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ISSUE # 108
CIC Info Bytes 01/23/25
🔊 Listen to the Podcast of Issue# 108
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The state statute concepts matrix is complete (for now)! Want to know if your state requires open meetings, sets enforcement standards, and more? Dive in! This matrix links to over 2,000 unique requirements from around 150 different state laws.
Trials and Tribulations of a Volunteer Director
View parts I, II, III, IV, V, VI, VII, VIII, IX, X, XI, XII, XIII, XIV, XV, XVI, XVII, XVIII, XIX, XX, XXI, XXII and XXIII.
$1,900,000 Embezzlement = Not Stress Free
Cedar City, Utah: Financial trouble at the Cedar Bend HOA.
Neighbors in the Cedar Bend community in Cedar City say they were shocked to find a notice taped to their doors detailing allegations that millions of dollars had been embezzled by the community’s property manager.
The notice reveals that an audit uncovered financial discrepancies in the accounts managed by Stress Free Property Management. The company’s manager, Blake Cousins, is now in custody facing 10 felony counts of unlawful fiduciary dealing. Cousins is the former chairman of the Iron County republican party, but he resigned in 2018 after pleading guilty to soliciting a prostitute…
…The embezzlement was uncovered as the HOA began transitioning from a developer controlled board to one run by homeowners…
🎥 VIDEO: Cedar City residents respond to allegations of HOA manager embezzling funds
— Cannon Seachrist | ABC4 | January 17, 2025
Florida: Condominium owners facing peril need help from the state that enacted infrastructure repair and reserve funding reforms that provided 2.5 years to make whole decades of deferred maintenance and diminished funding.
It's not just waterfront condo towers that face shocking maintenance increases. And it's not just Century Village and its humble two-story buildings.
Senior citizens all over Florida are up against the crumbling wall, left to face unexpected structural repairs their fixed incomes can't possibly accommodate. What to do? For one, a Florida Legislature already confronting soaring property insurance premiums and shortages of workforce and affordable housing, needs to craft low-interest loan programs that are easy to access and broadly available to seniors who meet income criteria. We need to help keep people in their homes…
Surfside's Champlain Towers South collapse in June 2021 awakened us all to what should have been obvious: that buildings don't last forever, especially in tropical South Florida, with its burning sun and salty air….
…These days, though, some find the costs so high that their only affordable option — sometimes, it's in fact a lucrative one — is to sell out en masse to a developer who can make more money tearing their building down and building a newer, more expensive structure, than undertaking structural repairs…
…It's hard, perhaps, to sympathize with homeowners association members who year after year voted not to establish reserve accounts. Likewise, politically, it also would be hard to sell the public on a grant program to bail out some HOA's when others paid for repairs out of hard-earned savings and not some government giveaway.
But the repairs some buildings face can cost in the millions of dollars. "The numbers these properties are dealing with are astronomical," condominium lawyer Ryan Poliakoff told us. And while loans are available from banks, the rates are relatively high and the terms are typically 5-10 years, not spread out over 30, he said.
The government would not be inclined to address the problem by pulling back the post-Surfside safety requirements in a way that might result in another tragedy. But a low-interest, long-term loan program, for owners who demonstrate financial need and a commitment to make repairs, seems like a humane response for a state that cares about seniors stuck in extreme circumstances.
After Surfside, Florida Baby Boomers need state help with condo repairs
— Editorial Board | The Palm Beach Post | January 08, 2025
Florida: Senator Bradley who serves a district with few condominiums is once again taking up condominium reform. Last year’s focus was good governance. This year’s focus is creating a workable solution to fund reserves and effectively inspect, maintain, repair and replace common components.
The Florida Senate Regulated Industries Committee heard from a panel of experts, including a Tampa-based engineer, on how the recent condo laws are impacting the industry…
…“The problems in condos has been a slowly unfolding crisis. It did not start with Surfside. For years, owners did not … require any inspection of these aging buildings,” Bradley said. “It’s a reality that no one wanted to exist, but it certainly was one that the system undeniably allowed to exist.”...
…“There can’t be any incentivization in this process for folks to find expensive repairs in the hopes of receiving the work,” Bradley said.
Other issues that were flagged by experts and eyed by Senate committee members for reform include: modifying language to clarify what’s required of condo associations regarding inspections and repairs, bifurcating structural repair items from other aesthetic repairs that condo owners might typically vote on and improving general transparency for prospective buyers of condo units…
Statewide experts weigh in on Florida Senate condo reform panel
— Gabriella Paul | WUSF | January 16, 2025
Florida: A former mayor dishes on the Sunshine State’s condo crunch.
In the wake of the Surfside collapse tragedy, Florida’s condominium landscape has been transformed, with new regulations and rising costs threatening the affordability of living in highrises across the state.
Dana Goldman, a condominium expert and former mayor of Sunny Isles Beach, said the combination of mandatory maintenance requirements and skyrocketing insurance premiums has created an “extreme unaffordability crisis.”...
🔊 PODCAST: “Extreme unaffordability crisis” in wake of Surfside collapse
— Anti-Social | Key Biscayne Independent | January 18, 2025
Baltimore, Maryland: Will the Maryland legislature help avoid Florida’s fate?
The Baltimore County Council on Tuesday unanimously approved a resolution to ask its representatives in Annapolis to amend a 2022 law to give common-ownership communities more time to conduct reserve studies.
