04.03.25

ISSUE # 113

CIC Info Bytes 04/03/25

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• North Miami, Florida: No April fool’s here for owners at Crestview Towers.

It took nearly four years of repairs and inspections for city officials to recently announce that they had deemed the building to be safe.

Ligia Mora, who co-owns an apartment at Crestview Towers, said the structure built in 1972 may be safe but her apartment is far from inhabitable…

Structural safety concerns prompted city officials to order a rushed evacuation on July 2, 2021, but residents still had to pay their condo [assessments].

North Miami Beach deems building safe but nightmare continues — Janine Stanwood | WPLG Local 10 | April 01, 2025

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Plymouth, Massachusetts: Fires are all too common in wood-frame townhomes and condominiums.

…When they arrived at the scene, firefighters found fire coming from a second-floor window. They said the fire started when a resident had put food on the stove, left it unattended for 15 minutes and returned to find the fire.  The fire then extended to the third floor and into the eaves of the roof.

Firefighters said six units received fire, smoke, and water damage, while the other six units incurred smoke damage.  Despite the fast-moving flames, firefighters said they could extinguish the fire in about 30 minutes.  However, firefighters said the building is now uninhabitable…

Mass. condos 'uninhabitable' after large fire caused by stove — Alex Svenson | WCVB | March 22, 2025

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Thailand: This message could be either reassuring or devastating.  Tall buildings constructed just in the last 17 years are “safe” from earthquakes.

In a bid to allay concerns among condo residents and owners over the safety of condominiums, in the aftermath of Friday’s earthquake, the Thai Condominium Association (Thaicondo) offered an assurance today that all tall residential buildings constructed since 2007 were designed to withstand earthquakes.

Condos built since 2007 are earthquake safe — Thai PBS | March 29, 2025

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Minnesota: The Midwest offers no sanctuary for condominiums facing mind-boggling property insurance premium increases.

Just after Nancy Brand secured a seat on the resident-led board at Edina’s Windwood Condominiums, the property manager revealed that after years of single-digit increases, their property insurance rates would increase — by 400%...

…Living in HOA communities has become more expensive in recent years, and insiders say rising property insurance costs are a major reason why. Insurance agents and brokers say the price pressures are especially acute in the multifamily market, a sector long viewed as a place for retirees to downsize or for first-time homebuyers to build equity…

…Insurers made a profit in Minnesota in 2024 after five years of straight losses, according to the Insurance Federation of Minnesota, an industry trade group. The high-water mark of claims outpacing premiums came in 2022, when carriers paid $1.92 for every $1 collected…

Property insurance increases of 400% seen at some condos, HOA properties — Bill Lukitsch | The Minnesota Star Tribune | March 21, 2025

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Denver, Colorado: Don’t bet your house that loss assessment coverage will help!  Read about it on our Insurance page.

If you don’t have it, she said, you should ask your insurance agent to add the coverage to your policy.

Walker said that loss assessment coverage of up to $50,000 is relatively inexpensive and crucial for condo and townhome owners.

It's important to note that loss assessment coverage only applies to specific perils. It will not cover assessments for routine maintenance like elevator repairs or pool upgrades…

Loss assessment coverage can help protect condo owners from skyrocketing assessments — Steve Staeger | KUSA 9 News | March 26, 2025

• Tulum, Mexico: Condominium promises prove too good to be true.

The pitch was perfect. In hindsight, perhaps too perfect.  A one-bedroom apartment with parota wood finishes and granite countertops, just a few minutes from the beach, starting at no more than $200,000. For extra, you’d get boho chic furnishings and decor and sinks carved out of stone. Amenities could include sprawling pools, fire pits, sunrise yoga classes, spas and private bike paths.

All of it in Tulum, a beach town along the turquoise waters of Mexico’s Yucatan peninsula.  Four years later, Norris’ dream home remains just that. A dream…

… In 2021, she signed a contract to buy a one-bedroom, 1,500-square-foot condo from Akela Development Group for $191,000.  She still doesn’t have it, and she likely never will.

The development firm, for all intents and purposes, disappeared with the $107,000 she put toward the unit — pretty much all of her life savings.

