12.21.23

ISSUE # 81

CIC Info Bytes 12/21/23

CIC Info Bytes are frequent, succinct updates providing educational and engagement opportunities that help your community thrive!  Please forward and share this newsletter with your peers, neighbors and colleagues so they can connect and join.  Our goal is to curate content that provides a robust basis for contextual understanding to support practical takeaways for you and your association.  Please consider following us on Twitter and Reddit. 

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• Seriously naughty industry-double-speak from KPT law firm in North Carolina.  They should have left the CAI NC LAC message alone.

Want to send a message?  Email KPT attorneys and let them know your thoughts.

Dear KPT Attorneys,

Your most recent blog post is a head-scratcher.  Why does the industry you represent (that's the community association business industry helmed by CAI) consistently provide a false narrative about exactly who you represent?  Your HOA profit center revolves around protracted client engagement that comes from liens, litigation and foreclosure.

Given the excellent reporting by The Charlotte Observer and The Sun Sentinel, it appears that legislators not only listened to your input, but also acted on it.  Else, bills such as HB542 and HB311 wouldn't have been picked apart and subsequently relegated to yet another topical "review" committee. Why is telling the truth so difficult?  Do blog posts like yours inure homeowners to your cause and/or increase your business?

Attorneys like yourselves work from the sidelines while homeowners -- the folks paying assessments, fines and legal fees and even losing their homes (!) -- are firmly on the front line trying to make sense of the overly permissive regulatory environment that provides ample opportunity for predatory practices.  The community association business industry -- of which you are decidedly a part -- has proven it will stop at almost nothing to keep its profit going by shamelessly advocating for itself while claiming to represent the homeowners whose existence is reduced to a revenue stream ready to be maximized.  Claiming that you're being ignored by legislators evidences a lack of authenticity one might otherwise expect from a toddler.  The very least you can do is accept a modicum of responsibility for your role in CAI's business-centric advocacy that continues to sideline progressive homeowner-focused legislation.

• Actions speak louder than words, yet CAI continuously makes bizarre claims given its composition, day-to-day operations and overt, business-centric advocacy.  Those who engage and take a peek under the hood will discover that the LAC is dedicated to the outcomes CAI wants. 

Here’s the less than transparent reality about WSCAI’s LAC (that’s Washington State CAI’s Legislative Action Committee):

• There’s ONE token homeowner member.

• That individual attended a gathering of homeowner leaders in August 2023, admitted a lack of familiarity with the law and stated that the industry attorneys — that’s everyone else in the LAC — are “experts” who know what they’re doing.  This homeowner does not materially participate in committee debate or outcomes.

• From attorney Michael D. Brandt in January, 2022: 

“CAI believes crafting regulation should always take place in an open and transparent manner, providing the opportunity for comment by all interested parties.”

“The LAC meetings are not open meetings, given the time-sensitive and confidential nature of the discussions.”

• QUESTIONS?  Read the CAI Report Card.

Colorado Homeowners’ Rights Taskforce

• Next Meeting: January 2, 2024 @ 12pm Pacific Time

  • More details from the calendar widget on our homepage.

Colorado DORA HOA Homeowners' Rights' Task Force — October 24, 2023

Colorado DORA HOA Homeowners' Rights' Task Force — November 21, 2023

Colorado DORA HOA Homeowners' Rights' Task Force — December 20, 2023

Colorado DORA Notifications

Free Director Education

• Free, online training for all who sign up!  Canada can teach us all a lesson!  Director Training from the Condominium Authority of Ontario

Doing Battle with the Industry

• Remember coverage from The Sun Sentinel in Issue# 77 about the industry undermining reasonable reforms?  Where legislation goes to die:

House Bill 542 as originally drafted would have prevented HOAs from foreclosing on homes for debts of less than $2,500. This provision would have put North Carolina in line with several other states - including Georgia, California and Arizona - that have passed laws to prevent HOAs from foreclosing over tiny amounts.

A later version of the bill would have prohibited nonjudicial foreclosures, a relatively quick and easy way for HOAs to foreclose on homeowners. In nonjudicial foreclosures, HOAs get the approval to foreclose from a court clerk rather than a judge. 

After appeals from the HOA lobby, those provisions were stripped away. In July and August, leaders of the HOA industry “vigorously pursued improvements to the legislation to minimize the damage” the bill would have done to associations, the industry’s legislative action committee reported. 

