01.04.24

ISSUE # 82

CIC Info Bytes 01/04/24

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.  Please consider following us on Twitter and Reddit. 

READ the full newsletter with graphics in the embedded document below.

All issues of CIC Info Bytes are available online and indexed from the omnibox search.

Sandwiches for Everyone

Here’s the conclusion of the Reddit poll re: $500 Poolside Sandwich from Issue# 81. 

Is THIS Reasonable?

• Is it reasonable to expend 1,776% more than the $3,800 to be recovered?

Colorado Task Force Recommendations

• Colorado’s DORA DRE submitted the following recommendations to the general assembly on behalf of the Colorado HOA Homeowners’ Rights Task Force.

HOA Homeowners' Rights Task Force List of Considerations for CO General Assembly

Up for some reading?  Colorado HOA Homeowners' Rights Task Force Documents 

Florida and Maryland Homeowners Under Pressure 

• This article is the best we’ve seen about concerns at Palm Bay Yacht Club where owners are battling each other over the costs of multi-million dollar repairs.

A new reinspection law passed in the wake of the 2021 Champlain Towers South collapse. For some, the price of keeping safe might cost them their homes.

Sonja Przulj loves her two-bedroom, two-bath condominium in Miami, located on the 21st floor of the 27-story Palm Bay Yacht Club, with spectacular views of Biscayne Bay, downtown Miami and South Beach. She paid $285,000 for the corner unit in September 2021 after renting in the building for years.

Przulj, 39, purchased at the height of the pandemic, when she was working nonstop as a nurse. “It seemed like it was meant to be,” she says. “But the thrill was very short-lived.”

That’s because less than a year later, Przulj, who lives in the condo with her husband, Jean Pablo Vialle, and their five-year-old son, was hit with a $145,000 special assessment by the condo association to pay for repairs in the aging building...

Towering uncertainty: 2 million Floridians live in condos subject to reinspection laws

— Robyn A. Friedman | Tampa Bay Times for Florida Trend Magazine | October 17, 2023

___________________

Also see coverage in Issue #77.

Maryland community associations are finding themselves squeezed by a 2022 law intended to ensure maintenance of condominiums and similar housing, but which is resulting in thousands of dollars in surprise fees and assessments that are leaving some residents struggling to make ends meet.

The law in question requires all Maryland housing cooperatives and condominiums, and homeowners associations with more than $10,000 in common area assets, to conduct reserve studies every five years analyzing what portions of shared infrastructure, such as a roof or boiler, might need to be replaced. And the law sets deadlines for associations to collect the money for the projects — as short as three years to collect, in some cases, millions of dollars from residents.

A 2022 law required HOAs to assess maintenance needs. Now it's time to pay up. — Peder Schaefer | The Baltimore Banner | December 22, 2023

Co-Op Board Power

• Don’t discriminate!

I have tried to sell my co-op apartment in Jackson Heights, Queens, several times, but the board never accepts the prospective buyer.

I lost a sale when the board said the co-op’s financial information wasn’t available because the building was being audited.

I lost another when the board said the buyer’s income was too low. 

And once I had a cash buyer who was going to live alone, without any pets, and they still turned him down.

I fear the board is discriminating against my prospective buyers on the basis of race, or retaliating against me because I have called 311 several times. What can I do?

My Co-op Board Is Preventing Me From Selling My Apartment — Jill Terreri Ramos | NYT | December 23, 2023

Electric Micromobility Devices

• Safeguarding your association from electrical fires is relatively easy: require devices and chargers that have been evaluated by a nationally recognized testing laboratory. 

  1. Don’t reinvent the wheel!  New York City has worked diligently to develop reasonable rules for NYCHA properties.  Our EV page has all the information in one place. 

Butt Out

• Fires on balconies.  Also see Fire Risk in Issue# 78 + Emergency Preparedness.

Fireplace ashes left on a balcony likely caused a Rohnert Park condominium fire that displaced two families.