A few months after her initial payment, one of the three partners at Akela was found dead on the beach. By October 2022, the company had told Norris to pause payments while the firm worked out a land dispute. A second Akela partner was found hanging from a rope in August 2024 amid mounting debt, according to a police report. The third is believed to have fled the country…

Deception in Paradise: Tulum Real Estate Boom Devolves As Allegations of Fraud Surface (free 🔗)

— Andrea Navarro and Tanaz Meghjani | Bloomberg | March 27, 2025

🔊 They Bought Dream Homes in Tulum. Then Came the Nightmare — Sarah Holder | Bloomberg Big Take | March 27, 2025

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Bangkok, Thailand: Earthquakes aren’t helping the condominium market.

A condominium glut in Bangkok is set to worsen after a deadly earthquake in neighboring Myanmar damaged thousands of skyscrapers in the Thai capital, spooking prospective buyers.

The 7.7 magnitude earthquake, which killed more than 2,700 people in Myanmar, led to the collapse of an under-construction office tower in Bangkok. Authorities have also reported varying degrees of damages to about 13,000 buildings, leading to mass evacuations and safety checks.

The quake, the strongest to hit Myanmar in a century, has shaken the confidence of prospective home buyers, especially those weighing condominiums, according to real estate consultants including Colliers Thailand. That will hurt condo sales in the short term, exacerbating an oversupply in the segment in Bangkok and its suburbs, they said.

“The earthquake presents a serious challenge to Bangkok’s condominium sector, particularly as the market is already burdened by high unsold inventory,” said Phattarachai Taweewong, the Research and Communication Director at Colliers Thailand.

Property developers in the greater Bangkok area were saddled with about 235,000 unsold residential units at the end of last year, the most since data dating back to 2018. Sales slumped 37% to about 53,000 units in 2024, according to the Thai Condominium Association…

Bangkok’s Condo Oversupply Problem May Worsen Over Earthquake Fears — Anuchit Nguyen | Bloomberg | April 02, 2025

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What’s hot for real estate in 2025?  Coastal cities and … the Midwest.

Five of Redfin’s 10 hottest neighborhoods of 2025 are in Midwest suburbs.

Pricey coastal cities are also in high demand, with neighborhoods in New York and San Francisco making the list as workers return to the office following the pandemic…

…“Workers wanted to get out of the crowded city during the pandemic, so they bought or rented properties in upstate New York or elsewhere in the country,” said New York Redfin Premier agent Ian Rubinstein. “Many companies now require workers to be in the office at least two to three days a week—so people are coming back. In my opinion, Brooklyn has become even more popular than Manhattan.”...

…“Midwest cities have risen in popularity because they’re more affordable than cities in other parts of the country, but many buyers are now widening their search to the suburbs after being priced out of popular urban areas,” said Redfin Chief Economist Daryl Fairweather. “These neighborhoods are generally a 15-20 minute drive to the downtown of a metro—a reasonable commute for workers—and have easy access to shopping, sought-after schools and recreational pursuits.”...

New York and the Midwest Dominate Redfin’s Hottest Neighborhoods of 2025 — Mark Worley and Asad Khan | Redfin | March 27, 2025

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The first rule of real estate: location matters!  This is a story of a lopsided market.

Two houses went on the market for similar prices at about the same time earlier this year. One got 25 offers. The other got none.

There are many variables that determine demand, from the condition of the house to the price set by the seller. But one factor is having a major impact right now: geography.

The Northeast and Midwest markets have far more prospective buyers than available homes. But parts of the Sunbelt are seeing a flood of houses for sale.

The divergence is playing out in places like Wyckoff, N.J., where a four-bedroom ranch was on the market for just over a week in early February. With dozens of offers, the winning buyers contracted to buy for about $200,000 above the roughly $1.1 million asking price. 

But in Miami, a six-bedroom with a grand staircase and pool has sat on the market for nearly two months without a firm offer. The sellers cut the price by $9,000 to $990,000.

“There are very different realities for sellers depending on location,” said Cara Lavender, research manager at John Burns Research and Consulting…

This 4-Bedroom Ranch in N.J. Tells You Everything About the Lopsided Housing Market — Veronica Dagher | WSJ | March 27, 2025

West Palm Beach, Florida has ritzy condominium units for sale.

