Category Archives: States

Reflections on Flags

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Flag etiquette is a touchy subject in this country. The U.S. Supreme Court has ruled that burning the American Flag is a protected form of speech under the First Amendment. Still, we hear calls from elected politicians that displaying the Confederate Flag is not protected speech.

The beginning of the Confederate War was never about slavery, it was about the massive tax burden being imposed by the North against southern businessmen. The slavery issue arose two years into the Civil War and at that point the Stars and Bars and slavery were forever linked.

But the original flag, the one that George Washington commissioned, was never about slavery, either. It was about this country’s brash argument that it wanted to be free from foreign rule and oppressive taxes. Yes, George Washington owned slaves. So did many others of the country’s founders. So did the Cherokee Indians, for that matter.

So how is the American Flag any less a symbol of slavery than the Confederate Flag? The two flags are just red, white and blue pieces of cloth stitched together. And now professional rabble rousers are insisting that anything Red, White and Blue be torn down and assigned to the dustbins of history.

The two flags represent culture. There are good and bad things in every culture. But believing that Americans are too stupid to make up their own minds about important cultural issues is Political Correctness run amok.

Flee from political correctness, that apple barrel of hypocrisy and prevarication which is sitting and fermenting and waiting to poison the discussion and the common sense that most Americans have.

Now, we have a very real situation taking place in a Southern Colorado neighborhood. A Hispanic man hung a flag upside down as a show of disrespect because of the racism he feels in his community. He says he feels harassed by the HOA’s management company.

Whew! Don’t we all?

There’s a craziness afoot in American neighborhoods. There’s an intolerance that’s as insidious as a cluster of cancer cells. Let’s get rid of it. Leave the flags alone. Leave our First Amendment alone. If someone has the bad taste to display a flag improperly, just walk away and let him be. What a nice place this would be if we just gave each other some space. Forgive, forget, and get on with life.

(link to El Paso County flag story)

 

What a Great Place for a Banker!

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I told you last year this was coming. John Carona, the Texas State Senator who lost his seat in the last election would be buying some banks. During his years in the Legislature he was criticized for writing, lobbying for and passing laws designed to benefit the HOA business.

Carona tightly controls more than 8000 Homeowners Associations through his company, Associa, making him the largest HOA management firm in the country. Residents of many Associa HOAs have complained bitterly about how difficult life is in these beige compounds. Last year a newspaper talked about how Carona was buying up unrelated businesses surrounding his compounds making it difficult for homeowners to shop at non-Carona controlled firms.

The natural second-line business model would have him in significant industry like banking, where he could make loans available to all the homeowners he controls.

(link to Dallas News story on Carona’s plunge into the wonderful world of banking)

He also waded into the self-publishing business last year with a book about how great HOA life is. What’s most interesting is the negative reviews on his Amazon page.

 

 

FL legislation passed will harm, not help Condo and Homeowners’ Association owners and residents

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guest blog by Deborah Goonan

I can’t say I’m surprised, but I am thoroughly disgusted by the nature of HOA legislation that has passed the 2015 Legislative session, despite the fact that the FL House threw in the towel 3 days early. Given the hostile nature of other pending bills, it was probably a blessing in disguise.

Here are some highlights of what HOA-related passed and what failed:

CCFJ-backed SB 1308/HB 1263, the bill that would have authorized limited state oversight of HOAs similar to that available to condo owners, died before ever making it to a committee, for the second year in a row.

SB 611 / HB 736, a bill that would have limited fees charged for estoppels, and that was hotly debated and opposed by management, collection companies and Association law firms, effectively died when the session was dismissed early. That means business as usual. Fee gouging and hitting buyers at closing with last minute with extra closing costs will continue for at least another year.

HB 791 passed 98-17 in the House and unanimously in the Senate. The bill will extend the Distressed Condominium Act (DCA) for two more years, until June 30, 2018.  The DCA allows investors to “bulk buy” condos for rehab and resale, but significantly limits bulk owner liability for construction defects and also allows investors to waive funding of reserves until each unit is sold. The DCA has played a key role in creating perverse incentives for investors to take over condo Boards and force termination upon remaining owners, who have in turn been forced to sell for a fraction of what they paid for their units several years ago.