Eight units comprised the building; four on each of the two floors. There were no fire breaks between units, officials said.

“If more time passed, the fire would have extended to more of the residential units,” Rohnert Park Department of Public Safety Deputy Chief Aaron Johnson wrote in a Nixle alert.

Rohnert Park condominium fire displaces two families; ashes left on balcony likely cause — Colin Atagi | The Press Democrat | December 22, 2023

Another Form of Fraud - II

• Reference Another Form of Fraud from Issue# 81.

The Rancho Santa Fe Association, the nonprofit homeowners group that runs a historic golf course and other amenities in the exclusive covenant near Del Mar, has acknowledged it applied for and collected $1.5 million in federal COVID-19 relief funds it was not eligible to receive.

Association officials struck a deal with federal prosecutors that calls for repaying money from the government’s Paycheck Protection Program — and nearly $500,000 in fees and penalties.

But the Rancho Santa Fe Association is set up as a 501(c)(4) organization — a type of entity that was specifically excluded from the program.

In its letter to the 1,800 or so members, the association said it had relied on advice from lawyers and a banker to determine whether it were eligible for the federal relief.

Rancho Santa Fe homeowners group illegally collected $1.5M in COVID-19 relief — Jeff McDonald | The San Diego-Union Tribune | December 01, 2023

More Embezzlement

• Womp, womp, womp.

A news release from Gulf Shores Police says they received a report of theft and embezzlement from the Craft Farms Property Owners Association in March. After examining financial records from January 2019 through May 2022 police say the property manager had been using association funds for personal use:

“To purchase items or pay bills that were not associated with the property association. These charges included food, entertainment, home improvement items as well as household living expenses such as utilities and real estate property taxes.”

Investigators say $40,000 had been stolen over the three-year period they examined.

Manager of Craft Farms Owners Association accused of stealing $40,000 — Chad Petri | WKRG | November 04, 2023

Hammocks Continued

• The Hammocks debacle has tentacles.

…Rundle said Alzate was an integral part of this scheme because he supplied notarized affidavits demanding payments from law enforcement that were used as a basis to refuse to comply with lawful production requests from law enforcement.

The HOA specifically supported costs of producing the documents by submitting sworn, notarized affidavits of Alzate. the HOA's attorneys also repeatedly represented to circuit court judges that Alzate was the custodian of records.

During a court hearing against Alzate as the custodian of records for failure to produce HOA records, he swore that he was not and had never, in fact, handled production of document requests for the HOA, the statement said….

VIDEO: Relative of ex-Hammocks HOA president charged in ongoing criminal probe… — Alfred Charles | CBS Miami | December 01, 2023

Key Biscayne Condo Woes

• Does Florida take the cake for condominium calamities?

Troubles at four large condominiums were the top story of 2023 in Key Biscayne, in a year that saw state and local lawmakers push for tougher regulations…

Condo trouble is Key Biscayne’s #1 story for 2023. — Staff | Key Biscayne Independent | December 24, 2023

Sweet Engagement

• Tellico Village HOA in Loudon, Tennessee: sweet success to engage residents with an annual cookie exchange.

HOA cookie exchange wraps up the year — Nate Tosado | News-Herald | December 27, 2023

___________________

Stonewood Homeowners Association holds annual Polar Plunge — Bea Ahbeck | The Stockton Record | January 01, 2024

Vet Before You Buy

• Most homeowners aren’t willing to invest the time and money required to properly vet what is often their largest purchase: a place to live.  N.B.  This topic has been covered over a span of decades.

Here's how to vet HOAs when house hunting — Ana Teresa Solá | CNBC | November 05, 2023

Key Questions to Ask Before Buying a Condominium — Robert J. Bruss | Los Angeles Times | September 17, 1989

Latex, Salt and and HOAs

• Would you trust the author of Priceless Advice on the Benefits of the Latex Mattress and Salt Secrets to dispense paid advice about condominiums?  Books by Joyce Starr 

• One of the latest experiments in basic income appears to have green shoots.

