Tag Archives: HOA corruption

A Lesson in Contradiction and Irony – America’s Real Estate Market

guest blog by Deborah Goonan

I must admit, it’s becoming very difficult to keep up with real estate market news these days. The most recent Census data report pegs the US homeownership rate at a mere 64% – a 25-year low. Yet, markets are heating up and home prices are making the American Dream even less attainable.

I’ve included a few links to some of the dozens of recent reports that I read every month. If I had to describe the current housing market in one word it would be “insanity.”

The so-called market recovery varies considerably from one market to another, and even between market segments. For instance, in Miami 4th Quarter year-on-year sales of single family homes were up 7.7%, while condo sales in the same market were down 3.3%. Prices were up 4.7% for single-family homes, and 8.6% for condos, despite falling demand. Yet 325 new condo towers have been have been proposed in Miami, and 13,000 of the total 41,000 units proposed are currently under construction. Foreign buyers from Russia, South America, and European countries make up a significant portion of the market, but their buying power is eroding as the value of the dollar increases.

Who is going to buy all of these condos?

Phoenix and Denver also reports low supply and high prices, while in Chicago, sales are still lagging behind.

Meanwhile, in the Tampa Bay area, where dozens of condo conversions gone bad were de-converted to apartment rentals in recent years, several previously stalled new construction condominium projects have since been scoffed up by investors and rented for several years. Guess what? Now those rentals are converting back to condos for sale. Staging companies are having a field day furnishing vacant units to woo buyers.

So in addition to displaced condo owners losing their homes and life savings, we also have displaced tenants competing in an already tight rental market. The problem is, condo prices are too high for most of these displaced owners and rents are going through the roof for all of these folks on the move. But who cares? Not all those private investors in the process of making their next wave of fortunes in this budding boom market.

The same condo conversion euphoria is reportedly occurring in other major urban areas, especially New York City.

My head hurts from shaking it.

At the same time, the luxury real estate market is going wild. In Tampa and Miami, for instance, many condos are selling above $1 million, even though the median price for condos in the Tampa-St. Petersburg market last year was a mere $110,000. New high-end condo complexes in Tampa Bay are pre-selling their units for millions of dollars.

Washington Post’s Christopher Ingraham reports that the McMansion is back in vogue across America. Developers are apparently targeting affluent families buying up the real estate ladder, despite the fact that the millennial generation is opting out of buying first homes and renting instead. (Be sure to check out the photos of some very posh properties in FL, selling at $5 million and up. The author also notes that despite all the marketing and political hype about the virtues of urban living, most developers and construction companies are politically Conservative (according to campaign contribution records), and prefer to live in spacious homes with large lots in far-flung locations away from the hustle and bustle of the city.

Go figure. After all, I suppose big-time stakeholders in this insane real estate market need somewhere nice and private to live

(link to Tampa Bay Times on condo de-conversions to conversions)

(link to NBC real estate market report – Miami)

(link to Tampa Bay Times on luxury condo market)

(link to Orlando Sentinel/Washington Post  on the return of McMansions)

(link to Jan 2015 US Census housing data)

Sewage backups a problem for St. Cloud condo complex, trailer community

guest blog by Deborah Goonan

There is a national misconception that HOAs are all prestigious gated communities or luxury condos for the wealthy. That’s just not the case. The vast majority of HOAs across the country are home to people of all income brackets.

Florida, like many other states, has its share of “affordable” and low-income housing in Associations. Most of these are multifamily arrangements such as low-rise condos and townhouses, or trailer parks where residents lease lot space.

But in St. Cloud, FL (Osceola County), owners in Palm Gardens condominium complex and Floridian RV Park have something to make a big stink about – literally. They’ve got sewage backing up when it rains, and bubbling up from the street and into yards. Their children cannot safely play in contaminated areas. The stench is terrible, and owners and residents are frustrated.

Florida DEP and Osceola County have been slow to respond. Palm Gardens condo owners have been told they will each have to come up with $3000 to rebuild the entire system, but few can afford that much money. They already pay $165 per month maintenance fees to the condo association.

It is unclear who will pay for repairs in both of these low-income residential neighborhoods, and perhaps that’s part of the reason these issues have festered so long.

This is another shining example of what can go wrong when public works are privatized: poorly built infrastructure, no regular maintenance or inspections of the system, finger-pointing and blame-shifting when inevitable problems come to the surface. Local governments say that the owners in the private community should pay for repairs. Owners say that building inspectors and code enforcement should have been doing their jobs all along. HOA and Condo Boards, with little guidance and oversight, have been allowed to underfund reserves or squander money over the years, and now owners cannot come up with hefty special assessments. They wonder, “Where did all our money go?”

Where indeed.

