Some neighbors say the homeowners association tried to force them to file individual insurance claims for roof replacements on their townhouses, citing damage from a hailstorm last spring that they say never happened. From the start, the HOA threatened to punish residents with a $6,000 assessment if they don’t file insurance claims to cover the cost of replacing the roof, according to an HOA letter. But neighbors say the HOA has since backed down.
The reviews of the association say he raised dues four years ago with the intention of covering the cost of replacing the roof. The association was supposed to now have more than $400,000 set aside for this purpose, records show.
“I don’t necessarily know where all that money went because we never really had that transparency,” resident Stephen Burlingame said. “They told us one thing in 2017, and now they’re telling us something else.”
In a statement to AJC, SkyShield founder Alberto Mizrahi “categorically denies any wrongdoing” and called the incident “maliciously instigated by a handful of disgruntled owners”.
Village Grove HOA did not respond to repeated requests for comment.
A spokesperson for the insurance commission said the bureau was investigating the matter but did not share details.
“Our office is investigating this matter as potential insurance fraud, but at this point the issue appears to be civil rather than criminal,” commission spokesman Weston Burleson said.
It all started in October, when Village Grove HOA sent a letter to residents informing them that SkyShield determined townhouses in the neighborhood needed their roofs replaced due to storm damage six months earlier, in March 2021.
Nowack says the circumstances of the dispute are unusual. In the vast majority of cases, an HOA is liable for bodily injury and is usually the one who insures the townhouse rooftops, he said.
He said the HOA was within its rights to require residents to file their insurance. But with national insurance companies and state investigators involved, he added the focus is on whether there was indeed damage from the storm.
“So really the story is, why is there an investigation into the activity?” Nowak said.
Residents such as Burlingame said there were no storms during the time in question.
Weather reports from Interactive Hail Maps, a company that provides weather information to roofers, support residents’ claims, as do independent inspections of two roofs. Additionally, on March 3, 2021, the HOA sent a letter notifying residents that their roofs had sustained storm damage, weeks before the supposed storm the HOA mentioned in its October letter.
“It seems like it’s turning into ‘We don’t have the money for it, so we have to find a way to convince landlords that it’s something they have to pay for,'” resident John Csenar said. .
“Emotions are strong”
Village Grove, located about an hour northeast of Atlanta, was built nearly two decades ago as Gwinnett’s explosive growth pushed ever further north. Comprised of both approximately 300 single-family homes and 149 townhouses, it houses all the traditional conveniences of a suburban community: a playground, a swimming pool, a sprawling and neatly landscaped common area resembling a college quad . Townhouses typically start at around $350,000, while single homes are around $550,000.
Those who feared the HOA would endanger them circulated a petition in 2021 and about 40 residents signed to voice their objections to the plan. Four residents met with the association but left unsatisfied with the responses, the residents said. In the meantime, Village Grove and SkyShield have continued with their plans.
Budget documents for 2017 show the HOA increased dues to $270 per month. Residents said it was an increase of about $90 per month. According to the budget documents, much of the extra money was to be earmarked for townhouse roof repairs. A five-year budget forecast from a Fall 2017 Village Grove Townhome meeting includes line items for 2019 and 2020 budgeting $225,000.00 and $200,000.00 for roof replacement.
The poor condition of the roofs is not in question. Burlingame, Csenar and other residents who spoke to AJC said the roofs needed replacing, but not because of a specific storm. They simply aged after two decades, they said.
In fact, some roofs have already been replaced. But locals say construction has come to a complete halt in recent weeks.
Deborah Goonan, an HOA expert who tracks disputes nationwide, said it’s rare for state authorities to get involved in an HOA dispute. There are few regulations governing associations, and authorities often reject complaints if they come from a handful of residents. Many cases end up in civil courts.
Money is often at the center of nearly every HOA dispute, whether it’s a disagreement over dues or unfair fines, she said. The infighting may seem insignificant, but the consequences can be serious.
Goonan’s blog, Independent American Communities, has chronicled many HOA conflicts across the country. She wrote about major indictments that saw association board members sent to jail for rigging a local condo election at a banal bickering over a stone retaining wall that cost the HOA and a resident millions in legal fees.
“There’s this feeling, at least in the United States, that when you own a house, it’s your castle. Emotions run high when someone at the HOA threatens that view,” Goonan said.
Authorities join the fray
The situation in Village Grove has gotten worse and worse and several Burlingame neighbors are looking for a way out. He said some locals told him that the HOA action and fear of retaliation caused them to want to sell and get out.
“I know several people who have sold or are selling their homes to leave the neighborhood,” Burlingame said.
Mizrahi, the owner of SkyShield, texted a Village Grove resident earlier this month, according to screenshots reviewed by AJC. In the messages, Mizrahi tells the resident to stop spreading “false information” about his business and threatens legal action. (SkyShield in January changed its name from A+ Exteriors, according to records from the Secretary of State’s office.)
Major national insurance companies have also taken notice. State Farm, Nationwide and USAA are investigating potential claims, according to posts reviewed by the AJC.
A State Farm spokesperson said the company could not speak specifically to a customer’s complaint. A Nationwide spokesperson referred the AJC to the Georgia Department of Insurance. The USAA did not respond to a request for comment..
State Insurance Commission investigators are continuing their own investigation, and several residents have met with high-level officials within the office to hand over documents and share their stories, a commission spokesperson confirmed.
“The investigation is still ongoing and we are not ready to release a final report at this time,” Burleson said.
As for what’s next, Burlingame aren’t sure. He has not heard from the association or the contractor recently. In the meantime, he and the other residents who have decided to stay in Village Grove are waiting for the state to complete its investigation.
“Until they fine me for the roof replacement, there’s not a lot of next steps,” Burlingame said. “It’s a wait and see.”