Tag Archives: HOA

Are Cities Exploiting HOA Owners?

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guest blog by Robert Frank, Colonel, USAF (Ret.)

Will Over-Taxing & Under-Maintaining Infrastructures Lead To Disasters?

Many cities claim to promote long-run ‘sustainability objectives’ following U.N. Agenda 21 policies. But, Homeowners Associations, CICs, CIDs, Condo Associations, acting as ‘private, quasi-governments’ wind up being over-taxed and under-maintained by cities.

The predicted results are windfall profits for industry and government, and failed CIDs. Is this yet another reason the HOA industry and local government is so hostile to those who question their policies and frequent overreaches?

We know that cities or counties charge the same property tax rates for all home owners. But, the costs to support HOA/Condo private property is much less than non-CIDs. This is particularly true in gated HOAs.

So, it can be reasonably argued that the local government organizations who dictate the requirements for CIDs and profit from receiving excessive taxes should either refund the surpluses to unit owners, or reserve the surpluses for future bailouts of failed CIDs.

Spending the surpluses for such unjustified things as vastly increased government worker salaries and pensions while the older CIDs are heading towards failure is unwise, selfish and immoral. This failing CID infrastructure situation for developments over 20 years old is well known.

Professor Evan McKenzie and others offer advice on CIDs to local governments and the industry. IMO those who create and highly profit from the terms, conditions and taxes created through the CID’s master plans cannot shed all responsibilities for helping to bail out failing CIDs.

We all want to avoid the kind of urban blight that happened (for somewhat different reasons) in Detroit, Michigan. But, CID common property structures seem to be designed to fail or require major (unaffordable) renovations within 20 to 50 years. This seems particularly true for gated CIDs and Condos. it seems that inventors and profiteers of such CID plans should be held at least partially responsible for enabling CIDs to sustain themselves over the long-run.

Is it not unreasonable, or at least unrealistic, to dump the total costs of common property replacement infrastructure on the backs of future unit owners using the almost unlimited power of CC&Rs during the last decades of structural life? What will that do to unit values in cities during those final decades?

As industry leaders have written, the future of CIDs is a predictable train wreck. If the HOA/Condo market is to be sustained, major changes are needed NOW in the master plans.

And, community planning is required NOW to build a balance of non-CIDs units where owners are individually responsible for their long-range planning?

Where are the better options? Industry and government demands for maintaining the “CID status quo” appears to be a formula for home owner disasters in our lifetimes!

Important Scam Warning, But Not HOA Related

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Here are some crooks who desperately need to be shut down, so spread the word on this scam to everyone you know.

I just had the most incredible scam caller on my private phone line. By his accent, the guy was obviously from India. He said he was from Windows and that my computer and my website were constantly mailing out error messages to the Windows company. I played along and acted dumb as long as I could. The caller eventually hung up, but he was a very gifted scammer. I searched online to see if others had received a similar phone call and I pulled up the following article:

http://arstechnica.com/tech-policy/2012/10/i-am-calling-you-from-windows-a-tech-support-scammer-dials-ars-technica/

My experience was identical to that of the author of this article. This is apparently a huge world wide scam, and it’s quite convincing so avoid it like the plague.

BTW, if you don’t want to click on the link (which is obviously wise) here’s the following search string I ran on Google:     strange call windows event viewer

It will pull up the same article I’ve linked above.

Feel free to send anyone you know the link to tonight’s post on the Neighbors At War site. Heck, it might even generate some new readers for our regular fare.

-Ward

 

The Case of the Disappearing Water View

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guest blog by Deborah Goonan

Now you see it now you don’t

One of my pet peeves about HOA master planned communities is the sales promotion of retention ponds as “lakes” with adjacent properties sold at a premium price for “water view” lots.

These “lakes” are man made bodies of water excavated during original construction, with the purpose of creating a catchment area for ground water and storm runoff. Most of them have little recreation value (there are a few exceptions with man made lakes large enough for boating and fishing) although they do tend to attract birds and wildlife if the ponds are maintained in healthy condition.

But these ponds are expensive to maintain. Storm water runoff contains all sorts of impurities and contaminants, from automotive fluids and pet feces to lawn fertilizers and pesticides. In fact, the pond serves as a place for impurities to settle or naturally dissipate before flowing downstream to interconnected ponds, streams and rivers, and sensitive wetlands. That’s why your HOA probably prohibits swimming in the water, and fishing is limited to catch and release. Trust me, you do not want to eat those fish.

All of these impurities are bound to throw off the chemical balance of the pond, so “Lake Maintenance” companies are hired to remove floating debris, and treat the water with chemicals in an attempt to keep the water clean and fresh. Periodically, a properly maintained pond needs to be dredged to remove built up muck from the bottom, and regular shoreline repair is needed to prevent erosion of the bank side into the pond. It costs thousands of dollars per year to properly maintain each pond.

Drive around any HOA community in Florida that is more than a decade old, and you will notice that some of these ponds look better than others. When not properly maintained, the water turns foul smelling and cloudy, algae blooms become prevalent (some of it toxic), the fish stocks die off, and water levels begin to fluctuate. What was once a pleasant vista evolves into an eyesore and a public nuisance. Even the birds and animals don’t come around anymore.

But homeowners in Woodland Villages, Ocala, have an even bigger problem: recurring sinkholes have drained their 5-acre pond 3 times in the past year, (five times since 1996) leaving behind a giant mud hole. It seems the ducks knew something was awry, because they started using the community pool instead of the “lake” about a month before two sinkholes opened up in June. The insurance company was contacted, and the pond was repaired, but in late July, the same two sinkholes opened up, larger than ever, and swallowed up the pond once again!

