Tag Archives: HOA Embezzlement

Tragic Loss Of Personal Rights

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On this blog we rant and rave about the alarming loss of Constitutional rights in our covenant controlled communities. 65 million people have moved into these neighborhoods having no idea how arbitrary and illegal these petty dictatorships can be.

In tonight’s blog and link I’m going to stray way, way over the line and suggest that anyone concerned about the dramatic loss of our 240 year old Constitutional Republic watch a documentary that was published on YouTube a year ago.

As a lifelong journalist, I’m not much of an alarmist. Yes, I watch and read material from the left and the right, the liberal media and the conservative. And I am usually thoughtful as I mull it all over. But I’ve always been more of an observer than an activist.

That being said, somehow I missed the documentary linked below. It pulled material from FOX News, CBS, ABC and various liberal and conservative commentators and sources. It looks at the loss of personal rights over the past ten years. In the name of terrorism a massive bureaucracy has emerged which is doing things that would have been incomprehensible fifteen or twenty years ago. Technology has essentially made privacy and personal rights obsolete.

Be forewarned, if you’re timid this may cost you a few hours of sleep.

(link to documentary on government overreach)

 

You’re A Brave Man, Greg Chumbley!

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You’d think that a prospective homeowner would be allowed to see the community financials when he’s buying a home, especially if it’s in the neighborhood covenants and ingrained in state law. But as I’ve long said, most HOA boards feel they’re above the law. And usually they’re right. Challenge them and they’ll take you to the cleaners.

That’s what’s happening in a developing story in Florida. The Village Walk of Naples has 850 homes behind its private gates. It employs eight people including the ‘town manager.’

When new homeowner Greg Chumbley asked the board of directors to show him the HOA’s financials they basically told him to take a hike. All Chumbley wanted to know is how much of his dues were going to pay for those eight employees.

The board claims that giving the public any record of its expenses might lower property values in the HOA. Really? That’s the kind of thumb-in-mouth attitude that makes a majority of Americans despise those gated communities. With all the tens of thousands of cases of neighborhood embezzlement, bribery and extortion that goes on in HOA Amerika it also raises a whole lot of understandable suspicion. “Light (truth) is the best disinfectant,” said a famous Supreme Court Justice.

Chumbley has now filed a lawsuit demanding that his HOA obey the law. The first hearing is December 1st.

Chumbley is a brave, brave man for a host of reasons. Not only is he “slapping this mule upside the head,” he’s doing it very publicly by releasing his phone number and ‘share button’ on his website.

Greg, you can’t imagine the number of admiring fans you have across the country. Please let us know how your case turns out.

Contact: Greg Chumbley,  239-300-6169

(link to press release on Chumbley’s lawsuit)

 

CAI Law Firms Fight Back

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CAI lawyers in Florida (and most likely elsewhere) are whining about one of the few court decisions that ever favored a homeowner against an HOA. It’s a case where the homeowner wrote a check for $840 with the notation, “in full and final satisfaction (of disputed amount).” The homeowner included a letter with the same basic language.

The HOA attorney instructed his clients to cash the check, but only apply part of it toward the original disputed amount. An Appellate Court has now ruled that since the check was cashed, the HOA cannot go after the $38,000 in additional fees it claimed was owed by the homeowner.

This is another one of those trashy HOA scams that have given the industry such a horrible reputation among American homeowners. If a homeowner claims, rightly or wrongly, that an HOA fine was improperly assessed, the HOA immediately begins tacking on late fees, fines, attorney’s fees, collection costs and interest. Florida law forces the homeowner to pay the most recent fees first. In other words, interest, collection costs, lawyers, fines, late fees, and only then can the homeowner ever repay the original debt.

It’s a beautiful system which has worked well for generations of Mafia families and for low-life debt collectors. While the debtor desperately tries to pay his original debt, the associated fines and interest keep rising, as do legal fees and collections. It’s a daisy chain that’s impossible to break. It’s a massive money maker for lawyers and collections agencies who, while doing absolutely no work, can raise their charges indiscriminately and perpetually until the homeowner is broken. Of course, the HOA prances in and seizes the home which it promptly puts up for auction. The lawyers then begin picking through the estate of the bankrupted homeowner. The system is fundamentally unfair to the individual homeowner who never has a chance to plead for his own day in court.