The resolution asks that such communal associations, whether they be homeowner or condo associations, have five years to collect the necessary fees to cover major infrastructure expenses; some must have the money in hand every three years under the current law.
The council is also asking the Maryland General Assembly to modify the law to reflect the different needs of the communal associations…
Baltimore County seeks relief for strapped condo, townhouse associations — Rona Kobell | Baltimore Banner | January 20, 2025
Prince George’s County, Maryland:
In late November, a group of Prince George’s County condominium owners panicked when they saw the notices posted outside their doors: The City of Laurel had deemed much of their complex unsafe, and they had about two weeks to vacate — indefinitely.
A majority of the condo complex’s 58 staircases didn’t meet city standards, and the cost of repairing them would total millions. The edict sent shockwaves through the roughly 170 Tiers of Laurel Lakes households, a diverse mix of young people and older adults. Some had bought their condos in the 1980s as founding owners; others had just moved in.
Nothing brings neighbors together like calamity, especially when it involves their homes. As this Laurel community would soon find out, the price of keeping theirs would only go up…
Condo sales are booming, but a Laurel community shows the risks — Hallie Miller | Baltimore Banner | January 13, 2025
Minnesota: In addition to everything else, some associations have to manage invasive species! What’s more, this HOA manages a subordinate service district.
While most property owners would prefer to lower their tax bill, the Caribou Lake Property Owners Association is looking to increase the special assessment that they levy through the Caribou Lake Watershed Subordinate Service District (SSD). The additional funds they would collect would go toward invasive species management.
Tom Rider is the president of the CLPOA. He told WTIP that through the SSD his organization currently collects a $12 annual fee from 138 property owners within the watershed area. He said that the funds that they collect go toward water quality testing. Samples are collected by volunteers, and the roughly $1,600 that the CLPOA receives through the special assessment goes to cover lab fees. The SSD’s proposal would bring the assessment up from $12 annually to $250 over five years.
With the increase in taxes collected by the SSD, the CLPOA will have an additional roughly $5,000 each year. Rider said that the entirety of the extra money would go toward addressing the rusty crayfish population in Caribou Lake. He explained that the invasive species poses a risk to the lake because they destroy native grasses, which are vital for maintaining good water quality and robust fish populations. Managing the population of rusty crayfish has become an issue of concern for property owners across the county…
Caribou Lake Property Owners Association seeks tax increase to cover rusty crayfish management — Kirsten Wisniewski | WTIP | January 21, 2025
Cincinnati, Ohio: Two fires in the past two years have left owners in dire straits.. Also see Quadruple Torts in our Governance Matters section for the legal fallout after fires in a Colorado association.
Nearly 200 homeowners at the Hammond North Condominiums in College Hill could be losing their homes.
It stems from two fires that occurred in the building. In March 2022, a person died after falling from the 12th floor of the 19-floor high-rise during a fire that caused an estimated $350,000 in damages to the building. Just under one year later, in February 2023, nine people were hospitalized — including two firefighters — after a fire on the building's first floor.
Renovations from those fires are still ongoing and it has left some condo owners in a difficult spot.
“I have not been back in my home since then," said Adrienne Moore Cornwell, a Hammond North condo owner.
Cornwell says she lived in the apartment right above where the fire started in 2023. She says she's been displaced for the last two years and has had to move three times…
🎥 VIDEO: Renovation costs put hundreds of College Hill condo owners at risk of losing homes — Alex Null | WCPO | January 17, 2025
Cambridge, Massachusetts: Condominiums far from Florida face structural despair.
They had planned to spend retirement there. Then late last year, amid grave concerns about newly discovered structural issues in the building’s concrete, residents of the 66-unit Riverview condo building had to evacuate their homes in a hurry. They believed they would need to be away for as little as a year before they could move back.
Now residents, most of them seniors, are facing difficult choices about what comes next and confronting the very real possibility that they might never return home.
Some have lived in the white-concrete building along the picturesque Charles River, which was built in the early 1960s, for decades. Others had moved there only recently. In weekly meetings in recent months with the company that manages the building, they have learned that the building may be too expensive to fix and therefore unsalvageable — and ripe for being demolished, according to several unit owners with knowledge of the discussions who spoke with the Globe…
…One option would be to reinforce the building with supports capable of holding its concrete slabs safely aloft, a feat they were told could cost tens of millions of dollars and would involve a number of other related and costly projects, including asbestos remediation.
Even a fully reinforced building would continue to have issues typical of a building that old, they said. For example, the problem with the building’s concrete that triggered the evacuation was discovered in the midst of a roof-repair project, which was paused when a construction crew discovered it but would still need to be completed.
If doing all of that repair work is too expensive, owners said, there is another option: demolishing it and starting fresh, perhaps building a bigger complex with more units they could move back into, or sell.
Meanwhile, the financial burden is accumulating. While they wait, residents have had to continue paying to heat and power their units, and their required condo fees. Insurance companies, they said, have so far denied their loss-of-use claims.
To cut their losses and make owners whole more quickly, the owners said, they are also exploring whether to simply sell the land to a developer….
Evacuated Cambridge condo building may need to be demolished — Spencer Buell | Boston Globe | January 09, 2025
Louisville, Kentucky: Broken elevators are essential components facilitating ingress and egress to and from units in mid- and high-rise properties.
