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In Surprise Move, Leisure World Managers Open Up Their Books

Residents, who have gone to court seeking access to financial records, say salary figures are still missing.

September 09, 2004|David Reyes | Times Staff Writer

After months of battling a cadre of Leisure World residents, managers of the Seal Beach retirement community relented Wednesday and allowed them access to financial records.

The surprise move came on the eve of a second round of court hearings and two weeks after the residents found attorneys to help them fight the Golden Rain Foundation, an umbrella group that governs the community of 9,000 residents.

"We believe there was enough pressure put on Golden Rain by our attorney to make them let us see their financial records," said resident Edmund Loritz.

On Wednesday, Loritz and several other residents pored over documents at Leisure World's administration office.

Residents said they were heartened by the foundation's decision to finally open its books. But after more than three hours examining records, they discovered that not everything was available.

"They didn't give us salaries for the administrators," resident Carol Franz said.

For months, the community's elected leaders and management denied the Concerned Shareholders of Leisure World access to records detailing how their monthly fees are spent and how much administrators are paid.

Officials said they were not required to release the records and that they did not fall under the Davis-Sterling Act, which governs homeowners associations and requires disclosure of many financial documents. But residents and other legal experts said that because they were members of the nonprofit foundation that runs Leisure World and they paid monthly dues, they had the right to see where the money was going.

As a result, the two sides have been locked in a battle that escalated into two Smalls Claims Court cases and one civil lawsuit. Although a Small Claims judge sided with the residents, the managers appealed that decision. That case is ongoing.

Last month, Golden Rain filed a lawsuit in Orange County Superior Court seeking to bar disclosure of its financial records. That case is pending.

It is unclear why Golden Rain changed its position and allowed the residents access to the books Wednesday. Neither Golden Rain administrators nor their attorney returned phone calls seeking comment.

Among the residents' priorities are learning the salary for chief administrator Habir "Bill" Narang, and the amount the foundation has spent on legal fees and contractors.

Stanley Feldsott, whose Newport Beach law firm has handled many homeowners association cases, said he believed Golden Rain officials changed their minds because "they had no defense."

"I suspect what Leisure World thought is that if they sued these people they would then just go away," Feldsott said. "[But] when these elderly people didn't roll over, it changed their minds."

Kenneth Babcock, with the Public Law Center in Santa Ana, said the center was intrigued by the notion of a few residents trying to garner information by suing in Small Claims Court, then getting sued themselves.

"These people didn't have an attorney and they needed to be on a level playing field," said Babcock, whose nonprofit center helped find a law firm to represent the residents.

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