10.17.24
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ISSUE # 101
CIC Info Bytes 10/17/24
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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QUOTE
💡 … there is just a sort of tendency to feel as though we are trapped under this boulder of constitutional democracy as it is currently constituted… And what I really love about what you’re saying, and I want people to listen to, is this happened because there was an effort to put this boulder on top of us.
And this is the important thing…It is fixable. It requires the same level of purposive, years long structural strategic planning that got us here… What does that look like to get the boulder to be shaped more like a foam finger for democracy as opposed to this thing that makes everyone feel kind of just lost and trapped?
Project 2025 and the new Supreme Court term: A preview.
— Dahlia Lithwick and Sky Perryman | Slate Amicus Podcast | October 05, 2024
😱 … I read a great quote the other day. It said a good lawyer knows the law, but a great lawyer takes the judge to lunch…
[NO JOKE: THIS IS SYSTEMIC FAILURE 101]
— Rob Ward, attorney at Adams Stirling in California | Presentation on new California Laws
Our blog, The Myth of Full Funding has been brought to life as a 🔊 podcast via NotebookLM.
Much has been written about the Corporate Transparency Act (CTA) which is a reporting tool designed to fight the funding of terrorism through small businesses. CTA is one part of a larger bill (the National Defense Authorization Act) that became law over three years ago.
CAI recently revealed its hand in waging an ongoing regulatory battle over applicability of the CTA to community associations (condos, co-ops and HOAs), which is easier to win since SCOTUS' obliteration of the doctrine of Chevron Deference.
CAI says it wants to "protect" you and your community association by having YOU PAY to become a member because, of course, its lawsuit might only protect members and not every single community association in the wild (CAI estimates there are ~365,000 associations).
Our unparalleled research into CAI’s ecosystem (see CAI Report Card) reveals that CAI’s current membership might include as few as 5,000 unique community association group members plus some additional individual "homeowner leader" members.
Community association and homeowner-based revenue is the smallest portion of CAI's annual revenue (10% or less). CAIwould obviously like to grow that figure.
⚠️ Don't take the bait. FinCEN allows you to file for free in about 15 minutes or less.
Trials and Tribulations of a Volunteer Director - Part XXII
View parts I, II, III, IV, V, VI, VII, VIII, IX, X, XI, XII, XIII, XIV, XV, XVI, XVII, XVIII, XIX, XX.
Texas: An owner received an enforcement notice that was postmarked six days after the date of the letter, yet the stated timeframe to request an opportunity to be heard is within 10 days of the letter’s date…
Got a letter... — u/IAmBriGuy | Reddit r/F*ckHOA | October 09, 2024
Midwest USA: A council member in a small Midwestern city says that developers are building homes closer together which creates runoff and drainage concerns leading to retention ponds. The city doesn’t want to maintain, repair and replace those ponds, so an HOA is the solution. This concept is further explained on our What Are CICs?! page.
HOA’s are new standard, per city standards — u/Financial-Context-86 | Reddit r/F*ckHOA | October 13, 2024
🤔 The landscape contract for this $67,500 budget is slated to increase by nearly 200% while reserve contributions are to decrease by 95% and the overall budget will increase around 2%.
The 2025 budget proposal is so bad it looks fake — u/Brobama21 | Reddit r/F*ckHOA | October 15, 2024
Miami, Florida: Read more about this seven-figure embezzlement case in Issue# 100.
…7Investigates obtained a copy of this $15,000 check paid by Turnberry on the Green Condominium Association to Rabin & Lopez, P.A., the Miami law firm now representing Arzumanov in this criminal condo case.
Sam Rabin: “I’ve been representing Mr. Arzumanov since earlier this year. I’d say approximately April of this year.”
That is the same month the check was issued. The memo reads: “Legal Retainer – Aventura PD.”...
$15,000 check raises new questions about former Aventura condo president… — Daniel Cohen and Heather Walker | WSVN 7 | October 15, 2024
Florida: The author of this opinion piece is president of CEOMC, a community management business trade and lobbying organization speaking out against a situation it helped create. CEOMC employed eleven (11) lobbyists in Florida during the FL 2024 legislative session. To put things in perspective, CAI employed one lobbyist for that same legislative session.
Read more in Issue# 100: Who Will Save Florida’s Condo Owners?