...West Palm Beach in particular is experiencing a renaissance, via World Trade Center developer Stephen Ross and his new venture Related Ross. He coined its new nickname “Wall Street South,” while pouring money into education and office space there. 

Unlike Palm Beach island, where buildings are capped at five stories, “the City of West Palm has its own rules and has a very different average demographic,” said John Cregan, a broker with Sotheby’s International Realty’s Palm Beach office...

...He represents unit 2203 at 1100 South Flagler Drive, a nearly 5,000-square-foot condo listed for $22.9 million.  Dubbed the Bristol, the 2016 approval of the 25-story waterfront building led to a “high-rise phenomenon” along Flagler Drive, Cregan said.  The five-bedroom, six-bathroom apartment occupies the southern end of the building, offering 320-degree views to the east, south and west…

Why condo prices are soaring in the land of ultra-rich lawn-lovers — Heather Senison | New York Post | March 21, 2025

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Major US cities have seen condominium prices plummet over the past few years.

Here are 10 big cities where condo prices have dropped by 10% to 22% from their respective peaks. Most of those peaks were in mid-2022. They’re examples of home prices coming unglued in many markets, while they’re still rising in other markets. Every market dances to its own drummer, as we can see in the charts below.

Where Condos Already Came Unglued: 10 Big Cities with Price Drops from 10% to 22% from Peak — Wolf Richter | Wolf Street | March 21, 2025

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Tokyo, Japan: Nearly half of condominium owners expect to list it vs. love it.

Close to half of buyers of high-rise condominium units in urban areas intend to sell the properties after prices rise, according to a survey by a company operating a real estate information website.  From the time the units were purchased, 45.9 percent of respondents said they intended to sell them, compared with 36.8 percent who intended to live there for as long as possible, the survey by Lifull Home’s Soken research institute showed…

…The survey covered 311 individuals who sold off their high-rise condominiums in Tokyo, Kanagawa, Chiba, Saitama and Osaka prefectures.  When asked the reason for making the sale, the most popular response, at 37 percent, was “it could be sold at a high price because real estate values were rising.”  When respondents were asked if they regretted their decision to sell, 33.8 percent said they felt they could have sold the units at an even higher price…

High-rise condos used more as an investment tool than a home — Masashi Kisanuki | The Asahi Shimbun | March 23, 2025

Built Environment

• Miami, Florida: Shiny new luxury condominium developments are springing up as many condo owners face financial despair to repair their 30, 40, 50 and 60 year old buildings.

Continuum Company has broken ground on a 32-story condo tower in North Bay Village called Continuum Club & Residences.

The tower is described as being curvaceous and striking, with a design by Arquitectonica.

48% of residences planned in the tower were already sold before yesterday’s groundbreaking. A total of 198 residences and penthouses are planned, ranging from 800 to 4,000 square feet…

‘Curvaceous, Striking’ 32-Story Glass Tower Breaks Ground — The Next Miami | April 02, 2025

• US sovereign debt is out of control.

Amid all the blaring headlines coming out of Washington, here’s a piece of news that is getting far too little attention: The US is on course for fiscal breakdown. That’s the unambiguous message from the Congressional Budget Office’s newly updated long-term projections. Unless Congress changes course, there’ll be a reckoning, and it will be grim.

As the CBO details, deficit spending is more out of control than ever. Both parties share the blame, as do both ends of Pennsylvania Avenue. And all should remember that investors’ appetite for US government debt isn’t limitless.

The federal government is currently spending roughly $7 trillion and collecting only $5 trillion in taxes annually. The resulting deficit is a little over 6% of gross domestic product, a disturbingly high number for an economy around full employment.

The CBO expects public borrowing to remain at this elevated level or higher for decades. Assuming no recessions, public debt will rise to 100% of GDP this year and 118% by 2035 — and it just keeps rising from there…

US Is Heading for a Grim Fiscal Reckoning — Michael Bloomberg | Bloomberg Opinion | April 02, 2025

Inflation and Monetary Policy

• Tariffs.  And more tariffs.  Condos, co-ops and HOAs are sure to feel the pressure.