…Ben Henwood, a professor at the University of Southern California Suzanne Dworak-Peck School of Social Work, partnered with the nonprofit Miracle Messages to give 103 people in the San Francisco Bay area and Los Angeles County $750 per month for a year. The six-month report is preliminary, but Henwood said the findings provide insight into ways to help address the problem.

…Miracle Messages CEO and founder Kevin F. Adler said the $2.1 million study grew out of a pilot program from the nonprofit that gave 14 unhoused people $500 per month. In that study, he said the funds donated funds allowed two-thirds of the people to secure housing.

"What we've seen is most of the money being spent on a mix of housing and food security," Adler said. "We've also had folks use money for family emergencies, child care, and other basic needs."

…None of the funding for this study came from the government, Henwood noted. Google's nonprofit arm, Kimberly Lynch, Scott Layne and the Homeless Policy Research Institute funded the study…

Homelessness in California: People used $750 stipend for food, shelter — Krystal Nurse | USA Today | December 20, 2023

Miracle Money California Interim Report — November 2023

___________________

• Housing affordability hits new lows…

Housing affordability plummeted this year to the lowest level on record amid the astronomical rise in mortgage rates, which put ownership out of reach for millions of Americans, according to a new report published by Redfin. 

Just 15.5% of homes for sale in 2023 were considered affordable for the typical U.S. household, the lowest level on record since Redfin began tracking the data in 2013. It marks a steep drop from the typical 40% seen before the COVID-19 pandemic home-buying boom began, and the 20.7% figure recorded in 2022…

Housing affordability plummeted to lowest level on record in 2023 — Megan Henney | Fox 13 | December 22, 2023

___________________

• We face a grim reality of a system that can’t handle the homelessness crisis created in large part by unaffordable housing.

Homelessness in the US reached a grim milestone in 2023. A new report from the US Department of Housing and Urban Development registered the largest number of homeless people nationwide since counting began more than 15 years ago.

The federal government’s latest figures paint a stark picture of growing precarity, with a 12% spike in the homeless population from last year to this year. That includes a sharp rise in the number of families with children in shelters: about 25,000 people total, an increase of 17% and a break from a decade-long decline in family homelessness.

The report also provides new detail about people living in crisis. For the first time ever, the federal point-in-time report accounts for the ages of adults experiencing homelessness. The figures are striking: One in six homeless people in the US are edging toward retirement age (ages 55–64)...

Senior Homelessness Tops Concerns as US Unhoused Population Spikes — Kriston Capps | Bloomberg | December 20, 2023

…There are many reasons for the unfettered rise of chronic homelessness, said Ann Oliva, CEO of the National Alliance to End Homelessness. Among them include the expiration of pandemic-era eviction bans, the dwindling or end of local COVID relief funds, and rising rents.

The nation has also been battling mental health and substance abuse crises for years, Olivet said.

But both experts pointed to a severe affordable housing shortage as the single largest driver for homelessness, chronic or otherwise.

"What we see is an incredible deficit of affordable housing units in this country where there are only about one unit for every three extremely low-income renters who need it," Olivet said…

Chronic homelessness is at an all-time high. Here’s why it continues to climb — Hannah Grabenstein | PBS Newshour | December 22, 2023

___________________

• Unaffordable housing leads a younger generation to live with their parents.

With younger generations facing tough economic circumstances, many parents are supporting their children long past the college years. Nearly half of young adults in the US live at home, and millions more are receiving help with rent, bills and everyday costs. For parents, it's a major expense, sometimes requiring greater debt loads, depleted savings and delayed retirement plans.

Parents Drain Savings, Retirement Funds to Support Adult Children — Paulina Cachero and Suzanne Woolley | Bloomberg | December 21, 2023

Nearly Half of Young Adults Are Living Back Home With Parents — Paulina Cachero and Claire Ballentine | Bloomberg | September 20, 2023

Older and wealthier Americans are choosing to rent vs. own, but they still make up a fraction of the total share of renters in the United States.

