06.06.24
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ISSUE # 92
CIC Info Bytes 06/06/24
CIC Info Bytes are frequent, succinct updates providing educational and engagement opportunities that help your community thrive! Please forward and share this newsletter with your peers, neighbors and colleagues so they can connect and join. Our goal is to curate content that provides a robust basis for contextual understanding to support practical takeaways for you and your association. Please consider following us on Twitter and Reddit.
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EVENTS
Visit our homepage to view events and add them to your own calendar.
The Financial Impact of Shifting Hurricanes Patterns: Wednesday, June 12 @ 7am Pacific
Colorado’s DORA has informative events nearly every month.
You may recall the Colorado Department of Regulatory Agencies (DORA) survey we highlighted earlier this year. It’s not exactly “big” in the grand scheme of datasets, but more so in terms of community association surveys. In any case, the final results are in. Here’s a summary of the most significant concerns and complaints from the survey:
HOA Board Concerns
Lack of communication and transparency: This includes failure to share financial information, lack of notice for meetings, and general unresponsiveness to homeowner inquiries.
Selective enforcement of rules and policies: Homeowners perceive unfair treatment, with rules applied differently to different owners.
Failure to follow governing documents and state laws: Boards accused of not adhering to bylaws, CCIOAs, and other regulations, leading to homeowner frustration and legal disputes.
Board member competence and behavior: Concerns about board members' qualifications, lack of understanding of HOA operations, and unprofessional conduct, such as bullying and harassment.
Financial mismanagement: This includes improper use of funds, inadequate reserve funding, and failure to provide budgets or explain fee increases.
Lack of homeowner input and voice: Homeowners feel excluded from decision-making processes and that their concerns are not heard or addressed.
HOA Management Company Concerns
Poor communication and responsiveness: Management companies are often unresponsive to homeowner inquiries and fail to provide timely updates or information.
Lack of knowledge and competence: Homeowners question the qualifications and abilities of management company staff, citing lack of understanding of governing documents and state laws.
Failure to perform duties and enforce rules: Management companies are accused of neglecting maintenance, not enforcing covenants, and mishandling paperwork.
Other Concerns
Rising costs of insurance and services: Homeowners are frustrated with increasing HOA fees and special assessments, often attributed to rising insurance premiums and other costs.
State legislation impacts: Some homeowners feel that recent state laws have made HOA operations more difficult and costly, while others appreciate the increased homeowner protections.
Difficulty resolving disputes: Homeowners find it challenging to address grievances with their HOAs, often resorting to legal action due to lack of alternative dispute resolution mechanisms.
These concerns highlight the need for improved communication, transparency, and accountability within HOAs, as well as potential areas for legislative and regulatory reform.
— Colorado DORA DRE Survey Data from August 2023 through March 2024
If you’re already familiar with our State Statute Matrix, what you see below is its big brother.
We’re enlisting anyone willing to lend a hand to help complete this concept-specific matrix for every state.
Trials and Tribulations of a Volunteer Director - Part XVII
View Parts I, II, III, IV, V, VI, VII, VIII, IX, X, XI, XII, XIII, XIV, XV and XVI. We ran out of time to include our Trials and Tribulations mini-blog in this issue.
There’s extensive (and expensive!) building science for condominiums.
There’s a popular bit of folk wisdom that when you’re approaching something new you should hope for the best, prepare for the worst. When it comes to buying a condominium, a new book may give you a whole new list of things you didn’t even know to be prepared for.
For instance, did you know that some super-tall high-rise buildings are subject to such high wind pressures that they can force rainwater through even tiny flaws in the waterproofing of exterior walls?...
…The book makes you ask questions like “How much do I know about my parking garage?”...
…“A condominium building is intended to be renewed almost in perpetuity, almost as if in suspended animation, neither improving significantly nor degrading significantly,” says Ms. Thompson…
…“Fee increases at a rate above inflation are the nature of the beast, especially for the first 20 years of the life of the condo,” she says in the book…
New book gives harsh lessons on the realities of condo ownership — Shane Dingman | The Globe and Mail | June 06, 2024
New York, New York: The lawsuit at 432 Park, a slim, supertall 125 unit condominium property completed in 2015, is old news, but new analysis reveals that lawsuits like this one hurt property sales.
…In a 2021 lawsuit, the condominium board alleged that the 125-unit building represented one of the worst examples of developer malfeasance in the history of New York City, with noise issues, leaks and malfunctioning elevators. The developers denied most of the allegations and called the suit “an effort to wrest unwarranted payments.”
The suit is ongoing, and as of March, at least 45 days of deposition testimony had been given by some 28 different witnesses in the dispute, with more than 4 million pages of documents produced, court filings show.