The latest version of the bill no longer sets a minimum dollar amount for foreclosure and no longer bars nonjudicial foreclosures. But it would require HOAs to wait until an account is delinquent 180 days — twice the current waiting period — before moving to foreclose.

…The legislative action committee for the CAI’s North Carolina chapter has opposed even that pared-down iteration of the bill. After the Senate passed that version in September, the committee asked CAI members to urge House members to hold the bill for further study, the committee reported.

…The same thing happened to House Bill 311, homeowner advocates say. Its original version would have set up a division within the state attorney general’s office to oversee HOAs. But after lobbying by CAI, the HOA advocacy group, that provision was removed from the bill.

When North Carolina HOAs want to block or pass legislation, they often get their way — Ames Alexander | The Charlotte Observer | December 14, 2023

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The history of ongoing concerns with community associations is telling.  Here’s 300 pages of documentation (!) from a single legislative presentation in 2008.

Select Committee on Condominiums and Homeowners Association Governance Packet — Florida House of Representatives | February 9, 2008

Committed to What?

• The story of CAI in three screenshots.  Worth following.

  • Tom Skiba (CAI’s CEO) dines in Dubai at an extravagant educational conference

  •  while pledging that the industry will help avoid another Surfside (legal reforms requiring immediate full funding in Florida and Maryland are wrenching homeowners) and CAI boasts about “untapped revenue sources” for management companies. 

Fighting A Wayward Association

• A MUST READ story.

Jackson, a 49-year-old registered nurse, bought her one-bedroom condominium in 2007. For years, she said, she never failed to pay her HOA dues. 

Her ordeal began in July 2018 when she got a notice from her HOA, the 400 Queens Road Condominium Association, that the heating and air conditioning unit on the balcony of her fourth floor condo was dripping onto the balcony below hers, she said. 

An air conditioning contractor checked the unit and concluded it was working properly. A plumber hired by the HOA subsequently determined that the problem appeared to be in a copper drain line that the association was supposed to maintain at the 1960s-era complex, a January 2019 invoice from the plumber shows. 

But starting in October 2018, the HOA began fining Jackson $100 a day for having “improper drainage,” according to billing records. 

In March 2019, the HOA’s plumber fixed the problem. But for more than a month after that, the HOA’s $100-a-day fines continued for reasons Jackson doesn’t understand. The total eventually climbed above $18,000, the records show.

As fines over leak mounted, Charlotte HOA member fought back — Ames Alexander | The Charlotte Observer | December 14, 2023

Change is Coming

• Community association homeowners need reasonable remedies within reach.  Ontario’s CAT provides numerous examples evidencing the look and feel of reasonable remedies.

..Homeowners need accessible remedies when associations violate the law. Homeowners shouldn’t have to shell out for lawyers to hold boards accountable. The law should mandate electronic record keeping by HOAs, open to owners. It should provide for executive and judicial remedies to overcome willful nondisclosure and other misconduct by boards…

For NC homeowners, 2 important things are lacking in our state’s state HOA laws — Timothy Hinds | The Charlotte Observer | December 19, 2023

All I Want for Christmas

• The sign says it all.

My hoa has a rule that you can not park in your driveway. I had to buy a new car so it fits in my garage. I see another neighbor put up this sign (which I love) and I think we can get a lot of petitioners.

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That was a rule in our community when we first moved in, and like you, we had to purchase a new vehicle that fit in the garage. 

After a couple of years, there was a vote to change it, so we were allowed to park in our driveway, but they substituted it for not allowing street parking! This caused another set of issues. 

It was changed again to allow daytime parking on the street, but no overnight street parking. Those overnight hours were between 11 pm and 6 am. So then, we actually had a neighbor tell their guest to park in front of OUR house so WE would receive the violation letter even though it wasn’t our car! Thank goodness we had security cameras to prove it. 

All of this makes it really difficult to live peacefully. After nine years of living with chaos and uncertainty, not to mention selective enforcement, we FINALLY sold the home we loved.  Life is not supposed to be this difficult!

All I Want for Christmas — r/HOA | December 11, 2023 

Another Form of Fraud

• Pandemic PPP fraud was rampant.  Community associations are generally not SBA “qualifying small business concerns” and 99.99999% are not 501(c)(3)s.