Following a WAVE investigation into broken elevators at the Brown Suburban Condominium Homes, city officials stepped in to temporarily move residents stuck on upper floors.
The broken elevators were expected to be fixed by the end of the first week of January. The repair date followed seven weeks without elevator access.
Residents told WAVE building management had not communicated with them at any point to give a timeline for when the elevators may be fixed or offer an alternative for disabled residents. Board leadership for the building contested those claims…
City steps in to relocate Brown Condominium residents without an elevator — Alena Noakes | WAVE 3 | January 13, 2025
Las Vegas, Nevada: Fire – especially in stick-built construction – ruins lives.
A condominium fire in the south Las Vegas valley damaged 9 units and left 29 residents displaced…
South Las Vegas valley condo fire displaces 29 residents, damages 9 units — Madina Ansary | KLAS 8 News Now | January 11, 2025
Good for a laugh!
My neighbor (on the board) is worried that my small SUV’s doors open too close to her car... — u/CriticismBudget | Reddit r/fuckHOA | January 11, 2025
“Regulation by enforcement” is a concept that many homeowners wish existed for the common interest communities.
…The main reason that the SEC brings cases like these, and one of the main reasons I write about them, is that they form the contours of legal financial conduct; they tell you what you are and are not allowed to do. If there is an SEC case against a firm for doing X, then that is a way of informing the financial industry that you are not allowed to do X; each big published enforcement action expands the law a bit, telling the world not just “this firm did a bad thing” but also “this thing that a lot of people were doing? It’s bad.” Compliance officers and law firms will send out memos to their clients, saying “hey after the SEC case last week, you are not allowed to do X.”...
The SEC Was Busy Last Week (free 🔗) — Matt Levine | Bloomberg Opinion | January 21, 2025
Condos, co-ops and HOAs issue mandatory assessments, NOT fees. Property ownership is expensive and assessments generally increase every year. Also reference Issue# 103 and Issue# 81.
HOA Fees Are Rising—and Getting Harder for Homebuyers To Avoid — Keith Griffith | Realtor.com | January 15, 2025
Coverage: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51 & 52
Energy
California: Batteries have benefits.
Inside an unmarked stucco building in a Silicon Valley office park, more than 1,000 black metal cabinets, each about the size of a fridge, line the floor in rows.
Each cabinet contains 20 new lithium-ion batteries that, starting this spring, will feed power into California’s often-strained electrical grid, helping prevent blackouts. They’re essentially bigger versions of the rechargeable batteries that power phones, laptops and electric cars. Together they’ll supply 75 megawatts of electricity to the grid, enough to power 56,250 homes...
...The deployment of grid-scale batteries in California began in 2013, when a state commission established energy storage targets for large utilities. That spurred utilities to issue contracts for battery installations to developers such as esVolta, Tesla and Fluence Energy. But installations spiked after a brutal August 2020 heat wave led to rolling blackouts and a reckoning among policy leaders about the state’s preparedness for climate change. From 2021 through 2023, the state installed 8,171MW of storage, according to BloombergNEF. That’s more than all the power plants in Alaska and Hawaii combined. There hasn’t been a rolling blackout since, despite plenty of high temperatures...
Giant Batteries Are Transforming the World’s Electrical Grids — David R. Baker | Bloomberg | January 17, 2025
The Cost of Net Zero
Dnipro, Ukraine: A 12-story condominium spent about $95,000 to install PV on its rooftop. Half the cost was provided by a grant from the Energy Efficiency Fund.
Residents of condominiums in Dnipro will save about half a million hryvnias thanks to SPP — Hanna Velyka | EcoPolitic | January 20, 2025
Housing Affordability & Homelessness
New York City, New York: Some great (and misinformed) ideas about affordability:
Build on top of libraries
Multi-family housing
Modular construction
Zoning overhauls
Reduce taxes on rental properties
Relief from environmental justice…
40 Big Ideas to Make New York City More Affordable (free 🔗) — Eliza Shapiro | NYT | January 16, 2025
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Academic research focused on the intersection of population and housing.
Population and housing growth are closely linked in the U.S. Census, less so in analysis. Overlooked changes in cohort size and lagged measurements have misled about current housing preferences, and quantity of housing needed, with mistiming producing great volatility. Drawing on decennial census data and American Community Surveys, we develop a cohort-based housing lifecycle model measuring active household formation of renters and owners in intervals from 1990 to 2021. Restrictions of credit and supply legislated in 2010 were aimed at curbing the excesses of the early 2000s bubble but clashed after 2011 with requirements of much larger millennial cohorts, creating shortages in rentals, then ownership. Cohort advancement through the housing lifecycle was greatly delayed until after 2016, when substantial catch-up began of postponed homeownership, widely varied by race. Housing policy should anticipate housing needs of changing cohort sizes and expected life-course transitions, reducing long lags between supply and demand.
Population and housing are intimately linked in family life and in the U.S. Census of Population and Housing. Fully 97 percent of the population lives in housing units, and the very identification and count of households is registered by presence of occupied housing units. Despite the joint collection of data about the population and housing universes in the census and the American Community Survey (ACS) and other major surveys, relatively little research attention has been given to interactions of the two universes. More than just correlating current characteristics of housing and its occupants, population and housing are both subject to long legacy and lag effects that require a deeper integration in order to explain and reduce their frequent misalignment…
— Myers, Lee and Park | The Russell Sage Foundation Journal of the Social Sciences | January 2025
California: Observe the increase in wildfires and damage from wildfires.
