Category Archives: Fraud

HOA Renters Beware!

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guest blog by Dave Russell

Do you think homeowners are the only ones being abused in HOAs? We have long blogged and discussed about the abuses of homeowners in HOAs. But what about those who rent in an HOA? Are they subject to the same HOA abuse? You bet they are!

Actually, renters are sometimes dealt a double whammy when it comes to renting in an HOA. I have heard it time and time again, “Oh great, another slum rental property, with more trashy renters!” Trust me when I tell you, rental properties and HOAs mix like oil and water. HOAs certainly do not roll out the red carpet for renters. Becoming a renter in an HOA is probably about as popular as playing leapfrog with a Unicorn, in most cases – “there goes the neighborhood!”

If the unfounded hostility towards renters isn’t bad enough, what if the landlord adds to it? Some landlords simply fail to inform their new renters that they are a little behind in their HOA dues. Now Mr. and Mrs. Renter, who are just thrilled with all of the amenities in their new humble HOA abode, that’s until they get what I call the “Nasty-Gram” from the HOA stuck to their front door.

Ah, the Suspension of Privileges Notice, that simple and short piece of paper informing the renter that their privileges to the pools, saunas, clubhouses and sometimes parking, have been suspended by the HOA for nonpayment of mandatory dues by their landlord.

Now you may be asking, what is a renter to do? Has the landlord violated the Tenant Landlord Act? In most States the answer to that question is no. The Tenant Landlord Act usually requires the landlord to keep the property in habitable condition. Most of these Tenant Landlord Acts do not address the issues regarding HOA amenities and simply state that the property has to be clean, safe and bug free.

Just like homeowners, the renters in HOAs are left with but one choice, which is suing the landlord. And just like with homeowners in associations, who has the time and money for that? The only difference between renters and homeowners is that the renter can simply move on while the homeowner is stuck in HOA purgatory.

Now just imagine this scenario, you are renting a condo, the doorbell rings and it’s a process server with legal papers. You see, the HOA is foreclosing on the property because your landlord has failed to pay his portion of the mandatory HOA dues. As we all know, some folks live from paycheck to paycheck, and many are already on the verge of homelessness. This leaves renters scrambling for a new place to live as well as paying for the cost of moving, deposits and time off of work to find another place to live.

Here is another frightening scenario where the HOA renter is once again victimized and stuck in the middle of the HOA vs. their landlord. The doorbell rings, again its Mr. Process Server with some more scary legal papers. The HOA has decided that they are going to do an assignment of rents because your landlord has failed to pay his/her mandatory HOA assessments. The court order directs you, as the renter, to send off your rent payments to the association’s law firm. Oh, did I mention that even though you are now paying the HOA, that you are still barred from all of the amenities?

HOA rental properties also seem to attract conmen and scammers. Here in my community, a single mother came in to introduce herself and requested keys to a specific unit. She stated that she just rented the unit through a “house sitting program.” The new renter stated the condo was in foreclosure and she paid a service $500 in exchange for free rent until the unit foreclosed. I personally knew the owner of this unit, and knew that the condo was not under foreclosure. I did some research on the person who signed the lease, to my amazement; it was a conman that I had seen on the news about a year ago.

I can’t tell you how bad I felt when I had to tell this single mother that she was the victim of a rental scam. I did contact one of my reporter friends at KPHO News Phoenix, who promptly blasted this conman’s scam and face during the evening news. This conman’s victims all had one thing in common — every scam he ran just happened to be in an HOA. I suppose it’s preferable to run a scam in a place where the biggest scams in history take place.

HOA Renters Beware! those gated communities, with those glorious amenities, may be a lot more, or a lot less, than you ever bargained for.

http://raycomgroup.worldnow.com/story/24812079/con-artist-accused-of-scamming-several-valley-victims-in-housing-program

Something Has To Be Done!

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We really do need to get national legislation, at least against some of the most outrageous HOA actions. The case linked below is actually a rather common problem in HOA Amerika… keeping a homeowner locked out of his gated neighborhood if he’s violated some minor covenant.

Jim Bartels of Fairview, North Carolina got into some kind of dispute with his HOA. The result? They installed a gate and wouldn’t give Bartels a gate code. The HOA board claims they can do that because he’s ‘not in good standing’ in the neighborhood.

A while back I blogged about a different case in Florida where a single mom was locked out of her neighborhood. She had to have someone drive to the gate and physically let her in. At the time I mulled over potential family emergencies and whether the whole neighborhood could possibly face a massive negligence and outrageous conduct lawsuit.

A lot of actions by HOA boards are outrageous. Some actions are despicable.

(link to WLOS News)

 

 

Bribes, Kickbacks & Other Forms of HOA Honesty!

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It’s not even an open secret that the typical HOA board member and common area maintenance company probably gets kickbacks from vendors. THEY GET KICKBACKS FROM VENDORS! Get over it. Don’t even question it. It’s about as common as worms on a sidewalk after a spring rain.

Since HOAs make their own laws and since government oversight over such things as kickbacks, bribery, extortion and embezzlement is approximately zero this kind of nonsense will continue indefinitely.

