Residents challenge $268,000 fee paid to homeowners' group chief
  

Article Courtesy of The Palm Beach Post

By Bill Douthat
Published on Monday, March 27, 2006

The payment of $268,000 to a homeowners association president for overseeing hurricane recovery is raising eyebrows at the Sherwood Lakes townhome community.

"I am not an embezzler," association President Leiann Davis told a meeting of homeowners last week, saying rumors were circulating that she took the money and moved away.

Although most of the more than 60 homeowners at the meeting applauded Davis' work as project manager for hurricane repairs, some questioned the size of her payment and why homeowners were not told the board approved it.

"I don't doubt that she worked hard, but what's your definition of reasonable compensation?" homeowner Gail Malchow said.

Although the payment was made in August, Malchow said she didn't learn of it until January, through neighborhood talk.

Davis' payment came from the development's insurance company, which decided to give her a 10 percent fee of $537,000 for acting as project manager and claims coordinator for work done in the months following 2004 Hurricanes Frances and Jeanne. Davis said she accepted half of the money and suggested that the remaining $268,000 be given to the association.

All of the money would have gone to an outside general contractor or claims manager had she not stepped in to act as both, Davis said.

"This didn't cost you any money," Davis told the homeowners. "It was money the association wouldn't have gotten anyway."

She said the association "profited by $268,000" when she decided to give up half her fee.

No mention of her check or the windfall to the association's account was made in a hurricane update Davis mailed to homeowners in December.

Davis, who runs an accounting service from her home, said she was unaware she would be compensated by the insurance company until shortly before the August board meeting.

Association presidents and board members normally are unpaid. The 596-unit Sherwood Lakes development has a property manager and secretary as paid employees.

"The vast majority (of association presidents) are volunteers who give selflessly of their energies," said Fort Lauderdale attorney Gary Poliakoff, a past chairman of the Florida Condominium Advisory Board. "They understand when elected it's a voluntary position."

Poliakoff said Davis should have gotten approval from the board before beginning her duties as project manager for hurricane restoration. Also, the board is required to see whether she is qualified as a project manager or claims administrator.

"There is nothing in the law that precludes an officer or director from being hired by the (association) to perform services for which they are licensed and experienced," said Poliakoff, who writes a column on condo law for The Palm Beach Post.

Theresa Lemme, the attorney for Sherwood Lakes Homeowners Association, said Davis was not paid in her position as a board member but for "services rendered."

"Ms. Davis' accounting background served the association well when she took on the dual roles of project manager for the cleanup and restoration and as insurance claim coordinator," Lemme said in an e-mail in response to questions.

Davis told homeowners at Tuesday night's meeting that she was aware the $286,000 "is a lot of money," but she earned it.

"From the time Frances hit until late December of 2004, I worked seven days a week, 18 hours a day coordinating services from various contractors," she said.

The work continued throughout 2005, causing her own business to suffer, she said. Another board member was paid for his work answering telephones and other jobs, she said, but she would not identify the member or his compensation.

Board member Judy Skuya said Davis' home looked like "headquarters hurricane" through much of last year with maps on the wall showing which homes needed repairs.

"Her office is a nightmare and I thought to myself, 'Oh, my God, she's living this day in and day out,' " Skuya said. "She earned the money and was legally entitled to it."

According to the minutes of the Aug. 29 board meeting, the decision to split the insurance fee 50-50 with Davis was approved unanimously.

"I thought that since this was money that was coming from the insurance company to compensate Leiann Davis for months that she neglected her own business, it was a decent thing to do," board member Tyrone Monte said.

"Could we have done it differently? Better?" Monte pondered. "If this had been communicated perhaps a little more broadly"

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