08.03.23

Legislative Recommendations for Washington State

• We dedicated many hours to create a robust set of legislative recommendations for Washington State using concepts and language borrowed from other states.

  • Did you know that the Uniform Law Commission significantly revised their recommendations for UCIOA in v2021?  UCIOA now includes a transition plan for all preexisting community associations in a given state.

Discontent

• This survey from the Netherlands reminds us why so many communities need help.

Over three-quarters of apartment owners are unhappy with the manager of their homeowners’ association, Vereniging Eigen Huis, the umbrella for homeowners associations, said after analyzing the complaints to its hotline. They complain about bad communication, poor administration, and managers making decisions without consulting the members.

[Community associations] complain that their managers don’t have the legal, administrative, and technical knowledge needed to do their job correctly.

Three-quarters of apartment owners unhappy with management of homeowners association — Cindy Kremer | NL Times | July 18, 2023

Embezzlement Squared

• Jail time.  Also read For the Love of Money in Issue# 70. 

My neighbor stole $80,000 from the Homeowners Association & blew it on shopping - she even bought a Lexus with our cash  | More Coverage

— Jacob Willeford | The US Sun | August 2, 2023

Getting Naked

• u/dogmomofone inquires about nuisance enforcement for a titillating situation.

Anime/Itasha car?

Community Association Myths to Avoid

• A concise blog that cites CA civil code, but that's applicable just about everywhere.  Also read Frequent Mistakes & Lessons Learned + 10 Habits of Great Homeowners.

One of our favorites: The president is the boss. NOPE!  The board, not the president, is the decider in [community] associations.  Healthy associations understand this and govern with boards led (not controlled) by their presidents.

Avoid these HOA Myths — Kelly G. Richardson | The San Diego Union-Tribune | July 29, 2023

Eviction for Nonagenarians

• Community associations contributing to the homelessness crisis.

A Pasco County couple in their 90s was given a seven-day eviction notice after the husband allegedly threatened a landscaping worker at their property.  “This aggressive, threatening behavior is in direct violation of the community rules and regulations and threats of violence are not tolerated in the community. As a result, the resident was provided a 7-day notice to vacate.“

Donald Timmons, 91, and his wife Darlene, 98, have lived at the Forest Lake Estates for 30 years.  The couple owns their home at Forest Lake Estates but rents the land that it sits on.  “A good portion our lives are invested right here, and this also represents a good portion of our lifetime assets,” Donald said.

Pasco couple in their 90s gets eviction notice after landscaper claims he was threatened — Annie Mapp | WFLA | July 27, 2023

Capital Improvement $$$

• Wanton spending on capital improvements should be regulated.  Units for sale in this association are all priced below $500,000.  A ~$15,000 special assessment to buy the empty lot next door isn’t necessarily affordable for most residents…

The condominium owners association at The Renaissance on Turtle Creek, a sleek complex with two high-rise buildings and over 600 units on 3.7 acres, has made a multi-million dollar offer on the half-acre property next door, according to a board member.

However, some condo owners expressed opposition earlier in the week to the plan to acquire the property and began collecting signatures for an emergency meeting to vote to remove the COA board, they said. They contend the board doesn’t have the authority to purchase property without owners’ input and that the fees -- which could be part of a special assessment of up to $9 million -- for the purchase would be costly, burdensome and could cause foreclosures.

Condo association bids millions for property some don’t want; board removal sought

— Jason Beeferman | The Dallas Morning News | July 28, 2023

Big Numbers

• It’s becoming more challenging to find housing not controlled by covenants.  Visit our US Census Bureau page for more information.

Nearly 30% of Illinois homes are part of an HOA, among the highest percentages in the nation

— Patrick Regan | Chicago Agent Magazine | April 21, 2023

Bigger Numbers

• Assessments (not “fees”) pay for maintenance, repair, replacement and operations of your community association, yet many homeowners don’t understand their annual budget and/or have cost amnesia.

Are High HOA Fees Scaring Homeowners Away? — Stephanie Horan | Today’s Homeowner | April 20, 2023

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• LendingTree conducted a survey about costs in HOAs.  One of their findings was particularly interesting, but not necessarily surprising.

Unhappiness with the cost of an HOA could be due to violations of membership rules. 

• 43% of unsatisfied members say their HOA has made their lives harder

• 23% of members unhappy with the cost say they’ve been given a violation notice, compared with 15% of all unhappy homeowners in an HOA. 

