Large scale developments like Serrano are highly regulated by the California Bureau of Real Estate. Extensive documentation is submitted to the BRE for review and approval at every step. First time buyers are given the BRE’s Final Public Report that describes the property and tells them how much the beginning homeowners dues will be among a lot of other details. Every buyer is given a copy of the CC&Rs and they agree to abide by them.
We moved to Serrano more than 10 years ago and love the community. Along with our friends and neighbors, we are fed up with all of Dean Getz’ disruptions, chaos and legal expenses. The new board has to repair the damage he caused.
I studied every HOA and BRE document I could find related to Serrano, talked to people on both sides and interviewed the developer to determine whether Getz’ many claims were true.
Miro writes, “Getz … unearthed the fact that the developer was allegedly voting in HOA elections, utilizing ballots issued to undeveloped lots that were not paying dues as prescribed in our CC&Rs.”
The fact is the developer has voting rights on undeveloped lots that paid $3.1 million in assessments to subsidize the HOA in the beginning years of the Serrano. This arrangement was developed by the BRE and the developer.
Undeveloped lot assessments ended in 2005 when the HOA became totally self-funded.
There is no provision in the CC&Rs that requires the developer to fund the HOA beyond that point. I was told by the BRE that once the HOA is self-funded the developer is not responsible for board-created deficits after that.
Getz and Rod Badaline (board counsel) concocted a $9 million payment demand and bullied an exasperated board to agree to present it to the developer. It was nothing more than three Excel spreadsheets and no written justification. The developer rejected the demand and sent the board a 17-page explanation to let them know where and why Getz and Badaline were mistaken. The developer’s position was nothing is owed.
Getz badgered First Service to report the $9 million on financial statements, which would have been a clear violation of GAAP rules of revenue recognition. If First Service had followed Getz’ direction, the HOA would have issued fraudulent financial statements because the $9 million was not collectable. People are in jail for doing that.
Recently, on the advice of outside lawyers, the board retracted the $9 million payment demand.
Getz has filed a $15 million lawsuit against the HOA, the developer and everyone associated with Serrano from the beginning of time. He has a right to sue. But now he has to prove his claims.
Meanwhile a cloud hangs over Serrano because of Getz. Our insurance rates will rise dramatically. Homeowners will have to pay litigation expenses not covered by insurance. Homeowners who are selling will have to declare the HOA is in litigation. Property values could be depressed until the matter is resolved. In short, every single Serrano homeowner will be harmed by Getz.
If Getz loses, which is very likely in my opinion, defendants including Serrano homeowners will go after him for their legal expenses, which will be substantial. If Getz wins, the lawyers will get most of it and homeowners will get 0.025 percent of what’s left. I don’t think Michael Miro would fly in an airplane with those odds.
Bill Osgood is an El Dorado Hills resident.