…“Defendants knowingly told the SBA and participating lenders that they were qualified entities to receive PPP loans, even though they are all not-for-profit homeowners associations, condominium associations, or country clubs that do not qualify as qualified entities under Congress’s act, according to the lawsuit. “They also all knowingly misrepresented their need for these loans.”

Riner’s complaint also argues there was a good reason Congress excluded clubs —because unlike businesses struggling during the pandemic, associations can file property liens for members who don’t pay dues.

“Defendants’ members are particularly wealthy, often with net worth of tens of millions of dollars, and it would not have been a hardship to raise their assessments and/or dues and fees in order to continue operations even assuming the highly doubtful proposition that the pandemic represented a hardship on these defendants,” the suit contends…

Dozens of Florida country clubs and HOA's are being sued over alleged PPP fraud — Tony Winton  | WLRN | December 19, 2023

In a Pickle

• This article is revealing in several ways:

  • Challenges are relative.

  • There are apparently experts on pickleball noise.

  • Required alternative dispute resolution procedure: NJ § 46:8B-14(k)

The Pickleball Courts Outside Our Townhouse Are TOO LOUD! — Jill Terreri Ramos | NYT | December 09, 2023

Rigged Foreclosures

• Do you think thousands of dollars in attorneys fees are bad enough?  A business known as The Estates and its founder Craig Brooksby figured out how to profit by gaming the foreclosure process.

View more foreclosure coverage in Issues# 80, 78, 75, 74, 72 and 71.

..Lawyers who represent homeowners in such cases say HOA foreclosures are ripe for abuse because just about anyone with a few thousand dollars can become the high bidder on a house — and then try to take advantage of owners.

Many HOA foreclosure homes are sold for less than $10,000, Charlotte attorney James Galvin noted. And at that price, schemers can sometimes make a profit by persuading the original homeowner to pay them more than what they paid or bid for the house. 

“You can’t extract $100,000 from the typical homeowner,” Galvin said. “But you can extract $5,000 or $10,000 or $20,000”…

Deceit, rigged bids and extortion: How HOA foreclosures can open the door to predators — Ames Alexander | The Charlotte Observer | December 14, 2023

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In a first-of-its-kind investigation, the Charlotte Observer and The News & Observer found that HOAs here have filed to foreclose in more than 5,500 cases since 2018, against owners of houses, condominiums and time shares. In more than 600 cases, owners lost their property or time-share stakes.

Homes foreclosed by NC HOAs, sometimes for small debts — Ames Alexander and David Raynor | The Charlotte Observer | December 14, 2023

Can an HOA sell your home? What NC law says, and how to challenge foreclosures — Mary Ramsey | The Charlotte Observer | December 14, 2023

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Home foreclosures in the U.S. dropped last month, but financial experts don't expect the numbers to continue in that direction in the new year…

There were 32,120 U.S. properties at some point in the foreclosure process in November, down 7 percent from October, according to ATTOM, which compiles land, property and real estate data. Overall, completed foreclosures were down 32 percent from last year, with lenders repossessing 2,558 properties in November.

Some states had far higher foreclosure numbers than others. Delaware, Maryland and Ohio had the highest rates of completed foreclosures, while Bakersfield, California, and Cleveland, Ohio, were the two metropolitan areas with the highest rates…

The highest rates of foreclosure filings were in Texas, California and Florida, with each state having somewhere between 2,000 and 3,000. More than 20,000 properties started the foreclosure process in November, marking a 4 percent decline from last month but an 8 percent jump from a year ago…

Home Foreclosures Surge in These 3 States — Mary Ramsey | Newsweek | December 14, 2023

Hostile Takeover

• A long story.  More on takeovers in Issue# 80 and Forced Selling in Issue# 60.

At the Silver Coast Citadel, an investment group has control of the building. The owners who live there feel stuck…

South Shore Condo Owners Allege Hostile Takeover of Building — Emeline Posner | South Side Weekly | July 24, 2023

Waning Association Construction?

• Survey of Construction data for homes in community associations paints a decidedly different picture than US Census Bureau new home sales data.

Share of Homes Built in Community Associations Edges Down Again — Ashok Chaluvadi | Eye on Housing | December 07, 2023

Rage Against Assessments - II

• Also reference Issue# 80.  There's a fascinating psychological barrier to paying assessment increases related to a detailed budget vs. paying increased costs for everyday purchases within one's own household where there is often no budget or analysis about how groceries, as a pertinent example, cost significantly more than they did 3 years ago (reference inflation).