• Major contributing factors to unhappiness: 

  • landscaping (34%) 

  • design changes (23%)

  • fencing (23%)

New survey reveals how homeowners feel about HOAs — Jeff Clabaugh | WTOP News | March 06, 2023

63% of Homeowners in HOA Say They’re Priced Fairly — Jacqueline Demarco | LendingTree | February 21, 2023

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Despite the misuse of the term “fees” (owner members pay assessments), explaining the differences between condominiums (COAs) and homeowners associations (HOAs) by general categories of expenditures makes sense.  Reference a slightly more detailed breakdown directly in the article.

Understanding Condo Fees Vs. HOA Fees: Home Association Cheat Sheet — Victoria Araj | Quicken Loans | January 11, 2023

Biggest Numbers

• Does it make sense to charge thousands of dollars in legal fees to collect a few hundred dollars in unpaid assessments?  Should collection fees be proportional?

Many – perhaps most – community associations fail to approach debt collection using a service trained in the nuances of obtaining payment (i.e. a collection agency).  Instead, associations largely rely on the blunt knife of foreclosure via their attorney.

HOAs have filed thousands of foreclosure cases in recent years, in disputes stemming from as little as a $308 lien.  Seven law firms each filed more than 100 foreclosure cases on behalf of Colorado HOAs over four years.

The 'lose-lose' fight between an ex-Bronco and his HOA — Brittany Freeman, Jeremy Moore and Sophie Chou | PBS | March 11, 2023

They faced foreclosure not from their mortgage lender, but from their HOA — Brittany Freeman, Sophie Chou, Mariam Elba | PBS | April 07, 2022

HOA Foreclosures Are a “Lose-Lose” Game for Coloradans, but These Lawyers Win Regardless of the Outcome

View past coverage:  1,  2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14 and 15. 

Energy

• A 2021 study by the University of California estimates that 63 billion gallons of water could be saved by covering California’s 4,000 miles of canals. 

Solar panels on water canals seem like a no-brainer. So why aren't they widespread? — Brittany Peterson and Sibi Arasu | AP | July 21, 2023

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A succinct list of thought-provoking questions related to renewable energy.  

ALSO READ: Seeing Red in Issue# 65.

Ten Questions to Ask Yourself About the Transition to Renewables — Brittany Peterson and Sibi Arasu | AP | July 21, 2023

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Say hello to ionocaloric cooling. It's a new way to lower temperatures with the potential to replace existing methods of chilling things with a process that is safer and better for the planet.

Scientists Invented an Entirely New Process For Refrigerating Things — David Nield | ScienceAlert | July 30, 2023

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Time to Chill Out About Air Conditioning’s Carbon Footprint — David Fickling | Bloomberg republished by WaPo | July 30, 2023

The Cost of Net Zero

• Out with the incandescent, in with the LED.

The new efficiency standard announced by the Biden administration requires light bulbs to meet a minimum standard of producing 45 lumens per watt. (A lumen is a measurement of brightness, and incandescents typically produce far less than that per watt.) An accompanying rule change applies the new standards to a wider universe of light bulbs.

Neither rule is an explicit ban on incandescents. And a few specialized kinds of incandescent bulbs — like those that go inside ovens, and bug lights — are exempt. But most if not all other incandescents will struggle to meet the new efficiency standards, and the same goes for a more recent generation of halogen lights.

“Energy-efficient lighting is the big energy story that nobody is talking about,” said Lucas Davis, an energy economist at the Haas School of Business, part of the University of California, Berkeley. “Going from an incandescent to an LED is like replacing a car that gets 25 miles per gallon with another one that gets 130 m.p.g.,” he said.

New Energy Efficiency Rules Ban Incandescent Light Bulbs: What to Know — Hiroko Tabuchi | NYT | August 1, 2023

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• The United States isn’t all electric for many reasons!  Also view prior coverage.

  • Some things can’t be electrified…

  • Cheaper alternatives may be coming for the most difficult-to-electrify areas…

  • Access to land, a surfeit of complaints…

  • Difficulty getting the necessary permits…

  • Electricity grids are highly interruptible…

The Five Things Keeping Us From Going All-Electric — Olivia Rudgard | Bloomberg | July 19, 2023

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• Want to know where your energy goes?  See Issue# 63 and look at RECS from the EIA.

Multifamily residential compared with single-family detached construction:

• 281% more efficient per household

• 200% more efficient per household member

• 3.37x more single-family detached homes use 948% more energy vs. multifamily

The Department of Energy said its proposal would save consumers $11.4 billion on their energy and water bills each year. To comply with the rule’s efficiency standards, which would take effect in 2029, new electric storage water heaters in the most common size would have to use heat pumps, and some gas-fired instantaneous heaters would have to use condensing technology.