…Americans who would traditionally be homeowners have become long-term renters, including some with no plans to ever buy a home. Renters are changing savings patterns, sparking new developments, and inspiring businesses, from contractors that help out with renovations for renters to high-end fixtures that are easily removed from one dwelling to the next.

Lace Village is one of hundreds of new rental developments rising up to serve a wave of higher-income and older renters flooding into America’s towns and cities searching for luxury without commitment, retirement without feeling old and tidy lawns without owning lawn mowers….

The Rise of the Forever Renters — Rachel Wolfe and Veronica Dagher | WSJ | December 22, 2023

• Cherry-picking policies and decades of failed insurers in a “takeout” market.

“You get to cherry-pick the policies,” Lucas said, describing how he has been able to select hundreds of thousands of favorable policies — and the revenue that comes with them — from Florida’s state-run Citizens Property Insurance Corp. “You are underwriting and cherry-picking the best policies,” he added, “leaving kind of the worst ones there.”

In Florida, this is what’s known as a takeout, in which an insurer is able to assume thousands of policyholders and millions in premiums in one swoop, without fees or acquisition costs. Florida officials created the system about 30 years ago to try to shrink the exposure of Citizens, the state’s insurer of last resort, and attract new carriers after Hurricane Andrew sent major carriers scrambling.

But while this system has been working for some top executives like Lucas, it has been crippling many residents and disaster victims, who are paying some of the highest prices in the nation for insurance while experiencing some of the worst claims handling and processing times, according to an investigation by The Washington Post. For many victims of last year’s catastrophic Hurricane Ian, the dysfunction has crushed their livelihoods, with scores still living in unfinished homes.

Over the past two decades, more than half of the carriers that participated in the “takeout” program have gone insolvent, state data shows. As climate-fueled hurricanes have repeatedly hit Florida in recent years, Citizens has picked up hundreds of thousands of new homeowners who otherwise couldn’t get insurance, fanning fears that the state-run insurer, with about half a trillion dollars of financial exposure, could need a U.S. taxpayer bailout.

How Florida lets insurance companies like Slide “cherry-pick” policies — Brianna Sacks | The Washington Post | December 30, 2023

• Some potentially interesting statistics for Q3 2023:

  • Overall homeowner equity increased by $1.1 trillion (6.8%) YoY.

  • Overall negative equity is down 8% YoY

Homeowner Equity Insights – Q3 2023 — Economy Team | CoreLogic | December 07, 2023

Boomers are growing older, and they'll start downsizing their homes at a quicker pace — and that's great news for the housing market, one expert says.

Meredith Whitney, known for calling the 2008 housing crash, said that aging boomers will bring a wave of supply to the market by freeing up inventory as they shift to smaller houses.

"Another major demographic trend you see is the aging of America, what's called the 'silver tsunami', is 10,000 people a day turning 65, and by 2030, the entire baby boomer generation will be over 65," Whitney told Yahoo Finance. "That'll be 20% of the US population."...

Home prices will fall as 'silver tsunami' of baby boomers to unload fresh housing supply… — Aruni Soni | Insider | December 28, 2023

Built Environment

• West Palm Beach, FL: A similar refrain the world over: new multifamily development changes the character of neighborhoods.  Elected officials are willing to allow more density which often means more height, more shadows, impinged views and reflective surfaces.  Yet density is a key factor in housing affordability.  

“Why must you always toss out the requirements that we residents felt protected our homes from becoming something totally different without any regard for those of us who live here?” Woods wrote in a letter to planning board members.

In September, West Palm Beach city commissioners unanimously approved a zoning change that would allow a 306-foot-tall structure to be built on the site of Temple Israel at 1901 N. Flagler Drive. The land was zoned for a maximum of 202 feet.