UPDATE: 105% increase in fees — _mahbloy | r/HOA | December 11, 2023

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A thoughtful article, BUT empathy is NOT a balancing factor for the realities of what it costs to operate your community association. The association is required to carry insurance and to provide certain services and to maintain, repair and replace the common elements, etc.  Those requirements should drive the budget.

PERHAPS empathy is a way of framing an approach to communicating changes in the budget or to considering how to fund an expensive project (perhaps offering an amortized long-term loan option instead of an up front payment), but that seems like empathy's upper limit.  Empathy is perhaps best summarized by "I'm a member, too.  My assessments are increasing along with everyone else."

"It’s about ensuring the financial stability of the association while empathetically considering the community's needs and capabilities."

Raising HOA Dues: A Balanced and Fair Approach — Jessica Allen | Neighborhood.Online | November 14, 2023

Capital Improvement III

• The Board at Renaissance on Turtle Creek got more than they bargained for after pursuing a $9,000,000 capital improvement to buy an adjacent lot.  View Issue# 73 & 71.

Over 150 condominium owners are calling for the removal of the owners association board of one of Dallas’ largest condo complexes after its directors bid millions on a next door property without the approval or knowledge of many owners.

In an August 15 letter obtained by The Dallas Morning News, an attorney from Riddle & Williams P.C., a firm retained by two owners fed up with the condo’s board, notified the board and property management that 156 owners, 26.2% of the complex, signed a petition to hold a special meeting to remove the board. The letter said owners will vote to remove each board member individually during an upcoming meeting, once all signatures are verified and a date is set.

“The stated purpose of the Special Meeting is for the removal of Board members,” Attorney Julie Dupont wrote in the letter. “This vote could potentially lead to the removal of all or a majority of the Board.”...

One of Dallas’ largest condo boards faces removal vote; bid on property at issue — Jason Beeferman | The Dallas Morning News | August 21, 2023

Infrastructure Woes

• Brentwood, Missouri:

…An inspection revealed a building containing units 1561 to 1575 on Swallow Drive was not safe. Residents said they received a letter around 3 Tuesday afternoon and had to be gone by 6 that evening. 

The letter came from the community manager, on behalf of Brentwood Forest Condominium Association and Community Property Management, which took over the property this year.

The letter said there were plumbing issues at the building a couple of weeks ago and there were cracks in the back foundation wall of the building…

Residents at Brentwood condo complex vacated with sudden notice — Justina Coronel | KSDK | October 19, 2023

My tenant had to sleep in his car after his condo association abruptly kicked him out… — Emma Crabtree | The US Sun | October 26, 2023

Condominium “Blacklist” Availability

• Individual associations will gain access to their list  status in 2024.

A little over a month after the Globe published a story about the Federal National Mortgage Association‘s condominium blacklist, the mortgage purchasing giant also known as “Fannie Mae” announced Thursday that it will make its secret “Condo Unavailable Projects and Phases Report” public. 

Previously, the information was available only to lenders, who were sent a spreadsheet with the header: “Fannie Mae Confidential and Proprietary — Subject to Non-Disclosure Obligations.”...

Fannie Mae to make its secret condo blacklist public

— Jim Morrison | The Boston Globe | December 07, 2023

2023 Legal Profile

• Certain rural and other communities are underserved + so much more:

2023 Profile of the Legal Profession — American Bar Association | November 30, 2023

Canada is leaning from the past to help protect the future:

[The Canadian]  government is moving forward with a catalog of pre-approved home designs to reduce the cost and time it takes to build housing. The idea dates back to the 1940s when thousands of soldiers returned from the Second World War and needed a place to live.

“We are living in a housing crisis, but it’s not the first time Canada’s been here,” said Housing Minister Sean Fraser at a news conference on Tuesday.

…The new program will differ from the wartime strategy in some key ways, however…Fraser said his government is seeking designs that add density, such as multiplexes, mid-rises, seniors’ homes, student housing, garden suites and lane-way homes. The catalog will feature multiple designs in each category to give communities flexibility…

Canada Revives Wartime Home Strategy to Address Housing Crisis — Laura Dhillon Kane | Bloomberg | December 12, 2023

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Homelessness is an American tragedy, but it’s not hopeless. In a recent column, I explored how Houston has become a national model by reducing homelessness by more than 60 percent.