Palm Gardens condo complex

Floridian RV Park, WFTV Video coverage

Benzer Testimony Gets Interesting!

Guns? Organized crime? Fear of winding up in the desert? Major law firms involved? The HOA racketeering trial in Nevada is producing some interesting testimony from witnesses in the scheme to takeover Homeowners Associations across the valley.

This trial continues to be a travesty because 37 of the criminals involved were allowed to plead guilty in order to get lighter sentences. The sentences won’t be announced until after the current trial is over. But I’ll take a reporter’s wild guess that the average sentence for these mobsters won’t be greater than 18 months, with much of that time off for good behavior.

This is the one instance where I’d be all in favor of debtors’ prisons. Keep these animals locked up until every Nevada homeowner is made whole.

That’ll never happen.

I know there are some FBI people who read this blog. Have some guts and start investigating racketeering in HOAs all over the country!

(link to ReviewJournal article on Las Vegas HOA racketeering)

 

A Mini-Love Canal in a Pennsylvania HOA

guest blog by Andy Ostrowski (former PA Congressional Candidate)

The Wilson School District was going to purchase a tract of land adjacent to the Hidden Valley condominium. They are both part of the same parcel in the “Lincoln Park” area of West Lawn, Spring Township, Berks County, Pennsylvania. Ironically, you cannot even find the Hidden Valley Condominiums at 1334 West Wyomissing Boulevard address on google maps – it is hidden, indeed. Google map it.

The School District did not go through on the purchase because battery waste was found on the property. The owner of that property, Al Barg, who was also once a President of the Hidden Valley Condominium Owners’ Association, and an owner of several units at Hidden Valley, then sold the property to Weiner Development, which, it is my understanding, is affiliated with Pinnacle Development. In the mid-2000s, Pinnacle constructed Penn’s Crossing on the property, which is a low income retirement apartment building containing 52 units.

The land upon which both are built has been referred to by one Environmental Protection Agency representative as “The Love Canal,” except for the amount of waste involved, which became the subject of national attention when the presence of toxic waste on that site was revealed in the 1970s, after having been concealed for decades. Accordingly, at least the 26 unit owners at the Hidden Valley Condominium, and the 52-plus residents at Penn’s Crossing may be living on contaminated land.

There were two fires at Hidden Valley, one in 1999 and one in 2011, both of which are believed to be electrical in origin. The one in 1999 affected 6 to 8 units. The 2011 fire resulted in the death of one of the residents, after over 80% of his body was burned. Although the Pennsylvania State Police are supposed to have exclusive jurisdiction in the investigation of fires resulting in injuries and death, the Township of Spring Fire Marshall did a report labeling the cause of the fire as “undetermined.” There was allegedly a statement made by the man who died, and a photograph of the burnt inside of an electrical box that were not mentioned in the report.

During my campaign, I began to be contacted by many people from across the country who are residents of Homeowner’s Associations (HOAs), with all manner of horror stories about their experiences. I see these as being core civil rights issues – affecting the very essence of people’s lives – the right to live and raise families in safe, secure, peaceable homes. I wrote a couple pieces about my view of these constitutional issues, i.e., the usurpation of basic government functions, by these private entities, who rely on their money for access and control of legislative initiatives, and their access to the courts, and posted them on my campaign site.

I met a woman who bought a unit at Hidden Valley when she was 26 years old – in 1999. She worked on my campaign. Hers was one of the units affected by the 1999 fire – the bottom, left unit of the building, for those who have seen the photos on http://hiddenvalleyhiddentruths.webs.com/. I learned much more about the situation, and the fifteen years of litigation in which this homeowner had been involved. I will cover more of that story down the road, but the bottom line is that, despite the clear, unequivocal proof of the deplorable conditions of that building, and the failure of the HVCOA and Township of Spring to do and/or enforce the proper repairs, nothing was done. Instead, the litigation turned into a years-long assault on the character and person of the homeowner.

I note that this particular homeowner has shown a character, resolve, and moral fiber that is possessed by only the rarest of breeds of people in this world. She realized what she had come upon, and the number of people who were at risk because of what she learned, and she has fought, against all odds, on the principles involved in this situation – all over a $40,000, 800 square foot condo. As you learn more about this, and as I continue to reveal more of the truths that have been, and continue to be, hidden, ask yourselves “would I have done what this homeowner did? Do I have that strength?”

After relying on lawyers, and getting mistreated by them, for years, the homeowner lost her trial in the Berks County Court. How? Why? This will be another facet of the story along the lines of what I have discussed for the past few years about problems in the courts. More to be revealed. I note that the EPA representative did tell her it was “political,” and he, along with almost all others along the way, told her to “just sell the unit,” i.e., don’t disclose these known hazardous conditions, and put others in harm’s way, and try to move on with your life, and live in peace. She was actually told to get out of the state, or even the country (why would he suggest Belize?).

