Tag Archives: HOA Embezzlement

Stan “The Man” and the Transfer Scam

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In my book, Neighbors At War, I wrote about a nasty little piece of HOA theft called ‘transfer fees. ‘ They’re hidden deep within the text of your CC&Rs and the vast majority of home buyers never even see them. Sometimes they’re not even in the paperwork. But they can cost you hundreds to thousands of dollars at closing time. What are transfer fees? They’re a scam. They probably refer to photocopying costs which at ten cents a page shouldn’t cost you more than about ten bucks. But the transfer fee is pure slush that pours into the pockets of the nearest property manager or lawyer.

Stan Hrincevich is the HOA Warrior in Colorado who’s long been trying to educate legislators about this scam. And Stan is Enemy #1 on the CAI’s list of really bad guys. To me he’s Colorado’s biggest hero. His battles against DORA (Department of Regulatory Agencies) are legendary. The Colorado Legislature created an HOA Ombudsman’s Office to try to shut Stan up. Sadly, the Ombudsman has no budget, no power and is dumber than a box of rocks. The only thing this ‘Ombudsman’ ombuds for is his own salary.

That’s the background.

Knowing that this same kind of situation exists in almost every state in the union I’ve asked Stan for permission to reprint a recent news release he sent to homeowners around Colorado.

by Stan Hrincevich (www.coloradohoaforum.com)

The HOA Manager licensing law requires disclosure of fees imposed by property management companies on home owners to be in their contracts with the HOA. If you know of anyone who has recently (after July 1, 2015) sold or bought into an HOA and paid an HOA Transfer Fee (this can be identified as a one liner on the closing documents) let us know. These home owners might be eligible for a refund and the management company fined. We will help in filing their complaint with DORA to pursue this issue.

The HOA Manager licensing rules are very weak for home owners and purposely left out specifics and justifications regarding fees imposed by management companies on home owners. However, there is still room for filing complaints and requiring HOA Boards and management companies to justify the imposition of the HOA Transfer Fees in HOA contracts and governing documents. Additionally, your HOA Board may also be required to inform home owners if they endorse such fees and to change the HOA governing documents/declaration to indicate the Transfer Fee is a financial obligation of the home owner upon the sale of their home (which may require a vote of home owners).

When someone buys a home in an HOA they are to be apprised of all financial obligations to the HOA as a home owner. This includes HOA dues and special assessments. The HOA Transfer Fee is rarely if ever disclosed as a legal obligation and therefore the property management company (and HOA) should be precluded from assessing this fee. The new licensing law precludes assessing fees unless it is in their contract with the HOA and/or supported by the HOA governing documents.

Filing a complaint costs zero and we will help as needed.

We will periodically issue this email requesting your cooperation on this topic.

NOTE: THE COLORADO HOA FORUM PROVIDES INFORMATION AND OPINION ON HOA ISSUES BUT SUCH INFORMATION SHOULD NOT BE CONSIDERED LEGAL ADVICE. WE ARE NOT LAWYERS. ALL LEGAL ADVICE ON COURT CASES AND OTHER LITIGATION SHOULD BE HANDLED BY A LAWYER.

Your Frickin’ Frackin’ HOA Rights!

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guest blog by Deborah Goonan

Did you know that when you purchase a home — either new construction or resale — you might not own the rights to mineral resources beneath that home? If not, then you must take the time to read Reuters 2013 Special Report: US Builders hoard mineral rights under new homes, linked below.(1)

It may seem unbelievable, and might never have crossed your mind, that the builder of your home would write into the deed and sale agreement that mineral rights would not convey to the homeowner. What this means is that if there should be oil, gas, gold, or any other valuable resource lurking in the soil beneath your home, you would have NO rights to compensation for withdrawal of those resources. In fact, whoever holds those mineral rights — be it the developer or an energy company that has acquired those rights from the Developer — has the legal right to drill under your property and take those minerals, whether you like it or not. And because you don’t own these rights, you won’t be making any money on the deal, even though you’ll assume all the risks involved during the drilling or “fracking” process that is sweeping across the country.

And quite often, the developer does not openly disclose that the buyer gives up property rights, including mineral rights. Most buyers find out either at closing or thereafter. The fact that most new construction is part of a homeowners’ association makes it easy for the builders to bundle these mineral rights and then lease or sell them to a third party, often without the homeowners’ knowledge or explicit consent.

Below, you can follow links to two June 2015 reports on fracking: one from the EPA concluding that contamination of water supplies is “isolated,” (2) and another news release from the University of Pittsburgh, citing a study of the correlation between proximity of pregnant women to fracking activity and lower birth weights of their babies (3). But there are literally hundreds of news reports, and dozens of studies have been done on the subject. The oil and gas industry and the EPA tend to downplay the risks, while environmental activists tend to play up exposure to human health risks as a result of air, soil, and groundwater pollution.