One takeaway is that homelessness, above all, reflects a shortage of cheap housing. So I’m intrigued by an approach to providing such housing that’s gaining ground around the country. It’s an idea so old, it seems new: converting single-family houses to rooming houses.

Rooming houses, boardinghouses or single room occupancy (S.R.O.) hotels used to be ubiquitous. President Thomas Jefferson stayed in a boardinghouse for several months before moving into the White House. At the seedier end, S.R.O.s largely disappeared over the past half-century, partly because of zoning and economic development projects…

The Old New Way to Provide Cheap Housing — Nicholas Kristof | NYT | December 09, 2023

• Flood insurance

Congress created the National Flood Insurance Program in 1968 as a way for the federal government to bear a risk that private companies wouldn’t. Since then, Uncle Sam has backed the vast majority of flood insurance policies in the United States.

Yet it is impossible to buy or renew such plans directly with the Federal Emergency Management Agency, or FEMA, which administers the program. Instead, the government relies upon a network of private companies to sell and service its policies — and hands them nearly one-third of the premiums the program brings in. Lately, that’s come to almost $1 billion a year.

There's a Billion-Dollar Industry Between You and FEMA’s Flood Insurance — Tik Root | Gizmodo | December 12, 2023

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California is learning that property insurance isn’t a one-way street.

When he campaigned to be California’s insurance commissioner, Ricardo Lara warned about the risk of climate change. Insurers agreed, so they tried to jack up rates and cut back on coverage.

When Lara blocked their rate increases, insurers, including Allstate, State Farm and Farmers Insurance, stopped or restricted new home-insurance business. That put Lara in the middle of the biggest insurance crisis in the country.

“For many Californians, this is an insurance emergency,” Lara told state legislators this week. 

…With his pledge to “defend all Californians from the threat of climate change” seemingly in tatters, the 49-year-old regulator is trying to make deals to bring insurers back to the state. 

The Man at the Center of America’s Biggest Insurance Crisis — Jean Eaglesham | WSJ | December 15, 2023

Seeing is believing.  Climate change is real and it’s causing chaos.

Climate Abandonment Areas Webinar Recording | Climate Abandonment Areas Slide Deck — First Street Foundation | December 19, 2023

• Putting home ownership in perspective:

...Before the Fed started raising rates, a person with a monthly housing budget of $2,000 could have bought a home valued at more than $400,000. Today, that same buyer would need to find a home valued at $295,000 or less…

The Math for Buying a Home No Longer Works. These Charts Show You Why. — Gina Heeb | WSJ | December 11, 2023

…To date, 240 contracts have been signed in the city for homes priced $10 million or more; last year, there were 235, according to data compiled by the broker Donna Olshan, who publishes a weekly luxury market report. “This year just shows you that the rich are still very rich,” Olshan says. 

And all of them, except for a townhouse on East 71st Street, according to Olshan’s data, were condos. “It’s the same old story,” Olshan says. “Uber-luxury condos sell, and they just stay above the pack.”

Co-op sales this year were nowhere near the top of the market; they make an appearance only as the 25th entry on Olshan’s list. Rich buyers’ preference for condominiums over co-ops is “not part of a cycle,” she says. “Co-ops have been on the decline for quite some time, which is not to say they’re not beautiful—they are, and many have some of the best architecture ever built,” she continues. “But the shareholders [of co-ops] are suffering. They accept lower-than-true-market value for the privilege of being in a dysfunctional club.”...

The 10 Priciest NYC Home Sales Show Market Doing 'Pretty Darn Well' — James Tarmy | Bloomberg | December 19, 2023

Built Environment

• Commercial real estate isn’t the only sector in trouble…

When it comes to commercial real estate, a lot of attention is obviously paid to offices. But it's not the only sector facing strains. Apartment buildings — or multifamily residential — may also be in for trouble. For years, rates were falling and rents were rising, and owning and operating apartments was a moneymaker. Then things went into overdrive with the pandemic, thanks to plunging rates, surging rents and an explosion in new household formation. But all of that is reversing. Rates have surged. Insurance costs have surged. Operating costs have surged. The household formation boom didn't last. And in some areas of the country — particular in some Sun Belt markets — rents are actually falling.