Since it became public, the litigation has had a tangible impact on sales activity and prices…Since news of the dispute broke in February 2021, 11 deals have closed at 432 Park. On average, those deals closed for 3.7% less than what the sellers originally paid for their units, and for those publicly listed, a discount of 27.4% from the highest asking price, property records show. (The Journal’s analysis excluded staff apartments sold individually and units sold to the building’s developers.)
NYC Courts: Board of Mgrs. of the 432 Park Condominium v 56th & Park (NY) Owner, LLC
2023 NY Slip Op 31873(U) | 2024 NY Slip Op 02865
A Mega-Lawsuit, a Rush of Listings and Price Cuts Galore: What's Going on at 432 Park? — Katherine Clarke | WSJ | May 29, 2024
NYC Supertall Tower Condo Board Sues Over Alleged Construction, Design 'Defects' — James Leggate | ENR New York | September 29, 2021
CIM Group Respond to Allegations at 432 Park Ave — Sasha Jones | The RealDeal | December 22, 2021
Columbia, South Carolina: The Hulon Greene Homeowners Association is discovering just how expensive elevators can be to maintain, repair and modernize. We calculated elevator modernization costs based on information from 5 different Seattle condominiums in 2021 and 2022 and discovered that the average cost per landing was over $18,000 with a cost per cab that varied from $258,000 to $450,000.
“After the multiple failed attempts to repair the elevator, the condominium board and Hulon Greene’s Board of Directors have revaluated the situation and taken the position that only a $120,000 modernization of the elevator will resolve the issue,” the HOA statement said.
HOA says single elevator at senior living community will cost $120K to fix — Jalen Tart | WIS10 | May 30, 2024
Portsmouth, Virginia: Utilities Uff-Da! from Issue #70 just keeps growing.
For now, the water will not be cut off to some 240 condo units at Charlestowne Condominiums on Greenwood Drive in Portsmouth.
The city confirms the complex has a $969,222.14 delinquent water bill. Money to pay the bill is supposed to come from the monthly homeowners' fees paid by each unit's owner.
"Somebody got that money, somebody got that money — it ain't like the people aren't out here paying. Somebody's got that money," said one resident, who didn't want to be identified.
The problem isn't new. In 2014, 13News Now reported that 200 Charlestowne residents could be forced from their homes over a delinquent $34,000 bill. It has only grown worse over the years…
Portsmouth condo assoc. didn't use HOA dues to pay naearly $1M in water bills — Janet Roach | 13 News Now | May 29, 2024
Some HOAs tow cars out of private driveways.
VIDEO: woke up thinking somebody stole my car and no…it was the HOA — Dystanee Brooks | TikTok | May 11, 2024
Know Before You Buy
Colorado DORA: Conducting Due Diligence Before Signing a Contract to Buy Real Property
Brandon, Florida: 16 units in one building at the Russellwood Condominium Association were heavily damaged and/or destroyed.
VIDEO: Two-alarm fire engulfs Brandon condominium complex — Julie Salomone | WFTS | May 31, 2024
Miami, Florida: The Hemingway Villa Condominium Association.
Miami-Dade Fire Rescue paramedics took 22 people to local hospitals early Tuesday morning after a water heater leaked carbon monoxide through a West Miami-Dade condo building, sending people into the street in the predawn hours to avoid the deadly gas fumes.
More than 60 people were checked at the Hemingway Villa Condominiums, 9375 SW 40th Terrace, after the 4:44 a.m. call, according to Miami-Dade Fire Rescue. “Fire crews, including HazMat, began assessing those feeling unwell as a result of a gas leak and carbon monoxide exposure, and started triage for treatment,” fire rescue said…
Carbon monoxide hospitalizes 22 condo residents, fire rescue says. A gas boiler leaked
— David J. Neal, David Goodhue and Milena Malaver | Miami Herald | June 04, 2024
Insurance companies are telling Colorado community associations to eliminate “open flame devices” such as gas grills. Also see Butt Out in Issue# 82 and Fire Risk in Issue# 78. Grilling on decks is left up to the AHJ in many states. Read more about FIRE on our Emergency Preparedness page.
The Marshall fire was “Pearl Harbor” in the insurance world.
…If associations don’t make rules banning the use of gas grills, they face premiums 10 to 30 times higher than what they pay now…
VIDEO: Ban on gas grills rolling through Colorado mountain HOAs — Brian Maass | CBS Colorado | May 27, 2024
This is unfortunate…
Neighbors of a Long Beach condominium complex are at a loss of how to fix their horrible living situation, all because of one man, a resident who owns and lives in one of the Gladys Avenue condos.
Over the last year, the Long Beach police have responded so many times, that neighbors say they are regulars to the complex.
The man's violence is captured on surveillance video, as he smashes car windows and condo windows and neighbors feel it is fueled by drug use. Even the windows of his own home are smashed out…
Long Beach condominium complex neighbors terrorized and terrified of window-smashing resident — Laurie Perez | CBS Los Angeles | April 06, 2024
Aurora, Colorado: Stolen funds.