Makes you wonder whether you really want one of those pricey “water view” lots.

Article on sinkholes opening up and draining the pond in July

http://www.ocala.com/article/20140730/ARTICLES/140739971/?p=1HYPERLINK

Article on sinkholes draining the pond in June plus prior history

http://www.ocala.com/article/20140626/ARTICLES/140629775?tc=ar

Article on removal of ducks from the pool a month before the sinkholes

http://www.ocala.com/article/20130510/ARTICLES/130519983?p=1HYPERLINK

 

 

The Hidden Danger To Home Values

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I blogged about this earlier: Homeowners Associations in many parts of the country are seeing property values trashed because cities are taking over water drainage systems that the original developer built incorrectly. But that means ALL homeowners, not just those living in the rarified gated HOA atmosphere, will end up paying the costs. HOA residents will get slaughtered of course, with highly escalated fees. But all non-HOA taxpayers should be angry as well because their taxes will go up because of misfeasance and malfeasance in the HOA system.

The two pictures below are of a beautiful little pond in an HOA near Wichita. Homeowners bought here because the pond was a gorgeous community asset. But when HOA leaders improperly maintained the pond, they inadvertently drained it. Now the beautiful little pond is an overgrown bug-infested swamp. How do you think HOA property values are holding up now?

Wards photo 1A pretty community asset.

Wards photo 2Thanks for our new view!

Yes, Homeowner Association boards and managers can thoughtlessly cause amazing damage to property values. And it happens in city after city. But home buyers are beginning to get wise. Wise Realtors are making sure their clients research the lawsuits and turmoil in a specific neighborhood before buying there. A lot of turmoil means home values are plummeting.

 

 

 

 

 

 

Are HOA & Condo Residents Really Happy?

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Ward’s note:
A lot of CAI members furtively log onto this site just to see what we’re all talking about. I know, because I can track their IP addresses. With this in mind, today’s guest blogger, Deborah Goonan, has an astounding look at CAI’s recent and incredibly deceptive survey of homeowner happiness. Spread this one to every legislator!

 

guest blog by Deborah Goonan

According to Community Associations Institute, “The more than 65 million Americans who make their homes in condominiums and homeowners associations are overwhelmingly satisfied with their communities.”

The survey was done by Public Opinion Strategies for the Foundation for Community Association Research. The survey says almost two-thirds of community association residents rate their overall association experience as positive, while 26 percent are neutral on the question. Only 10 percent express some level of dissatisfaction.

Yes, we all know the spin on survey research funded by CAI, conducted by affiliates. What would be more interesting is if an impartial organization would conduct surveys of CIC residents, asking non-leading questions, and addressing more specific issues affecting residents in CICs.

This research does not even encompass basic demographic data on CIC residents such as age ranges, income ranges, geographic distribution, the number of years they have resided in a CIC, how mobile the residents are, education levels, etc. The survey asks mostly subjective questions, and allows more than one in four respondents to remain neutral on level of overall satisfaction! Less than 2 out of 3 respondents rated their CIC experience as positive. I would reject a hotel or restaurant rated at only 64% positive. And had I seen this survey before purchasing – not the news release but the survey summary – it would have steered me away from an HOA.

One can just as easily conclude from 2014 data that 36% of residents are either dissatisfied or neutral – neutral ratings can be construed as meaning that if a better option presents itself, the resident would move elsewhere. (A moot point in metro areas where very few non-CIC options exist). At least that is the way most market research is interpreted. Incidentally, comparing 2012 and 2014 data on supposed overall satisfaction, one notes that the positive rating dropped by nearly 9% (from 70%to 64%).

At the same time, respondents rating their overall CIC experience as negative increased by 25% ( from 8% to 10%). Neutrals increased by 15% (from 22% to 26%). If we combine neutrals with negatives, and compare to 2012, there has been a 20% increase (from 30% to 36%) in the number of residents who cannot rate their overall experience as positive.

By the way, if we are to conclude these percentages translate to the entire population of CIC residents, that means that 6.5 MILLION CIC residents are decidedly dissatisfied. (10% of 65 million). An additional 16.9 million CIC residents are sitting on the fence, or they have mixed feelings about their communities.

These are not small numbers. And the survey has not even touched on several important issues:

* How many residents own vs. rent?

* How many owners are underwater on a mortgage?

* How old is the community where they reside?

* How many residents live in the respondents community?

* What amenities do they have, and which of those do they use regularly?

* How many units does each respondent own? (Very relevant, and it would be interesting to correlate satisfaction with level of financial interest in a CIC)

* What factors led to the resident’s decision to buy or rent in their current community?

* If they could move elsewhere, would they?

* Did they purchase their home directly, or inherit it?

* Knowing what they now know, would they buy/rent in their same community, or would they choose a different community, perhaps not in a CIC?

*  How about measuring the level of knowledge CIC residents have?

An educational organization, which CAI claims to be, might want to know: how many CIC residents have read their governing documents? (Or are even aware of their existence?)

* How many are familiar with their relevant statutes?

* Have residents ever attended a meeting, and if so how often?

* Do they vote in elections, or is the developer still in control?

* Do the residents even know whether their Board is Developer-appointed or Owner-controlled?

* Do they know the rules? Do they know how votes are allocated and how they are cast?

* Do they know what to do if they are having trouble paying assessments?

* Are they aware that the CIC can lien or foreclose their home?

* Do they know their legal rights in the event they get a violation notice, or if the Association fails to maintain or repair common areas per the CCRs?

Lots of questions. Not many answers.

(link to CAI survey summary)