…This is why, at a minimum, adjusting the looming Jan. 1, 2025, deadline for compliance is so critical. This decades-old problem did not develop overnight and will not be corrected overnight. Laws that both permitted condominiums to waive their reserves (funds that are set aside to pay for building maintenance) and instructed them how to waive their reserves have thankfully been repealed – but have also left a path of fiscal confusion in their wake that requires a more realistic compliance glide path…
Debbie Reinhardt: Collaborating for sensible solutions to Florida’s condo safety challenges — Debbie Reinhardt | Florida Politics | October 04, 2024
Florida: Four-, five- and six-digit special assessments have become the norm in Florida. $224,000 assessment per unit is more than some and less than others. OUCH!
Ten years ago, Howard and Sheila Konetz bought themselves a Florida dream: an 1,820-square-foot condo in a leafy gated community north of Miami, complete with access to a country club, tennis courts and swimming pools. The $478,500 purchase would usher them into blissful semiretirement, they thought. With enough cash in the bank, the couple didn’t need a mortgage and downsized from their house in Miami Beach.
Seven years later, on June 24, 2021, the Champlain Towers South condo building in the nearby town of Surfside partially collapsed when its corroded concrete and steel supports buckled, killing 98 people. Florida lawmakers responded by requiring condominiums that are at least 30 years old to undergo inspections, make critical improvements and amass reserve funds for future repairs.
Suddenly, the Konetzes found themselves facing a $224,000 bill — their share of a special assessment to renovate and repair their 36-year-old building. Unable to secure a loan or sell the unit, the couple now fear bankruptcy…
…The deadline for the required building inspections is Dec. 31, 2024. Proponents of the legislation say it’s necessary to prevent another tragedy, since many of these buildings have avoided funding structural repairs for decades. But for the people living in them — many of them retirees or second-home owners — the dream of living in Florida has curdled into a financial nightmare.
About a million condo units meet the age requirement under Senate Bill 4-D, leaving owners with a stark choice: pay up, sell, or go into foreclosure. Retirees on pensions or fixed incomes often cannot afford the renovations, which are meant to shore up the entire building. And would-be buyers are avoiding older buildings because of the assessments. All the while, insurance premiums for condo associations are rising in the face of strengthening storms like Hurricane Helene, which devastated the Gulf Coast of Florida last week…
Why Owning (and Buying) a Florida Condo Has ‘Turned Into a Nightmare’ (free 🔗) — Julia Echikson | The New York Times | October 03, 2024
Toronto, Canada: 100 owners face a roughly $7,000,000 special assessment.
…When CTV News reached out to the condo board Patrick Greco, partner with Shilbley Righton LLP Barristers and Solicitors said he was speaking on behalf of the Toronto Standard Condominium Corporation No. 2579 and in a statement said “The Board has worked and continues to work with the Condominium’s professional engineers to investigate garage deficiencies and to consider repair options. How the garage may appear to the layperson is irrelevant to a professional engineering analysis, upon which the Board must rely.”
“The Condominium’s engineers have advised that water penetration into the concrete garage roof slab poses a serious structural risk which must be addressed. The Board takes this issue extremely seriously, especially in the wake of the deadly 2021 condominium collapse in Surfside, Florida, which was similarly caused. The Board is tasked with ensuring that necessary repair work takes place, even if the difficult decisions it makes are unpopular with owners.”...
North York condo owners say they are facing special assessment of $70K — Pat Foran | CP 24 | October 04, 2024
London, Ontario: Special assessments happen in condominiums everywhere, but here’s a case of owners feeling the pinch and being offered no runway to provide additional funding to “top up” their reserve study. 🎗️ Don’t confuse fees with assessments.
When Bruno Santos bought his three-bedroom condominium in northwest London last October, he wasn't expecting to see an increase in his condo fees or to have to pay a reserve fund top-up payment. He is now considering selling.
In less than a year, Santos's monthly condo fees, also known as maintenance fees, increased by over 36 per cent. The fees first went from $399 to $499 a month when he moved in. Then in June, they climbed again to $545.
The latest increase came after the condo corporation conducted its Reserve Fund Study, which is required every three years under the Condominium Act. Reserve funds are needed to pay for maintenance, major repairs, and other expenses the corporation must keep up with.
The review also found the condo corporation's reserve fund was too low. Board members sent a letter to all 14 units telling homeowners they needed to pay a $5,000 "Special Assessment" fee on Oct. 1 to replenish the reserve fund…
...Santos said he asked the board members if there was a payment plan option, but was declined.
