Info Bytes 09.29.22
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ISSUE # 49
CIC Info Bytes 09/29/22
CIC Info Bytes are frequent, succinct updates providing educational and engagement opportunities that help your community thrive! Please forward and share this newsletter with your peers, neighbors and colleagues so they can connect and join .
Our goal is to curate content that provides a robust basis for contextual understanding to support practical takeaways for you and your association. This bi-weekly newsletter is packed to the brim. We've done our best to create meaningful section breaks and incorporate engaging visuals. When in doubt, Ctrl + F!
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LAST CALL
2022 CIC Staff Compensation $urvey
Final results of this survey will be published next week.
You'll get to view preliminary results immediately after completion.
💰 INTEREST RATES & MONETARY POLICY 💰
Global Financial System in Turmoil…
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The 10yr Treasury yield broke above 4%, but is still inverted (lagging behind shorter term government debt (1yr, 2yr, 3yr, 4yr, 5yr). - WSJ
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Listen to Mohamed El-Erian : Coming to Last Phase of Dollar Strength, Yield Surge
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'Volatility vortex' slams into $24tn US government bond market - Financial Times
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"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."
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Dun dun . . . dun dun . . . dun dun dun dunnnnnnnnnnnnn! - Financial Times
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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
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HEAD SCRATCHER
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Extreme moderation makes it practically impossible to post comments to CAI's sunshine and rainbows marketing publication, HOA Resources. The same might be said for CAI's Exchange Forum where the thread about this topic disappeared after 72 hours. Here's a capture of the thread before it went missing .
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The latest missive from HOA Resources, titled Top 3 Benefits of Living in an HOA , posits that HOAs are great because they are 1) governed by neighbors, 2) managed by professionals and 3) protect property values. Common interest communities of all types can be great places to live, but the scant evidence included in this article fails to support its thesis.
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!
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The article gets at least one thing right (albeit the understatement of the year):
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While CC&Rs are developed and enforced to protect all homeowners, they do not eliminate occasional disagreement and discontent.
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Resource Updates
Governance Hierarchy (again!)
Following last week's update to our governance hierarchy diagram, we're up to it again! This time we've built an inverted pyramid structure intended to be even more intuitive.
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How does this work? Start at the top with STATUTES and work your way down to BOARD DISCRETION which comes – yes wait for it – at the very end (unless you're dealing with omnipotence in which case you just burn the diagram and dream some things up with Stable Diffusion & DALL-E 2 (you can sign up for free; we promise good fun).
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Each band is a 'weighted' relative to its overall influence and scope of applicability on your governance.
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Want to know more? View our Duty of Care page:
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Discretion is not reasonably exercised when:
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the procedures laid out in the governing documents and relevant statutes are not followed
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the information used in the decision-making process is not reasonably accurate
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Courts do not owe deference to an association's interpretation of its governing documents...
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Governance Matters
Remedies Limited by Ambiguity
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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.
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Read more about enforcement case law on our Enforcement page.
Rage Against the Machine
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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.
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"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]."
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Amendments of State Statutes NOT Automatically Incorporated Into Declaration / CC&Rs
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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.
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Read more about Arizona Courts' rulings related to blue-penciling (a distinctly separate, but similar concept related to substantive amendments)
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Homeowners | Volunteer Leaders | Managers & Management Companies | Vendors
A Note About Ukraine
The people of Ukraine are undergoing tremendous displacement from their homes coupled with loss of life, tragedy and suffering. Considering the global landscape can help us gain perspective in our daily lives. CIC Info Bytes readers expressed their support for Ukraine last year. Please voice your own support!