Jan Bergemann, one of the heroes of our movement just posted something unbelievable on his website. Actually, it’s not unbelievable. It’s just sad.

http://www.ccfj.net/CCFJCAMBribe.htm

Costco Hacking Scam

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We keep reading about the international hacking scams but little is said about how and when these cyber-criminals rip you off. Well, here’s one I was able to nip in the bud just tonight.

My first tip was who it was emailed to. The scammers chose a website that I own but is in no way connected to my Costco account.

Second: I’ve never received this kind of refund from this store.

Third: The “view your reward here” address doesn’t look anything like what might come from a major retailer. It’s too long, it doesn’t have any markings that look like Costco. Bottom line? It’s a scam, folks. Your name, your website, your email address and banking information are all in the hands of crooks who buy lists of potential suckers from the hackers. If you click on a link that looks like the one below it automatically installs malware on your computer.

Beware and be aware my friends.

Ward

Reward Month: October For: xxxx@xxxxxxxxxx

October 3, 2014 ——————————– Your October Costco Rewards Are Available. To claim your October Rewards, view the link below. Average Reward Balance: $78.52 View your reward here:

http://federalbly.us/ZOzoaqS-09234-03d4558M3425R9-2305P84435234-058923450832A4-09G345345V852345842352349B0-5-09-2934W5BW9879723452345234j5345l34k345j2345ou54231

 

What Happens When Government Fails to Ensure Quality Construction in HOAs?

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guest blog by Deborah Goonan

Does your HOA have problems with shoddy construction or defects in common areas such as roads, storm water drainage, street lighting? Did your developer fail to deliver what was promised at the time of sale?

If so, you’re not alone. Check out the video reports linked below. Hidden Lake Estates HOA in Sherwood, Arkansas, has issues with poor drainage, causing owners’ yards to flood every time it rains. At Stone Hill Estates HOA in Durham, North Carolina, the Developer has left roads, sidewalks and storm water drainage systems unfinished for several years.

Owners from both HOAs have appealed to city leaders to help resolve these issues. In both cases, the Cities initially balked at getting involved. However, one council member from Sherwood has called for an investigation into storm flooding at Hidden Lake, and a judge in Durham recently ruled that the City help pay for unfinished work at Stone Hill. Protracted battles will likely continue. These are just two examples, but this is becoming a common problem all over the country.

Who’s responsible, and who should pay?

During the building boom of the last decade, plenty of planned developments and condominiums were hastily approved and built to keep up with growing buyer demand. Additional contractors were hired, and some of them lacked sufficient skills. When the dust settled, problems began to appear.

It’s clear that architects, design engineers, and developers ultimately bear responsibility for the quality of their work and that done by their construction crews, but the obvious unasked question is:

What is government’s role in development of HOAs and prevention of poor construction?

Local development and planning commissions have responsibility for issuance of construction permits, establishment of building codes, inspection of work at various phases in the project, and issuance of occupancy permits upon successful completion.  In many cases, additional state and local agencies, such as the Department of Environmental Protection also play a role in ensuring development meets health and safety standards.

As taxpayers, we expect our local government agencies to ensure that our homes and major infrastructure of our communities are built to a standard of safety and reasonably sound quality. Unfortunately, as evidenced by thousands of construction defect claims in the past decade, local planners and inspectors quite often fail to do due diligence before, during, and following construction.

Why? Perhaps it is because city or county staff does not have to maintain HOA infrastructure or Condominium buildings. Therefore they are not overly concerned about quality of design and construction, and ease of maintenance.

Worse than that, sometimes our local elected officials undermine quality control policies.

Take the Lakewood City Council of Colorado, for example. (see link) The Council wants to enact an ordinance that would make it easier for Developers to avoid litigation of construction defect claims with HOAs. If passed, the ordinance would reduce rights that currently exist under state law, making it more difficult for HOAs to sue.

Supporters of the City ordinance claim that current state law makes it too easy for owners to sue Developers, drives up the cost of insurance, and makes it unfeasible to construct additional entry-level condominiums for millennial buyers.

So let me get this straight: Lakewood City Council wants to make it easier for developers to avoid liability for shoddy construction, in order for the Mayor and Council to entice Developers to build more Condos (with HOAs). No doubt, the city government’s goal is to increase its tax revenue base, with minimal impact to the city budget. But at what cost to taxpayers and consumers?

In all fairness to Lakewood City, local government politicians in cities and towns all across the nation have adopted a similarly misguided stance.

Dare I say, depending on the politics of local government, committees that vote to approve new construction projects can have cozy family or business ties to real estate developers and to investors?

Attorneys representing all sides of ensuing controversies – developers, engineers, construction companies, HOAs, owner groups in HOAs – are the only clear winners when local government fails to prevent shoddy or unsafe construction in the first place.  Owners of HOA properties often find themselves stuck with unresolved problems, damages to personal property, uncooperative Boards, special assessments to cover fees for attorneys, and possibly even higher property taxes.

In HOAs, owner financial responsibility for common areas often leads to common headaches.

(link to video of defective drainage in Sherwood, AR HOA)
(link to video of unfinished development, Stone Hill HOA, Durham)
(link to article on proposed Lakewood, CO ordinance)