US President Donald Trump announced reciprocal tariffs Wednesday, saying he would apply a minimum 10% levy on all exporters to the US. The Republican asserted that dozens of countries with the largest trade imbalances will face even higher rates. According to Trump, the European Union will be subject to a 20% levy, China a 34% rate and Vietnam a 46% tariff. Alluding to how much if not most of the administration’s threats and implementation of tariffs is a negotiating gambit, Trump, 78, indicated he would consider lowering rates if other nations remove trade barriers on US exports. The stock market plummeted in late trading on the news.

Trump’s escalating tariffs are expected to raise the cost of trillions of dollars in goods shipped annually to the US from other countries, with most economists predicting American consumers will be among the hardest hit as a result. Trump’s latest salvo also turbocharges the worldwide trade war he began, a conflict likely to be marked by tit-for-tat strikes that destabilize supply chains, stoke inflation and encourage more countries to form alliances that exclude America…

Trump Makes Good on Massive Trade War Escalation: Evening Briefing Americas — Jordan Erb | Bloomberg | April 02, 2025

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Fair Housing Cases in Jeopardy

• Texas: The Department of Housing and Urban Development (HUD) works through the Department of Justice (DOJ) to pursue violations of the Fair Housing Act…until now.  Homeowners face an uncertain future as to whether HUD will pursue valid FHA concerns.

The findings were stark. In one investigation, the U.S. Department of Housing and Urban Development concluded that a Texas state agency had steered $1 billion in disaster mitigation money away from Houston and nearby communities of color after Hurricane Harvey inundated the region in 2017. In another investigation, HUD found that a homeowners association outside of Dallas had created rules to kick poor Black people out of their neighborhood.

The episodes amounted to egregious violations of civil rights laws, officials at the housing agency believed — enough to warrant litigation against the alleged culprits. That, at least, was the view during the presidency of Joe Biden. After the Trump administration took over, HUD quietly took steps that will likely kill both cases, according to three officials familiar with the matter.

Those steps were extremely unusual. Current and former HUD officials said they could not recall the housing agency ever pulling back cases of this magnitude in which the agency had found evidence of discrimination. That leaves the yearslong, high-profile investigations in a state of limbo, with no likely path for the government to advance them, current and former officials said. As a result, the alleged perpetrators of the discrimination could face no government penalties, and the alleged victims could receive no compensation…

Federal Investigators Prepared Two Texas Housing Discrimination Cases — Until Trump Took Over — Jesse Coburn | ProPublica | March 25, 2025

Most Associations Have Authority to Hire a Manager

• Michigan: Of course your association can hire a management company.  But should it?

The Bylaws’ “No Compensation for Agents” Clause does not prohibit hiring a management company…

…Long Lake Shores Association is a Michigan HOA governing a residential subdivision. In early 2023, the Association’s Board of Directors decided to enter into a contract with McShane and Associates, a professional property management company. The board presented McShane’s $11,000 annual fee as part of the proposed budget at the 2023 annual members’ meeting, and it also proposed raising the yearly HOA dues from $200 to $400 to cover increased costs. The homeowners present at the meeting approved the budget and the dues increase, which included the expense for the management contract.

Despite this membership approval, a group of homeowners (the plaintiffs) filed suit in May 2023 seeking a declaratory judgment that the board lacked authority under the bylaws to hire McShane and that the management contract was null and void. After initial proceedings, the trial court denied the homeowners’ claims and ruled that the board acted within its powers. The homeowners appealed, but the Court of Appeals agreed with the trial court, siding with the Association….

Michigan Court of Appeals Confirms HOA Board’s Right to Hire a Property Manager — Livia Khemmoro | Hirzel Law | March 13, 2025

Neuman v. Long Lake Shores Association — Michigan Court of Appeals | October 10, 2024

Know Your Obligations

• Nevada has what are arguably the most precise minimum requirements for condos, co-ops and HOAs, but every state has requirements that owners and board members should know.

Is your association or management company next to face Nevada Real Estate Division at a commission hearing? Here are some of the allegations or violations that were heard by the commission:

Operating without the statutory required three-board members per Nevada Revised Statutes 116.31034 (1). This is a problem for many associations when homeowners do not want to serve on the board. No excuse from the commission.

Signing checks without the appropriate two signers on checks in violation of NRS 16.31153. How about failing to provide proof of an annual audit for three years, a violation of NRS 116.31144. Remember as directors of your association you have a fiduciary responsibility to your homeowners. Money and how it is spent is a big-ticket item.

