Category Archives: Fraud

Here Come The Special Assessments!

      4 Comments on Here Come The Special Assessments!
guest blog by Deborah Goonan

When buyers consider a condominium association, they are often sold on a “carefree, maintenance free” lifestyle. There are promises that someone else will take care of the landscape, cleaning the sidewalks and parking lots, and most exterior maintenance. It can be very enticing for busy professionals or retirees who don’t have the time or inclination to do the work themselves.

But the reality is that, when you buy into a Association-Governed Residential Community, you are actually purchasing shares in a corporation. And the truth is, all too often that corporation does not perform optimally. There are no guarantees that the developer or owner controlled Association board will operate with efficiency or fairness. Even with the best of intentions, mistakes happen. And sometimes the Board neglects its duties.

Even with a management company, the landscape maintenance might not be done consistently. Traffic signs might be installed incorrectly. That was the case at Villas on the Green Condominium Association, managed by M.M.I. of Palm Beach, FL.

A preventable accident

In 2011, overgrown hedges and a misplaced stop sign obscured visibility for a resident backing out of her driveway. Unfortunately, she did not see 9-year-old Andrew Connor Curtis riding his bicycle on the sidewalk. The result was the untimely death of young Andrew.

The parents of Andrew sued the driver of the vehicle, Villas on the Green Condo Association, and M.M.I. of Palm Beach (the management company), resulting in a $12 million award, 90% of which is payable by the condo association and the management company. The court ruled, and an appellate court upheld, that, as a result of the Condo Association’s and Management Company’s failure to properly maintain visibility at the end of a driveway and roadway intersection, two parents lost their child.

Added risk for HOA and condo owners

Had this accident occurred outside of an Association-Governed Residential Community, only the driver of the vehicle would have been brought to court. Of course, the owner probably would have kept the hedges trimmed to begin with. The municipality would have properly installed the stop sign.

But because the Condo Association is a corporation, it can sue and be sued for various reasons. Even if the condo association is adequately insured against this kind of loss (not all Associations are), future insurance premiums will significantly increase. Every condo owner will pay for this lawsuit, just as they have paid for inadequate maintenance that led to a tragic accident in the first place.

Owners have very little control over these unpredictable liabilities – which they automatically share – yet another hidden cost of owning property in a homeowners, condominium, or cooperative association.

Appeals Court Upholds $12 Million Award in Wrongful Death Lawsuit

http://independentamericancommunities.com/

 

Service Dogs and some Nasty Lawsuits

      2 Comments on Service Dogs and some Nasty Lawsuits
guest blog by Deborah Goonan

Not a week goes by that we don’t learn of yet another Fair Housing lawsuit, usually involving discrimination on the basis of disability. This time, the Condo Association will have to answer to two lawsuits, one filed by the owner of a condo unit, and the other by his former tenant.

The latest report comes from Aspen View Condominiums in Colorado. Natasha MacArthur leased one of the 18 units from condo owner Alvara Arnal, beginning in November 2013. MacArthur has a golden retriever, and claims her dog, Stevie Nicks, helps her cope with a seizure disorder.

The condo association forbids dogs, but MacArthur claims her pet is a service animal, and that the association is obligated under Fair Housing law to provide reasonable accommodation to allow Stevie Nicks to reside with her.

According to a report in the Aspen Times, MacArthur provided documentation of her disability from a physician, as well as documentation from the organization that trained the dog as a service animal. The former (now deceased) president of the association interviewed MacArthur in her home for 45 minutes. But the association was still not satisfied that the information provided was sufficient to allow the dog to remain.

Aspen View COA then began fining owner Arnal $50 per day in January 2014. MacArthur moved out of the unit in March 2014, prior to the end of her lease.

Arnal was hit with $1435 in fines, plus $4234 in attorney fees in June. A lien was placed on his unit in July 2014.

In addition to MacArthur’s Fair Housing complaint, Arnal has filed suit against the association and its management company, alleging discrimination, retaliation, and interference with a contract.

The remaining 17 owners of Aspen View better open up their wallets. These two lawsuits will probably cost them a great deal of money in legal expenses and the eventual settlements.

For readers interested in learning more about service animals for people with seizure disorders, I have provided some additional links.

(Aspen HOA denies wrongdoing in service-dog flap)

 

OK, I Admit It! HOAs Have A Purpose!

      4 Comments on OK, I Admit It! HOAs Have A Purpose!

Before you hire an assassin to take me out, please listen to my reasoning.

Next door ‘party houses’ are the bane of the existence of any homeowner. People buy the house, then start renting it out to party-throwing wild people who screw things up for the entire neighborhood. Certainly, Homeowner Associations can take these houses down. They assess fines, file liens and lawsuits and can shut these places down.

