Looking over the

Springhouse Homeowners Association, Inc. files.

The Springhouse Homeowners Association, Inc. is a community of 27 private residences with privately owned lots.

springhouse.pdf

Springhouse Homeowners Association, Inc. Easement, Joint Use and Maintenance Agreement

Springhouse Homeowners Association, Inc. plat d609a

Springhouse Homeowners Association, Inc. plat d609b

Photo of center area of Springhouse Homeowners Association, Inc. plat

The HOA plats clearly show the property lines and are referred to from the Easement, Joint Use and Maintenance Agreement recorded in
Campbell County Misc. Book 120, pages 476 thru page 488.
Page 476 clearly states that Springhouse Homeowners Association, Inc. is the owner of this property including the common areas and community facilities,
as recorded in
Group 1192D, in Plat Book 10, Page 29D of the Campbell County Clerk's records.
The Campbell County computer version of the plat is now known as D-609A and D-609B.
The D-609B plat revised one of the buildings from having 6 private residence lots to having 5 private residence lots.

Note the aerial image showing that the Easement, Joint Use, and Maintenance Agreement Exhibit C (community center area)
is the small area around the clubhouse, pool and parking lot only!
Springhouse Homeowners Association, Inc. Easement, Joint Use and Maintenance Agreement Exhibit C

Note the aerial image showing that the Easement, Joint Use, and Maintenance Agreement Exhibit A
is the separate adjacent condo community.
Springhouse Homeowners Association, Inc. Easement, Joint Use and Maintenance Agreement Exhibit A

Springhouse Homeowners Association, Inc. declaration

Springhouse Homeowners Association, Inc. declaration, first amendment
(transfers the streets to the City of Cold Spring, KY for public use)

Springhouse Homeowners Association, Inc. articles of incorporation
The Springhouse Homeowners Association, Inc. articles of incorporation explain that the private residence lot owners are non stock members in the corporation with one vote per lot.
The Springhouse Homeowners Association, Inc. does not qualify to be a nonprofit organization under current Federal Tax Laws.
The Tax Reform Act of 1976 created Internal Revenue Code (IRC) Section 528 specifically for homeowners associations.
The Springhouse Homeowners Association, Inc. files federal tax Form 1120-H, the corporate tax form specifically for homeowners associations.
The Springhouse Homeowners Association, Inc. board of directors has a fiduciary responsibility to protect the interests and financial assets of the 27 private residence owners.

Springhouse Homeowners Association, Inc. by-laws

The Springhouse Homeowners Association, Inc. property contains 27 privately owned lots, with private homes.
These 27 homes are all privately owned structures within the HOA property lines.
(The Springhouse HOA, Inc. plat drawing is consistent with the Zillow / bing real estate aerial image of the HOA lot lines.)

This is completely different from the adjacent condominium community, the Springhouse Council of Co-Owners, Inc., a Kentucky corporation
which has community owned buildings, and their own community property lines and governing documents.

The above documents are subject to Kentucky state laws. (This is often also explicitly stated within the documents.)
Some Kentucky Statutes for what corporations must do:

statute273233.pdf

statute271b16010.pdf

Looking over some Kentucky Insurance Statutes:

statute30447020.pdf

Looking over some Federal Tax Law corporate record keeping requirements:

http://www.irs.gov



Springhouse HOA Inc. property line stake.

Property line stake

As a separate corporation, the Springhouse Council of Co-Owners, Inc. has it's own separate set of documents including it's own articles of incorporation, declaration, by-laws,
and a 9 part Master Deed for all the community owned Condo buildings.

Now lets take a short look at just 3 of the 9 COA community Master Deed documents for the Springhouse Condo community.

Springhouse COA master deed phase 1 of 9

Springhouse COA master deed amendment 1 phase 2 of 9

Springhouse COA master deed amendment 2 phase 3 of 9



Notice how the largest condo units have more than twice the ownership in the common interest (assets and debt) than the smallest condo units!

By making the condo fees the same, the small unit owners are paying way more than their fair share while the large unit owners are paying way less than their fair share.

In the nearby Granite Spring condos, the monthly fees range from about $262. per month for large units, to about $150. per month for small units.

Condo fees correctly depend on the percentage of ownership in the common interest for the building maintenance and insurance costs!
Pool, grass cutting and snow fees are separate and not paid monthly.
There is a $65. annual fee and another $. quarterly fee, for these items that are not related to the building maintenance and insurance costs.