Related Group 25-story waterfront tower Denied, but it's not over yet — Kimberly Miller | The Palm Beach Post | December 21, 2023

___________________

Lake Geneva, WI: All aboard!  This train transitioned into a hotel and then six condominium units.

This caboose turned condo seeks a permanent passenger for $125K — Hannah Frishberg | NY Post | January 2, 2024

___________________

Seattle, WA: Office to apartment conversion (68 units).

Seattle office building is set for apartment conversion — Heidi Groover | The Seattle Times | January 03, 2024

Seattle's first post-pandemic office-to-residential conversion surfaces in Uptown — Marc Stiles | Puget Sound Business Journal | January 03, 2024

Inflation and Monetary Policy

• Soft landing — and lower interest rates — are on the horizon…

The Federal Reserve is winning its fight over inflation, boosting Americans’ spirits and offering greater reassurance that the U.S. economy can avoid a recession while bringing prices under control.

The Fed’s preferred inflation measure, the personal-consumption expenditures price index, fell 0.1% in November from the previous month, the first decline since April 2020, the Commerce Department said Friday. Prices were up 2.6% on the year, not far from the Fed’s 2% target…

Prices Fell in November for the First Time Since 2020. Inflation Is Approaching Fed Target — David Harrison and Amara Omeokew | WSJ | December 22, 2023

___________________

Minutes from the Federal Reserve’s December meeting released yesterday suggested rates could remain at restrictive levels “for some time” until a durable move down in inflation can be seen. Fed policymakers nonetheless acknowledged rates had probably peaked and they would begin cutting in 2024. The minutes indicated increased optimism among participants about the path of inflation, noting “clear progress.” The committee gave no indication easing could begin as soon as March, prompting traders to temper bets: rather than March the first cut is now fully priced in for May. 

— Charlotte Hughes-Morgan | Bloomberg 5 Things to Start Your Day | January 04, 2023 

A Model that Works

Jurisdictions in the United States would be wise to implement a system like the Condominium Authority of Ontario (CAO) that resolves hundreds of disputes between homeowners and community associations. 

Don’t Discriminate

• Many community associations have paid the price for discrimination.  See our Fair Housing page for more.

HUD Charges Hawaii Condominium Association, Management Company, Condominium Unit Owners, and Real Estate Agent with Disability Discrimination

— HUD # 23-280 | December 18, 2023

Don’t Discriminate - II

• Synagogue: denied.  Board seats: denied.  Anti-semitic rhetoric runs amok.

First Liberty and our volunteer attorneys at Jones Day and Lawson Huck Gonzalez recently sent a letter to the Loggers’ Run Homeowners Association (HOA) in Boca Raton, Florida, calling for it to end all illegal, discriminatory and antisemitic actions against Rabbi Naftaly Hertzel and his wife Henya.

First Liberty Urges HOA to Stop Discriminating Against Jewish Residents — Jorge Gomez | First Liberty | December 22, 2023

Association & Attorney Sanctions

• Boca Raton, Florida:  Here’s the latest!  Also read Boca View Still At It in Issue# 76.

…the magistrate judge sanctioned Boca View and its attorneys for filing a federal lawsuit that was “factually and legally frivolous,” and “filed in bad faith based on a legal theory with no reasonable chance of success, all for an improper purpose.”

Boca View filed the federal lawsuit in May, shortly after the Fourth District Court of Appeal denied the association’s motion to suspend the state circuit court order while its appeal is pending.

The sanctions were a response to a motion filed on July 4 by the Lepselters asserting that claims in the federal complaint were “wholly unsupported by the facts and law needed to sustain them.”

The magistrate judge ruled that Boca View filed the lawsuit to “forum shop” and caused Eleanor Lepselter and her husband — named as a co-defendant in the cases — to incur unnecessary attorney’s fees.

The magistrate judge’s sanction order requires Boca View to pay the Lepselters’ costs of fighting the federal suit….