Still, if you have a strong zoning department they can shut these houses down much more quickly and without costing HOAs a ton of money in legal fees. And Zoning Departments have to follow Constitutional law. It doesn’t make them slower in enforcing reasonable standards, but it does make them more accountable.

As a property owner in an HOA, wouldn’t you rather deal with Zoning than with a bunch of slander-slinging neighbors? Wouldn’t you rather have your insurance and legal fees remain stable so you don’t get hit with special assessments to pay for legal fees? Wouldn’t you rather be in a position where the HOA insurance company doesn’t cancel the community policy because of an excess of Board lawsuits?

It’s all about peace and quiet enjoyment of property. Wouldn’t you rather have the county cracking the whip than your next-door neighbor, or your Nazi-minded board member?

It’s all about common sense, which apparently isn’t a factor in the national HOA scam.

(link to story on party houses)

ble.”

Hiring an HOA Management Company

      9 Comments on Hiring an HOA Management Company
guest blog by Jill Schweitzer

As a Realtor in Arizona, I recently went to a class presented by an HOA property management company. The topic was the various ins and outs of HOAs hiring a management company. But as the class progressed, I thought it really would be better taught by an attorney and not somebody within the HOA industry.

Here are my conclusions after going through this class:

1. Absolutely, have an attorney review and make changes to the contract! Have the attorney tell you what items to add in to the contract items that are missing in the laws to protect the both the HOA and the individual homeowners…thereby holding the management accountable and responsible for any misfeasance or malfeasance. Also have the attorney remove the indemnification clause! Why pay to defend a management company for its bad actions?

2. Check court records online and in person to examine lawsuits the company may have been involved in.

3. Recommend that boards either eliminate or lower transfer and disclosure fees!

4. Recommend the board get a website independent of the management company. This would ensure that the HOA’s connection with homeowners survives any future change in management.

5. When hiring a management company, HOA boards should be careful of all the extra junk fees; printing, copies, coupon books, violation letters, etc.

6. Finally, mandate that any management company hired by an HOA certify that it has insurance against all misfeasance and malfeasance by management company owners, executives or employees.

 

What Happens If HOAs Can Affect Your Credit Score?

      2 Comments on What Happens If HOAs Can Affect Your Credit Score?
guest blog by Nila Ridings

At various times, I have heard the discussion of HOAs having the ability to report delinquencies in HOA dues to credit reporting agencies. The link below offers some excellent information about the importance of having excellent credit. It also brings to mind the additional risks of owning in an HOA.

For example: Numerous times in my growing up years, my dad told me to never co-sign a loan for somebody. He would not be proud to know I listened to him and never co-signed for a friend’s loan, but I did co-sign to pay the debts of 512 of my neighbors! That’s right. Buying in an HOA puts every homeowner in a position of being the guarantor on all debts, loans, lawsuits, settlements, construction defects, and disaster rebuilds. That makes co-signing for a car loan for your recent college-graduated kid brother seem like small potatoes, doesn’t it?

According to this article, a bad credit score can prevent you from getting a license to practice medicine, law, and other professions. Hypothetically, let’s say grandma gives you the gift of a down payment on a condo so you have a place to live while you go to medical school in Boston. And you leave your trash can out twelve hours too long because an emergency happens and you stay to help at the hospital. So, the HOA fines you $100 for the trash can violation. You refuse to pay it. They tack on another $2,000 for the attorney to send you a letter demanding the money for the fine. Next comes interest, more legal fees, and on and on. If this HOA had the power to report to the credit reporting agencies you could graduate from medical school, pass your boards, but still not be issued the license to practice medicine! All because of one day when you were trying to help save lives you didn’t make it home to put the trash can away by the deadline.

If I shared this scenario with a non-HOA resident they would most likely laugh and say that is insane!!! But for those of us who live in HOAs we know all too well this could very likely happen.

I think it makes yet another good point why HOAs should never have the ability to affect the homeowner’s credit. Not to mention so many of these HOAs have such poor financial record keeping.

For example, I talked to a neighbor a few days ago. He told me our HOA has gotten a judgement for back dues against him. He asked for a ledger so he could see what charges they have applied. They told him they do not have one, but would try to get it from the property manager. The property manager said they do not have one, but maybe the previous property manager has one. The only thing anybody seems to have is a total amount he owes. In the past, he has owned a business and finds this insane that nobody can give him a detailed ledger of the charges. I agree with him, it is insane. And he is at the mercy of them to pay what they demand because his house is being held hostage with a lien. What would happen if they could also destroy his credit rating?

Clearly, too much power would be in the hands of the totally incompetent. There’s no limit to the destruction they could cause to homeowners in HOAs!

America, please wake up! Please stop pretending that HOAs are some sort of fun-loving living paradise! Please stop building these horrible nightmares! And please prevent them from EVER having the authority to report to the credit bureaus!

(link to column about credit scores and how they can impact you)