How to Read This Chart: California Wildfires — Phillip Bump | The Washington Post | January 11, 2025
…The real story of the wildfires isn’t about malice or incompetence. It’s about well-intentioned policies with unintended consequences.
Take insurance—a trillion-dollar industry built to identify risks, particularly from disasters such as wildfires. Insurance companies communicate this risk to homeowners through higher premiums, providing them with useful information and incentives. People may think twice about moving to a fire-prone area if they see the danger reflected in a fee.
But in 1988, California voters passed Proposition 103, arbitrarily reducing rates by 20 percent and subjecting future rate increases to public oversight. Nobody likes high premiums, of course. But the politicization of risk has been a catastrophe. Artificially low premiums encouraged more Californians to live in the state’s most dangerous areas. And they reduced the incentive for homeowners to protect their houses, such as by installing fire-resistant roofs and siding materials.
Decades of worsening climate risk alongside suppressed premiums have prompted many insurers to drop coverage altogether. Just last summer, State Farm dropped 1,600 home-insurance plans in Pacific Palisades. Earlier this week, most of the neighborhood was burning.
Many Californians in high-risk areas have been forced to depend on the California FAIR Plan—a public insurer of last resort. In 2023, the plan covered an estimated $284 billion in home value. In 2024, that exposure increased by 61 percent. Within the next few years, California taxpayers could be on the hook for more than a trillion dollars. The state insurance commissioner is scrambling to bring insurers back. But it may be too little, too late.
Artificially low premiums have also spurred new housing production in fire-prone regions on the edges of cities like Los Angeles. From 1990 to 2020, California built nearly 1.5 million homes in the wildlife-urban interface, putting millions of residents in the path of wildfires. Policy didn’t just pull Californians into dangerous areas. It also pushed them out of safer ones. Over the past 70 years, zoning has made housing expensive and difficult to build in cities, which are generally more resilient to climate change than any other part of the state…
How Well-Intentioned Policies Fueled L.A.’s Fires — M. Nolan Gray | The Atlantic | January 11, 2025
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A check on California's wildfires and the costliest US natural disasters.
…“It is plausible that the Palisades Fire in particular will become the costliest fire on record, period. Not just in California, but in general,” said Daniel Swain, a University of California Los Angeles climatologist, in a briefing on Wednesday.
Long before the Palisades erupted in flames, the multimillion dollar homes in the area had become a concern to major insurers. That’s because the homes are both extremely expensive and tightly packed together, which makes it easy for fires to jump from one property to another. The neighborhood is also located along steep canyons, which makes it less accessible for firefighters.
The rise of massive wildfires in the state over the last several years has been exacerbated by climate change. Droughts have become more frequent as temperatures rise. The Los Angeles area has had no meaningful rain for many months, despite the fact that winter is usually the rainy season. The enormous volumes of claims following recent fires has taken a toll on insurers. Seven out of the 12 biggest home insurers have limited their coverage in California over the past two years, driven in part by increased fire risk…
The ‘Costliest Fire on Record,’ Not Just for California — Leslie Kaufman | Bloomberg | January 09, 2025
Is California’s insurance market on the brink?
If you live in California, you’re always bracing for the Big One. This week it arrived in the form of uncontrollable flames...
...“Pacific Palisades really jumps out, even in the context of high-risk areas in California,” said Michael Wara, a senior researcher and wildfire expert at Stanford University. He was a member of the expert group five years ago working to envision nightmare liabilities for state utility companies. “It’s like the bullseye in terms of one of the locations where the insurance industry can lose the most money in 24 hours.”
Risk models identified the Palisades — along with Silicon Valley’s Los Altos Hills and the Moraga and Orinda area east of San Francisco — because of problematic commonalities: the highest value homes, difficult topography for fighting blazes, and increased susceptibility to the kind of windy, dry weather conducive to fires...
...As the fires continue largely unchecked, it’s left many wondering if this event will permanently alter the relationship between climate risk and homes in one of the world’s most valuable property markets. “Could a single event cause insurers to become insolvent? That’s the great fear,” said University of California, Los Angeles climatologist Daniel Swain, an authority on why California seems to be perpetually burning down. “I hope we don’t get there.”...
...It will take weeks to know the full extent of damages from fires that haven’t yet subsided. But already the Los Angeles wildfires threaten to push the fragile California insurance market closer to the brink. Seven out of the 12 biggest home insurers have limited their coverage in the state over the past two years; increased fire risk driven by climate change is part of the reason.
California Insurance Commissioner Ricardo Lara is intensely aware of the problem and last month issued back-to-back regulations meant to make it easier for insurers to make money in the state. The first allows insurers to use catastrophe models informed by rising temperatures and worsening droughts when setting rates, instead of relying solely on historical data. The second reform allows reinsurance costs to be passed down to customers in their premiums...
...But only the first policy has been fully implemented. Any impact in steadying the insurers may come too late in the face of huge new liabilities, which could push private companies further towards the exit. For some it has raised the prospect of a housing crash...