Why Multifamily Is the Next Stress Point in Commercial Real Estate — Tracy Alloway, Joe Weisenthal, and Aashna Shah | Bloomberg | December 07, 2023

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South Africa has around 70,000 community associations accounting for “27% of the total value of residential property in South Africa”.  Wow!

“Many trustees have not even begun to comprehend the legal implications of being a trustee. In other words – the personal liability for your work as a trustee is great. Many have not gone to explore that.

“Sometimes when I have to make findings in terms of an adjudication, I find myself having to tweak an order in such a way that my explanation for getting to the order does not result in somebody following further on that order by taking legal action against a trustee, because it can easily happen.

“The implications of your conduct as a trustee are immense to you personally, and many don’t think seriously about that”...

Warning for trustees in complexes and homeowners associations in South Africa — BusinessTech | August 19, 2023

Inflation and Monetary Policy

• The US Fed holds rates steady and signals a series of potential rate cuts in 2024:

The Federal Reserve pivoted toward reversing the steepest interest-rate hikes in a generation after containing an inflation surge so far without a recession or a significant cost to employment.

While Chair Jerome Powell said Wednesday policymakers are prepared to resume rate increases should price pressures return, he and his colleagues issued forecasts showing that a series of cuts would be likely next year. Powell said the topic came up at their meeting, where the Fed decided to keep rates at a 22-year high for a third straight time.

Moreover, Powell’s lack of pushback during his press conference against growing investor expectations for 2024 rate cuts helped spark a massive rally in Treasuries and sent the Dow Jones Industrial Average of stocks to a record high…

Fed Pivots to Interest Rate Cuts in 2024 as Inflation Heads Toward 2% Goal — Craig Torres and Catarina Saraiva | Bloomberg | December 13, 2023

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US consumers’ near-term inflation expectations dropped in November to the lowest level since April 2021, according to a Federal Reserve Bank of New York survey released Monday.

Median year-ahead inflation expectations declined for a second month to 3.4%, down from 3.6% in October. Expectations for what inflation will be at the three-year and five-year horizon held steady at 3% and 2.7%, respectively. 

Inflation Expectations for Year Ahead Drop to Lowest Since April 2021 — Alexandre Tanzi | Bloomberg | December 11, 2023

Nacional de La Plata, Argentina, in 2001 when a debt crisis prompted default, riots and a devastating depression. A dazed middle class suffered ruin, as the International Monetary Fund insisted that the government make misery-inducing budget cuts in exchange for a bailout.

Watching Argentina unravel inspired Mr. Guzman to switch majors and study economics. Nearly two decades later, when the government was again bankrupt, it was Mr. Guzman as finance minister who negotiated with I.M.F. officials to restructure a $44 billion debt, the result of an earlier ill-conceived bailout.

Today he is one of a number of prominent economists and world leaders who argue that the ambitious framework created at the end of World War II to safeguard economic growth and stability, with the I.M.F. and World Bank as its pillars, is failing in its mission….

The Debt Problem Is Enormous. Experts Say the System for Fixing It Is Broken — Patricia Cohen | NYT | December 16,  2023

Cashing In

• American households hold just under $18 trillion in liquid assets, which includes cash deposits, representing an astounding increase from the $10 trillion level in 2013. Consumers added $5 trillion in liquid assets in 2020 alone…

US households are now sitting on an 'unprecedented' $18 trillion in liquid assets — Matthew Fox | Insider | December 12, 2023

Shameless

• A somewhat common refrain from homeowners centers on a lack of understanding the conventions of civil procedure.  Put simply, facts are not enough.  The legal profession would be in serious jeopardy if litigants could present a trove of evidence without wrapping it in a blanket of procedural pomp and circumstance.

One of the things I thought about a lot when I was reading the briefs is that there’s this asymmetry here.  Investigative reporters can dig up the real facts of a case and expose the lies. 

BUT there are all of these norms and conventions around how we litigate cases and how the court deals with cases.  And the idea that one of the justices would, during oral arguments, say, “Hmm, Mr. Grossman, everything you’re saying is a lie”—that would never happen. 

So, there’s a strange way in which we have to deal with the facts as they are briefed, not as journalism reveals them to be true. The real facts don’t penetrate the chamber.

Oops! The Supreme Court Heard Another Case Built on Shameless Lies. — Dahlia Lithwick and Joseph Stern | Slate | December 11, 2023

Disciplinary Action

• California Civil Code § 5855 requires  specific procedures before the imposition of disciplinary action.  North Carolina, Virginia and other states also have explicit due process requirements.

