Category Archives: Horror Stories

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)

 

Outrage of the Week: Object to Development, Get Sued by Developer

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guest blog by Deborah Goonan

Add another shady, abusive tactic to the HOA playbook. When taxpayers show up at the planning commission meeting, and speak out against development of yet another HOA or Condo project, if you’re the Developer, just give your attorney a call. Then threaten a lawsuit.

When a Planning Commission denies a Zoning change, or the two parties cannot agree on a development plan, it is quite common for the Developer and Landowners to file a suit against the government, hoping to arrive at a reversal of the Zoning decision or at least a mutual compromise.

But for developer John O’Flaherty (through law firm Ungaretti & Harris) to sue 22 concerned citizens and activists, who publicly objected to the proposed development plan, is stepping way over the line. Legal experts are calling this maneuver nothing more than a SLAPP suit, (Strategic Law Suit Against Public Participation), aimed at intimidating private citizens – who have no power to make Zoning decisions – from expressing their opinions in accordance with free speech under the First Amendment of the US Constitution.

Taxpayers and homebuyers are increasingly learning of the risks and pitfalls of covering every empty plot of land with yet another privately governed HOA.  FHA has balked at financing condominium projects for the past several years. That is no secret. Even if you’re not apt to buy a condominium for yourself, as a taxpayer, why should you favor your local government allowing development of another potentially risky mixed-use project? What is the potential long-term tax revenue, weighed against hidden costs and non-tangible social costs of a housing model that is failing all over the state of Illinois and the country?

What’s next? Maybe developer’s attorneys will start to sue news reporters, bloggers, and consumers who tell their Realtor, “Don’t show me any condos, and no HOAs!”

(link to Chicago Tribune story on Park Ridge)

Don’t Be Gay In A Texas HOA

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One of the most fundamental problems with the American HOA system is that it actively encourages apathy among its residents. In a hostile neighborhood, homeowners are afraid of being targeted for public shaming or humiliation. It makes neighbors paranoid of each other, afraid to be activists. After all, most of us want to live in private homes in a human quest for peace and quiet. That, in turn, makes people unwilling to participate in the governing process. Stay home, don’t make waves, don’t stand out from the crowd. Beyond all else, don’t show up at HOA meetings.

Bam! That’s the dynamite!

Once you remove a majority of the neighborhood from the governing process, small-minded power-hungry dictators are free to threaten, defame, cheat, steal, and embezzle with pure abandon. It’s hog heaven for human swine. With tiny majorities behind them they rise to the top where they create neighborhood havoc, usually by finding and tormenting a handful of targeted ‘unwanteds.’ An unwanted homeowner can be anything from a single mom to a family with a Down’s Syndrome child, to unmarried couples, black families, Jews, gays, lesbians, essentially anyone the dictator on the board thinks can be easily targeted. It’s fundamentally good war strategy. Don’t give the enemy a reason to fight back, turn the enemy against itself. Churn up chaos and drive homeowners further behind their shield of apathy.

That brings us to a crazy situation in the Gilbert Homeowners Association in Dallas. A single man owned a condo for years but his domestic partner is not listed as an owner. He’s deemed by the HOA to be “a guest.” The HOA board in its lawsuit against the couple said, “Ken Ray (the guest) is not an owner of the condo….under current Texas law he is, therefore, not a member of the Association.”

It gets a whole lot crazier. The two men claim they tried to get the association to repair a leaking sprinkler back in 2008. The repair never happened. The two domestic partners began to get a little more aggressive in trying to get the HOA to fulfill its obligations to repair the damage. One of the men discovered the contractor who was supposed to do the repairs was a daughter of a board member. The homeowner demanded to see the HOA’s financial records.

That’s when the proverbial “ship hit the span.”

The two domestic partners claim they were indirectly threatened with “use of a firearm.” Their sprinklers were purposely turned off damaging their landscaping. The front gate entry code was changed so that the buzzer went to the management company, not to the mens’ condo. Threats were made to physically remove “the guest” from HOA property. The men were prohibited from hiring their own contractors to repair damage caused by the board’s neglect.

The lawsuits and counter-suits mean the eventual legal bills will stretch into the hundreds of thousands of dollars. A jury verdict against the HOA could conceivably stretch into the millions.

If so, one more American HOA could be forced into bankruptcy. It’s happened before.

“I see stupid people. They’re everywhere. They walk around like everyone else. They don’t even know that they’re stupid.”  -slight rewrite from The Sixth Sense, 2007

(link to Dallas Observer story)

 

“What Hath God Wrought?”

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“What hath God wrought?”

It’s the anguished question from the fourth book of the Old Testament.

It was the astonished phrase that opened the first telegraph line between Baltimore and Washington in 1844.

It could also be used to express complete disgust at a current HOA news story from Detroit.

Waterford homeowner Natalie Forte bought a Chevy Volt which she charged from an outlet in her shared HOA garage. She had no problem with paying an extra charge for the power. But she says her HOA demanded four times the amount of power that her Chevy Volt actually used.

What did the HOA do? LOL! They just disconnected all the power to Natalie’s garage, forcing her to use a 100 foot extension cord to charge the Volt from her condo.

Really? Can HOA vindictiveness get any more ridiculous than this?

What hath God wrought?

(link to WXYZ-Detroit story)

(link to Green News)

 

Something Stinks In This Washington State HOA!

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guest blog by Deborah Goonan

Ruth Crompton and her neighbors recently discovered that 7,000 gallons of raw sewage has been discharged into their storm sewer vault over the past 9 years. It seems that someone, presumably the defunct developer, mistakenly connected Crompton’s black sanitary sewer pipe to the white storm sewer drain. Big “Oops!” The error was recently discovered by the County’s Surface Water Management Division.

Crompton and her neighbors want to know why the County inspector signed off on the plumbing project at the time of construction. Not willing to accept responsibility, the County claims that perhaps a bad repair was made sometime after the County inspector approved the work.

Snohomish County officials insist that Crompton and five neighboring homes belong to an inactive HOA, and that homeowners are now responsible to pay for the cleanup, at a total cost of $15,500. If owners do not comply, they could face additional fines up to $5,000 each. The crazy part is, Crompton and her neighbors never knew about the small HOA. It was never discussed prior to sale, and, without a Board, they have never paid any assessment fees. County records indicate that the community was created as Starlight Park Condominiums. The six homes share a driveway, and, even though the now-bankrupt developer never funded the HOA, owners are just discovering they must share the cost of maintaining their common drainage system.

Ms. Crompton plans to fight against paying for what she believes is the County’s error and responsibility.

Never mind the apparent inspection blunder at the time of construction. Since this HOA never got off the ground, shouldn’t the County step in? And why did it take the County 9 years to discover the problem? Obviously, the County and water management authorities approved construction permits for the developer, who turned out to be somewhat of a dud. Why should the owners – who are truly victims of circumstance – pay for the errors and incompetence of the parties who were responsible for construction from initial permitting to issuance of a certificate of occupancy?

The Ombudsman’s explanation: well, if these owners don’t pay for the cleanup, the County will face sizable Federal stormwater fines, and the taxpayers will have to foot the bill. Sounds like someone is passing the buck – literally.

I predict that County taxpayers WILL pay for the inevitable lawsuit brought by Crompton, and they may also be unable to avoid the federal fines. Wouldn’t it be less expensive, easier, and fair for the County to simply take care of the problem it helped to create?

(link to Herald Net article about sewer system cleanup)