Speaking about money, this violation is a big one for NRED, failure to adequately fund your reserve and maintain its budget in accordance with the reserve study per NRS 116.3115...

...Don’t think that financial accounting is solely the responsibility of your management company. Failing to maintain current, accurate and properly documented financial records per Nevada Administrative Code 116.405(5)(8)(e)(g)(j) is a violation. NAC are the regulations in addition to NRS the state laws. Again, as a director, you have a fiduciary responsibility to make sure you are carefully reviewing your monthly financial reports....

...Record keeping is a requirement of NRS 116.31151 (1)(a). Your association must create, retain and/or maintain proper record-keeping. Another similar violation is failing to have proper recordkeeping and regularly transferring reserves per NAC 116.415...

Understand your legal obligations as HOA board member — Barbara Holland | Las Vegas Review-Journal | March 31, 2025

Ongoing Litigation re: Prohibited Business Activity 

• Boise, Idaho: This story continues from coverage in Issue# 91.

Judge Derrick O’Neill ruled largely in favor of the Two Rivers HOA last spring, but allowed a portion of the dispute to move ahead to a trial. In the meantime, the Buchinskiys filed a counterclaim in February alleging the HOA is violating its own rules by renting out the neighborhood’s clubhouse to outside residents to bring in revenue, which they say qualifies as a “trade, business or professional activity” the HOA’s rules prohibit.

In the meantime, the court put a permanent injunction in place blocking Valentina Buchinskiy from operating her alteration business, or any similar business, out of her home in the neighborhood in June of last year.  The case is tentatively scheduled for a jury trial in December [2025]...

…In their documents filed with the court, the Buchinskiys argue the Two Rivers HOA has waived their right to enforce this rule after allowing several other businesses to register their businesses in the neighborhood for years. O’Neill said after reviewing all of the evidence submitted, including declarations from residents discussing “technical” violations of the HOA’s rules, he ruled that there still is an open factual question of whether the Two Rivers HOA waived its rights to enforce the ban on any business activity in the subdivision.  This is the question that will continue to be litigated in the case…

…The Buchinskiys filed another lawsuit of their own back at Two Rivers HOA earlier this year.  On February 4th, the couple filed a countersuit in court against the HOA, alleging its own work to rent out the clubhouse violates the ban on “any grade, business or professional activity.” These rules date back to the founding of the neighborhood and its HOA in 2000. According to their filing, the board of the HOA decided to start renting out the clubhouse in the subdivision to non-residents for events starting in 2007 or 2008 to generate revenue to cover maintenance costs by homeowners in the neighborhood…

“The (covenants, conditions & restrictions) does not provide the Two Rivers HOA the authority to use and rent the subdivision’s common areas, specifically, the clubhouse to non-residents for business purposes for monetary gain,” their complaint for the countersuit said. “Accordingly, Two Rivers HOA’s continuing operation to rent out the clubhouse, a common area of the Two Rivers Subdivision, is a direct violation of the CC&Rs…”

Two Rivers couple counter sues HOA over in-home business — Margaret Carmel | BoiseDev | April 01, 2025

Actual Cash Value vs. Replacement Cost Value

• Colorado: This townhome community and their experts assert that all 43 insured roofs were damaged by hail and need to be replaced at a cost of $3,467,488 borne by their insurance provider (QBE).  The policy has a “5% hail deductible” that applies to each covered building.  QBE paid the association $1,587 based on an actual cash value determination separate from a replacement cost value calculation.

1:22-cv-02364 Homeowners Association of Players Club Villas Townhomes, Inc., The v. QBE Insurance Corporation

— US Federal District Court | Colorado | March 21, 2025

HOA Joins Local School Board Lawsuit

• Fort Worth, Texas: Is THIS what your association’s Board should be doing with their time and your money?

A far north Fort Worth homeowners association has asked a judge to remove the five Keller school board members who planned to split the district. In a petition filed March 27, the Heritage Legal Task Force, representing the Heritage Homeowners Association, requested the removal of board President Charles Randklev and members Heather Washington, John Birt, Chris Coker, and Micah Young for “incompetency and official misconduct.”...