LA Wildfires Push California Insurance Market to Its Limit
— Leslie Kaufman, Lauren Rosenthal, Michelle Ma and Alexandre Rajbhandari | Bloomberg | January 10, 2025
Florida: Will California’s wildfire crisis drive Florida premiums higher?
After sympathy, the apocalyptic, fiery scenes from the Los Angeles area are likely to give rise to a question from the other disaster-prone state now paying the country’s highest average premiums: Is this going to affect my insurance rates? The short answer is no. It is not expected to affect Florida homeowner policyholders — not immediately, anyway.
Luckily for other parts of the country, much of the wreckage from this burning that’s being called one of the most destructive in California history will be borne by local insurance coverage and won't affect the market at large, several insurance industry and reinsurance experts agree.
“The tragic California wildfires will have no impacts on the Florida insurance marketplace, similar to how Florida hurricanes have no impact on the California insurance market,” Mark Friedlander, director for corporate communications for the insurance industry-backed Insurance Information Institute, wrote in an email. “Risk is rated at the local market level. National insurers typically have subsidiaries that operate in large markets like California and Florida. They rate risk specifically to that market, not across the United States."...
Will the L.A. wildfires heat up homeowners insurance premiums in Florida? — Anne Geggis | The Palm Beach Post | January 11, 2025
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On top of the human tragedy they’re still inflicting, the Los Angeles wildfires are exposing a gap between what people thought their homes were worth and what they’ll actually get from insurance companies when those houses have been reduced to ash. Potentially thousands of homeowners are learning it won’t be nearly enough.
But this isn’t just a Los Angeles problem. From California to Texas, Florida and beyond, parts of the US most susceptible to natural disasters are slowly waking up to an underinsurance nightmare. It’s still ballooning in scope as home values keep rising, people keep crowding onto the front lines of climate change and a heating planet keeps intensifying those disasters.
Four years ago, the total difference between harsh reality and what a site like, say, Zillow suggested homes were worth might have been $1.2 trillion, according to one estimate. Now that estimate has grown to $1.7 trillion. Without better foresight and action from policymakers, mortgage lenders, realtors and homeowners, it will keep growing, potentially to $2.7 trillion…
The $2 Trillion Housing Market Nightmare Is Getting Even Worse — Mark Gongloff | Bloomberg | January 15, 2025
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California sought to protect more Los Angeles-area homeowners from potentially losing their home-insurance policies as wildfires continued to ravage the region.
State Insurance Commissioner Ricardo Lara amended last week’s mandatory moratorium on cancellations and non-renewals of residential insurance policies to include neighborhoods affected by the Hurst, Lidia, Sunset and Woodley fires…
California Adds More ZIP Codes to Insurance-Cancellation Ban — Alexandre Rajbhandari | Bloomberg | January 15, 2025
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There’s a truism in municipal debt: Bonds rarely move on natural disasters. That long-tested concept had held up until fires destroyed thousands of properties in Los Angeles last week.
The Los Angeles Department of Water and Power — the biggest American municipal utility — has seen its bonds drop and credit rating downgraded as the blazes continue to burn. A planned debt sale this week is in limbo. While there hasn’t been anything to establish a connection between LADWP’s power lines and the Palisades Fire in its territory, the investor concern is clear.
The disaster has exposed LADWP’s fire preparedness as vulnerable and perhaps inadequate. It didn’t turn off electricity in the Pacific Palisades before the massive blaze erupted Jan. 7 — the type of move power giants PG&E Corp. and Edison International frequently make when extreme winds are forecast. The utility has already been sued by homeowners faulting it for not supplying enough water to fight the flames…
LA Fires Test Bond Market Used to Shaking Off Disasters — Maxwell Adler, Mark Chediak, and Amanda Albright | Bloomberg | January 16, 2025
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A little-noticed rule change last year by California’s insurance regulator will likely shift a large chunk of the cost of the Los Angeles wildfires to homeowners across the state.
Pushed by insurers, the change puts California homeowners on the hook to pay directly toward the cost of rebuilding from very large disasters through even fatter insurance bills—whether they were exposed to the L.A. fire or not…
…The rules change means insurance companies can bill their customers if they are forced to bail out the plan, which has an estimated $200 million in cash and $2.5 billion in reinsurance, according to data it reported last year.
That is likely not enough to cover the Fair Plan’s share of the losses from the fires, forecast at up to $6 billion by analysts at Evercore ISI…
Insurers’ Rule Change Puts California Homeowners on the Hook for L.A. Fire — Jean Eaglesham | WSJ | January 15, 2025
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A shrinking California insurance market will leave Los Angeles-area residents more dependent on a patchwork of federal programs, charitable aid and their own savings to rebuild lives devastated by the most-expensive fire in U.S. history.
The blaze that swept through one of America’s wealthiest shorelines this past week has racked up more than $50 billion in losses. The recovery will take years, and some residents might simply sell the land beneath their former homes…
Who will pay? Insurers. FEMA. Taxpayers. Individuals.
Who Pays to Rebuild California When Insurance Falls Short? Everyone Else — Heather Gillers | WSJ | January 11, 2025
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You may live hundreds or thousands of miles away, but the wildfires tearing across Los Angeles and other natural disasters stand to raise your home-insurance bill...
...Insurers have tended to raise rates on homeowners in regions where disasters strike. But researchers say the scale of losses leads companies to tap faraway customers to recoup their money.
