Category Archives: Government

Ye Olde Clubhouse…The Other Money Pit

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guest blog by Nila Ridings

You may pass it by every day with merely a glance and no thoughts to the cost of the HOA clubhouse.  Yet, when we take a closer look at its financial drain you’ll probably sit up and take notice. 
 
These party palaces can suck away more money than a 40 foot speed boat with twin engines.  And in the case of Quivira Falls there is rarely a party or a paid rental to be found. Most communities restrict usage to homeowners. That makes sense except when the homeowners rarely rent it.
 
A short time ago, the Quivira Falls board president slyly pulled off a self-dealing maneuver and milked the HOA cash cow for a complete redecorating of the clubhouse.  She claimed to be in the “decorating business” so she slid the job through her company.  No other bids were taken.  There is probably more to the redecorating details, but here’s the list of what I know was done: new window treatments, new hardwood flooring, paint throughout, new bathrooms, new kitchen, new door locks, mold abatement, and custom-framed photographs.  She claimed none of this cost too much because she was keeping “the boys” busy during the winter months.  “The boys” just happened to be employed by the property manager.  None of these redecorating expenses included the price for labor.  Did you ever know of a construction project that didn’t require labor?  And furthermore since the houses are rotten and need repairs and painting, why weren’t these guys laid off like most construction workers and the wages saved until better weather so it could be spent on the townhomes not the clubhouse?
 
According to the May 2014 issue of QF The News, rentals so far this year have totaled $1,000.  Nice even number, but expenses so far are: janitorial supplies $292.30, pest control $76.72, R&M (whatever that is?) $213.13, utilities $2,393.79.  I’m not a CPA, but my calculations total the expenses at $5,075.94-$1,000=($4,075.94) in the hole. Summer is coming in Kansas so the cooling cost on this money-sucker is going to skyrocket to nearly $900 per month.  You may be asking why the utilities are costing so much for a building that by the rentals would indicate it is empty at least 29 days per month.  Well, here’s the answer: the property manager has ONE EMPLOYEE working in that building Monday through Friday.  Thousands of dollars per year are spent on heating and cooling just for one person to sit at a desk and answer the phone, play computer games or whatever, in that building!
 
Before the redecorating “money maker,” the previous HOA president had stucco applied to the exterior and told me the cost was $100,000.  There have always been yearly landscaping expenses and most recently lighting was installed on the entry stairs attached to a deck that extends beyond the doors.  I call this place the Taj Mahal.  
 
It eats money like a slot machine but it’s really too small to be of much benefit.  Most clubhouses are one big room, this one is a small room and another small room with a conference table.  Select homeowners use it for Bunco games.  Others who have tried to use it for meetings regarding the conditions of the community, have been given the excuse of either the furnace doesn’t work in the winter or the air conditioning is broken in the summer.  Always an excuse for keeping the “pariahs” out of the clubhouse their money is being spent on. 
 
Wichita has a condo association where the clubhouse has a bar.  Its been the source of more than one juicy rumor and drunken fight.  But one night it became the place of a flaming disaster.  A board member rented it to someone outside of the COA and the stories are varied but all pretty much conclude with it being quite the drunken scene.  In the wee hours of the morning it ignited into flames and burned to the ground.  The board members blamed the fire on one of their most-hated condo owners.  (You know the guy that was eventually beaten with a crowbar.)  The Fire Marshall testified that the cause was an outlet behind the refrigerator.  Apparently, it was damaged when somehow the refrigerator was pushed back too far into the wall and the plug smashed into the outlet.  His explanation was logical but the bullies on the board still blame their enemy.  And the damage was around one million dollars.
 
I’ve had friends who lived at a lake community in the area.  They have a golf course, stables, and a clubhouse with a restaurant.  Now, there’s another “hook” on the HOA concept.  You must eat so many meals per month at the restaurant or pay anyway.  When HOA life goes sour the last thing people want to do is have a meal with their enemies sitting across the dining room pointing, whispering, and glaring at them.  They were happy to sell and get out of there, but part of the revenue comes from “outsiders” renting the venue for parties and wedding receptions. That reduces the financial sting a bit. 
 
Next time you drive past your clubhouse envision that it is bleeding money because it probably is.  If you are thinking of buying into an HOA…well…I would advise you not to do that, but certainly put the cost of a clubhouse at the top of your list for reasons to run for the exit!

What’s Up With The Realtors?

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This blog is absolutely self-serving, and I have no problem admitting it. After all, I’m trying to sell my book and part of that means doing paid speeches across the country.

A few weeks ago a huge real estate firm in a major Midwest city offered a pretty nice fee to have me speak at their annual convention. I was out of state at the time, but rushed back to talk to these Realtors about the country’s HOA mess and the kinds of financial and housing disasters that are racing down on this country like a falling bomb. But while I was in the air, my agent got a call saying the company was cancelling my speech.

