Category Archives: Free Speech

More Money Down The Drain

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guest blog by Deborah Goonan

Yet another case of shoddy construction, this time a failing storm drain and a sinking retention pond in Michigan. Over several years, homeowners of Windridge Estates HOA have experienced cracked foundations and basement windows, shifting soil in their back yards, and movement of retention walls, as the shoreline of the nearby pond crumbles into the water.

The HOA lacks the means to make the needed repairs, so the City of New Baltimore has agreed to “help” by setting up a special assessment district, in order to collect $1.45 million from homeowners over the next 10 years. Each lot will ultimately be taxed roughly $6500.

That’s in addition to any regular HOA assessments and property taxes they have paid all these years the problem has gone unaddressed.

The HOA Attorney argues that the City should pay at least 18.5% of the cost, since City roads drain into the pond when it rains. In this particular HOA, the City maintains the roads and easements, but not storm drainage. This illogical arrangement is amazingly common in HOAs.

Several questions come to mind.

First, how did this storm water system get approved by the City Inspector? Second, why isn’t the developer on the hook to pay for these repairs? Third, how much will this end up costing City taxpayers who do NOT live in Windridge Estates?

Local governments have been abdicating responsibility for maintenance of major infrastructure for decades. But retention ponds and underground stormwater pipes are notoriously difficult and expensive to maintain and repair, even when they are constructed properly. Repairs almost always involve precise engineering design, heavy equipment, and moving around large amounts of soil. How do local governments justify dumping this responsibility on a volunteer Board and the disproportionate expense on unsuspecting homeowners?

In the meantime, one unfortunate recent buyer just got a fine welcome to the community. The seller hadn’t disclosed problems with the pond, and now the buyer is on the hook for his share of the cost. Just goes to show how affordability of your home in an HOA can be wildly unpredictable.

Oh, and as I’ve mentioned before, but it bears repeating: a lot adjacent to a retention pond is NOT a “lake view” or “water view” for which a buyer should pay a premium.

(read the story, check out the photos, here)

 

George Lucas Gets HOA Payback!

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Movie producer George Lucas, frustrated because his rich Marin County neighbors wouldn’t let him expand his studio on acreage he’s owned for years, is aiming at getting some payback.

He has a large amount of acreage in Marin County where he runs his Skywalker Ranch Studio. If he had been allowed to expand his studio he would have created a handful of high-paying jobs for film makers. His ultra-rich neighbors hated the idea claiming, falsely, that it would bring too much additional traffic to the area.

So, Lucas is doing the noble thing. He says, “We already have too many millionaires in the area. What we need is some good affordable housing.”
Now, he’s planning on using his land to build the largest low income housing project in the Bay Area.

A note to all those wealthy Marin County boo-birds: Tweaking a tiger’s tail isn’t always the smart thing to do!

(link to story on Marin County furor)

 

HOAs often pit Investors vs. Homeowners, and homeowners usually lose

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guest blog by Deborah Goonan
Even in the nation’s Heartland, homeowners’ and condo associations are subject to considerable consumer risk. The Des Moines Register story highlights just one example of what happens when investors take over an Association, a common occurrence across the country.

Here’s the blatant truth. The corporate structure of HOAs — allocating voting rights to the Property instead of allocating those rights to People based upon residency — leads to the inevitable consequence of pitting investors against homestead property owners.

Because an HOA property owner gains voting rights for EACH property owned, it creates the incentive for investors or developers to buy up – or retain – as many “shares” of the HOA corporation as possible. And everyone knows that a majority shareholder controls a corporation.

But not everyone realizes that nearly all HOAs are corporations. Share this story with everyone you know, especially if they are considering buying a home.

We need to decide in this country: are homes a place to live and gradually accumulate stable personal wealth over time, or are they merely investment commodities subject to the whims of a volatile real estate market – where a few people profit at the expense of everyone else?

(link to warning in Des Moines Register)

 

Disbanding an HOA

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I think I’ve written about this before, so forgive me if this is repetitive. But a friend of mine lives in a tiny HOA of about a dozen houses. Last year he bought a dozen copies of my book and lobbied every member of the association to read it. The neighbors voted unanimously to disband their corporation.

Now, my friend says, there are sounds of kids laughing and playing. Several basketball hoops have gone up. Neighbors are now talking over the back fence and inviting each other over for dinner. He says the difference in the neighborhood is incredible.

Plus, insurance liability costs have gone down.

Life is amazing, isn’t it?

Trouble brewing in Poinciana HOA?

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guest blog by Deborah Goonan

You might remember previous blogs about Poinciana HOA in Florida, the community of over 50,000 residents that has been attempting to incorporate as a city for the past three years.

Well, now the Board’s President, President Jolly, has filed complaints with State Attorneys in Osceola and Polk Counties, alleging that $2 million is unaccounted for. Poinciana is managed by mega-management company, First Services Residential (FSR).

WFTV has been covering the story. The Board refused to allow video coverage of a recent special meeting called to discuss complaints filed by Jolly against FSR. Someone even made a motion to remove Jolly as President, but that motion failed to carry.

Believe it or not, Poinciana’s earliest phases were incorporated in the 1970s, but construction is still ongoing today. Tony Iorio, AVP of home builder Avatar (now known as AV Homes) is on the Board of the HOA. Yes, you read that right, the HOA Board still has representation for the Developer, after over 4 decades.

Iorio is seen on this video defending FSR, and claiming that Jolly has no proof of impropriety.

Well, that’s why Jolly has filed formal complaints and requested an audit. We’ll have to wait and see what the auditor’s report says.

An official statement from FSR denies any wrongdoing.

If that’s not enough potential trouble, in recent years, violent crime and gang activity has been reported in the once quiet community, including an attempted murder in January of 2015.

To give you some perspective on what could be America’s largest HOA, according to public records, about 20% of homes were constructed in the 1990s, and a whopping 62% of homes were constructed between 2000-2009. As of June 2014, 23% of homes remained vacant following the housing market crisis. The community is located in the middle of what was once a rural area in Central Florida. Although Poinciana is certainly large enough to be a city, since it is a private planned community governed by an HOA, it does not have its own police or fire protection, and must rely on services from Osceola and Polk counties.

Perhaps these recent events will garner sufficient support for the next attempt at attaining status as an official city.

(link to WFTV coverage of complaints against FSR over missing money)

(link to Orlando Sentinel report of gang violence in Poinciana)

(link to housing Statistics for Poinciana FL)

(link to previous blog)