A property management company has filed for bankruptcy after a judge determined that its owner stole $700,000 from a homeowners’ association in Aurora and spent the ill-gotten gains on a Lincoln, a Louis Vuitton, a stay at the Ritz-Carlton and other frivolities.
Mastino Management, in Parker, filed for Chapter 11 on May 15. Its co-owner, Kim Bacon, who was found to have orchestrated the theft in Aurora, also filed for bankruptcy that day….
…About $1.4 million in homeowner assessments went into Mastino’s bank account between May 2018 and August 2020 but only $728,000 was transferred to Traditions’ operating account or spent on Traditions expenses, according to Leutwyler’s verdict last month.
The rest was stolen, he determined. According to Bacon’s own testimony, it was spent on a Lincoln SUV, a Louis Vuitton bag, mortgage payments, payroll, health insurance, restaurant bills, grocery bills, clothes, beauty supplies and home improvements.
The balance in Traditions’ bank account when Mastino was fired was negative 51 cents. Board President Ken Haldeman testified that Traditions was “so close to insolvency” that “it was no joke.” The HOA had unpaid bills dating back to 2018 and no money to pay them…
Property manager bankrupt after stealing $700K from Aurora HOA — Justin Wingerter | BusinessDen | May 23, 2024
Colorado: Crystal Lakes HOA. Two employees at this HOA are now unionized apparently because mailing letters counts as “interstate commerce.”
…The NLRB Regional Director ruled that the board has a precedent of determining HOAs to be employers “as long as they take in more than $500,000 in annual gross revenue and participate in interstate commerce to a non-negligible degree.”
IAM Western Territory Grand Lodge Representative Jason Hardwick was able to help prove that Crystal Lakes was qualified as an employer because the association takes in over $1 million per year and spent more than a thousand dollars on postage last year…
NLRB Ruling, Union Election for Colorado Homeowners Association Workers — IAMAW | May 23, 2024
The resale certificate said there was no current or pending litigation. This relates to the legal fees lawsuit from our prior issue. It took over 14 months since the lawsuit was filed to fix the resale forms…
VIDEO: Management company of Power Ranch HOA accused of lying to home buyers — Jason Barry | Arizona’s Family | May 23, 2024
Greensboro, North Carolina: The pool, the tennis court and the parking lot look distressed. $240/month x 250 units is $720,000 in annual assessments.
James Joyce walks out of his condominium, strolls across the parking lot, and shows us where he parks. The asphalt has eroded in several areas. Joyce brushes his foot on the ground, and you can see tiny pieces of gravel and sand pop up.
“Out there where I park my truck there isn’t (any) pavement, when rains it's mud,” Joyce said.
The asphalt parking lot is cracked in several sections, potholes are popping up all over and many of the parking lot lines are faded to the point it’s tough to tell where to park.
“It’s bad, it’s deteriorating, pebbles pop up, it needs repaving big time,” Jennifer Dorsett said.
Joyce has lived at the complex for 37 years, he tells WFMY News 2, that he has never seen the complex look this bad…
VIDEO: Residents at a Greensboro condominium complex ask; Where's the money going? — Kevin Kennedy | WFMY | May 24, 2024
What a nuanced case. 2023-00125R CAT Decision issued March 13, 2024
The Condominium Authority of Ontario’s tribunal powers (the CAT) and enforcement actions are incredibly refreshing.
Coverage: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 and 36
Energy
We last covered gravity batteries in Issue #64, but they weren’t being added to buildings where people live and work.
The architecture firm that designed the world’s tallest building is considering ways to build skyscrapers that can store energy using gravity.
Skidmore, Owings & Merrill LLP has developed a series of prototype designs that use electric motors to elevate massive blocks, creating potential energy that can be converted into electricity when the blocks are lowered. The designs are based on technology developed by partner Energy Vault Holdings Inc. as an alternative to lithium-ion batteries and other types of chemical cells. They are seeking developer partners interested in offsetting greenhouse gas pollution from buildings, which the United Nations estimates are responsible for almost 40% of global emissions…
Chicago-Based Architectural Firm Looks to Turn to Buildings Into Batteries — Will Wade | Bloomberg | May 30, 2024
Energy Vault Concept Video Snippet
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There's a lot of interest in the electricity grid these days because we're in the midst of this big decarbonization push and the hope is that the existing infrastructure, which came up in a world of big centralized power plants (gas, coal, and to some extent nuclear) can work for clean forms of energy (sun, wind, and to some extent nuclear).
Yesterday on the Odd Lots podcast, we talked to author and professor Brett Christophers on whether we’re doing decarbonization the wrong way. On today's show, we have a part II of sorts, with Syracuse professor Matt Huber and the pseudonymous energy writer Fred Stafford. Take a listen to Matt and Fred and find the episodes on Apple, Spotify or elsewhere.