Holiday Spirit

• Recall the (Un)Boxed post/poll from May 2023?  Changing policy to initiate a $75 initial offense penalty for failing to crush and flatten boxes instead of a warning yielded 2024 garbage and recycling anticipated savings of $10,000.  Get into the spirit!

• While economists have proven that restrictive covenants DO NOT "maintain property values", some rules, like crushing cardboard boxes, can have a measurable bottom line benefit to your community association. 

$500 Poolside Sandwich

• What would your association do in this situation?  View the thread on r/HOA.

...The story of Rubin's brother's $500 sandwich illustrates the power a homeowners association wields, sometimes in ways that irk its residents.

Rubin doesn’t dispute that the pool regulations at her building, Commonwealth Plaza on Diversey Avenue, stipulate that no food is allowed, or that as they entered the pool deck, she and her brother passed a sign that reiterates the rule.

“What’s preposterous,” Rubin says, is that “they went straight to the $500 fine, with no warnings.” Rubin, a semi-retired reporter who spent 25 years at the Chicago Tribune, checked with 10 condo buildings and found that in every one, “there’s a series of warnings before you ever get fined, whether it’s for eating by the pool, smoking weed in the halls or playing loud music.”

Rubin appealed the fine at a Nov. 21 meeting of the Homeowners Association board and a week later received a reply that the board was holding firm. “No negotiation, no reduced fine,” Rubin says. She was able to set up a payment plan, $50 a month for 10 months, beginning with the new year...

HOA fines condo resident over a sandwich — Dennis Rodkin | Crain's Chicago Business | December 19, 2023

SHOULD monetary penalties have limits?  Members of this association think so: 

Reasonable AND Foreseeable

• In Arizona, amendments to the declaration / CC&Rs can only be properly adopted if they are 1) reasonable and foreseeable -OR- 2) adopted by 100% of the members.  Also see Limits of Amendment Authority in Issue# 22.

To determine whether the original CC&Rs give sufficient notice the court will “apply an objective inquiry” to determine whether the amendment was within “a homeowner’s reasonable expectations” based on the language of the original CC&Rs. 

A general amendment provision in the original CC&Rs, with nothing more, cannot provide proper notice. 

The original CC&Rs need not “give notice of the particular details of a future amendment,” but must provide “notice that a restrictive or affirmative covenant exists and that the covenant can be amended to refine it, correct an error, fill in a gap, or change it in a particular way.” 

An amendment cannot be “entirely new and different in character.” “[A]ny doubts [are] resolved against the validity of a restriction.”

An HOA Amendment that was not Reasonably Foreseeable under the Original Declaration may not be Enforceable Without the Consent of 100% of the Owners

— Daniel Miske | Association Alert | June 20, 2023

Want to Serve on the Board?  Get Educated!

• Education is essential, yet only required in Montgomery County, Maryland and Ontario, Canada.

Governing a residential Owners Association is a business, not a social function. Condominium and Homeowners Associations are corporations structured similarly to well-known public and private companies in which the Board of Directors has specific responsibilities and obligations.

Your Board is an elected group of owners responsible for making decisions which protect the interests of the Association as a whole.

Holding such a position of trust and responsibility requires specialized education and training to competently fulfill the duties attached to being a Director of the Association…

The 1st Step in becoming an association board member? Education — Christopher Carter | Islander News | October 4, 2023

Government Sponsored Mediation

• Lacey, Washington is making strides.

Lacey City Council on Thursday voted to expand and extend a contract the city has with the Dispute Resolution Center of Thurston County, an organization that offers mediation services. 

The original contract between the city and DRC was created to address disputes between landlords and tenants. But after members of two homeowners’ associations, including the 127-home Aldea Glen HOA, recently came to the city with concerns, the council weighed whether to offer HOAs mediation services, too. 

“It makes a lot of sense to open this up to HOAs,” said Lacey Mayor Andy Ryder. Complaints about HOAs include a perceived abuse of power, lack of transparency and general dysfunction, according to comments shared by city staff during the meeting…

Frustrated with your homeowners' association? Lacey produces a possible solution — Rolf Boone | The Olympian | December 15, 2023

Observe All Posted Signs & Placards

• An increasing number of municipalities have tree ordinances and community associations are regulated businesses that must observe the entire governance hierarchy: federal and state laws, municipal (county, city and/or township) ordinances, and governing documents.  Don’t forget common sense (and don’t substitute what you think is common sense for written requirements).

