Unpaid Bills, Unseen Dangers: What $21K in Hidden Legal Invoices Reveals About HOA Oversight
How concealed liabilities and management silence jeopardize board decision-making, vendor trust, and financial transparency in Illinois associations.
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🧾 $21K in Legal Bills Left in a Drawer — What Else Are Boards Not Being Told?
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When your management company “forgets” to tell you about $21,000 in unpaid legal invoices... and that’s just what you found.
🧾 The Governance Ledger | July 2, 2025
“Left in the Drawer”: What $21K in Legal Bills Tells Us About Management Oversight
This isn’t an accounting error. It’s a case study in mismanagement — and it’s not the first time we’ve seen it.
Just weeks ago, a suburban Illinois condominium board discovered $21,489.55 in unpaid legal invoices quietly sitting in a drawer. Literally.
The invoices, all from Saul Ewing LLP, spanned June 18, 2024, to March 14, 2025 — even though the law firm was officially terminated on December 31, 2024. The invoices were never paid. Worse still, the board had no idea they existed until they transitioned to a new management company in April 2025.
In a formal inquiry sent to the outgoing manager on June 27, the board asked the obvious question:
“Why were these invoices not paid — and why weren’t they disclosed to the board at any point during your management?”
🚨 A Pattern of Concealment
If this sounds familiar, it’s because it is. Back in 2018, I personally discovered $155,000 in legal bills that had been similarly buried, not disputed, not flagged, just ignored. That manager eventually left, but the damage to trust and transparency lingered for years.
These are not bookkeeping glitches. Under Illinois law (Title 68, Part 1445 of the Administrative Code), licensed community association managers are required to uphold professional competence. That includes:
Proper financial reporting
Use of sound accounting principles
Timely and accurate communication with the board
Concealing known liabilities is unprofessional conduct and could be a violation subject to enforcement by the Illinois Department of Financial and Professional Regulation (IDFPR).
🧠 What Boards Must Learn From This
When managers sit on unpaid legal bills — especially from firms the board has already terminated — several red flags go up:
Budgeting becomes meaningless when liabilities are hidden.
Vendor relationships deteriorate, especially when they’re stiffed without cause.
Boards are exposed — legally and reputationally — for decisions based on false financials.
This isn't just negligence. It’s governance malpractice.
📰 In the Press
This week, Skyline spotlights the unfolding financial crisis at 175 East Delaware Place HOA, where forensic audits have uncovered widespread irregularities — including unauthorized raises, manipulated reserve studies, and false tax filings.
As detailed by forensic accountant Michael Novak, these issues reflect a broader pattern of governance failures and lack of oversight affecting community associations across Illinois. With mounting evidence of board and management misconduct, the case underscores the urgent need for transparency, regulatory reform, and stronger protections for homeowners.
✅ Board Action Checklist
If your association is switching management — or even if you're just overdue for a financial check-up — ask for the following immediately:
A full vendor aging report
Copies of all outstanding legal invoices
Confirmation that all board-approved payments have been executed
A list of terminated vendors with dates of final billing
Because if you don’t ask… you might find out what’s been sitting in the drawer after it’s too late.
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📧 mnovak@cia.mba
Common Interest Advisors, LLC
Independent Forensic Investigators for Community Associations
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