Their argument is that nuclear “worked” as an economical source of energy in a time when power utilities were understood as big, publicly-supported infrastructure. In a world where we try to shove “markets” into natural monopolies, which grids are, then the economics work against nuclear. There are gigantic upfront costs, but they can't compete well with intermittent forms of energy like wind and solar, which can occasionally provide virtually free energy.
In other words, if you want more nuclear, then the argument is that we need fewer market mechanisms in the grid design itself. More public ownership. More thinking of the grid as a true public utility, like the highway system. Their argument is spelled out more at Damage Magazine…
— Joe Wiesenthal | Bloomberg 5 Things to Start Your Day | May 30, 2024
Odd Lots: Are We Doing Decarbonization Totally the Wrong Way?
The Cost of Net Zero
The UNaffordability of nuclear power is a significant hurdle.
The United States used to build nuclear-power plants affordably. To meet our climate goals, we’ll need to learn how to do it again…
Nuclear energy occupies a strange place in the American psyche—representing at once a dream of endless emissions-free power and a nightmare of catastrophic meltdowns and radioactive waste. The more prosaic downside is that new plants are extremely expensive: America’s most recent attempt to build a nuclear facility, in Georgia, was supposed to be completed in four years for $14 billion. Instead it took more than 10 years and had a final price tag of $35 billion—about 10 times the cost of a natural-gas plant with the same energy output.
But the United States might not have the luxury of treating nuclear energy as a lost cause: The Department of Energy estimates that the country must triple its nuclear-power output by 2050 to be on track for its climate targets. For all the recent progress in wind and solar energy, renewables on their own almost certainly won’t be enough. Arguably, then, we have no choice but to figure out how to build nuclear plants affordably again…
…The 94 nuclear reactors operating in the United States today are based on more than 50 different designs. In countries such as France and South Korea, by contrast, public utilities coalesced around a handful of reactor types and subsequently saw costs remain steady or fall…
Nuclear Energy’s Bottom Line — Rogé Karma | The Atlantic | May 26, 2024
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The United States could revive some of its recently retired nuclear power plants to help meet rising demand for zero-emissions electricity, or add reactors to existing sites, Energy Secretary Jennifer Granholm said in an interview.
The administration of President Joe Biden believes nuclear power is critical to meeting greenhouse gas reduction goals and decarbonizing the economy by 2050 to fight climate change, but the industry has been hindered by the high cost of new construction.
"I do think they can come back," Granholm said about some shut nuclear plants, in an interview late on Tuesday.
The Department of Energy's Loan Programs Office (LPO) in March issued a $1.52 billion conditional loan to Holtec International to reopen the shut Palisades reactor in Michigan, which could become the first nuclear plant in the country to restart after being shuttered. The plant, which closed in 2022, now needs approval from the Nuclear Regulatory Commission, which oversees nuclear safety.
US may revive some shut nuclear plants to help meet emissions goal, energy chief says — Timothy Gardner | Reuters | June 05, 2024
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A technology developed by Oak Ridge National Laboratory works to keep food refrigerated with phase change materials, or PCMs, while reducing carbon emissions by 30%.
More than 100 million household refrigerators in operation across the United States consume up to 2 kilowatts of electricity daily. These refrigerators contribute to energy consumption and carbon emissions by using compressors that cycle on and off day and night, pumping refrigerants across evaporator coils to maintain low-temperatures for fresh and frozen compartments.
ORNL’s innovation uses advanced evaporators with PCMs installed in each compartment for cold energy storage. PCMs are useful for heating and cooling because they store and release energy when changing from solids to liquids or vice versa. Researchers applied porous metals, direct-contact defrosting technology and a refrigerant with low global warming potential to enhance performance and minimize environmental impact.
“PCMs are integrated with evaporator coils to keep temperature constant, requiring one operating cycle and allowing refrigerators to operate almost 100% at nighttime, when energy use is lower,” ORNL’s Zhiming Gao said. “This reduces electricity demand, saves costs and maintains efficiency.”
Less Carbon, More Chill Novel Refrigeration Approach Uses PCMs To Freeze, Cool Perishables — US DOE via CleanTechnica | May 29, 2024
Environment
Fort Mohave, Arizona:
Retirement was pretty idyllic for Mac and Debbie McKeever, who moved to Fort Mohave in Arizona for the desert views, starry nights and fresh air. The couple hosted cocktails by the pool and taco Tuesdays with their neighbors – an active bunch of Republican-voting retirees with a penchant for gas-guzzling RVs and side-by-sides, and the unlikeliest environmental activists.
However, in late November 2023, the McKeevers found out that the local government, the Mohave county board of supervisors, was about to vote on a zoning proposal for a gas-fired peaker plant less than 1,200ft (0.2 miles) from their middle-class neighborhood Sunrise Hills.