When the Obama administration last updated water heater efficiency rules in 2010, some large electric heaters began using heat pumps to comply, signaling a shift in that direction.

The water heater rule roughly lines up with what many consumer groups, environmental advocates and manufacturers expected.  Regulators and experts say the proposed rule, which could be revised after the department solicits comments and holds a public hearing, is significant because water heating accounts for about 13 percent of U.S. consumers’ annual residential energy use and utility costs. Heat pumps are more than twice as efficient as previous technology.Households would save an average $1,868 over the life of their electric heater, the department said. That doesn’t include potential savings from the Inflation Reduction Act’s environmentally-focused tax credits.

New rule aims to make outdated home water heaters cheaper and greener — Shera Avi-Yonah | WaPo| July 21, 2023

EIA: Table CE1.1 Summary annual household site consumption and expenditures in the United States—totals and intensities, 2020

EIA: Table HC1.1 Fuels used and end uses in U.S. homes, by housing unit type, 2020

EIA: Table HC6.1 Space heating in U.S. homes, by housing unit type, 2020

EIA: Table HC8.1 Water heating in U.S. homes, by housing unit type, 2020

Environment

• Plastic was phased in as a paint binder after lead-based paint lost its luster.  In the cost of net zero category: two brands of paint in the article below sell for over $100/gallon.

Today plastic-based paint makes up almost 95% of the global market, which topped 44.4 million tons in 2019, according to consultants Kusumgar, Nerlfi & Growney.  About 58% of microplastic in oceans and waterways comes from paint, according to a 2022 report from Swiss consulting firm Environmental Action.

House Paint Has a Microplastic Problem — Olivia Rudgard | Bloomberg | July 19, 2023

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In 1980 losses from three US natural disasters—a drought, a flood and a hurricane—topped $1 billion each (in 2023 dollars). Last year there were 18 $1 billion-plus events across the country, including Hurricane Ian, which was responsible for $114 billion in damage, according to the US National Oceanic and Atmospheric Administration. “The number and cost of disasters are increasing over time, due to a combination of increased exposure, vulnerability and climate change,” says Adam Smith, a climatologist at NOAA’s National Centers for Environmental Information.

Although 2022 wasn’t the costliest year on record (2005 has that honor, thanks to Hurricane Katrina, followed by 2017 with Hurricane Harvey), it’s part of a trend of ever more expensive and destructive disasters. Global warming has lengthened the wildfire season and made blazes more frequent, more dangerous and more widespread (think this year’s fires in Quebec). And warmer air means clouds can hold more rain and dump it faster in places unaccustomed to floods (think Vermont this summer)...

The Skyrocketing Toll of the Billion-Dollar Climate Disaster — Minh-Anh Nguyen and Marie Patino | Bloomberg | July 27, 2023

Housing Affordability & Homelessness

• It’s all about zoning.  Read about ‘kludge’ in Issue 69 and more on zoning in Issue 64.

The huge inequalities between upscale municipalities and their poorer neighbors didn’t just happen; they are in large measure the product of laws that are hard to square with the inclusive In This House, We Believe signs on lawns in many highly educated, deep-blue suburbs.

Liberal Suburbs Have Their Own Border Wall — Richard D. Kahlenberg | The Atlantic | July 05, 2023

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What does the future hold for this Habitat for Humanity built Four Ten Condominium?

A 1904-building that started as a single family home and served as a 6-unit apartment building made way for a 13-unit condo complex with six one-bedroom units, five 2-bedroom units and 2 three-bedroom units. The condo design allowed the project to maximize the number of new homes in the development. Habitat could have tried to put up two or three townhouses, but going condo allowed them to more than quadruple the total number of units. The project also did not include parking in this transit-rich core of the Hill…

Habitat for Humanity just opened its first affordable condo building on Capitol Hill — and is getting ready to build another

— CHS Staff | CapitolHillSeattle.com | March 06, 2023

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Is 5 World Trade Center the new face of affordable luxury housing?

The thing is, set-asides like this can go only so far — not just numerically but in terms of city- and community-building. They embed middle-class people in a neighborhood they would otherwise be excluded from, which is a definite good, but they don’t make much of a dent in the crisis of people who have nowhere at all to live. In this case, the income tiers are set from about $40,000 to $150,000 depending on family size, which in most cases means one nice professional salary or two blue-collar ones. That’s hardly going to get homeless people off the streets; it’s more on the model (sans exclusionary policy) of the original Stuy Town, intended for teachers, firefighters, and paralegals. It’s no knock on this good outcome to say it also shows us what buildings like this can’t do.

