Not an April Fool’s Joke: Utah HOA Slaps Residents with $25K Assessment and Imports Construction Firm Employees from Washington State during Coronavirus Outbreak Tamara Gaffney Follow Apr 1 · 6 min read

A community board of 75 townhomes in Draper, Utah announced to residents on March 31st that they were going to move forward with a massive construction project using two construction firms based out of Washington State starting this month. The project, which was initiated because some trim board wood had been absorbing water, has been the source of consternation for many homeowners because the townhomes were just built in 2012 and the elected board hired a firm, J2 Building Consultants, who is known in the Utah for providing “excessive” estimates that advise HOA boards to perform extensive water remediation repairs. One attorney who was unable to represent the homeowners due to a conflict described J2 as “a company that never met a building they didn’t suggest to completely re-clad.”

The townhomes at the Villages at Draper Hills are mostly stone veneer and wood but have small portions of stucco which are known to be a siding that allows water to penetrate and can have hairline cracks over time. Based on the assessment of 5 homes that had swollen trim wood, J2’s project manager Jim Kessler, recommended completely re-doing the outside of 62 of the units and brought in another Washington State contractor, Multi-M Construction who, not surprisingly, turned out to be low bid on the project. The expected work totals about $2 million and all residents have been given until May 15th to come up with nearly $25,000 each or be automatically assigned into a hard money HOA loan program with an undetermined interest rate, payment terms, and underwriting fee.

Concerned homeowners have filed multiple petitions with the HOA board requesting revisions to their rules and to vote on the recall of board members only to be told that their petitions are not considered “valid” by the board. The first attempt in April of 2019 was rejected due to not having all the signatures from each person listed on the title of the home. For example both husband and wife were required to sign if they were both listed on the title of the home according to Stephanie Schmidtke, Association Manager at Community Solutions, the company who was hired to run the association. Homeowners who signed the submitted April petition received visits from board members to their homes that were considered by many to be “intimidating” according to a resident in the community who supported the petition but wished to remain anonymous. The resident said she was “yelled at” while getting her mail from the mailbox about signing the petition by unhinged board member Patricia Bond. The second petition attempt in January, 2020 was rejected with a notification from the association manager Schmidtke because the petition request which stated “I would like to have a vote of the homeowners of Villages on Draper Hills Homeowners Association to recall the existing HOA board” was considered “too vague” and the terminology “vote to remove current board” writing on the top of each page was considered “not descriptive enough” for each page of the petition signatures.

The building’s original developer, Brad Reynolds Construction, offered to help but was also rejected by the board while homeowners in the community with construction backgrounds advised that there was likely a maximum of a few hundred thousand dollars of work to be completed on perhaps 15 of the 75 units. Calls for additional inspections were dismissed as the board retreated to closed door meetings to make decisions without further community involvement. The “official” board president resigned earlier in 2019 to spend more time with his new baby and one resident who applied for the open position was rejected by then board Vice President Gary Giancola, a Delta Airlines pilot. Board member Kathi Goodfellow described the conversation at the April closed door board meeting as homeowner Melissa Woolridge’s official application was characterized by Giancola as “a diatribe” while Giancola argued against Woolridge, who is a Process Engineer at a large national bank, on the basis that she wouldn’t make a good board member because she is a “single mother”.

The board appointed another homeowner who hadn’t even officially applied for the position, Lynn Goodale, in April 2019, refusing to bring the position to a community vote. Board member, Kathi Goodfellow continued to work behind the scenes to support the petitions to remove the board and voiced heightened concerns about the obviously self-interested board votes. Goodfellow, however, went on to vote in favor of controversial decisions, likely in order to encourage other board members to approve her request to build a deck at her townhome. In February, Lynn Goodale, resigned the “acting” president role and rather than call upon the community to install a new president, the board Vice President, Gary Giancola, assumed the role as President, leaving the board incomplete with only 4 members. Goodfellow has now listed her home for sale and has not responded to a request to explain why she would go through so much trouble to get the deck approved only to sell the townhome during the COVID-19 outbreak.

Aside from the obviously large demand for money during a time when financial hardships are so severe that federal, state and local authorities are heroically attempting to prevent homelessness through any means necessary, homeowners are also questioning the safety and rational behind bringing contractors not licensed in Utah into the state given the massive impact of COVID-19 in the contractor’s home state of Washington. For many, the project that is dubious at best, certainly it is not essential work to be done in the month of April when coronavirus infections and deaths are at their peak. Residents point out that the community homeowners are mainly aged 60 and above which is a particularly vulnerable group if potentially exposed. When board members were asked what would happen to homeowners who couldn’t afford the assessment, the board said, “they will just have to move out”. Gary Giancola attempts to reassure homeowner Angela Evatz that that the Board would get the money out of homeowners described a process where the HOA would authorize placement of credit-damaging liens on the homes and force homeowners to sell in order to pay the assessment, if necessary. Details of this process were sent to the entire community by the board via a letter from Ms. Evatz outlining her conversation with Giancola. Subsequent questions about what happens if homes do not have enough equity to pay the assessment due to the market downturn, however, were left unanswered.

Homeowners reached out to their City Council and received a response back from the council members and city attorney that there is nothing Draper City can do. Complaints filed with the State Attorney General’s office yielded no response and multiple attorneys advised concerned homeowners that the state legislation only focuses on protecting developers against this new form of litigious construction consulting firms. In Utah, the consistent theme from government officials is that homeowners within associations should take steps to be more informed buyers. Meanwhile realtors, homeowner associations and governments provide no guidelines to advise prospective buyers on the types of questions and documentation they should be considering when they purchase.

Members of communities on Facebook and Nextdoor responded to the story by indicating that they had no idea that sort of massive assessment could be imposed upon homeowners without so much as a vote. Janice Tablish, resident within the community said, “It is really hard to understand the impact of what is missing in the rules and bylaw within HOA documentation. We didn’t realize we needed to restrict the board’s special assessment authority until this happened. The requirements for a petition aren’t listed anywhere. Turns out you don’t know what to look for until you are already in a terrible situation.”

Tamara Gaffney, who has led the most recent petitions and provided all of the details for this story, said, “I find a lot of things about this situation deeply troubling but the biggest reason for me to expose all this was Gary’s (Giancola) comment that communities all over the state will be experiencing the same expenses soon.” Gaffney went on to say that she believes that homeowners are badly exposed to scare-tactics from companies that see big HOA pockets run by boards with no construction experience and she is hoping that even though they can’t save the Villages at Draper Hills, lawmakers and association homeowners will take action to avoid the financially devastating consequences of Utah’s approach to HOA law in time to protect the next victimized HOA community.