"Can I pay in five months $1,000 each month or something like that, they say no. You have to pay $5,000 by October, no matter what happens," he said.
While the fee was due Oct. 1, Santos said he doesn't have the money to pay it and will have to take it out of a line of credit. He said his neighbours have also raised concerns and also haven't paid, "Other homeowners here are not comfortable with the situation."...
London condo owner frustrated after condo fees climbed 36 per cent in less than a year — Erika Chorostil | CBC News | October 11, 2024
San Antonio, Texas: Thoughtful tips when gearing up for another festive holiday season.
MySA contacted around two dozen HOAs in the greater San Antonio area and scouring at least a dozen more HOA regulations publicly available online. The general consensus: HOAs in the Alamo City aren’t messing around with spooky season spectacles, or any holiday decorating for that matter. At least not in clear-cut wording...
...But before you go stringing up those lights or inflating that 6-foot zombie yard ornament, you’d be wise to check in with your local HOA before making any big displays for the Halloween festivities. Vague regulation language can sometimes be the nail in the Halloween decorative coffin, according to lawyers who wrote extensively on the role HOAs can play on Halloween-time décor...
...While there were no specific mentions of holiday décor in any of the covenants or regulations MySA could track down, Douglas warns there could be rules around the size of an inflatable, how long holiday decorations can be up or generally around “offensive decorations.” It’s in these kinds of more vague regulations that things can get a bit dicey....
San Antonio HOAs have mixed rules on Halloween decorations — Zachary-Taylor Wright | mySA | October 07, 2024
Washougal, Washington is joining the City of Lacey in establishing a registry of community associations.
The City of Washougal is excited to announce the launch of its Homeowners Association (HOA) and Neighborhood Registry, aimed at fostering stronger community connections and enhancing local communication. Washougal is comprised of roughly 200 neighborhoods with their own unique character and appeal.
The registry allows HOAs and neighborhood associations to officially register with the city, providing a centralized resource for residents to access information about community organizations. Residents are encouraged to register their associations online to stay informed about city programs, initiatives, and opportunities for collaboration. The city is committed to supporting neighborhoods and strengthening community ties through this new initiative…
HOA & Neighborhood Registry | Washougal, WA
City of Washougal Launches HOA and Neighborhood Registry —Lacamas Magazine | October 03, 2024
Coverage: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44 & 45
Environment
Water, water everywhere … and nowhere it is most needed.
Humanity’s survival depends on water, yet global reserves are rapidly shrinking. Growing populations, water mismanagement and climate change mean that by next year, half of the world’s people will face water scarcity. As a result, water arguably has replaced oil as the most likely cause of global conflict. So can technology help secure humanity’s future water needs?...
Video: The Future With Hannah Fry and the Global Fight to Secure Water — David Rovella | Bloomberg | October 04, 2024
Housing Affordability & Homelessness
CRE distress could drive more office-to-residential conversions, but will it increase housing affordability?
A seismic event is brewing in a corner of the commercial real estate market, with many office buildings facing distress as they approach a wall of maturing debt and struggle against enduring work-from-home trends.
Those factors — which have left some of the worst office buildings nearly deserted — are about to spark a handful of fire sales, potentially kicking off a wave of office-to-apartment conversions that will add more housing supply to the pipeline, real estate pros said.
Richard Barkham, the chief global economist of commercial real estate investment firm CBRE, says he sees an upheaval of Class B office buildings — a segment of office properties that struggle to attract tenants, mainly due to being older and in need of renovation.
These second-tier properties have vacancy rates as high as 80%, he said, predicting that many could be ripped down or transformed over the next decade.
"The banks are going to have to dispose of that real estate," Barkham told Business Insider in an interview. "So we will see. I think over the next — and this will pay out over two to three years — I think we'll see a wave of offices going back to banks, and I say, they'll be firesold and either demolished or converted."...
— Jennifer Sor | Business Insider | October 12, 2024
Siesta Key, Florida: These folks are rebuilding. Again.
…“There is no chance I’m pulling up stakes,” Fiore said on Friday, pointing out the waterline where ocean water earlier this week was 2 feet (60 cm) up a wall. “I’m doubling down, thinking about hurricane windows and doors, figuring out how to stop this water from coming in.”
This sentiment was echoed by several residents of Siesta Key who spoke with Reuters on Friday. Residents were outnumbered by clean-up workers and people handing out cards advertising roofing and other construction services following two major hurricanes in two weeks.