For all of these reasons, when homeowners in North Carolina and Florida became aware of developer mineral rights hoarding practice, they demanded action from their Attorneys General. In both states, homebuilder DR Horton agreed to return mineral rights to homeowners in 2013. (4)

In Colorado, developers such as Lennar have incorporated mineral rights companies (5) as subsidiaries of their homebuilding corporation. In Weld County, drilling activity has been going on for several years just outside of Rinn Valley HOA. A 2011 report features Rinn Valley homeowners who have lived through the noise and disturbance of gigantic heavy equipment during the 24/7 drilling process, within 500 feet of their back yard. Now homeowners have to contend with unsightly tanks and round-the-clock trucks that collect gas, oil, and wastewater and haul it away. It’s way more intrusive than most homeowners ever imagined. (6)

Plus, there may be hidden risks. A CBS report on Colorado’s 2013 flooding highlights flood waters wreaking havoc on tanks at drill sites – tanks containing oil and toxic chemicals used in the fracking process. (7) Some of those tanks sat mighty close to Rinn Valley. Could fracking activity, combined with flood damage, have played a role in soil and foundation problems for Rinn Valley homeowners, where Lennar is currently involved in construction defect disputes? Maybe. Maybe not. Hopefully there will be some competent experts working on behalf of homeowners to determine the extent and cause of these defects.

As a home buyer, the best way to protect your interests is to thoroughly research the developer and to hire a competent real estate attorney to represent your interests from the point you sign a sale agreement through closing. Your attorney can examine the deed and provide title insurance, disclosing any irregularities to you before you get to the closing table with the moving van already packed to the gills. Do not allow the developer’s or mortgage lender’s title company to represent you at closing!

References:

1 Reuters Special Report: US Builders hoard mineral rights under new homes

2 EPA study shows Marcellus Shale fracking doesn’t cause widespread water pollution

3 Study cites lower birth weights near fracking – Pitt health study finds correlation

4 DR Horton Returns Homeowners’ Mineral Rights

5 Lennar Colorado Minerals LLC incorporate 2011

6 Gas drilling and fracking occurred adjacent to Rinn Valley Ranch (2011)

7 CBS News report on Colorado flooding and its effects on fracking sites (Video)

 

Oh, That Sinking Feeling When Your Builder Walks Away!

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guest blog by Deborah Goonan

Let’s face it. There is no shortage of construction defect reports for many homes built in the past decade, and Colorado homeowners seem to have more than their share of shoddy construction.

The focus in the news lately has been on condominiums, with city leaders bucking state law to go around legal protections for homeowners, claiming that if they do not ease up on construction standards, developers won’t be able to build enough “affordable” condos for first-time buyers.

Well, here’s a story of apparent construction defects affecting some pricey single family homes on the outskirts of Frederick, roughly 30 miles north of Denver. It seems Dr. Robert Landry, a veterinarian, his wife and two small children have had to move out of their home. Landry alleges that the family’s Lennar-built “forever home” is uninhabitable, because the foundation is sinking into soft soil, allowing moisture and mold build up, buckling wood floors, and kitchen counters pulling away from the walls.

The homeowner hired an engineer to examine the foundation and crawl space, and to conduct soil testing. The results of recent soil tests indicate that the soil is too soft to support construction of a home. Lennar claims that soil testing done in 2006 indicated a drastically different soil composition that was deemed suitable for construction.

However, in 2013, Colorado saw historic flooding, and Weld County – where Landry’s home is located – was particularly hard hit. Additionally, Frederick has a history of coal mining activity, and in recent years, nearby land has become the site of oil and gas drilling, and the controversial practice of fracking. (the subject of another blog) Several of Landry’s neighbors report similar damage to their homes.

A Google search of Lennar Homes in Frederick indicates the company is no longer building homes in Rinn Valley HOA, the site of Landry’s home. Landry has approached the Town of Frederick and the HOA for assistance, before bringing his story to local media.

Landry contends that new soil testing should have been done following the 2013 floods, prior to breaking ground on his home and others nearby. He questions why the Town of Frederick approved construction and issued occupancy permits for homes built on shifting soils, particularly without drilling deep piers into bedrock to support their foundations. The inspection officer admits that the Town’s policy is to simply accept the Developer’s reports, signed by the builder’s own engineers.

This is common practice in many states – the local government’s development planning officials are mostly paper pushers. As long as the Developer files the required reports with signatures, the project is good to go. And many site inspections are either conducted by the Developer’s chosen experts, or, if conducted by the city or county, such inspections are cursory at best.