A Harvard Business School study found that expensive disasters in some parts of the country affect insurance rates in others, as insurers bump up premiums for homeowners in other areas to help cover big losses.
“It’s spread all over the country, and it spreads in a disproportionate way, where some people are bearing an overwhelmingly higher cost,” said Ishita Sen, a co-author of the study and a Harvard finance professor...
What Wildfires Mean for America’s Home-Insurance Bills — Joe pinsker and Oyin Adedoyin | WSJ | January 10, 2025
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California is a microcosm of what happens when insurance breaks down: Either households face potential ruin, or the public is handed a financial time bomb…
The World Is Getting Riskier. Americans Don’t Want to Pay for It. (free 🔗) — Greg Ip | WSJ | january 19, 2025
Housing Market
King County, Washington: Cost and sales increased in 2024 compared with 2023.
…The number of closed single-family home sales increased 8% in King County last year. Snohomish, Pierce and Kitsap counties also recorded more sales, a notable shift after two years of decline.
Higher sales volumes show that in some ways “we’ve turned the corner” from a super-sluggish year in 2023, but the data “does still reflect a market where a lot of people are staying put,” Tucker said.
The condo market tells a different story. In King County, the number of condos listed for sale in 2024 surged 25% from 2023.
Seattle-area housing market remains far from peak years despite pickup — Heidi Groover | The Seattle Times | January 17, 2025
Built Environment
Singapore: Fewer “shoebox” condominium units can be developed in properties within the Centra Area.
…In Singapore, shoebox condominiums are typically defined as compact residential units with a size of around 500 square feet or less. These units are part of non-landed residential developments, such as private condominiums or apartments.
They generally range from 250 to 500 square feet, and often consist of a single room with an open layout combining the living, dining, and sleeping areas…
The Urban Redevelopment Authority (URA) introduced new guidelines on shoebox apartments in Singapore effective 18 January 2023. These guidelines primarily focused on developments within the Central Area of Singapore, aiming to promote a better mix of housing options and ensure quality living environments. For condo buyers, those looking for shoebox units in the Central Area may find fewer options available. Larger condo units may be priced higher due to reduced unit density in developments.
At least 20% of dwelling units (DUs) in a development must have a minimum net internal area of 70 square metres (approximately 753 square feet). This aims to cater to families and larger households, ensuring the Central Area remains a vibrant place to live, work, and play…
What happened to Shoebox Condominiums? — Grace Leong | Singapore Home & Decor | January 09, 2025
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Thailand's real estate market continues to attract foreign investors, with a notable increase in condominium unit transfers during the third quarter of 2023, according to a report released by the Real Estate Information Center (REIC) on Wednesday.
The report revealed a 11.6% year-on-year (YoY) surge in the number of condominium units transferred to foreigners, reaching 3,756 units. The total value of these transactions also climbed by 8.9% YoY to 18.571 billion baht…
The most popular price range for foreign buyers remained below 3 million baht, accounting for over 50% of all transactions.
Units ranging between 31 and 60 square metres (1-2 bedrooms) were the most sought-after by foreign buyers.
Chinese nationals continued to dominate foreign purchases, followed by Myanmar and Russia.
Bangkok, Chonburi and Phuket remained the top destinations for foreign condominium buyers, accounting for over 74% of all transactions.
Foreign investors continue to pour money into Thai condominiums — Nation Thailand | January 08, 2025
Condo Connection's financial coverage is indexed to our Dollar$ and $ense page dedicated to all things CIC finance.
The rich keep getting richer.
…The 100 largest fortunes combined now exceed $4 trillion — more than the collective net worth of the poorest half of Americans, spread over 66.5 million households. The share of US wealth owned by the top 0.1%, at nearly 14%, is now at its highest point in Fed estimates dating back to the 1980s…
American ‘Oligarchy’ Decried by Biden Gained $1.5 Trillion During His Presidency — Ben Steverman | Bloomberg | January 16, 2025
US 10 Year Treasury yields are higher while the US Fed Funds rate is lower. Monetary policy, tariffs, debt pressures and more all impact bond yields.
For those unsettled by the relentless rise in government bond yields in the US and across much of the world lately, the message from markets is getting clearer by the day: Get used to it.
The world’s biggest bond market and global bellwether is leading a reset higher in borrowing costs, with the prospect of a prolonged period of elevated rates carrying consequences for economies and assets everywhere.
…The rate on 10-year notes alone has soared more than a percentage point in four months and now is within sight of the 5% barrier last breached briefly in 2023 and otherwise not seen since before the global financial crisis nearly two decades ago...
Global Bond Tantrum Is a Wrenching and Worrisome Start to New Year — Michael Mackenzie and Ye Xie | Bloomberg | January 12, 2025
🎥 VIDEO: What Higher Bond Yields Mean for Markets and Everyday Borrowers — Bloomberg Big Take | January 17, 2025
Cashing In
Beware your association’s cash getting swept into low (near zero) yielding accounts.
Wall Street is starting to pay the price for the stingy interest rates it gave some customers for their cash.
Wells Fargo and Bank of America’s Merrill Lynch unit agreed to pay a combined $60 million to settle Securities and Exchange Commission probes into the accounts that hold cash for some of their wealth-management clients, the agency said Friday.