So in this rare decision where the Court ruled in favor of the homeowner, the tears and gnashing of teeth are being heard throughout the CAI community.

(CAI firm’s warning to the HOA industry)

 

National Association of Home Builders’ Federal Agenda

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guest blog by Deborah Goonan

To further challenge the misguided notion that buyers, owners, and residents in HOAs need no federal legislative policy, we will now examine what NAHB is doing on the Congressional level. Although NAHB’s scope and mission is more broadly defined, and encompasses the multi-family rental sector, a significant portion of new residential construction designed for home ownership will undoubtedly be governed by HOAs. Therefore, this analysis has relevance to HOA Reform efforts.

In March 2014, NAHB conducted its “Bringing Housing Home” campaign. Regional conferences were held for the purposes of allowing NAHB members to meet with their respective Congressional leaders to discuss important federal issues for home builders.

NAHB addressed four Priority Issues:

1) Housing Finance Reform:

On this issue,  “NAHB has made recommendations to Congress outlining a plan by which Fannie Mae and Freddie Mac would be gradually phased into a private-sector- oriented system, where the federal government’s role is clear, but its exposure is limited.”

NOTE: While CAI appears to oppose expanded privatization of mortgage financing, for fear that such a system would result in unfavorable lending standards for HOAs, NAHB appears to more fully embrace it.

While both NAHB and CAI insist upon a federal role in housing finance, they fail to support a federal role in oversight of governance and management standards for those communities.

2) Immigration reform:

NAHB states that “foreign-born workers account for 22% of the construction labor force nationally,” and NAHB contends there is a current labor shortage. Therefore, NAHB favors an immigration policy that will remove the current cap of 15,000 immigrants for construction industry. They further urge Congress to enact legislation “… preventing state and local governments from creating their own versions of verification requirements for employers. This is essential for any business that operates in multiple states.”

If NAHB is successful in convincing Congress to relax E-Verify standards for immigrant construction workers, what might this mean for HOA buyers? NAHB seems to be making the argument that labor shortages are driving up construction costs, but does not state that increasing the labor supply will result in lower sale prices for buyers. At this point, there does not appear to be a shortage of available homes for sale. The main purpose of NAHB lobbying appears to be aimed at reducing labor costs for home builders.

Yet there are no legislative efforts by either CAI or NAHB to reduce operating costs for HOAs. Indeed, Developers and CAI-backed HOA Boards want to maintain carte blanche on their ability to generate revenue from homeowners the form of regular and special assessments. It is up to owners in HOAs to press Congress for reasonable limitations upon the HOA’s ability to demand ever more money, with nothing to show for it.

3) Tax Reform

NAHB favors maintaining the Mortgage Interest Deduction on first and second homes, and maintaining Low Income Housing Tax Credits for construction of multi-family rental housing.

So why not extend a comparable tax deduction to homeowners in HOAs for assessments – at least the portion that pays for services that would otherwise be provided by local governments? After all, to some extent, HOA homeowners are subject to double taxation. Why should non-HOA taxpayers of similar size homes have a tax advantage over HOA homeowners?

4) Flood Insurance Reform

NAHB successfully lobbied Congress to pass legislation that keeps flood insurance rates affordable in the short term, while buying more time to reevaluate flood maps.

On the surface, that appears to be a good thing for some homeowners in high-risk flood zones. But at the same time, this new legislation has not provided any mandate or disincentive that would prevent Developers from continuing to build in flood prone areas.  In the future, inevitable increases in rates will hit HOA owners hard. If FEMA continues to remain underfunded, all taxpayers will feel the pinch.

In conclusion, for every major federal legislative issue that CAI and NAHB pursue, there are related or competing federal issues for HOA owners and residents that have been largely ignored for decades.

Isn’t it high time we change that trend?

