🦈 💰 INTEREST RATES & MONETARY POLICY 💰🦈 

Global Financial System in Turmoil… 

• The 10yr Treasury yield broke above 4%, but is still inverted (lagging behind shorter term government debt (1yr, 2yr, 3yr, 4yr, 5yr). - WSJ

• Listen to Mohamed El-Erian: Coming to Last Phase of Dollar Strength, Yield Surge 

• ‘Volatility vortex’ slams into $24tn US government bond market - Financial Times

  • “Right now it is all about market volatility,” said Gennadiy Goldberg, a strategist at TD Securities. “You have investors staying away because of the volatility — and investors staying away increases volatility. It is a volatility vortex.”

• Dun dun . . . dun dun . . . dun dun dun dunnnnnnnnnnnnn! - Financial Times

  • Whatever way you cut it, the seismic shift in the US Treasury market is tightening financial conditions for everyone on the planet. If we continue along this path, something is inevitably going to break. - Financial Times 

1) Governed by Neighbors: Quote: Volunteer leaders are accountable to the neighbors who elect them.  That’s only true in certain associations where Board omnipotence and homeowner complacency has not taken hold.

2) Managed by Professionals: A significant portion of the 355,000+ common interest communities (CICs) in the United States, especially those that are 20 units or less, are not managed by a third party firm.  To wit: 43% of condominiums in Seattle are 10 units or less.  Even in managed communities, homeowners are constantly flummoxed by the actions and advice (and lack thereof) of their manager and management company.   This is the reason for writing Great Expectations! and creating tools like the CIC Governance Matrix.

3) Protect Property Values:- Have you ever seen a study (even a questionable one) proving the relationship between CC&Rs and property values in similarly situated neighborhoods?  If you know of such a study,  please  share it!

• The article gets at least one thing right (albeit the understatement of the year): 

  • While CC&Rs are developed and enforced to protect all homeowners, they do not eliminate occasional disagreement and discontent.

Remedies Limited by Ambiguity

• • Precision of language in your governing documents matters, especially when it comes to a court of law.  In Homes Association of Cedar Hills v. Craig, the Oregon State Court of Appeals found that language in the association’s declaration could be reasonably interpreted two different ways and, without any evidence of intent provided by either party,  resolved the ambiguity in favor of the defendants and against the party responsible for drafting the language: the association. 

  •  Read more about enforcement case law on our Enforcement page.

Rage Against the Machine

• • In Estates of Red Lion Maintenance Corporation v. Broome, the Court of Chancery of Delaware ruled that the height of a van does not include any attachment or appendages.

    • "Deed restrictions are construed in accordance with their plain meaning in favor of a grantee [such as a homeowner] and against a grantor [such as a homeowners' association]."

Amendments of State Statutes NOT Automatically Incorporated Into Declaration / CC&Rs

• • In Cao v. PFP Dorsey Investments, LLC, Arizona Court of Appeals Division One found that subsequent amendments to the Arizona Condominium Act (view on our Statutes page) were substantial enough exceed the plaintiff's reasonable expectation of such changes that impacted their privately owned real property and, as such, that the amendments were not incorporated without the owners’ explicit consent.

  • Read a longer summary from the AzApp Blog

  • Read more about Arizona Courts' rulings related to blue-penciling (a distinctly separate, but similar concept related to substantive amendments)