Investors often have some incidental cash in their brokerage accounts, including from dividends and interest on their holdings. Many firms automatically put that money into so-called sweep accounts that pay very low interest rates. The settlement over these sweep accounts follows a period when brokerages paid clients minimal interest even when broader rates were rising…
Banks Scrimped on Customer Interest. Now They’re Paying for It — Rachel Louise Ensign | WSJ | January 18, 2025
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…Wall Street is really worried about bonds. It might be time to buy some.
What is spooking markets, however, is that much of the recent rise in yields doesn’t appear to reflect expectations of stronger economic growth. Rather, it might be the result of investors applying a higher discount or “term premium” to hold long-term bonds, estimates by the Federal Reserve suggest. Some analysts attribute this to the possibility of Donald Trump’s promised tariffs derailing the global economy and leading to a jump in inflation, while his tax cuts bloat budget deficits further.
Movements in term premiums are usually strongly correlated across the globe, and the consequences are being felt more starkly in weaker economies overseas, especially in Britain. There, 30-year yields are trading around 5.4%, a 27-year high. U.K. Treasury chief Rachel Reeves, who has made a public pledge to appease bond markets while also attempting to set out some moderate growth ambitions in her latest budget, is under strong pressure…
A Bond Selloff Is Rocking the World. You Might Want to Take the Other Side — Jon Sindreu | WSJ | January 12, 2025
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The Fannie Mae and Freddie Mac saga has been going on for, depending how you count, 16 years, or perhaps many decades. There are strong feelings and a lot of lore. It’s back in the news now, and I thought it might be nice to start with the basics.
In the US, as a matter of policy for many decades now, the federal government wants it to be relatively easy to buy a house. Most people do not have enough money to buy a house, so this policy mostly means that the government wants someone to lend buyers the money on generous terms. In practice, “generous terms” means something like “a 30-year fixed-rate mortgage with an interest rate not that much higher than Treasury bond rates.”
The Fannie and Freddie Trade Is Back — Matt Levine | Bloomberg Opinion | January 08, 2025
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Issue #106 addressed predictions about monetary policy / interest rates. See below for reflections on market performance in 2025.
Making Sense of Wall Street’s Dubious Forecasts for 2025 — Walter Frick | Bloomberg | December 22, 2024
Are you fascinated by case law? Maybe you should be?
Johannesburg, South Africa: What’s good for the goose is good for the gander!
…The architectural rules of the Cedar Lakes Estate in Johannesburg state that timber must be used for all garage doors. Should a homeowner wish to utilise a different material or finish, approval must be sought from the HOA.
A homeowner installed a new garage door with a mirror finish and duly applied to the HOA for approval, which was refused, despite the fact that several other properties in the estate had garage doors that were not made of timber.
The homeowner approached the Community Schemes Ombud Service, which found no evidence that the HOA had acted unreasonably, and ordered the homeowner to remove the garage door.
The homeowner appealed the decision to the High Court, arguing that, given the evidence provided of other properties with garage doors of a different finish, the Adjudicator’s order was flawed. The appeal was upheld by the High Court and the order to remove the garage door was set aside.
This case provides a warning to the managing authorities of communal schemes not only to act in accordance with the applicable rules and regulations, but also to ensure consistency and fairness in their decisions.
Consistency is key for Homeowners Associations — Jaco Lötter | George Herald | January 10, 2025
Colorado: Fire in Club Valencia stripped over 160 people of their former home.
Lawsuit #1 was filed on April 26, 2023 by the Association's property casualty insurer requesting that the court make an adjudication that the insurer's policy does not provide coverage for either of the two fires.
Lawsuit #2 was filed on November 3, 2023 by the Association against those responsible for causing the fire that occurred on November 3, 2022.
Lawsuit #3 was filed by the Association on February 1, 2024 against those responsible for causing the fire that occurred on February 1, 2023.
Lawsuit #4 was filed by State Farm against the Association for the November 3, 2022 fire based on subrogation claims.
Club Valencia Condominium Owners Association - Atty Letter re 4 Lawsuits — January 15, 2025
Providence Village, Texas: Fascinatingly, Texas passed updated laws in 2023 aimed at curbing discriminatory housing practices in HOAs, but that hasn’t stopped some associations from pressing forward with workarounds. FirstService Residential is named as a defendant providing lackluster management while claiming “we’re not responsible for the HOA.”
“It’s a unique situation, in 2025, to have this kind of overt discrimination determination by HUD, and based on overt race-based behavior,” Daniel says.
Lawyers for FirstService Residential Texas, the Providence HOA and the individuals charged did not respond to a detailed request for comment. But according to the HUD complaint, “respondents allege that the rules they enacted were intended to promote well-maintained homes, stabilize property values, and address community concerns regarding crime.” FirstService also told HUD it wasn’t responsible for the HOA’s actions.
The HUD investigation sheds new light on what kind of coordination Providence may have had with other FirstService HOAs. The rental rules were based on ones passed earlier by a nearby HOA called Savannah, and HUD lawyers write that the property manager shared Providence’s rules with “other FirstService-managed communities looking to do something similar.” (The lawyers don’t specify which, or how many.) FirstService Residential manages more than 9,000 residential communities like homeowners associations, condos and cooperatives across the US and Canada…
Texas HOA Charged With Discrimination for Banning Section 8 Renters — Sarah Holder | Bloomberg CityLab | January 20, 2025
North Texas HOA charged with discrimination for trying to kick out low-income renters — Sarah Baharl | The Dallas Morning News | January 15, 2025
De Pere, Wisconsin: A family with five autistic kids wanted a fence to ensure that they could play in the backyard “without running away and getting lost.” A fair housing lawsuit ensued that resulted in injunctive relief allowing the fence to be erected and now a $200,000 judgment against the Nazcr Trac POA. Some neighbors have paid their $1,350 share of that judgment while others refuse.