All were feeling down but none seemed defeated, despite the threats of more and stronger hurricanes in the future.
“Paradise is still paradise, despite this mess,” said Pat Hurst, who along with her husband Bill has lived on Siesta Key since 2011 and has been visiting for over two decades.
“That said, cleaning up from one hurricane while trying to prepare for another was really stressful.”
Florida residents hit by Milton and Helene vow to rebuild — Brad Brooks | Reuters | October 12, 2024
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Siesta Key, Florida: This couple is leaving.
Lance and Nichol Fountaine moved to Siesta Key from Tennessee in 2020 when the COVID-19 pandemic made it possible to work remotely.
They love the island life and the community on the key, but after their home flooded six times in 14 months they are exhausted, frustrated and contemplating moving.
Nichol Fountaine says she has “PTSD” from all the water in her home, with every storm bringing a wave of anxiety...
…“I’m done,” Nichol said. “I love it, I’ll visit it but I don’t want to live it anymore.”...
After multiple floods, Siesta Key resident says she’s “done” with island life — Zac Anderson | USA TODAY and Sarasota Herald-Tribune | October 12, 2024
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Florida: Explore our Insurance page to learn more about Florida’s insurance boom + bust.
...The largest insurer of residential and commercial property in Florida is now Citizens Property Insurance, created by the Florida legislature as an insurer of last resort and aimed at property owners who cannot find coverage in the private insurance market. Run by a state-appointed board and overseen by the governor and other state officials, Citizens insured 1.26 million policyholders as of September...
...Premiums are going up around the country, often by double-digit percentages, as insurance companies win permission for higher prices and other concessions from California, Louisiana and other states. Insurance is regulated at the state level, and officials face a tough balancing act in trying to keep both insurers and homeowners from leaving...
...Higher premiums are helping increase revenue at insurance companies. At the same time, higher interest rates position insurers to earn bigger returns on their investment portfolios. That “does position the industry better over the long term,” said Josh Esterov, head of U.S. insurance research at CreditSights...
Storms Are Reshaping Florida’s Insurance Market. Here’s What to Know. — Heather Gillers | WSJ | October 12, 2024
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State-based insurers of last resort are taking on extraordinary amounts of risk.
…Conceived as a fallback to ensure homeowners can maintain insurance needed to secure mortgages, these insurers offer subsidized policies when private insurance is unavailable. But they are now operating in ways they never anticipated as increasing climate risks shrink private insurance options and boost premiums across the country.
“I’m pretty skeptical of the longer-term willingness of states to continue to shoulder the burden,” said Benjamin Keys, a real estate and finance professor at the University of Pennsylvania’s Wharton School.
If state-run programs continue to be the only option for some homeowners in climate-distressed areas, the financial pressures will likely continue to grow, raising fears that they will ultimately have to turn to federal taxpayers for help…
Climate-Fueled Disasters Are Raising Insurance Rates — Zack Colman and E&E News | Scientific American | October 08, 2024
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Betting on disaster: Even FEMA sells catastrophe bonds.
Investors in catastrophe bonds are girding themselves for substantial losses as the combined destructive force of Hurricanes Helene and Milton looks set to trigger payment clauses on a scale not seen in years.
Two weeks after Helene unleashed severe floods in more than a dozen states, Florida is bracing itself for the impact of Milton, a potentially lethal Category 5 storm on the five-step Saffir-Simpson scale. It’s expected to make landfall early on Thursday morning, pushing a wall of water onshore. Millions of people have already fled the coastline, including residents in the densely populated city of Tampa…
Catastrophe Bond Investors Brace for Major Losses as Milton Rages — Gautam Naik | Bloomberg | October 08, 2024
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…Cat bonds, as they’re known on Wall Street, are a bet on the probability of huge natural disasters. The catastrophe could be a hurricane, earthquake, wildfire or flood. If the calamity doesn’t occur, investors who bought the bond stand to make big returns that could be hard to find elsewhere. If it does, buyers could lose some or all their money.
Of the 300 outstanding bonds in the market, about 70% insure against US storms — and a big chunk of those cover hurricane risk in Florida. Payments are usually made when certain thresholds of real-world losses are met after assessors are deployed on the ground to survey the damage. While it can take months for those payouts to occur, stricken places like Fort Myers, Florida — walloped by both Milton and Helene — can quickly tap emergency state and federal funds while waiting for the money to materialize.
