Neighbors might have to pay Woodbridge HOA dues
Following news of a U.S. Securities and Exchange Commission investigation into Woodbridge, and the company’s subsequent bankruptcy, homeowners neighboring the company’s area properties could have to pick up the tab if Woodbridge can’t pay its HOA dues.
The company has substantial property holdings in two Carbondale-area developments, Aspen Glen and River Valley Ranch. At this point, managers at the two private communities wouldn’t speculate too much on what impacts there may be to their homeowners associations.
But Sterling Page, manager of the RVR association, said that the cost of losing Woodbridge’s HOA dues would have to be spread across the community’s other property owners. RVR consists of around 500 properties, he said.
“That’s true of every cost impact in any HOA, and this community is no different than any other,” he said. “These are concerns we have to address as a management association and as a community through the board, and we make contingency plans around that.”
Page said that having to absorb a member’s nonpayment of HOA dues is “just standard business.” And it probably won’t be the last time for the HOA to wonder if a member is going to be able to pay his dues, he said.
“It’s an ongoing management situation that happens in every HOA,” Page said.
Woodbridge holds about 10 percent of RVR’s properties, and not all of those are in bankruptcy. Page said that, at RVR, only 10 of Woodbridge’s units were affected by the bankruptcy.
“At this point in time we are waiting on the bankruptcy court, and we don’t want to speculate how it may affect us,” Lance Luckett, community manager at Aspen Glen, wrote in an email.
Page said RVR hasn’t heard anything new from the bank or Woodbridge since the bankruptcy was filed.
Woodbridge Group of Companies, based in California, filed for Chapter 11 bankruptcy earlier this month, claiming to be about $750 million in debt. Woodbridge said that its bankruptcies were due to the cost of doing business, the ongoing investigations, and the company’s inability to pay its one-year notes to investors.
In late November, Woodbridge closed its sales office at Aspen Glen, following news that the company was under SEC investigation for securities fraud. In addition to the federal investigation, several states, including Colorado, have over the last couple of years leveled similar accusations, including fraud in some cases.
At that time, Robert Shapiro, then-president and CEO of the company, noted via email that Woodbridge has settled three of the state cases with no admission of guilt or finding of fraud. Shapiro then resigned as Woodbridge president at the beginning of this month.
The company has pledged to “continue to cooperate fully and work with the SEC and state regulators toward resolution of any investigations.”
“To date, the division alleges that [Woodbridge] raised approximately $57 million from 450 Colorado investors, and [continues] to solicit investors through online and radio advertising,” according to a court filing by the Colorado Division of Securities in October.
“Woodbridge made these sales to Colorado investors using at least 10 other sales representatives, none of whom were licensed to sell securities in Colorado,” according to the Colorado filing.