That’s OK, it happens. But it’s unusual enough that it got me wondering. I learned I was hired on a recommendation, but at some point someone in this real estate network must have read my book and discovered the topic was, shall we say, controversial?

Controversial?

Well, let’s take a second look. If a looming real estate disaster is about to destroy the financial well-being of millions of people as they buy homes and take out mortgages, shouldn’t someone advise them to be cautious about how they structure their new purchase? And who should that be? Are the Realtors giving their clients such warnings? Me thinks not.

If the entire Real Estate profession is on the verge of getting hammered by a housing disaster a hundred times bigger than the 2008-2009 recession, who should know about it first? Do you think the Realtors know? Me thinks not.

A lot of us are being blinded and hornswoggled about the state of our economy. I’m going to link to a 2008 Wall Street Journal column about a hedge fund manager who predicted the 2008 mortgage crash, and found several ways to ‘short’ the housing market. He made billions of dollars profit for himself, and many billions more for his hedge fund.

And who knows absolutely nothing about how this obscure investor made his billions? Do the Realtors? Again, me thinks not.

(WSJ column on John Paulson, hedge fund manager)

 

Handicapped NC Woman Beats HOA

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Rebecca Cunningham, don’t count your chickens before they’re hatched!

Ms. Cunningham is handicapped and four years ago installed a lift on her porch to allow her to avoid the stairs. No problem. The HOA approved it. All of a sudden, the HOA said she had to repaint it to exactly match the new cream color of the trim. She talked to the manufacturer who said it shouldn’t be painted, because it would make maintenance too difficult. So she appealed to the HOA, and lost.

Rebecca then appealed to a local television troubleshooter who got some attorneys involved, and hoo boy, did this HOA ever stumble and scramble backwards.

Rebecca, listen carefully because I’m going to give you some inside dope. HOAs hate disabled people. It’s not about you, it’s the fact that you’re disabled. Really! We’ve seen this thing happen time and again across the country where HOAs seem to come down especially hard on the handicapped. You’re persona non grata. Your very presence apparently brings down property values.

But, Rebecca, it gets worse. You embarrassed your HOA board by going public and getting your story broadcast on the Durham, N.C. ABC-affiliate. They were further embarrassed by having to rescind their illegal order against you. Babe, from now on you are a target. You’ve got a big target on your back. They will harrass you mercilessly. Not only is your disability bringing down property values, you failed to worship at the feet of the neighborhood Nazis. Watch your back Rebecca. But don’t ever back down.

(link to ABC-TV story in Durham, NC)

By the way, below is the management of this HOA if you’d like to thank them for accommodating handicapped people. Keep it nice!

Elite Management Professionals, Inc.
Address:
Street: 4112 Blue Ridge Road, Ste 100
Town: Raleigh
State: NC
Zip Code: 27612
Country: USA
Telephone: Telephone: (919) 233-7660
Fax:

Neighborhood Snit In Austin

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It’s happening all over the country, but another old neighborhood in Austin, Texas has decided to create a community improvement association to encourage homeowners to clean up their properties. The old time homeowners who’ve been in the Hyde Park neighborhood generally don’t want to turn the association into a mandatory HOA. Newbies in the neighborhood definitely want that kind of dictatorial power.

One homeowner says he’s spent a fortune upgrading his house. So have other residents. But there’s one neighbor who won’t go along.

“It’s just not fair!” the clean guys say. “Just no fair!” Gosh, when you hear a whiner throwing that kind of phrase around, watch out! Life isn’t fair. What’s fair about a crippled kid, or racism, or crime, or any of the other unfair things that happen in life.

This neighborhood’s first step is a good one. A voluntary group that encourages a cleaner neighborhood is a boon to property values. When a homeowner resists improving his or her home, that’s a time for diplomacy, not threats or humiliation. Not ostracism or confrontation. This is a chance to prove the benefits of inclusion and good will, volunteerism and neighborliness. It actually works, folks!

Well, these ‘clean’ neighbors now want the fascist rules of the HOA movement imposed so they can snatch the offender’s house, clean it up themselves, and sell it to a new owner who’ll agree to abide by the ‘clean rules.’ And suddenly you’ve got a fascist government arising from the ashes of what used to be a relatively free neighborhood.

The place to fight for mandatory rules is with the local zoning commission. If an HOA is created then it creates a neighbor vs. neighbor mentality where the most vicious of personal attacks are made. If city zoning rules are imposed, the disputes are less expensive, less confiscatory and peace in the neighborhood can be maintained.