🎥 VIDEO: Backyard battle: Fence dispute sparks $200K lawsuit, forcing neighbors to pay up — Karl Winter | NBC26 | January 14, 2025
Boca Raton, Florida: This is not the first association to pursue legal action for residents feeding wildlife. View more in our July 14, 2022 issue.
If you feed the ducks, we’re going to sue you. That’s the warning being carried out by the Boca Terrace Condominium Association against owner Lois Blake. The condo association says she is engaged in “illegal and nuisance behavior by feeding ducks and wildlife behind her unit and on the association property which is subject to the association’s declaration.”
According to the complaint obtained by BocaNewsNow.com, the Boca Terrace Condominium Association first sued Bleke back in 2022 seeking injunctive relief and to enforce a previous order obtained during arbitration. The association and Bleke reached an agreement, according to the suit. But Bleke allegedly refuses to comply with the deal she made.
“To date, Defendant Bleke has failed to comply with the settlement agreement and stop feeding the wildlife” wrote attorneys representing the condo association in the latest filing. “As part of the agreement, Bleke admits to all the allegations of Association’s Complaint filed in the lawsuit and agrees that the Association is entitled to a final judgment of injunction if Bleke failed to refrain from feeding ducks or any other wildlife at any time on or within Boca Terrace.”...
Boca Raton Condo Association Sues Duck-Feeding Resident — BocaNewsNow | January 16, 2025
We first covered 1521 v. Viracon in Issue# 89. 23-2-23997-1 SEA was removed to federal court on December 28, 2023. Here are the causes of action from the amended complaint:
Civil Conspiracy to Violate, and Violation of, the Washington Consumer Protection Act
Violation of the Washington Consumer Protection Act
Fraud (Viracon, LLC)
Fraudulent Concealment (Viracon, LLC)
Violations of the Washington Condominium Act (Viracon, LLC)
Violation of the Washington Product Liability Act (Viracon, LLC)
1521 v. Viracon, et. al — 2:23-cv-01999-BJR
Orange Beach, Alabama: As noted in our State Statute Concepts Matrix, Alabama has a relative paucity of state statutes governing CICs.
…Typically, condominium associations handle the management and maintenance of the condominium buildings for which they are organized. Every now and then, litigation arises about how the buildings or associations are run. Ex parte Caribe Resort Condo. Ass’n Bd. of Directors, __ So.3d__ (Ala. 2024), decided on December 13, 2024, is one such example.
In Ex Parte Caribe Resort, a group of Caribe condominium unit owners filed a “derivative” lawsuit on behalf of the Caribe condominium association against members of the Caribe condominium association’s board of directors and the general contracting companies hired by the board to perform maintenance work at the building. The unit owners asserted that the board members breached their fiduciary duties to the condo association by hiring the contractor companies, who, the plaintiffs alleged, billed their services to the condo association in excessive amounts and failed to perform maintenance work and services in a workmanlike manner.
In its opinion, without reaching the merits of the unit owners’ lawsuit against the board members and contractors, the Supreme Court addressed the threshold legal issue of whether Alabama law authorizes “derivative” actions in the context of nonprofit corporations.
If you have ever watched television shows like “Billions” or “Succession,” you probably have heard the term “derivative” suit. Basically, a derivative lawsuit involves one or a group of a for-profit corporation’s shareholders banding together to file suit on behalf of the corporation (i.e., in the company’s best interest), against any number of the corporation’s board of directors or corporate officers, often in the context of a board member or officer’s alleged breach of fiduciary duties to the corporation (mismanagement, fraud, etc.). These cases invariably involve complaints about the misfeasance or malfeasance of corporate leadership with regard to the corporation’s finances.
In the context of a nonprofit association, whether a 501(c)(3) nonprofit charity group, homeowners’ association, or condominium association, it is less clear under Alabama’s Nonprofit Corporation Act whether a derivative action is possible. The Supreme Court of Alabama in Ex Parte Caribe Resort addressed that issue.
In an opinion written by soon-to-be Chief Justice Sarah Stewart, and joined by Chief Justice Parker, Justice Mitchell, and Justice Cook, the Court found that under Alabama’s nonprofit corporation statute, members of a nonprofit association actually have no “general right” to bring a derivative action on behalf of the organization. The Court did note that there is a limited exception to that general rule under the Alabama nonprofit corporation statute: that is, members of a nonprofit association can bring a derivative action specifically “against the officers or directors of the nonprofit corporation for exceeding their authority.” Ala. Code § 10A-3-2.44(2)). This “ultra vires act” exception would apply where, for example, a nonprofit association’s board of directors is alleged to be engaging in illicit self-dealing…
Alabama Supreme Court issues opinion clarifying the rules controlling nonprofit corp. governance — Tripp DeMoss | Yellowhammer News | January 16, 2025
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