…The HOA joined a lawsuit filed by a district resident on March 3 against members of the Keller school board, alleging that they violated the Texas Open Meetings Act when they met in private to discuss a plan to split the district…

Fort Worth HOA demands removal of 5 Keller ISD board members over split — Rachel Royster | Forth Worth Star-Telegram | March 27, 2025

• ARIZONA: An uprising over HB2442?  The bill would change a few things including what you see below.

  • A COPY OF ANY PROPOSED BUDGET SHALL BE MADE REASONABLY AVAILABLE FOR UNIT OWNER REVIEW AT LEAST FORTY-EIGHT HOURS BEFORE THE BOARD MEETING AT WHICH THE BOARD OF DIRECTORS WILL CONSIDER THE APPROVAL OF THAT BUDGET. 

  • IF THE ASSOCIATION OWNS AND OPERATES A COMMERCIAL FACILITY THAT IS OPEN TO THE GENERAL PUBLIC THAT FAILS OR HAS FAILED TO GENERATE A PROFIT FOR THREE SUCCESSIVE FISCAL YEARS AND THAT CREATES A BURDEN ON THE MEMBERS TO SUBSIDIZE THE EXPENSES OF THAT COMMERCIAL FACILITY, THE ASSOCIATION SHALL SEND THE QUESTION OF THE CONTINUED OPERATION OF THAT FACILITY TO A VOTE OF THE MEMBERS

• MINNESOTA: Legislators have come together in bipartisan fashion to support reforming Minnesota’s state governance of condos, co-ops and HOAs.  Read more in Issue# 110 and Issue# 111.  See below and also see this post.

Legislators got an earful when they asked constituents to voice concerns about the homeowners associations that govern 80% of new housing in the state, including one resident who described foreclosure proceedings started against them over a $56 trash fine.

“We’ve seen abuses, we’ve seen conflicts of interest, we’ve seen kickbacks, we’ve seen outright fraud,” said Rep. Kristin Bahner, DFL-Maple Grove…

But some HOA residents and property management companies want to slow down the proposed legislation that would reshape how the private communities are governed. Dozens of mostly individual board leaders rallied Wednesday afternoon at the Capitol in St. Paul to protest some aspects they consider overbearing, burdensome and problematic.

“As we all know, the road to hell is paved with good intentions,” said Ron Klemz, an 80-year-old president of the Pine Hollow condominium community in Stillwater, speaking from a podium in the Capitol Rotunda on Wednesday. The legislation is “deeply flawed” and must not pass as presented, he said…

Items on lawmakers’ reform agenda include caps on fines and fees and restrictions on the ability to initiate foreclosure proceedings. Property management companies also could see a diminished ability to turn a profit through contract work in the communities they’re hired to advise, in light of concerns around self-dealing and conflicts of interest.

Critics welcome some ideas for change, such as increased transparency. But board members take issue with the focus on egregious cases they say are not representative of the experience many have living in an HOA. And they believe board members who volunteer to lead associations are demonized because of the actions of a select few bad actors….

HOA board leaders, property managers protest reforms — Bill Lukitsch | The Minnesota Star Tribune | April 02, 2025

• THAILAND: A strict approach to short-term rentals.

The Thai Hotels Association (THA) has called on the government to amend existing laws as well as employ stricter legal enforcement to tackle the issue of daily condo rentals by foreign investors.

The issue is primarily related to condominium owners, often Chinese nationals, who purchase several units and list them on online platforms for short-term rentals at significantly lower prices than hotels can offer.

This practice, commonly referred to as “zero-dollar condos”, is considered illegal under Thai law, Thienprasit Chaiyaphatranan, president of the THA, said on Friday, adding that it is causing distress among local residents as well as hurting the business of hotel operators.

He pointed out that under the current law, officials must pretend to be a customer and secure a rental receipt as evidence before they can arrest the operator. In most cases, officials manage to arrest the owner of only one unit, while there could be several rooms in the same building that have been put up for short-term rent, he said.

The Hotel Act of 2004 mandates that daily accommodation services must be licensed as hotels, a condition most condominiums do not meet.

Thienprasit suggested that a clause be added to the current law, allowing officials to arrest condo owners upon finding that they advertise short-term rental via media channels. This would eliminate the need for a sting operation by law-enforcement officers, he said…

Call for law amendments to tackle illegal daily condo rentals — The Nation | March 22, 2025