Solis Gardens Apartments Was Not Properly Managed in Accordance with HUD Requirements or Its Regulatory Agreement

Official summary from the Oversight.gov

We audited Solis Gardens Apartments’ management of its HUD-insured Section 207/223(f) multifamily property as part of our annual work plan. The owner of Solis Garden Apartments manages 62 units in accordance with HUD requirements and its regulatory agreement which includes restrictions on the use of project funds and assets. We selected Solis Gardens Apartments for an audit based on risk indicators, such as surplus cash deficiencies, missed or late mortgage payments, HUD’s risk rating, and the absence of any HUD Management and Occupancy reviews. Our audit objective was to determine whether the owner managed Solis Gardens Apartments in accordance with HUD requirements and its regulatory agreement. The owner of Solis Garden Apartments did not manage its property in compliance with HUD requirements or its regulatory agreement. Specifically, the owner made improper routine cash distributions totaling more than $1.5 million and improperly deposited $35,979 of reserve for replacement funds into an owner-controlled account while the property was in a non-surplus cash position. The owner also accrued $25,210 in excess asset management fees and charged more than $16,764 in excess property m