An Island of Affordable Housing at the World Trade Center — Christopher Bonanos | Curbed | August 01, 2023

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Despite the cooling housing market, Seattle-area buyers now need to earn more money than a year ago to afford a starter home — typically priced in the low to mid-$500,000s.

Seattle-area households need to make nearly $142,000 a year to afford a typical first home in the region, according to an analysis from Redfin. That’s an increase of 4% from last year, and well above King County’s median household income of about $106,000.

As buyers need to earn more to buy a modest home, “it just seems like the door into homeownership is shutting in a lot of places,” said Redfin Chief Economist Daryl Fairweather.

Seattle-area homebuyers need to earn $142K to afford starter home — Heidi Groover | Seattle Times | August 02, 2023

Condo Connection's financial coverage is indexed to our Dollar$ and $ense page dedicated to all things CIC finance.

Inflation and Monetary Policy

• The FOMC nudged rates another 25bps up to a band stopping at 5.50% on July 26th.  The ECB, BOE and several others hiked in June, July and August.  Most experts have said we’re just about at the end of this incredibly hawkish policy tightening cycle aimed at tamping down runaway inflation.

The US economy keeps plowing ahead despite all those predictions that the Federal Reserve’s rate-hike campaign would trigger a downturn. Indeed, talk of a recession among perpetual skeptics is even petering out. The gross domestic product picked up steam in the second quarter, key inflation measures continue to cool, consumer spending is rising and the labor market remains at near-historic strength. 

Understandably, a growing number of economists (including those on staff at the Fed) are rethinking unrealized predictions of a downturn. Some are even growing confident that Fed Chair Jerome Powell can accomplish a soft landing. In Europe though, the picture isn’t quite as rosy, with fears of slow growth amid the European Central Bank’s unprecedented cycle of interest-rate hikes. And in Asia, a surprise move by the Bank of Japan—the only major central bank yet to start dialing back easy monetary policy—had global implications.

Economists Come Around to a Soft Landing Scenario

— Victoria Cavaliere and Ian Fisher | Bloomberg Weekend Reading | July 29, 2023

Cashing In

• When it comes to living and retiring comfortably, Americans have some big numbers in mind for what they will need.

Blame high inflation, which peaked at an annual rate of 9.1% in June 2022, according to consumer price index data.

While the pace of price increases has subsided since then — with the CPI up just 3% from a year ago as of June — surveys show many Americans feel they’re falling short of what they need to get by.

To feel financially secure or comfortable, Americans say, they would need to earn $233,000 on average, a recent Bankrate survey found. But to feel rich, respondents said they would need to earn $483,000 per year on average, the June survey of more than 2,500 adults found.

Meanwhile, to retire comfortably, Americans have another big number in mind — $1.27 million — according to recent research from Northwestern Mutual. That is an increase from $1.25 million cited last year, according to the firm’s recent survey of more than 2,700 adults…

Americans have big number goals for salary, retirement

— Lorie Konish | CNBC | July 24, 2023

Cashing Out

• Womp womp.  This isn’t the first time US sovereign debt has been downgraded and it probably won’t be the last.

Fitch Ratings downgraded the U.S. government’s credit rating weeks after President Biden and congressional Republicans came to the brink of a historic default, warning about the growing debt burden and political dysfunction in Washington.

The downgrade, the first by a major ratings firm in more than a decade, is evidence that increasingly frequent political skirmishes over the U.S. government’s finances are clouding the outlook for the $25 trillion global market for Treasurys. Fitch’s rating on the U.S. now stands at “AA+”, or one notch below the top “AAA” grade.

Fitch Downgrades U.S. Credit Rating

— Matt Grossman and Andrew Duehren | WSJ | 08/01/2023

Where The Sun Doesn’t Shine

• Multiple states have guaranteed the right to install solar pursuant to reasonable, limited restrictions by community associations.  Georgia isn’t one of them…yet.

He put solar panels on his roof. Now his HOA wants them removed — Drew Kann | The Atlanta Journal-Constitution | 04/13/2023

Feeling the Heat

• Joyce Sasser lives in Building 5 of the Whitehall Condominiums of the Villages at Palm Beach Lakes Association, Inc. in West Palm Beach, Florida.  The AC unit she had installed in March 2021 has freon leakage issues that apparently relate to a pipe that runs under the building (through common elements).  The association told her even though the problem is under the building, she needs a city permit and other documentation and then a vote of the board.  She’s still waiting for the board to act after two weeks.

We haven’t taken the time to evaluate this story in detail, but we’d like to make a recommendation for anyone reading: do your homeowners a favor by adopting a policy supporting maintenance, repair and replacement activities that relate to the habitability of units.  Boards in Florida community associations – and in several other states – are prohibited from making decisions via email.  Well-written policies avoid the need for Board intervention.

