Quote:
Originally Posted by GammaZeta
Millions of dollars were put into the hands of people with NO real estate experiece, NO landlord experience, NO construction experience, NO management experience.
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Again, assuming this is how things really are (just my way of being open-minded since this is not a situation I know about), that is a real shame because I would think the key advantage of a centralized Housing Corporation for an entire fraternity would be the ability to have one management team of alumni who were experts in real estate, business law, property management etc.
Beta is going the complete opposite direction. We never had nationally centralized management of chapter housing, but these days there is no support at all- not even to give alumni basic assistance with small legal questions and the like. I do not like this at all since it pretty much "hopes" that every chapter will have alumni with the right expertise to run a housing corporation.
I very much like the concept of what LXA did, but it appears the trouble was in the execution.
Being on my chapter's housing corp. I hear a lot of stories about other chapters and even other fraternities since a lot of us keep in touch to share advice and the like.
Many years ago, there was a particularly strong chapter of a fraternity at a very good school which had a Housing Corporation that owned the house outright. The original donors had long since passed away and at the time of this incident the Board members were not people who had put in much, none in most cases, money to the housing corporation- nor was there really any appropriate expertise.
After 2 major renovations to the house in a 10 year period, there was a new mortgage taken out and the housing corp did not want anything to do with it, so 2 alumni took on personal liability. Then when the chapter had some rough times numbers-wise, the housing corp did nothing and the 2 alumni panicked and sold the house without telling anyone for well below market- in fact below tax appraisal- to a real estate speculator who flipped it for a 6 figure profit not long after. The proceeds barely paid off the second mortgage and so there was almost nothing left where just weeks before there had been a $1 million + house.
This is one of the worst stories I know of, but I have heard similar ones. Housing Corporations tend to have very strict charters and rules, but if they are not being followed- and if the properties are not being well managed- then multi-million dollar assets can be completely screwed up by people who are in charge of them but never made any contribution to their creation and maintenance.
A well-run central housing corporation authority could avoid those risks, and I am just sorry it appears that you guys' case it was the same old story that happens to all of us- only now on a larger scale.
For all practical purposes, I doubt any of the LCAP Board will ever suffer for anything they might have done inappropriately. But the questions I outlined above would at least help any movement from the alumni in determining just what they are facing and how to proceed. If LCAP is a non-profit entity or has some other special tax designation, then that gives outsiders with a connection to the entity (ie the alumni) a lot of ability to force the books to be opened.
The good news is that when people do something inappropriate with someone else's money and there is a paper trail, it is not too hard to knock them into shape fast. You just need to know where to get the right baseball bat.
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