In other words, as a home buyer, no one is looking out for your interests.

To add insult to injury, the Attorney hired by Landry says that it is impossible for homeowners to sue Lennar, because the Developer requires arbitration to settle construction defect disputes. Those consumer-hostile terms were written into the sales contracts for all homebuyers. (Similar terms are most likely written into the governing documents for the homeowners association, with regard to defects that occur in the common areas.)

Landry and his neighbors hope to convince Lennar to buy back their homes, so they can move on with their lives.

Source articles and video:

(homeowner blames builder for sinking house)

(earlier report, Shifting Soil Damages Brand New Home in Frederick)

(March 2015, Dr. Robert Landry asks for assistance from Town of Frederick with Rinn Valley homes)

(Rinn Valley Ranch HOA)

Little Free Library Must Go Says The HOA!

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guest blog by Nila Ridings

Jennifer Fontanilla of Stockton, California had no idea she could not erect a Little Free Library in her front yard. Well, let’s say she had no idea her LeBaron Estates Owners Association could prohibit her from keeping the Little Free Library she won and then erected.

It’s got a bright yellow door and gives the impression literacy is just tempting inquiring minds of the young and old to open it. Take a peek inside. Find something interesting. And take it home to read.

OMG! What if there was a copy of Neighbors At War The Creepy Case Against Your Homeowners Association by Ward Lucas in there? What if Miss Jennifer and her neighbors learned the TRUTH about the risks of owning in the HOA? What if they came across this website and read these blogs about abusive bullies on the HOA boards? What if she has no idea the board members can spend massive amounts of money to drag her into a lawsuit, a jury trial, and foreclose and take her home and life’s savings? All because she was providing FREE BOOKS to her neighbors to READ! Tell me dear readers, has there ever been a greater sin?!?!

The Little Free Library movement has gone global. To me, it’s a wonderful thing. I’ve been known to put books in the ones in my area, but NONE OF THEM ARE IN MY HOA! I would love to build one and fill it with books. But I know I would have to figure out a way to live in it because my HOA would definitely foreclose and take my townhouse if a Little Free Library appeared anywhere near here.

The ignorance in America continues to grow. Shouldn’t we be willing to do anything possible to encourage learning? Are we really this stupid to believe a Little Free Library across the street is going to depreciate property values? And are we willing to pay dues so a bunch of bullies can sue the neighbor that has a Little Free Library that most everybody enjoys?

When will we stand up and say, ENOUGH IS ENOUGH?

Jennifer Fontanilla has another ‘hearing’ about this issue on July 14th. Can we figure out a way to show our support for her from all across America?

A special thank you to Record staff writer, Nicolas Filipas for exposing more insanity from a California HOA.

(link to Little Free Library story)

http://www.recordnet.com/article/20150703/NEWS/150709883#ReaderReaction

Reflections on Flags

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Flag etiquette is a touchy subject in this country. The U.S. Supreme Court has ruled that burning the American Flag is a protected form of speech under the First Amendment. Still, we hear calls from elected politicians that displaying the Confederate Flag is not protected speech.

The beginning of the Confederate War was never about slavery, it was about the massive tax burden being imposed by the North against southern businessmen. The slavery issue arose two years into the Civil War and at that point the Stars and Bars and slavery were forever linked.

But the original flag, the one that George Washington commissioned, was never about slavery, either. It was about this country’s brash argument that it wanted to be free from foreign rule and oppressive taxes. Yes, George Washington owned slaves. So did many others of the country’s founders. So did the Cherokee Indians, for that matter.

So how is the American Flag any less a symbol of slavery than the Confederate Flag? The two flags are just red, white and blue pieces of cloth stitched together. And now professional rabble rousers are insisting that anything Red, White and Blue be torn down and assigned to the dustbins of history.

The two flags represent culture. There are good and bad things in every culture. But believing that Americans are too stupid to make up their own minds about important cultural issues is Political Correctness run amok.

Flee from political correctness, that apple barrel of hypocrisy and prevarication which is sitting and fermenting and waiting to poison the discussion and the common sense that most Americans have.

Now, we have a very real situation taking place in a Southern Colorado neighborhood. A Hispanic man hung a flag upside down as a show of disrespect because of the racism he feels in his community. He says he feels harassed by the HOA’s management company.

Whew! Don’t we all?

There’s a craziness afoot in American neighborhoods. There’s an intolerance that’s as insidious as a cluster of cancer cells. Let’s get rid of it. Leave the flags alone. Leave our First Amendment alone. If someone has the bad taste to display a flag improperly, just walk away and let him be. What a nice place this would be if we just gave each other some space. Forgive, forget, and get on with life.

(link to El Paso County flag story)