Tag Archives: foreclosure

HOA Water Stupidity & California Drought

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Homeowner Association bullies continue to show their utter stupidity in the face of the horrible southwest water drought. I have two links for you. The first is the idiotic treatment of a homeowner by the Aviara Master Association in northern San Diego County.

The second link is even more fascinating. It’s about the mind-blowing drought in the Middle East and what happens when you don’t respect Mother Nature.

(link to story on HOA drought idiocy)

(link to story on Middle East drought)

 

 

HOA Treasurer Pleads Guilty

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I’ve blogged about this lady before. She embezzled about 43,000 bucks from her HOA in Forsyth, Georgia. You’d think those southern folks would look down on somebody looting the neighborhood treasury. Well, it looks like she got 2 or 3 months detention. Oh yes, and she has to pay about $3300 in restitution. The jail sentence is probably light because she’s apparently repaid about $32,000.

Embezzling from Homeowners Associations continues to be one of the massive unreported crimes in America. At least this one got caught.

(link to story on HOA embezzler)

 

FL legislation passed will harm, not help Condo and Homeowners’ Association owners and residents

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guest blog by Deborah Goonan

I can’t say I’m surprised, but I am thoroughly disgusted by the nature of HOA legislation that has passed the 2015 Legislative session, despite the fact that the FL House threw in the towel 3 days early. Given the hostile nature of other pending bills, it was probably a blessing in disguise.

Here are some highlights of what HOA-related passed and what failed:

CCFJ-backed SB 1308/HB 1263, the bill that would have authorized limited state oversight of HOAs similar to that available to condo owners, died before ever making it to a committee, for the second year in a row.

SB 611 / HB 736, a bill that would have limited fees charged for estoppels, and that was hotly debated and opposed by management, collection companies and Association law firms, effectively died when the session was dismissed early. That means business as usual. Fee gouging and hitting buyers at closing with last minute with extra closing costs will continue for at least another year.

HB 791 passed 98-17 in the House and unanimously in the Senate. The bill will extend the Distressed Condominium Act (DCA) for two more years, until June 30, 2018.  The DCA allows investors to “bulk buy” condos for rehab and resale, but significantly limits bulk owner liability for construction defects and also allows investors to waive funding of reserves until each unit is sold. The DCA has played a key role in creating perverse incentives for investors to take over condo Boards and force termination upon remaining owners, who have in turn been forced to sell for a fraction of what they paid for their units several years ago.

The bill also specifies that official records now include only “written records,” effectively eliminating audio or videotapes among the records HOAs must retain for at least 7 years. Also in this bill: if you are a tenant, and your landlord owns multiple units, but owes any financial obligation pertaining to even ONE unit, the HOA may suspend your privileges to use the recreational amenities and common areas until the owner is current, even if your unit is not directly tied to a fine or delinquent assessment.

Also buried in this homeowner-hostile bill is a carefully crafted provision that will allow HOAs governed under Statute 720 to issue fines exceeding $100 per violation and $1000 in the aggregate if the governing documents allow it. There will be no absolute maximums that HOAs can fine owners, so long as the oligarchy that controls a supermajority of votes is able to amend the documents any way it sees fit.  To make it even easier to accomplish a vote, the bill also permits proxies to be faxed or emailed, and will now allow for online voting.

And the standard priority of payment application for HOAs remains as follows: payments first apply to interest, then late fees, then attorney and collection fees, and last, but not least, the amount of the delinquent assessment. And HB 791 merely states that fines of less than $1000 may not become a lien against the home, implying that fines of $1000 or more CAN become liens that could then lead to foreclosure by the Association.

The topper for outrage in HB 791 is the fact that even if an Association fails to provide timely notice of an amendment to the CC&Rs, that will not affect its validity. In plain language that means that you can be penalized for violating a new covenant or amendment, even if you have no idea that it exists.

Attached are relevant links for any wonks out there that want to read the details.

(link to attorney summary of FL legislation affecting HOAs, Condos)

(link to SB 791)

(link to CCFJ SB 1308, now dead)

 

FL legislature passes amended version of condo termination bill, still full of loopholes

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guest blog by Deborah Goonan

Florida Legislators have done it again. They have managed to pass a bill that gives the illusion of protecting condo owners, but, in reality, does very little to prevent real estate investors and developers from exploiting consumers, violating 5th Amendment Rights to unlawful taking of property and just compensation.

In the final week of the 2015 legislative session, both the Florida House and Senate voted unanimously to approve passage of HB 643 (identical to SB 1172). Republicans Chris Sprowls and Chris Latvala sponsored these companion bills, with the intention of making it more difficult for bulk buying investors to take advantage of condo owners, particularly those who paid high prices at the time of purchase. Tens of thousands of Florida condo owners have faced forced termination of their distressed condominium associations, with the result that most have been kicked to the curb, forced to sell their units for pennies, most losing all of their equity or left with outstanding mortgages.