(link to NAHB assessment of 2014 election)

(link to NAHB Federal Lobbying Campaign)

CAI seeks Federal Legislation, So Should Homeowners Rights Advocates

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guest blog by Deborah Goonan

CAI makes it abundantly clear they oppose federal regulation of HOAs. Yet the HOA industry has relied heavily on federally backed mortgage financing to support a behemoth HOA housing empire created of, by, and for Developers.

The height of industry hypocrisy is made apparent when we take a close look at federal legislation that the HOA industry promotes before our Congressional leaders.

CAI recently conducted its “August 2014 Recess Advocacy Campaign,” where members were urged to meet with Congressional leaders in their respective District (local) Offices.

CAI is currently focused on three key federal issues. Let’s look at each one, using CAI’s own words, my emphasis added in italics for clarity.

1) Mortgage finance reform

CAI’s goal is to ease access to federally backed mortgage financing. Congress is planning to replace Fannie Mae and Freddie Mac with a new finance system that will likely be more dependent on private lenders with potentially diverse (strict) lending standards. CAI members are instructed to remind Congress that the  “current national standard for community associations has reduced complexity and duplicative work by associations when providing information to mortgage lenders. Eliminating community association standards will drive up association cost, create confusion, and lead to impractical requirements that interfere with the responsibilities of association boards.”

2) Disaster relief fairness

CAI laments that Association insurance policies do not always fully cover repair costs after natural disasters, and reasons that HOAs should be eligible to receive FEMA disaster relief because, “Residents of community associations should be treated equally with all other taxpayers … Owners in community associations must likewise receive the same federal benefits as all other residents within a local jurisdiction in the aftermath of a natural disaster.”

3) Amateur radio parity in associations

 “CAI opposes unnecessary federal intervention in the operations and governance of community associations… Community associations do not need an Act of Congress to work through differing points of view that are simply best settled by neighbors talking to each other.”

Take note of CAI’s interesting perspective for protecting the rights of HOAs.  But are these advocacy efforts beneficial to HOA owners?

Historically, loose mortgage standards have led to high default rates, and failure of Fannie Mae and Freddie Mac, which has proven to be more harmful than helpful to HOA owners. CAI seeks FEMA benefits for HOA common areas that lack adequate insurance coverage and protective measures such as surge protection. They do not advocate for FEMA relief for individual homes or units.  The more important concern should be why are so many HOAs lack inadequate insurance protection in the first place? The odds of squeezing funding out of a cash-strapped FEMA for HOA common areas is slim to none, particularly since FEMA views corporate HOAs as businesses. (I wonder where they got that idea?)

Now, let’s examine the People’s perspective. Why do advocates seek federal legislation aimed at HOA reform, and improved alternatives to HOAs? Why support federal standards and oversight?

First, federal standards would reduce complexity and confusion that results from a mosaic of ever-changing statutes across the country. Furthermore, mandating national democratic governance standards tied to Constitutional rights will prevent individual states from enacting state-level legislation that primarily serves the interests of the local real estate industry.  If state-level advocates exchanged notes on what policy works and doesn’t work, it could save potentially millions of dollars spent on lobbying for or against potentially harmful or ineffective legislation.

As advocates, we seek equal justice under the law, on par with other taxpayers. Are HOA residents not entitled to the same federal benefits of the Constitution through the 14th amendment, and under the same Bill of Rights as the rest of our fellow Americans? Are we, as individuals, not entitled to consumer protection in the form of policy that holds HOA leaders accountable to the people? After all, we pay taxes just like our counterparts that do not reside in the HOA regime! We should be treated equally!

And, recall that it DID take an act of Congress to remind HOAs that Americans have the right to display our country’s flag. Yes, Congress passed the American Flag Act of 2005, a law that some HOAs still flagrantly ignore and manipulate by creating twisted rules under the dubious authority of a “contract.” Disputes still occur with the neighbors that should be able to settle disagreements by simply talking to each other. After all, homeowners and HOAs never need to hire a $400-an-hour attorney to settle those differences, right?

With CAI lobbying at the Federal level, it becomes even more important that HOA Reform advocates do the same.

(link to CAI’s August 2014 Federal Advocacy Campaign)