all of which will have long-term effects on associations. To be honest, I don’t really see any improvement in the short term, and for the long term, that is going to depend heavily on the economy and whether or not the housing industry rebounds.

When I used to do seminars for association board members, I would tell them that it wasn’t their job to keep assessments low, but to spend the money wisely. After this year, I think I need to change that to: It’s your job to collect the money efficiently, watch over it like a guard dog, and then, spend it wisely!

To all of you who donate your time and talents to keep your association going through these tough times: thank you!