Boca condo board loses federal records suit, sanctioned for 'frivolous' claims — Ron Hurtibise | Sun Sentinel | October 13, 2023

More Skeletons

• Littleton, Colorado: Remember Skeletons in the Yard from Issue# 80?  Sterling Ranch initially told homeowner Kyla Sarazin that skeletons in December were not “seasonally appropriate,” but subsequently rescinded that decree after public outcry and media coverage.  

Jessica Towles, who works for the Sterling Ranch Community Authority Board is also the immediate past chair and still a member of CAI’s Board of Trustees.  No wonder this association needs help!

…Towles told 9NEWS Google searches to determine compliance with community rules is not a standard operating procedure and reversed the action against Sarazin because they believe it wasn’t the right thing to do, especially during the holidays…

HOA told homeowner Christmas-themed skeleton display wasn't 'seasonally appropriate' — Steve Staeger | 9News | December 22, 2023

___________________

In April, Jake Levin got a letter from his homeowners association. “The giant skeleton on [the] front lawn needs to be put away,” it said. “Holiday decor needs to be taken down immediately after the holiday.”

…one does not simply put away a 12-foot skeleton, and so Levin had adapted Indiana Bones to each subsequent holiday: a turkey leg for Thanksgiving, a Santa suit for Christmas, a leprechaun costume for St. Patrick’s Day. This tactic, along with a conspiracy among neighbors to move Indiana Bones periodically from yard to yard, has allowed Levin to avoid any fines.

Huge skeletons are just part of how we live now — Maura Judkis | The Washington Post| October 25, 2021

City Intervention

• Herber City, Utah: The City’s former stance saw it help enforce short-term rental bans based on HOA covenants.  Thankfully, that level of interference is changing to better align with the overall lack of government support for reasonable reforms. 

The change dissolving the letter requirement and allowing HOAs to reach out to the city with their rules about short-term rentals received a unanimous vote.

Heber City look to HOAs to govern short-term rentals — Brock Marchant | ParkRecord | December 23, 2023

Procedure Matters

• Reference Issue# 74 and 67.

Two homeowners who had their properties foreclosed on and sold are not entitled tot the remaining proceeds from the sales because they failed to file the required paperwork in a timely fashion to claim an interest in the funds…

Michigan Court Denies Homeowners Surplus Foreclosure Funds — Quinn Wilson | LAW360 | January 2, 2023

Claiming Surplus Funds After A Michigan Foreclosure — Babi Legal Group | March 9, 2023

43 Michigan counties agree to pay millions to former owners of foreclosed properties — Matthew Miller | MLive | May 31, 2023

• New Jersey: S2760 intends to address structural integrity concerns.  The NJ Senate passed this bill on December 21, 2023.  View PDF.

• Putting condominiums on par with the government assistance programs available to single-family homes is on Florida’s radar in HB1029:

Since Florida began making thousands of dollars available to single-family homeowners for storm-hardening improvements, condominium owners have wondered why they were left out.

That could change on July 1 if a bill introduced to the Florida House of Representatives on Wednesday is enacted during the upcoming legislative session that begins on Jan. 9.

The proposed My Safe Florida Condominium Pilot Program would make inspections and grants available to condo associations and unit owners for improvements similar to those funded under the existing My Safe Florida Home Program:

• Wind-resistant windows and exterior doors, including garage doors

• Reinforcing roof-to-wall connections

• Improving the strength of roof-deck attachments

• Secondary water barrier for roofs

Condos would be eligible for home hardening grants if Legislature agrees — Ron Hurtibise | The Sun Sentinel | December 28, 2023

• California already limited annual assessment increases beyond 20% without an affirmative vote of the members, but went further by adopting new language from AB572 incorporated into law as CA Civ. Code §5605(c).

New law limits HOA assessment increases for new CIDs — Carrie B. Reyes | firsttuesday Journal | December 31, 2023