So, is something wrong with the Springhouse COA condo fees? Are the Springhouse COA small condo unit owners being taken advantage of?
Are the large condo unit owners taking a ride on the financial backs of the small condo unit owners?

A condo unit owner should not be forced to pay for more than their percentage of ownership in the common interest for expenses.
Pay special attention to Article II Section 2.05 and Article XII Section 12.01 (g) of the Springhouse COA master deed phase 1 of 9 above.
The Springhouse Council of Co-Owners, Inc. board of directors has a fiduciary responsibility to protect the interests of even the smallest condo unit owners.

There is a big difference between owning a private residence with a lot, as compared to owning a Condo unit, in a community owned Condo building structure!

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All verbal and written requests to Vertex Professional Group and the Springhouse Homeowners Association Inc. Board of Directors for copies of the financial audits have gone unanswered.

Is something wrong here?

The 27 homeowners are entitled to copies of the annual CPA financial audits under both the HOA Inc. by-laws, and Kentucky State Corporate Law.
As members of a separate corporation, the 27 HOA private residence owners are entitled to separate proxy votes, and a separate board of directors that represents their interests.

Is something wrong here?

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The names of the board members of each separate corporation can be found online at the Kentucky Secretary of State annual reports website.
Why are some board members listed for both boards that are not on the boards and left in a prior year?

Why does the board act and presents itself as a single board or a joint board most of the time while the public records tell a different story.
Why is the accounting not completely separate as the corporate law requires?

Why were Occupational License forms filed with Campbell County, Ky that claimed each separate corporation is not a corporation at all? The forms were completed in such a way as to remove the "Inc." from each of the two corporate names, and also fail to ckeck the corporation box. The forms claimed that each corporation was an unincorporated non-profit.
Why was this done? Were the boards trying to claim that the Kentucky corporate laws did not apply to them?
Did anyone see anything in a newsletter stating that the board was un-incorporating each corporation?
The county disallowed this and marked the corporation box in red ink to show that the county had changed the Occupational License forms for both corporations.

You can obtain black and white copies of these Occupational License forms via a public records request at Campbell County KY.
Requests by the county to Vertex Professional Group and both boards of directors to resubmit both Occupational License forms went unanswered.

Was this a deception behind the backs of both corporation's members?
Why has Vertex and the "joint board" refused to return the forms with the "Inc." put back on each corporate name?
Was this an attempt to justify diversion of the homeowner's funds to the condo community?

Courts generally accept the filing of tax returns as evidence of a corporation. Campbell county has verified that both corporations file separate tax returns.

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The May 2009 Springhouse News

The Springhouse Homeowners Association, Inc. board of directors has been told that this $11,000. is considered unaccounted for.

What happened to the fiduciary responsibility of the separate Springhouse Homeowners Association, Inc. board of directors to protect the financial assets of the 27 private residence members?
There are two separate boards of directors as the Kentucky state annual statement filings clearly show.
Are false statements being made on public records?
Is there not really two separate independent boards of directors as the public records show?
There are no provisions under the law for any joint board of directors that denies the 27 homeowners their own separate proxy votes, and fails to protect their interests.

Copies of all the signed proxy votes from each separate corporation for the transfer of the streets to the city are on file at Campbell County Ky. This street ownership transfer was the first admendment to the HOA Inc. documents (about 27 pages of proxy votes with homeowners signatures). It was the tenth admendment to the COA Inc. documents (about 100 pages of proxy votes with condo owners signatures). Clearly it was well understood which streets were on each corporation's property.

The street known as Bluestone was on the property owned by the Springhouse Council of Co-Owners, Inc. The $11,000. remains unaccounted for.

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The March 2014 Springhouse Minutes

So let's just plan to wipe out $66,000. of the homeowner's reserve money, and spend their money to solve a problem in the condo community. A problem that drains directly into the condo community from the 18 inch pipe out the side of the Ameristop parking lot, and never enters the Springhouse Homeowners Association, Inc. property.
This outrage and planned failure of fiduciary responsibility is said to be stopped.
Where is the independent board required for each corporation under Kentucky corporate law?