Even in its original draft, HB 643 and companion bill SB 1172 had loopholes. (See link to previous blog) But over the course of recent weeks, the two bills were consolidated and amended (watered down) 9 times.

So many loopholes remain in this bill, and news releases are providing inaccurate and incomplete information, touting HB 643 as a “step in the right direction.”

For instance, a recent news release states that condo owners will receive 1% of the value of the unit to help with relocation expenses. But HB 643 specifically states that the relocation allowance will be equal to 1% of termination proceeds. With all the offsets allowed against termination proceeds — the outstanding first mortgage, delinquent assessments, special assessments, fines, etc. — the proceeds could end up being very low or even zero. Do the math – 1% of zero is zero.

Plus there are so many conditions for condo owners to receive the original purchase price of their condo units, that this bill is unlikely to help the vast majority of condo owners. The conditions include:

o   The original purchase has to be made from the developer, not a resale;

o   The property must be the owner’s homestead, as registered in the County of residence;

o   The owner must have absolutely no financial obligation to the lender or the HOA, including an unpaid exorbitant special assessment and/or questionable fine issued by the bulk owners in order to “break” owners and pressure them into selling at a loss.

o   The “full purchase price” concession only applies if bulk owners represent at least 80% of voting interests approving a plan of termination. What if the bulk buyer that controls, say, 75% of voting interests, but then amends the documents to allow for first right of refusal? That would give investors the power to approve sales to straw buyers that will vote in favor of termination, but exempt them from reimbursing owners their full purchase price when that exceeds current fair market value. As written, the bill would not require buyers to be disclosed as affiliates as long as no one buyer acquires at least 20% of the condominium.

And if the bulk buyers control less than 80% of the voting interests, but a percentage sufficient to allow unilateral amendment of the governing documents, this bill does nothing to stop investors or developers from changing the basic rules of the game to their own advantage — even reducing the percentage necessary to approve the termination below 80%, as is permitted by FL Statute.

The loopholes are so obvious, even to non-attorneys and lay people. How can Legislators – many of them educated in law, political science, business, or public policy – justify voting in favor of HB 643?

(South FL Business Journal news release on HB 643)

(unanimous vote of approval)

(full text of HB 643)

(previous blog)

Light At The End Of The Quivira Falls Tunnel

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guest blog by Nila Ridings

Today, I had lunch with one of the escapees from Quivira Falls Community Association. Sixteen years of his life was spent in this rotten hellhole. He finally walked away and let the place foreclose. Only to say today he wishes he had done it years ago.

He tried for years to see the financial records. Filing a pro se lawsuit produced no results. When it rained, the hillside between his and his neighbor’s front door washed mud all over his sidewalk. It was often times over an inch deep so walking to the door resulted in muddy shoes. The front door has big pieces of peeling paint to greet visitors.

A dead tree stood out front for a long time before somebody took a saw and cut it down leaving the stump to rot. His fence around the patio is falling down and missing pickets. The hillside behind it is all weeds.

This is the ‘quality’ of maintenance provided by Quivira Falls if you are one of the “pariahs” as a former board president called those she does not like in the community newsletter.

When this man tells the story about the “blow and go” paint jobs prior to my mistaken purchase into Quivira Falls, it’s hysterical. The board hired a painting company that sprayed the townhouses with paint; windows, screens, doors, and foundations included. One warm night after the “blow and go” he decided to open his second story bedroom window. One push and the entire window flew out and crashed onto the patio below. Fortunately, he had some carpentry skills and was able to install a replacement window.

After lunch we removed all of the new door knobs, light fixtures, tools, and other supplies from the garage. I will donate all of it to Habitat Restore tomorrow. At one time, he had plans to completely redecorate the inside of his unit, but finally accepted the fact it was a waste of time and energy. He stopped paying the HOA dues and mortgage payments. And gave up hope for better days in Quivira Falls. He set himself free of the insanity to live out the rest of his life in a rented apartment which he loves.

To help him walk away and never look back, I agreed to be the Power of Attorney and coordinate the foreclosure with the attorneys and mortgage company. Without any hassle, they were nice enough to give me a set of keys after they changed the locks. Imagine that: A foreclosure company is far more pleasant to work with than the Quivira Falls board members that are also neighbors! They asked me if they should expect the owner to protest the foreclosure and I said, “Oh no! That will never happen because he’s delighted that you are taking the place off of his hands!”

And the light at the end of the Quivira Falls tunnel is getting brighter for another escapee.