Category Archives: lawsuit

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)

Young Boy Drowns At Remington Point HOA

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guest blog by Nila Ridings

Nothing I can think of could possibly be more painful than losing a child.  Micah Wheeler was only six years old and swimming in the pool at the Remington Point HOA in Fort Worth, Texas when he drowned.

The HOA did not hire life guards to watch over the innocent children that frolicked in the pool under the hot summer sun of Texas.  They opted to pay security guards to keep the unwelcome guests out of their private pool.

The “what if” and “if only” questions will never come with an answer.  Little Micah’s family will suffer this loss and feel this pain forever.  I am so sorry for his family and loved ones.

Perhaps the board of directors will weigh their priorities more carefully in the future?

Neighborhood pools…are they worth the risks?  I think not.

(link to story on Texas drowning)

Give This To Your Lawyer!

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No one is more insightful or articulate than Arizona HOA warrior George Staropoli. When he comments on an HOA issue, you really want to stand up and pay attention. He’s written an incredibly interesting analysis of a recent U.S. Supreme Court decision that he says could ultimately have a direct impact on the national HOA scam. I would do a disservice to him if I tried to sum up his argument.

I would also do a disservice to you if I didn’t give you a link to his paper and urge you to read it, print it out and give copies to every influential person you meet. Your lawyer should have a copy of this. At some point our movement is going to reach a tipping point. Who knows? This could be that point.

(link to “Supreme Court says corporate entities cannot be used to evade Constitution”)

 

 

Are We Winning? Hunter’s Run Decision Says We Are!

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I never thought I’d see this day. But doesn’t it seem to you like more and more Homeowners Associations are losing big court cases involving fines, judgments and legal fees?

There’ve been several in a row where the feds came down hard on HOAs that overtly or passively discriminated against families with children or handicapped members.

The latest is an Indiana family that moved from their home and rented it out without asking HOA permission. The Indiana Court of Appeals ruled that the fines and the lien the Hunter’s Run HOA filed on the family were illegal. More than that, the lien was invalid and a slander against the homeowner’s property title making the home unsaleable. Now the Hunter’s Run HOA will have to pay thousands and thousands of dollars to this family to make them whole.

I would bet dollars to donuts that members of this HOA didn’t have a clue their bully board’s actions were going to lead to huge assessments against every homeowner.

See this as a victory, folks! Homes in Hunter’s Run have lost all their value. They can’t be sold. The equity is gone. What fool would buy a home in an HOA where the board was stupid enough to lose this kind of case?

The tide is turning, and you and I are finally having an impact!

(the losers in Hunter’s Run HOA)