Peaker plants are designed to fire up to meet spikes in energy demand when people get home from work or during a heatwave. If approved the plant’s jet engine turbines would block the McKeevers’ view of the majestic Black mountains, while spewing carbon dioxide particulate matter, nitrogen oxides and sulphur oxides, as well as leaking methane, a potent greenhouse gas, into the atmosphere…
In one of the US’s hottest deserts, utilities push gas rather than solar — Nina Lakhani | The Guardian | May 23, 2024
MAPPED: Oceans rising and PFAS in the water.
Sea Level Rise Viewer — NOAA
Interactive Map: PFAS Contamination: 6,189 Sites in 50 States — EWG
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4 billion tons of concrete creates about 7.5% of annual global CO2 emissions due to a key ingredient: cement. A new “miracle” discovery might make greener concrete.
PODCAST: Concrete without CO2: can our biggest building material go green? — Madeleine Finlay | The Guardian | May 28, 2024
Zero-emission 'electric cement’ is an 'absolute miracle' — Andrew Paul | Popular Science | May 23, 2024
Housing Affordability & Homelessness
Super liens cause super troubles. This newsletter has covered the challenges created by community associations’ collections and foreclosure practices many times. Reference Issue #72 for more coverage about foreclosure in Colorado and Is THIS Reasonable? in Issue# 82.
Homeowners' associations have become increasingly dominant, but the federal government has been reluctant to regulate them. Nearly 80% of new homes built for sale are in homeowners’ associations, or HOAs, or similar communities, which are governed by a board charged with keeping up shared spaces.
We’ll talk about how HOAs can offer the hope of affordable housing, but in reality hold it just out of reach. And we’ll hear what the government is doing, or not doing, to address the power of HOAs. “These are basically private governments that are really under-regulated, critics would say, by the federal government.” …The power of these associations to enforce their rules can threaten sustainable homeownership…
HOAs maintain an often strict code to create an idyllic landscape across a neighborhood intended to protect property values. And for that, they charge monthly dues ranging from hundreds to more than $1,000. On top of that, seemingly small violations can draw big fines.
About 20 states give HOAs “super-lien” priority over other lenders. That means an HOA can claim the property, even over the bank, if an owner is behind on fees or fines.
“That allows HOAs to move to foreclosure and really be ruthless in getting that debt paid off,” Bloomberg CityLab reporter Sarah Holder said on the Big Take podcast…
“While some state and local lawmakers seem to be tracking the complications that come with HOAS, so far, the federal government hasn't said anything. I reached out to the Department of Housing and Urban Development and they told me that they had no comment on HOAs. I also tried tracking down a number of former federal government officials, anyone who could give me a window into the conversations around HOAs from the inside, and no one would talk…”
HOA Fees and Fines Can Worsen Housing Affordability Crisis — Saleha Mohsin and Julia Press | Bloomberg | November 30, 2023
LISTEN: Bloomberg Big Take: HOA Fees and Fines Can Worsen Housing Affordability Crisis
Despite ever increasing home prices, condominiums remain significantly more affordable than single-family homes.
The median home price in King County topped $1 million last month, a record high even as elevated mortgage rates continue to keep many would-be homebuyers on the sidelines.
Beyond a typically busy spring real estate market, the million-dollar median price highlights the dual pressures Seattle-area home shoppers have faced over the last two years. High mortgage rates have driven up monthly payments and suppressed demand for new homes, which should cool prices. Instead, prices remain high and rising, in large part because there are so few homes for sale in the region.
Median prices are up from last year across the region. Even so, prices are rising more slowly than at the height of the pandemic-fueled market, according to May data the Northwest Multiple Listing Service released Wednesday…
King County median home price tops $1M — Heidi Groover | The Seattle Times | June 05, 2024
Webinar: The Financial Impact of Shifting Hurricanes Patterns: Wednesday, June 12 @ 7am Pacific | Presented by First Street | REGISTER HERE
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This is NOT the news release you want to see as a homeowner in Colorado.
Consumer Advisory: Division of Insurance Shares Tips After Severe Hailstorm Pummels Eastern Colorado — Colorado DORA | May 22, 2024
Consumer Advisory: Division of Insurance Shares Tips After Hailstorm Batters Metro Denver — Colorado DORA | May 31, 2024
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Follow-up to Bloomberg coverage in Issue# 87 and the podcast in our last issue.
…This is why we wrote this story, because it is a very vicious cycle. The more that private insurers retreat, the bigger the Fair Plan grows. So that presents more risk to the private insurers that are attempting to reduce their risk by retreating. But then more people are left without options…
LISTEN: Big Take: A New Housing Crisis Is Brewing In Places Prone to Climate Disasters — Bloomberg | March 05, 2024
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The Federal government is refusing to restore eroded beaches in Pinellas County unless homeowners agree to one condition: public access.