If Hyde Park homeowners think an HOA will raise property values, think again. Those who don’t want to live, or don’t like living in an HOA amount to about 90% of the population. Think about it. 90% of all potential home buyers won’t even look at your for sale sign. What’s your nice clean home really worth now? HOAs have just been developing a stinky reputation over the past few years. And you’ll see my predictions come true. HOAs do not improve or preserve property values, and there are thousands of examples around the country.

(click here for Hyde Park story)

http://www.austinhydepark.org/2014/04/is-there-a-homeowners-association-in-hyde-parks-future/

$100,000-Love Scores Zero With Quivira Falls Homeowners

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guest blog by Nila Ridings

Tennis anyone?  Well, not for the past several years because the courts have been bolted shut.  The surface is broken and the weeds are growing wild up through the cracks.  When the courts were open they were enjoyed once in a blue moon by non-residents with Missouri plates on their cars.

On October 22, 2007 six of the board members signed and mailed a letter to every homeowner to defend their position against the petitions that had been signed by over 240 homeowners to recall the board.  In that letter they state, “They say we are also frivolous to buy wind screens for the tennis courts.”  And, then they go on to say that due to the foreclosures that would impact their revenue they voted “for,” but decided “against,” buying the wind screens and new nets.

Warning

You bet there were homeowners opposing that ridiculous and unnecessary purchase because our townhouses were rotten to the point of having frame damage.  As a matter of fact, just four months after that letter was written the electric meters fell off my house because the siding and the structural frame was so rotten it just completely gave way.  This happened during a torrential rain storm and ripped two holes about the size of five gallon buckets in the back of my house.  Water was literally spraying out the electrical breakers on the wall downstairs and the water was gushing in under my new wood flooring, all over my new basement ceiling, down the walls, and running like a river across my brand new white berber carpeting and on across the basement to the drain in the utility room!  And there was absolutely nothing I could do to stop it.  My work order had been in for over two years for wood rot repair and it was met with nothing but totally goofy childish excuses.  When I told a board member I was going to hire my own contractor to repair the exterior of my house and apply the stucco, she told me…get ready now readers… brace yourselves………………..“If you hire your own contractors we are going to sue you and make you take the stucco off and put the wood rot back on!”  To this day, that is one of the most stupid things anybody has ever said to me in my entire life!

Back to the tennis courts.  One of the homeowners got ticked at the HOA and decided to report the tennis courts as abandoned property to the City of Overland Park.  Of course, I was notified of this because any time people are upset…I hear about it.  

Nobody wants to raise hell with this HOA board because if you dare do it, there is hell to pay. Sheer hell.  Ugly hell. Hate-filled hell.  That treatment silences 99.999% of the homeowners.  They haven’t been blind to the treatment I’ve gotten by the board and their cronies so they are not marching down the “Nila Ridings Road.”  No sir, they value their quality of life and bank accounts far more than speaking out…thus, this HOA is a horrible nightmare!

Quite by accident I found the property manager on my driveway right after hearing of this report.  I decided since she was right here within two feet of me, I’d ask about the status of the tennis courts.  She told me it was CITY CODE that Quivira Falls had to have these tennis courts resurfaced or totally removed, including the asphalt.  The cost to remove the fencing and asphalt for both courts was going to be $100,000.00 and 1/3 that amount if they were resurfaced.  I was skeptical….my gut instinct and intuition was saying this “smells” rotten.  My call to the City revealed it is not City code for Quivira Falls to have tennis courts.  A plan can be submitted for something new in their place, OR they can be removed. BUT THE ASPHALT DOES NOT HAVE TO BE REMOVED!

I’m 99% sure I could find somebody that would take those fences down for free and haul them off and reuse them.  I know a few loads of dirt and some grass seed can be purchased for far less then $100,000.00.  And, in the end the HOA would save money by not having to maintain the courts, buy nets, or those wind screens that were voted on in 2007, the lights could be removed as well and probably sold, but certainly there would be no electricity burning and there would be no expense of changing the bulbs when they burn out.  

I sent emails to the property manager and the board demanding this project be stopped so further discussion could take place before another $35,000 is wasted.  For those of you who don’t know this, my HOA borrowed $1M and most definitely it makes more sense to pay down debt then it does to resurface unused tennis courts! Nope, this CAI property manager is going forward with this project no matter what!  

Did I fail to mention just a couple of years ago they built a fancy handrail down the steps to the tennis courts?  That’s right, it’s been the “staircase to nowhere” because once you walked down there you were “welcomed” with the padlock!

Homeowners are putting protest plans together.  It looks like ANOTHER war is about to begin in Quivira Falls!

Here’s the kicker…”Arizona Dave” just had the tennis courts at his condo complex resurfaced.  They are larger than the ones in Quivira Falls.  Dave’s association is managed by him, not a CAI property management company.  He emailed me the paid invoice….$12,000.  

Like I said, something “smells” rotten!