The Heritage Hunt HOA PPP loan is under investigation by the Department of Justice for alleged improper application and misuse of funds. A resident complaint accused the HOA of violating its governing documents and state regulations.
Heritage Hunt HOA PPP Loan Sparks Controversy
The Heritage Hunt HOA PPP loan, approved in April 2020, has sparked controversy and led to an ongoing DOJ investigation. The loan amounted to $397,600, allegedly surpassing the borrowing limit set by the HOA’s Articles of Incorporation. The complaint claims the loan was obtained without the required two-thirds community approval.
Residents argue that the board miscalculated annual budget expenses to justify the loan. They allege that the reported expenses of $10,081,413 were inflated, as the actual figure was $8,470,263. If the lower amount were used, the 4% borrowing limit would have been $338,810, making the $397,600 loan ineligible without community consent.
Resident Complaint Challenges Heritage Hunt HOA PPP Loan
Five households filed a resident complaint against the Heritage Hunt HOA PPP loan. The complaint demanded the resignation of Sandra Painter, the board president, when the loan was approved. Painter, now the board’s secretary, voted against the complaint without recusing herself, leading to criticism of a conflict of interest.
The complaint accuses the board of breaching fiduciary duties and violating the HOA’s Articles of Incorporation. It also claims the PPP loan violated the HOA’s Declaration of Covenants, Conditions, and Restrictions and Virginia state regulations.
DOJ Investigation into Heritage Hunt HOA PPP Loan
The DOJ is investigating whether the Heritage Hunt HOA PPP loan was obtained under false pretenses. The HOA does not have paid employees, as board members and committee chairs are unpaid volunteers. However, the PPP loan application claimed payroll expenses for 45 jobs.
At the time, Heritage Hunt HOA contracted UptoPar to manage its food, beverage, and golf services. UptoPar requested the HOA apply for the PPP loan to pay its contract employees during the pandemic. This request allegedly led to a misrepresentation of payroll expenses, prompting the DOJ to investigate potential violations of the False Claims Act and the Financial Institutions Reform, Recovery, and Enforcement Act.
Board Decision and Community Reactions
The Heritage Hunt HOA Board of Directors voted 4-3 to reject the resident complaint on January 23. Three of the four dissenting votes came from board members who were involved in approving the PPP loan. This decision has divided the community, with some residents questioning the board’s integrity and transparency.
The HOA has not publicly commented on the matter. Current board President Maureen Storey confirmed the board’s decision but did not address the allegations or the DOJ investigation.
The DOJ investigation into the Heritage Hunt HOA PPP loan is still ongoing.
