Category Archives: States

Mob Mentality in Las Vegas HOAs

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We haven’t heard much lately about the Las Vegas Homeowner Association scandal and the federal investigation which has already obtained ten guilty pleas against public figures for corruption. But, we may as well do this blog to keep Las Vegas criminality in the headlines.

The Mountain’s Edge Homeowner Association is being sued by investors who tried to snatch up foreclosed homes in the Vegas area. In the mortgage collapse, investors have taken a huge risk in trying to buy up homes which were abandoned by bankrupted homeowners. Those investors are just about the only financial thread keeping entire neighborhoods from going under.

But investors are now filing complaints or suing dozens of HOAs which they claim are gouging them with inflated liens and excessive dues, fines and collection costs. The old wisdom is “don’t bite the hand that feeds you.” Investors are pouring money into dying neighborhoods, but HOA boards are slamming them with fistfulls of phony fines.

The mortgage mess will take years to clear up. But many Las Vegas HOA boards don’t seem to “get it.”

Welcome the investors. Bring in the investors. Use their money to prop up your dessicated neighborhoods. But if you use your customary mob mentality against this new money, you’ll end up paying a high price.

The obvious message to investors is… “never buy a home in an HOA. Not in Las Vegas. Not anywhere.”

Ward Lucas
Author of
Neighbors At War: The Creepy Case Against Your Homeowners Association

How D’ya Like Your HOA Re-sale Value Now, Bunky?

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Washington State is such a pretty place to live. They call it “The Evergreen State.”

And a boat-load of Homeowners Associations were all going to help protect and preserve property values for all those new owners. Well, it’s not working out so well for folks in the Hazel Dell Townhomes, part of the Timbers at Town Center HOA in Vancouver. About six years ago, crowds of real estate agents dragged their clients in to buy some of those ritzy new townhomes. Now, HOA dues are going unpaid, a lot of personal wealth has been shredded, common areas are uncommonly unkempt. At this point, a townhouse owner probably couldn’t unload his property in a bad poker game.

It’s an old, sad story. The developer went broke in 2006, leaving a bunch of homes unsold. He transferred his bankrupt company along with the CC&Rs to the neighborhood. One of those rules is that it takes a quorum of 50% of the community to elect a board, to hold a meeting or even to petition the courts for help.

Now the homeowners are whining to the State Legislature that it’s “just not fair.” Maybe the Legislature will help out, and maybe not. The problem isn’t the developer. The problem is that investing in covenant-controlled housing is a big fat “P.S.I.” (pretty stupid investment). It’s just another case of “the big lie” being told over and over again by every real estate agent in Kingdom Come.

They’ll call me a fibber for saying it, but the real truth is that, “No, the HOA does NOT protect your property values.

In the meantime, many homeowners in The Evergreen State could reasonably call it “The Ever-Broke State.”

Ward Lucas
Author of
Neighbors At War: The Creepy Case Against Your Homeowners Association

Do You Smell Something Rotting in the Air of Las Vegas?

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With several dozen Las Vegas Homeowner Associations mired in the muck of a federal corruption investigation, members of one association have learned they may be targeted by huge IRS assessments and fines.

Sun City Summerlin Community Association is not one of the Nevada HOAs where investigators have found corrupt cops and judges and lawyers. But this HOA’s accounting practices are attracting lots of federal attention.

The HOA operates several commercial golf courses and restaurants. So in addition to HOA dues, there’s a chunk of money coming into the coffers of the HOA from outside sources. Theoretically, taxes should be paid on that income. But Sun City Summerlin Association has been deferring millions of dollars on its annual tax forms. Homeowners don’t seem to be aware that their snowbird homes may end up as tax magnets instead of tax shelters.

Sun City Summerlin is a not-for-profit organization, so theoretically homeowners should have been given some rather large refunds. Instead, each homeowner may be given some rather large surprise tax assessments.

Other Homeowners Associations across the country area are closely watching what happens in Las Vegas. Elderly homeowners may suddenly discover a downside to investing their life savings in a retirement home in the Sun Belt.

Ward Lucas
Author of
Neighbors At War: The Creepy Case Against Your Homeowners Association

How to Crash Property Values in an HOA!

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What if your HOA suddenly passed a rule that no member could ever convert his home to a rental?
Homeowners rent out their homes for many legitimate reasons: to stall for time until sales values go back up; to bring in some money while Dad’s is relocating to a job out of state. Some parents invest in homes near a college so a child can decrease living expenses by taking in a roommate.

Poorly maintained rental property certainly brings down values of nearby homes. But well-maintained rentals harm no one.
So, what’s the harm in outlawing non-owner occupancies?

We may soon find out.

The City of West Saint Paul has passed an ordinance that says no more than ten percent of the homes on a block may be used as rental property. It was adopted because of fears that banks would convert foreclosed homes to rentals instead of selling them.

Several questions come to mind: what protects neighborhood values more, a number of well-maintained rentals? or waves of foreclosed homes sitting empty waiting for an economic turnaround that may never come? And another: if you knew you were buying a house you could never convert to a rental under any circumstances, would that raise it’s value? or would you be tempted to low-ball the seller? And wouldn’t your low-ball purchase bring down ‘comps’ on all other nearby houses?

And a final question: would lenders be more or less eager to lend money to a borrower who might have to default because he could never rent out his home in a future emergency?

West Saint Paul, Winona, and any other cities with such bans, you haven’t just shot yourself in the foot. You’ve shot, re-loaded, shot, re-loaded, shot, re-loaded……..

Ward Lucas
Author of
Neighbors At War: The Creepy Case Against Your Homeowners Association

STOP THE PRESSES!!!

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Well, at least it sounded cool, but I didn’t have the guts to say that to my publisher. I actually did want to hold off for a couple of weeks on my new book, Neighbors At War: the Creepy Case Against Your Homeowner Association. With all the embezzlements from HOAs, I’ve got a last minute update I’d like to make. I want to slip into Chapter 14 a $1000 challenge: a reward for the reader who can compile a verified list of the largest number of Homeowner Association embezzlements.

It’s really too tragic to be funny. But the latest case involves Kevin Douglas Harris, an HOA officer who pleaded guilty to embezzling money to buy himself some golf equipment. It’s the Hi Hill Village Homeowners Association in Orion Township, Michigan. Perhaps Kevin felt he was working so hard as treasurer, his neighbors sort of owed him a new set of clubs.

This theft was only for 6000 bucks. But still, don’t HOA homeowners get it? It’s too easy! Embezzling from Home Associations is out of control.

So, if my publisher doesn’t beat me to death with a tire iron first, here’s the deal: compile and verify the longest list of HOA embezzlements in any 365 day period. I’m the sole judge. If you win the money, I get to publish your research in my second book!

If we both do our jobs quickly, maybe our golf club embezzler will be able to read both books while he’s still on parole…that is, if he gets sentenced at all.

http://www.theoaklandpress.com/articles/2012/01/13/news/local_news/doc4f0f724e2c027029623300.txt

Ward Lucas
Author of
Neighbors At War: The Creepy Case Against Your Homeowners Association