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Recently installed "Millstone drainage rock is too big."
Approved work for L & S with no bid?
So let's just plan to take that asset and move it to a different corporation's property, without any compensation to the Springhouse Homeowners Association, Inc.
Don't big rocks cost a lot more? Won't small rock clog up with dirt rapidly? Approved an unnecessary expense for the HOA Inc.?
Was there a failure of fiduciary responsibility to protect the Springhouse, Homeowners, Association, Inc. from an unnecessary expense?
Who requested, specified, and installed the rock in the first place?

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The March 2005 Springhouse News
Can you see the problems here?
Agent advised it is now changed back to separate insurance policies for each corporation.
Was there a failure of fiduciary responsibility to protect the Springhouse, Homeowners, Association, Inc. with proper insurance as required by their by-laws?

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(Document provided from Bob Stuck, thanks Bob).

HOA property income

Federal tax law requires that income from Springhouse Homeowners Association Inc. property (the clubhouse)
be reported on the Springhouse Homeowners Association Inc. federal tax return.
There are no provisions under the law for any diversion of funds to a different corporation's account.
Were federal tax laws violated? How long was this going on?
Under the communications section of Kentucky state corporate law, the income should not be known to or accessible by
the Springhouse Council of Co-Owners, Inc. board of directors.
The budgets must be separate and based on the actual income and expenses, and property lines of each separate corporation.
Diversion of funds and another failure of fiduciary responsibility?

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Why is there not a separate grass cutting contract based on the actual square footage of the Springhouse Homeowners Association Inc. property?
Was there a failure of fiduciary responsibility to get a proper separate contract for the Springhouse Homeowners Association Inc. property?
Did a board member sign their name to a single grass cutting contract that effectively diverts the 27 private residence homeowners funds to subsidize grass cutting in the condo community?
Did the board leave the grass cutting contract unsigned?
It appears that there is 5 to 10 times as much grass to cut per condo as there is per homeowner's private residence.
How much money would this divert each year, and how long has it gone on?
The 27 homeowners are still waiting for copies of all the past audits. Is the board hiding something?
All requests to Vertex Professional Group for copies of the "Grass cutting contracts" went unanswered.
All requests to Vertex Professional Group for copies of the "Management contract" went unanswered.

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Where is the website Vertex Professional Group promised in their sales pitch?

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The Kentucky annual statement filings clearly show the same board members serve on the boards of the 2 separate corporations.
Was there a failure of fiduciary responsibility to protect the homeowners members financial assets?
As stated before, the 27 homeowners are entitled to copies of the annual CPA financial audit under both the HOA Inc. by-laws, and Kentucky State Corporate Law.
Why are the 27 homeowners being stonewalled on this request?
Copies of the audits should be sent to each homeowner every year.
Any conspiracy to divert funds or destroy records may be a crime.

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Federal tax law requires that corporate tax returns and financial records be kept for a period of 10 years.
State corporate law requires that all books and records be available for inspection, and explicitly states that the right of inspection cannot be denied by corporate action.

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Why is the recently installed clubhouse deck swelling, cracking and splitting?
Who specified, and installed the decking?
Why was low quality material used, and not the same good vinyl decking as was used in all past deck replacements?

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Requests to Vertex Professional Group for copies of all past "Credit Card receipts" went unanswered. Were the credit cards issued in the names of individual board members, or the Springhouse Homeowners Association Inc., or the Springhouse Council of Co-Owners, Inc? Which corporation paid for and owns whatever was purchased? We all have a right to inspect the records. Why have all requests for copies of the audit reports gone unanswered?

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A corporation is defined as "An artificial being, invisible, intangible and existing only in contemplation of law. It is exclusively the work of the law, and the best evidence of its existence is the grant of corporate powers by the commonwealth." Definition source: Business Law Principles and Cases, Third Uniform Commercial Code Edition.

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If you request the Springhouse Homeowners Association Inc. documents from Vertex Professional Group, they send you a documents .pdf file that is a mixed up mess of documents. Some very important documents are missing, (such as the Easement, Joint Use and Maintenance Agreement which defines the Springhouse Homeowners Association Inc. property lines and the 27 homeowners individual lots). It includes a withdrawn rental restriction document that was never filed with Campbell county and is a flawed legal document. It also includes a joint dog poop "resolution" that seems to claim the 27 private residence homeowners are somehow governed by the Condo community master deed.

The Springhouse Homeowners Association, Inc. is a community of 27 private residences with privately owned lots. They are not governed by any master deed.

The flawed dog poop "Resolution".

The board knows full well they file separate KY corporation annual statements and separate tax returns.
Each corporation must have it's own resolutions, budgets, documents, and communications with it's members.