…The Jungle Den Villas Recreation Association voted to cut the tree down, Adams said.

So Adams hired Above the Rest Tree Service to do the job. He said the owner of the company, Jeff McAfee, assured him he didn't need a permit and only needed an arborist report.

Adams said he believes the county should penalize the tree service company instead of having property owners foot the bill.  As for the county's replacement costs, Adams said, "They're more vigilantes than they are environmentalists."

McAfee said the customer is responsible for permitting, which is noted in the agreement provided to Adams. He said in working with residential properties, getting an arborist to assess the tree before removing it is usually sufficient. But he said he didn't say a permit wasn't necessary.

Lack of a tree-cutting permit could cost Astor condo association more than $20,000 — Sheldon Gardner | The Daytona Beach News-Journal | May 08, 2023

Trading Control for Assessments

• Q&A about abandoning association status to eliminate assessments (and control) and subsequently pay more property tax.

We live in a Chicago suburb in a community with 26 single-family homes. The town that we live in has told us that we could turn over responsibility for the two retention ponds that we have to the town and get rid of our HOA. They did mention that this would raise our property taxes, but then we would have no HOA fees.

This is probably harder to do with a townhouse development, but it is just a thought…

Residents in some areas could benefit from trading HOA costs for an increased tax bill — Baltimore Sun | November 30, 2023

Conflict of Interest

• The Board president is also a paid consultant to the management company of the HOA and master association.  The rub: when is a conflict illegal vs. problematic?

Conflict of interest or business as usual? Resident questions HOA president's multiple jobs — Ryan Poliakoff | The Palm Beach Post | October 08, 2023

Shuttered

• Can an association require individual units to install hurricane shutters at their own expense?  Only if the declaration allows it.  The declaration can only be amended by a vote of the members.

Can association force lone holdout in building to get hurricane shutters? — Ryan Poliakoff | The Palm Beach Post | September 17, 2023

Remedies for Civil Concerns?

• What happens when the association doesn’t perform an audit or hold an election?  Escalate!

What can residents do when the HOA or condo board hasn't posted audit or held elections? — Ryan Poliakoff | The Palm Beach Post | July 02, 2023

Remedies for Crimes Committed?

• Florida’s HB919 is a start to addressing criminal acts that plague the civil realm.

What Legal Remedies May Be Available to Condominium Associations When Criminal Conduct is Committed? — Adams and Reese | September 27, 2023

Forced Servitude

• Can your association require Board volunteers to work?  Only to the extent required by your governing documents and as allowed by state law.  Plus additional Q&A.

QUESTION: I am a new Board member of a condo association. First, on the day I was elected I was told I must work in the office one day a week from 9 a.m. to 12 p.m. I told them I would not be doing so, but offered alternative ways of contributing. A couple of days ago I was told Board members must serve as “Block Captains” and today at a meeting there was a Board vote on that. I am a volunteer, elected by members. Can the Board require Board members to work (outside of typical duties of attending meetings and voting)? --B.C., New Port Richey

ANSWER: Simply put, the answer is No. The Board cannot mandate that directors work in the office or serve in other capacities in order to serve on the Board. With that said, it is typical for directors to serve on committees and perform other functions outside of attending Board meetings, but you cannot be forced to do so.

Can Board members be required to work outside of attending meetings and voting? — Richard D. DeBoest | TC Palm | September 02, 2023

“Whose loss is it anyway?”

• “Whose loss is it anyway?” depends on your state statutes and declaration / CC&Rs which we discuss in more detail on the Condo Connection Insurance Page.  There are three different questions and answers in the article below.  Enjoy!

Condo association is responsible for damage caused by a burst water pipe — Howard Dakoff | Chicago Tribune | February 12, 2023

Got DORA?

• Colorado has DORA, the Department of Regulatory Affairs.  Colorado DORA Public Policy Prohibitions Slide Deck — November 17, 2023 

• California: Plenty to read in California’s AB1764 + 2023 Legal Update and Case Law Review provides a nice summary.

• Florida: Obligatory community donations!  House Bill 173 seems like an odd duckling.

• Washington: The big one: SB5796.