Not just this, but she was told to “just get out,” “they want you to have a fire and burn the fuck up,” and many frightening, intriguing things along these lines, like turning over a stack of documents containing information about environmental contamination, insurance fraud, and sundry other misconduct, and warning her that “once I turn over these documents, there is no backing out. You must go all the way now, and I will be killed if they find out.” There are two dead former HVCOA Board members. This one, and the one who burned in the 2011 fire, who also was allegedly about to blow the whistle on the HVCOA. More to be revealed.

After she lost her court case in 2009, and had her lawyer mishandle her appeals, and commit egregious malpractice (or deliberate malfeasance), she did not go away. She continued to fight. She continued on her own, with just a few trusted friends along the way, to gather evidence, talk to witnesses, and fight the fight that her heart and conscience motivated her to fight. It was a truly remarkable effort by a truly remarkable person. Again, more to be revealed.

After years of relying on lawyers, not finding anyone who would go down to this property, having her proof cut off at trial, having her personal work product stolen by her own attorneys, being denied any access to justice, and being followed, defamed, harassed, and abused all along, she did finally find a highly-credentialed structural engineer to do a report on the property.

That report was finalized on February 5, 2015. That report confirms everything this homeowner has said all along. That report talks about severe moisture infiltration, subsurface conditions, fire hazards, an entire electrical system in need of evaluation, needed environmental testing, suspicious missing documentation for the Department of Labor and Industry, changed documents, the battery acid meeting minutes, a reference by our EPA friend to this place as a “contaminated condo,” and the fact that “major demolition” is needed to even do any type of full and proper investigation.

On Monday, February 23, 2015, I attended a Spring Township Board of Supervisors meeting with Stephen Runyeon, a friend, and loyal supporter, of the homeowner (more to be revealed). Stephen presented the report and some other information to the Board of Supervisors who, at least in the past, had ample and abundant knowledge of the problems at the Hidden Valley. Stephen did so in a very professional and appropriate manner, supporting the homeowner’s contentions all along. (A Board member communicated that the HVCOA got their lawyer through the Township – more to be revealed). He made a passionate appeal that the Board of Supervisors perform their public duties, and enforce appropriate action to have these issues properly addressed, and to protect the residents of Spring Township who are in harm’s way.

I got up after Stephen, and talked directly about the people in harm’s way, and my motivations in taking an interest in this case, and the extent of the information about the contamination issues, and the HOA issues implicated by this situation, and the problems that occur when government functions are ceded to private, corrupt, money-driven entities. I also asked that this place be condemned, and that steps be taken immediately to address the safety and security of the people at Hidden Valley, at Penn’s Crossing, and in Lincoln Park, where two elementary schools were recently torn down for some vague reason, one specifically on an adjacent tract of land.

Upon advisement, the homeowner did not attend, citing the history of abuse and defamation, and the recent information she learned from her EPA contact after discussions with Township officials that “they” wanted a “pound of flesh” from her, that she would not get off “scot-free” (completely free from obligation, harm, or penalty), among continuing defamatory remarks.

Interestingly, and very sadly, she was also told by this EPA representative that she should just put Hondurans, or Mexicans, or some other people in her unit who would be used to those conditions, and would just be happy to have a roof over their head. Of course, this is unacceptable to this homeowner, as she has always been motivated by the protection of the many lives at risk at this “contaminated condo,” with its mold and fire hazards, and her demand has always been the same – the truth. The truth has been hidden for many years. It is now being revealed.

We need all of your continued assistance. We do not expect the Township to come in and do what they should do, and we are cautious about the other law enforcement authorities taking this case and running with it – read about the effort that was required at the Love Canal. We need this information proliferated. We need the people at Penn’s Crossing contacted. We need the Township contacted. We need to fill the meeting rooms, and use the phone lines of the Attorney General, the U.S. Attorney, the Township of Spring, and Governor of Pennsylvania, and anyone else we can think of to get some attention, and immediate action, on these issues. We need to show the power of the people, and the strength in numbers, and we need to make sure that there are no more hidden truths at Hidden Valley. We need to show that this is what is demanded by our Constitutional right to life, liberty, and the pursuit of happiness.

You may tell them that you got the information from Andy Ostrowski, and that I asked you to call.

Yet Another HOA Embezzling Case

These stories come to us daily. Sometimes the loss is $28,000. Some are over a million dollars. Even when convicted there’s rarely any restitution from the embezzlers. And that means that every member of the Homeowners Association is going to be hit with a special assessment to cover the losses. Embezzling, kickbacks. And sometimes these crimes are so organized and so massive that they bankrupt entire neighborhoods.

Someday homeowners will wake up.

(link to another embezzlement in Tennessee)