Lisa Hendrickson is almost out of sand. Hendrickson is the mayor of Redington Shores, Florida, a well-heeled beach town in Pinellas County. Her town occupies a small section of a razor-thin barrier island that stretches down the western side of the sprawling Tampa Bay metro area, dividing cities like Tampa and St. Petersburg from the Gulf of Mexico. Many of her constituents have an uninterrupted view of the ocean.
The town’s only protection from the Gulf of Mexico’s increasingly erratic storms is a pristine beach that draws millions of tourists every year — but that beach is disappearing fast. A series of storms, culminating in last fall’s Hurricane Idalia, have eroded most of the sand that protects Redington Shores and the towns around it, leaving residents just one big wave away from water overtaking their homes.
This perilous situation is the result of a standoff between local residents and the U.S. Army Corps of Engineers, the federal agency that handles flood prevention and protects many of the nation’s beaches. The Corps often rebuilds eroded beaches by hauling in thousands of tons of sand, but the agency is refusing to deliver $42 million of new sand to Pinellas County unless the area’s coastal property owners grant public access to the slivers of beach behind their homes. Hundreds of these property owners, however, are in turn refusing to sign documents that grant these points of access, which are known as easements. The faceoff has brought the area’s storm recovery to a near standstill…
A Homeowner Mutiny in Florida Is Leaving the State More Vulnerable to Hurricanes — Jake Bittle | Grist via Gizmodo | June 04, 2024
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In Pembroke Pines, the Heron Pond condo complex’s property insurer halted coverage in April, and the general liability carrier warned it won’t renew its policy when it expires in June.
Near North Miami Beach, the Star Lakes condo complex’s board president said he expects this year’s insurance premiums to be about 45 percent more than the association paid in prior years.
And at the Hammocks in West Kendall, the association’s general liability and umbrella insurers refused to renew policies this year, and few new carriers offered new policies.
These associations have one thing in common: For years, board members pulled off various types of mismanagement and schemes, lawsuits and homeowners allege.
HOAs, Condo Associations Face Mounting Insurance Woes in Florida — Linda Dinkova and Katherine Kallergis | The RealDeal | June 03, 2024
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After she saw a story about the insurer pulling out of Santa Cruz County, her longtime home, she called her agent to confirm that her plan would lapse — setting off a desperate search for a replacement policy that is ongoing.
“Our first quote came in at over $10,000 a year, and that was bare bones coverage,” she said. “And then I kept pressing, contacting other brokers … contacting all these weird companies you’ve never heard of.”
But those quotes were even higher, coming in between $17,000 and $25,000, she said.
Lafollette lives near Soquel, which lies near Monterey Bay and its picturesque view of the Pacific Ocean. The location’s trade-off is the forest that surrounds her home, bringing with it the ever-growing threat of wildfire.
Why more and more homeowners are dropping insurance — Patrick Cooley | The Washington Post | May 27, 2024
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Insurance issued to consumers in Washington State is getting more transparent…
Insurers will soon have to provide customers a clear explanation for increases in their auto and home insurance premiums at the time of renewal.
Beginning Saturday, June 1, 2024, companies must do so in writing if a policyholder requests it. In 2027, that information must be provided automatically and in easy-to-understand language on policy renewal notices….
The insurance industry objects to some of the requirements, arguing that the changes will needlessly drive up costs for insurers at a time when many premiums are already on the rise.
WAC 284-30A applies to all property and casualty insurers in the state that sell private passenger auto and homeowner coverage [PERSONAL COVERAGE], including coverage for manufactured homes, condominiums and renters. Insurers of health, disability, life, and long-term care would be exempt…
After June 1, 2027, insurance companies face additional requirements. They must send policyholders a notice by mail or email at least 20 days before renewing a policy with a premium increase of 10% or more.
Each notice has to list factors used in calculating the premium and contributing to the hike.
Those can include claims history, discounts, fees and surcharges, as well as the policyholder’s age, credit history, education, gender, marital status, and occupation.
Washington will require insurers to reveal reasons for rate hikes — Jerry Cornfield | Washington State Standard | May 29, 2024
WSR 23-13-114 — Permanent Rules of the Office of the Insurance Commissioner
Housing Market
Foreclosures are on the rise.
In some Texas and Florida cities, foreclosures are rising, suggesting early signs of distress in the once booming housing market. The likely reasons: rising property taxes and insurance premiums and higher interest rates that make it increasingly difficult for homeowners struggling with mortgage payments to sell their properties or refinance their way out of trouble.
Because of storms and other natural disasters, insurance costs in recent years have been rising faster in those states than in much of the rest of the US. What’s more, the median local property tax bill in Texas for single-family residences had climbed $1,015 by 2023 from 2019, the biggest jump in the US, a CoreLogic data analysis shows…
Foreclosure Spike: Warning Signs in Texas, Florida Amid Rising Taxes, Insurance — Prashant Gopal | Bloomberg | May 29, 2024
Homebuyer revolt.
