Tag Archives: HOA Abuse

Not In My Back Yard!

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David Evans, guitarist in the rock band U2, owns some view acreage overlooking Malibu. He’s now into his 9th year trying to get approval to build five luxury homes, one of which he plans to live in himself. For all those years, opponents have complained to zoning officials that those five new homes will bring in way too much noise and traffic and spoil their view.
Now, it looks like zoning officials are moving closer to approving the project.

It’s too bad Evans didn’t follow the lead of movie director George Lucas, who’s been refused permission to build a small studio on his property north of San Francisco. When Lucas wasn’t allowed to build on his 1100 acre estate, he announced he’d turn his estate into a big development of affordable housing (read that, ‘low rent’). These days it’s next to impossible for county officials anywhere to reject plans for affordable housing.

Evans should use the same strategy on his Malibu property. Heaven knows Malibu could certainly use a few hundred low-rent homes!

(link to story on U2 guitarist’s development)

 

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)

 

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.

Vile HOAs Finally Attract Lawmakers’ Attention

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Well, well. A North Carolina legislator has introduced a bill that would strip Homeowners Associations of their ability to foreclose on homes. It won’t pass, of course. The lobbying powers that profit from the HOA business will pour millions of dollars into defeating any such bill anywhere in the country.

Still, it’s interesting that HOA abuses and bully boards are entering the collective consciousness of American homeowners.

(link to North Carolina proposal)

 

Got $60,000 to Spare?

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guest blog by Deborah Goonan

Do you have $60,000 to spare?

Imagine you own a one or two bedroom condo in Fort Lauderdale, with a balcony view toward the Intracoastal, and within walking distance to the Atlantic Ocean and beach city night life. Ah, paradise!

Until you get a letter from the Condo Association, demanding that you cough up nearly $60,000 for needed repairs in just a few weeks. You read that right: SIXTY.THOUSAND.DOLLARS.

According to a Channel 10 news report by Bob Norman, owners received notice of the special assessment on February 20, 2015. The first $20,000 was due on April 10, with the full balance due by June 10. Nearly half of owners were unable to come up with the first $20,000 installment. It’s not looking good when the Association cannot collect even one third of what it says is needed to make repairs.

Now many owners are understandably stressed out, knowing they face possible lien and foreclosure if they are unable to come up with all the money within a few weeks. The Association Board is reportedly looking into loan financing to raise the balance of the money needed for repairs, and to allow owners to pay over time. It’s looking like a loan — if they can secure one — will be for millions of dollars plus interest. Either way, assessments will increase dramatically. So much for the argument that condos provide affordable housing.

A quick check of public records for Embassy Tower II Condo reveals recent sales values of perhaps $170,000 – $300,000 per unit, depending on the size and number of upgrades inside. This special assessment amounts to perhaps 20-33% of the value of the unit at the time of sale. Even if owners are able to come up with this sizable chunk of change, will they ever see a good return on their investment?

Also according to public records, Embassy Tower II condo was built in 1973. That makes this condominium complex 42 years old. If owners had been setting aside reserves all along, there would be no need for a $60,000 special assessment. But, as readers of this blog know, it is rare for HOAs to adequately fund reserves.

Let’s do the math, 102 units times $60,000…that’s about $6.1 million shortage of reserves!

So, I’ll make a prediction. Because of its location near both the Atlantic Ocean and the Intracoastal, I’ll bet investor groups are keeping a close eye on Embassy Tower II, just waiting to snatch up units from owners desperate to sell, or facing foreclosure. Why, as soon as they can oust enough current owners, and take control of the Board, they can terminate the Association, and boot out the remaining owners. Then they can raze the 42-year-old building and put up a shiny new condo tower with twice as many units! They’ll make millions!

You see, the dirty little secret about many “affordable” condominiums is that planned obsolescence is part of the equation, virtually guaranteeing redevelopment every 30-50 years.

 

(link to Channel 10 report on huge special assessment)