There can be no joint resolutions.
Does the notary seal make the flawed and deceptive joint dog poop "resolution" look official? Where is the Campbell county stamp?

Why has the Springhouse Homeowners Association Inc. board of directors not demanded that this deceptive and flawed joint dog poop "resolution" be withdrawn? Was this joint dog poop "resolution" never filed with Campbell county? How would that work? There is no joint corporation in the county records.

Also, the city has laws covering pets.

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The Feburary 2012 "Springhouse Sentinel" news sent by Vertex Professional Group contains an article entitled "Two Communities" and states "Each association is a legal corporation on its own, with its own by-laws, its own Articles of Incorporation, and its own Covenants and Master Deed." This statement is deceptive because only the Condo community has a Master Deed, which states the street address, and percentage of ownership in the common interest, for each condo unit owner based on the square footage of their condo unit. A condo "unit" is the ownership of space or the right to use space within a community owned building structure.

The Feburary 2012 "Springhouse Sentinel" news article also fails to show the "Inc." on each corporate name. Why was this done? Remember, the Campbell County Occupational License forms discussed above were filled out in such a way as to state there were no corporations at all, but this was not allowed by Campbell county. Remember how the March 2005 Springhouse News stated "Insurance was combined into one organization (Springhouse)". The insurance agent has verified that several years ago the insurance was split into a separate policy for each corporation. At least the insurance problem seems to have been fixed, with separate insurance for each corporation.

What were they trying to do?
Claim the 27 homeowners have a master deed and join the 27 homeowners reserve funds?

The 27 homeowners are not the piggy bank for the financial problems in the condo community.

Anyone who owns stock (or a non-stock member interest) in a corporation should get to ratify the selection of the CPA financial auditor every year, on a proxy vote at the annual meeting for each corporation.

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Call for a criminal investigation.


Due to the refusal of the Springhouse Homeowners Association Inc. board of directors and Vertex to comply with Kentucky state law, and provide copies of all past audit reports (financial and legal audit reports which the homeowners are entitled to under Kentucky state law), a criminal investigation is now necessary and demanded. They have had over 1.5 years to comply with state law and have refused to do so.

The Springhouse Council of Co-Owners Inc. board of directors has no legal interest in the Springhouse Homeowners Association Inc. property or funds, and no right to divert money paid by the 27 homeowners, or divert income from their corporate property.

The Springhouse Council of Co-Owners Inc. board of directors must be investigated for willingly and knowingly facilitating corrupt business practices and possible criminal violations in the following areas:

Facilitating proxy voting fraud.

Diversion of funds. (Through various unusual business practices; and also the $11,000. discussed above is still considered unaccounted for.)

Double book keeping. (Percentage expenses do not properly reflect any real physical corporate property expense as must be reported on separate corporate tax returns. This results in diversion of funds to the condo community, but would not be evident on the tax returns.)

False income and expense reporting on Federal tax forms.

Arranging fees to financially benefit the the largest condo owners, a good number of whom have been Springhouse Council of Co-Owners Inc. board members. Forcing the small condo owners to subsidize the cost of insurance for the large condo owners. This may be shown to involve very large sums of money over a period of many years. Fraud against the small condo owners through unusual business practices completely outside of the public records. Violation of the Master Deed percentages of ownership of assets and expenses as recorded in the Campbell county public records.

Systematically diverting fees paid by the 27 homeowners to benefit the Springhouse Council of Co-Owners Inc. condo community through unlawful contracts (including unsigned contracts). (example: A single grass cutting contract based on percentage payments rather than the actual property square footage of each separate corporation).

Telling the state of Kentucky one thing every year about 2 separate corporations while doing something completely different is making false statements on public records that people depend on.

Diversion of income from Springhouse Homeowners Association Inc. clubhouse property to the Springhouse Council of Co-Owners Inc. account.

Attempting cover up by refusing to release audit reports and no longer recording useful information regarding corporate actions in the illegal “joint meeting” minutes. There is also a history of not releasing annual meeting minutes until they are approved a year after the fact. This was in violation of state corporate law requiring the minutes be available in a reasonable time.

Stonewalling and attempted past intimidation of people who ask questions.

Violations of Federal laws including conspiracy to commit theft facilitated by corporate proxy voting fraud where there is no legal interest.



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The public records are very clear.
The corporate laws are very clear.