The US housing market — long crippled by an inventory drought — is finally starting to see listings rise. But now, in many places, the buyers just aren’t showing up.
Sellers are grappling with the fact that higher-for-longer rates are choking off demand during what’s typically the key season for the market. And more of those owners are cutting asking prices than any time since November 2022 as inventory grows stale, according to Redfin Corp.
“With mortgage rates rising back over 7%, the willingness of homebuyers to take a stab this season is diminished,” Ralph McLaughlin, senior economist at Realtor.com, said. “You can have high prices or you can have high mortgage rates, but you can’t have both for long.”
Real Estate: Homebuyers Are Starting to Revolt Over Steep Prices Across US — Prashant Gopal and Michael Sasso | Bloomberg | June 01, 2024
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ARM Race.
A small but mostly affluent group of Americans are about to see their mortgage payments skyrocket.
They are the more than 1.7 million owners of homes bought since 2019 with an adjustable-rate mortgage. These loans — averaging about $1 million to finance more expensive properties — are set at a rate lower than the prevailing 30-year for the first few years, then adjust once or twice a year based on current borrowing costs.
Coming out of the fixed period after interest rates soared to a two-decade high is the worst timing for an estimated 330,000 of these borrowers. Another 100,000 will see their first adjustment in the next 12 months, according to ICE Mortgage Technology. Even though they tend to be well off, the approaching reset dates are creating some stress, said Chris Stearns, a southern California-based mortgage loan advisor at Thrive Loans…
Rich US Homeowners With Adjustable-Rate Mortgages Are About to Get Whacked — Alexandre Tanzi | Bloomberg | May 29, 2024
Built Environment
Boston, Massachusetts: Chic and expensive. 19th Century East Boston Firehouse Converted Into Condominiums — WBZ 1030 | May 29, 2024
Condo Connection's financial coverage is indexed to our Dollar$ and $ense page dedicated to all things CIC finance.
Middle-class Americans are feeling financially stretched and thread-bare and don’t expect that to change for the rest of their lives.
Almost two-thirds of Americans considered middle class said they are facing economic hardship and don’t anticipate a change for the rest of their lives, according to a poll commissioned by the National True Cost of Living Coalition....
In the large poll of 2,500 adults, 65% of people who earn more than 200% of the federal poverty level — that’s at least $60,000 for a family of four, often considered middle class — said they are struggling financially.
A sizable share of higher-income Americans also feel financially insecure. The survey shows that a quarter of people making over five times the federal poverty level — an annual income of more than $150,000 for a family of four — worry about paying their bills...
Majority of Middle-Class Americans Say They Struggle Financially — Alexandre Tanzi | Bloomberg | June 04, 2024
The ECB cuts rates in a divergent move from the US Fed.
European Central Bank Cuts Interest Rates for First Time Since 2019 — Eshe Nelson | NYT | June 06 , 2024
An independent Federal Reserve is potentially at risk.
The Federal Reserve will face a significant risk of losing its independence to ramped-up political interference if Donald Trump is elected president again, according to the latest Bloomberg Markets Live Pulse survey.
Forty-four percent of respondents said they expect Trump to seek to to politicize the central bank or limit its power if he returns to the White House. Overall, they put a probability of 40% on the Fed losing its autonomy under a second Trump administration.
A push to roll back the central bank’s independence — a step that would face significant hurdles — would likely rock financial markets, undermining investors’ faith in the Fed as overseer of the world’s largest economy and exposing it to political pressure to cut interest rates. That concern would be especially acute now, when the central bank is keeping its benchmark rate at a more than two-decade high to curb inflation and prevent the economy from overheating.
A Trump Win Would Threaten Fed Independence, Move Bonds: Poll — Ye Xie and Rich Miller | Bloomberg | June 02 , 2024
Cashing In
Retirement: so much saved, but still a long way to go.
Much of the financial industry is devoted to running retirement funds—$25 trillion in traditional pensions, 401(k)-style plans and annuities and $13 trillion in individual retirement accounts. But Ghilarducci says tens of millions of workers aren’t getting the help they need to save…
Retirement Crisis: $38 Trillion in US Pensions, 401(k)s, Annuities Isn’t Enough — Sonali Basak | Bloomberg | May 24, 2024
Are you fascinated by case law? Maybe you should be?
This is a landmark retaliation case from Hawaii that we have been remiss not to highlight previously. Few states have retaliation legislation codified in law.
The directors of a landmark Honolulu condominium have agreed to pay $600,000 to settle a lawsuit brought by a fellow director who alleged he faced retaliation for raising concerns about the condo board.
The litigation involving Hokua at 1288 Ala Moana had been closely watched by advocates for condo owners as the first major test of a 2017 law designed to prevent condominium boards from retaliating against owners, board members and managers who raise questions about potential violations of Hawaii condo law or association bylaws.