Sasser points to two state cases, one in 2009 and another in 2014, which she says prove the condominium association is responsible for the needed repairs when the damaged infrastructure is outside of a particular condo unit.

Florida woman's condo like 'an oven' after weeks of no AC — Steve King | 25WPBF | 07/26/23

You’re Free to Resign

• Resignation of directors (orally and in writing) is guaranteed by nonprofit corporation statutes in multiple states.  No acceptance required.  Here are two examples:

RCW 24.03A.525 - Resignation of Director

ORS 65.321 - Resignation of Directors

Shut the Door!

• How does your association ensure that you provide correct information to owners and residents?  How do you handle things when you provide incorrect information?

…Before they bought the door, Frank and Nicole sent these plans to their property manager:

Nicole Torres: “‘Note: Door is to swing out,’ in capital letters.”

The property manager replied the plans are “conditionally approved.” They would just need to paint the door and get a city permit.

Nicole Torres: “I mean, it seems like it’s a clean-cut thing, you know? We got the approval, we were given the consent to order the door, and therefore, we ordered the door.”...

Outward swinging front door at center of dispute between Margate condo owners, association

— Kevin Ozebek and Leisa Williams | WSVN 7News | 08/04/22

Kappes Miller Reckoning

• Associations in the greater Seattle area realized over the years that engaging an umbrella organization (you could be excused for confusion with the Umbrella Corporation which brings about the zombie apocalypse) that provides management, reserve studies and insurance isn’t a good thing.  Enter a lawsuit in which Kappes Miller and some other individuals and entities are named defendants.  

23-2-10294-1 SEA: EPIC HOMEOWNERS ASSN ET AL VS HOLMES ET AL

A group of related companies that manage condominium associations in the Seattle area has been accused of illegally funneling money from five associations to their owner, Mark Holmes, CEO of the Kappes Miller Family of Cos.

The associations that stretch from Belltown to Issaquah last month filed a claim in King County Superior Court for damages against Holmes and his three property management companies: Kappes Miller Management, ECondoServices.com and Yates, Wood & MacDonald, a 79-year-old company that Holmes bought in 2016.

The plaintiffs allege the companies induced the associations to buy insurance through another Holmes company, Association Underwriters of Washington (AUW), which is named as a defendant. The civil complaint alleges the defendants hid from the condo associations how Holmes' companies are related. State law requires such relationships to be disclosed to clients.

Seattle-area condo associations accuse CRE executive of fraud — Marc Stiles | Puget Sound Business Journal | 07/18/2023

Lone Star

• “There’s a move towards further transparency.  It’s good for everyone to know what the rules are and what obligations they have.”

Does your HOA have too much power? What homeowner associations can and can’t do — Heaven Gibbons | The Dallas Morning News | 07/18/2023

Reasonable Accommodations

• Residents of Cedar Creek Commons in Mt. Juliet, TN likely had their fair housing rights violated (neither the residents, nor the news station that reported this story, mentioned FHA or HUD).  The new ramp (built to replace a dilapidated ramp installed 8 years prior) is materially the same with the exception of hand rails.  

While the prior ramp apparently received no approval, its existence for 8 years may have established an implied approval.  Forcing the removal of accommodations such that residents are no longer comfortable exiting their home seems highly unreasonable.  View our Fair Housing page for more information and view other cases such as Raleigh HOA settles dispute over wheelchair ramp — WRAL | 03/23/2015. 

Housing providers must make reasonable accommodations and allow reasonable modifications that may be necessary to allow persons with disabilities to enjoy their housing.

Under the Fair Housing Act, a reasonable modification is a structural change made to existing premises, occupied or to be occupied by a person with a disability, in order to afford such person full enjoyment of the premises. 

Reasonable modifications can include structural changes to interiors and exteriors of dwellings and to common and public use areas. Examples include the installation of a ramp into a building, lowering the entry threshold of a unit, or the installation of grab bars in a bathroom. 

Under the Fair Housing Act, prohibited discrimination includes a refusal to permit, at the expense of the person with a disability, reasonable modifications of existing premises occupied or to be occupied by such person if such modifications may be necessary to afford such person full enjoyment of the premises.

‘Violated, bullied’: HOA makes disabled Mt. Juliet, TN couple remove wheelchair ramp — Stephanie Langston | WKRN | 03/02/2023

Legislation

• Have some legislation for us to share?  Please let us know!

• View newly effective CIC-specific statutory requirements on our Legislation Page.

Please contact us if you’re aware of legislation to feature from YOUR state!