The equivalent bonds used by developing nations are designed differently and can be less forgiving. Jamaica has a small amount of infrastructure covered by insurance and therefore uses an instrument that pays out only if a storm hits a predetermined air pressure reading. Such mechanisms, known as parametric triggers, unlock money very quickly, without waiting for damage assessments. But the setup can also yield harsh results.
Jamaica was unlucky. Beryl missed the trigger laid out in its cat bond by the thinnest of margins — just nine millibars – a discovery made in part thanks to the data captured by Pituch’s plane. US and European investors who bought the bond are set to book returns of about 12% this year. Jamaicans will get nothing…
The Harsh Reality of 'Hurricane Insurance' — Gautem Naik, Jim Wyss and Greg Ritchie | Bloomberg | October 13, 2024
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…Private market insured loss estimates from Hurricane Helene range from $8 billion to $14 billion, with the best estimate around $11 billion, according to Moody’s RMS Event Response. That’s higher than the $6.4 billion that catastrophe modeling firm Karen Clark & Co. estimated last week...
...Milton has the potential to result in tens of billions of dollars of insured losses if it hits the Tampa Bay area, according to early forecasting from Bloomberg Intelligence analysts. When Hurricane Ian hit Florida in 2022, it drove insurance losses to as much as $65 billion...
Insurers’ Helene Loss Estimates Climb as Hurricane Milton Nears Florida — Alexandre Rajbhandari | Bloomberg | October 08, 2024
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Answers from Florida about a condo repair impasse and an answer to the question: is the association held to all the same rules as owners and residents?
Avid readers will note this is the latest in a series of coverage about owners who are left without their condominium home due to repairs by their association. Many of those repairs drag on for years.
Fire guts condo but association balks at paying its share to repair damages. Now what? — Ryan Poliakoff | The Palm Beach Post | October 13, 2024
Condo Connection's financial coverage is indexed to our Dollar$ and $ense page dedicated to all things CIC finance.
The FOMC’s policy-making has long-lasting effects.
Even if the Federal Reserve engineers a soft landing, the bank’s monetary policy during and after the pandemic will distort the housing market for years to come.
Jerome Powell Is Not the Greatest Fed Chair Ever (free 🔗) — Allison Schrager | Bloomberg Opinion | October 15, 2024
Are you fascinated by case law? Maybe you should be?
Washington: “The belling of the cat.” Developers and insurers are waiting to learn what 2019 changes in state law mean for liability.
Podcast: Lay of the Land: Has Washington State Resolved the Condo Liability Problem?
— David S. Rubenstein & Aaron Laing | K&L Gates + Parker, Smith & Feek | October 08, 2024
Nevada: State law prohibits directors from accepting bribes and from entering into contracts with an association, but conflicts of interest can often be more elusive. Something is better than nothing: many states have no such protections.
HOA board members must disclose conflict of interest — Barbara Holland | Las Vegas Review-Journal | October 14, 2024
Missouri: It helps when you’re connected to a state legislator, but don’t forget that county and city and township municipal ordinances can still control. Is keeping poultry in your backyard the highest priority for owners? Absolutely not, but it sounds good.
…The story behind the change in law is an interesting one. Jamey Murphy, of Oakville is, you might say, legislatively connected. He is an aide to State Sen. Nick Schroer, a St. Charles County Republican who represents District 2. Murphy also happens to be the son of state Rep. Jim Murphy, a Republican who represents part of St. Louis County. It was Schroer and Jim Murphy who sponsored the bill that is now law.
Murphy’s grandchildren — Jamey’s daughters Josie, 9, and Lily, 11 — wanted chickens but couldn’t have them because of homeowners’ association restrictions. A bill was drafted. The two girls testified in Jefferson City on behalf of the bill, according to their proud father.
Jim Murphy tells me: “It came to my attention because my grandchildren wanted to raise chickens. … There was a debate as to whether or not the homeowners’ association would allow them, even though the county does,” he says…
Pokin Around: Homeowners' associations can no longer ban chickens; a coop quickly goes up — Steve Pokin | Springfield Daily Citizen | October 14, 2024
MARYLAND: Although we provided our own coverage in past issues,, the article below is a nice summary of 2024 Maryland legislation.
2024 Maryland Community Associations Legislative Update | Lerch, Early & Brewer — Lurch, Early & Brewer via JD Supra | May 14, 2024
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