The settlement provides more than token relief for Mark Brown, a retired Army colonel and former member of the board that oversees Hokua. Joining Brown as a plaintiff was Harvey Hampton, a fellow condo owner…
Prominent Honolulu Condo Directors Pay $600,000 To Settle Retaliation Claim — Stewart Yerton | Honolulu Civil Beat | July 13, 2023
These are perennial questions: “my association has ghosted me, what do I do?” and “what’s the benefit of an HOA and why do HOAs exist?” We’ve tackled these questions in a number of ways with “What to Do: When Things Go Askew” (communicate and escalate!) and our CIC Explainer page.
Owners say condo board ghosting them after skipping inspection, not insuring building — Ryan Poliakoff | The Palm Beach Post | June 02, 2024
Read this case to learn about the power of easements!
Decision - 9th Circuit Court of Appeals - No. 22-35573 — December 29, 2023 22-35573: Alaska Railroad Corporation v. Flying Crown Subdivision
The docket has 456 entries. The president of this association (who has never resigned, despite the judge’s recommendation) and his wife have already filed bankruptcy in an attempt to stave off the multi-million dollar outcome. Judgment day is coming soon.
An old well springs to life and Santa Clara homeowners' nightmare begins — Thy Vo | The Mercury News | January 28, 2020
19CV349909 | Superior Court of Santa Clara, California Doug Ridley et al vs RANCHO PALMA GRANDE HOMEOWNERS ASSOCIATION
Have some legislation for us to share? Please let us know!
CALIFORNIA: In addition to two bills we highlighted previously, California is also working toward a measure that will have some HOAs elated:
A bill limiting the number of houses that a corporation can buy has passed the California State Assembly and is now in the state Senate.
AB 2584, introduced by Democratic Rep. Alex Lee, would prevent businesses from buying more than 1,000 single-family home properties and renting them out, as enforced by the state's Attorney General. Lee says such institutional investors profit off of real estate markets with increasing rents while outbidding everyday Californians who are trying to buy homes.
California bill targeting 'housing-shortage profiteers' by limiting ownership passes Assembly — Kinsey Crowley | USA Today | May 24, 2024
FLORIDA: Last year’s watered down Florida legislation for HOAs was deemed the “HOA Bill of Rights.” That bill is actually HB1203 that passed in 2024 and is effective July 1, 2024 in addition to HB59. Here’s the staff analysis for HB1203.
HB1021, the “Condo Bills of Rights”, also takes effect July 1. Here’s the staff analysis for HB1021. It will now be a FELONY to destroy records and more.
DeSantis signs bill to limit HOA fines, increase transparency — Kevin Accettulla | WFLA | May 31, 2024
Leave your cans out, park your truck: DeSantis signs bill to rein in overbearing HOA fines — C.A. Bridges | USA Today | June 03, 2024
Gov. Ron DeSantis has signed a bill that cracks down on controversial enforcement practices by homeowner associations while requiring greater transparency by those associations. Among a long list of measures, the new law bars HOAs from fining homeowners for failing to bring in a trash can within 24 hours before or after a collection time. It also prohibits HOAs from fining residents for leaving holiday decorations up longer than allowed by governing documents unless a written notice is issued…
Long list of HOA reforms signed into law by Gov. DeSantis — Ron Hurtibise | South Florida Sun Sentinel | June 03, 2024
DeSantis signs laws on hurricane hardening, HOAs, warranties, more — Owen Girard | Florida’s Voice| May 29, 2024
HAWAII: Out of dozens of bills – perhaps the largest slate of community association bills of any state in this legislative biennium – Hawaii managed to pass the following:
SB2600 — Allows email as a valid way to deliver notice and certain documents.
SB2726 — A study of how ombuds, management licensing, ADR, owner education, general regulation and records disclosure works in other states.
HB2315 — Requires that RONR be used to conduct meetings; repeals the use of electronic voting devices at meetings, explicitly allows electronic voting, further defines what can happen during emergency declarations.
HB2801 — Allows condominium associations to be eligible for commercial property assessed financing.
HB2685 — Allows multi-family residential property owners to invest in funding solar energy system distribution for low- and moderate-income households.
Green signs off on condominium bills — Mitchell Tsai | Spectrum News | May 31, 2024
NEVADA: The Silver State has some of the most robust community association statutes of any state. 2023 SB378 added practical requirements for cyber insurance and also provided that notices (with specific exceptions) can be delivered electronically unless a unit’s owner opts out. This bill is still awaiting codification into NRS 116.
WASHINGTON: We were pleased to see the following newsletter from Senator Pedersen highlighting SB5796 and the delightful poster showcasing SB5973 (HVAC legislation) created by a friendly Redditor.
AND last, a friendly reminder that WUCIOA applies to virtually ALL common interest communities in Washington State effective January 1, 2028.
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