The bill also specifies that official records now include only “written records,” effectively eliminating audio or videotapes among the records HOAs must retain for at least 7 years. Also in this bill: if you are a tenant, and your landlord owns multiple units, but owes any financial obligation pertaining to even ONE unit, the HOA may suspend your privileges to use the recreational amenities and common areas until the owner is current, even if your unit is not directly tied to a fine or delinquent assessment.

Also buried in this homeowner-hostile bill is a carefully crafted provision that will allow HOAs governed under Statute 720 to issue fines exceeding $100 per violation and $1000 in the aggregate if the governing documents allow it. There will be no absolute maximums that HOAs can fine owners, so long as the oligarchy that controls a supermajority of votes is able to amend the documents any way it sees fit.  To make it even easier to accomplish a vote, the bill also permits proxies to be faxed or emailed, and will now allow for online voting.

And the standard priority of payment application for HOAs remains as follows: payments first apply to interest, then late fees, then attorney and collection fees, and last, but not least, the amount of the delinquent assessment. And HB 791 merely states that fines of less than $1000 may not become a lien against the home, implying that fines of $1000 or more CAN become liens that could then lead to foreclosure by the Association.

The topper for outrage in HB 791 is the fact that even if an Association fails to provide timely notice of an amendment to the CC&Rs, that will not affect its validity. In plain language that means that you can be penalized for violating a new covenant or amendment, even if you have no idea that it exists.

Attached are relevant links for any wonks out there that want to read the details.

(link to attorney summary of FL legislation affecting HOAs, Condos)

(link to SB 791)

(link to CCFJ SB 1308, now dead)

 

FL legislature passes amended version of condo termination bill, still full of loopholes

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guest blog by Deborah Goonan

Florida Legislators have done it again. They have managed to pass a bill that gives the illusion of protecting condo owners, but, in reality, does very little to prevent real estate investors and developers from exploiting consumers, violating 5th Amendment Rights to unlawful taking of property and just compensation.

In the final week of the 2015 legislative session, both the Florida House and Senate voted unanimously to approve passage of HB 643 (identical to SB 1172). Republicans Chris Sprowls and Chris Latvala sponsored these companion bills, with the intention of making it more difficult for bulk buying investors to take advantage of condo owners, particularly those who paid high prices at the time of purchase. Tens of thousands of Florida condo owners have faced forced termination of their distressed condominium associations, with the result that most have been kicked to the curb, forced to sell their units for pennies, most losing all of their equity or left with outstanding mortgages.

Even in its original draft, HB 643 and companion bill SB 1172 had loopholes. (See link to previous blog) But over the course of recent weeks, the two bills were consolidated and amended (watered down) 9 times.

So many loopholes remain in this bill, and news releases are providing inaccurate and incomplete information, touting HB 643 as a “step in the right direction.”

For instance, a recent news release states that condo owners will receive 1% of the value of the unit to help with relocation expenses. But HB 643 specifically states that the relocation allowance will be equal to 1% of termination proceeds. With all the offsets allowed against termination proceeds — the outstanding first mortgage, delinquent assessments, special assessments, fines, etc. — the proceeds could end up being very low or even zero. Do the math – 1% of zero is zero.

Plus there are so many conditions for condo owners to receive the original purchase price of their condo units, that this bill is unlikely to help the vast majority of condo owners. The conditions include:

o   The original purchase has to be made from the developer, not a resale;

o   The property must be the owner’s homestead, as registered in the County of residence;

o   The owner must have absolutely no financial obligation to the lender or the HOA, including an unpaid exorbitant special assessment and/or questionable fine issued by the bulk owners in order to “break” owners and pressure them into selling at a loss.

o   The “full purchase price” concession only applies if bulk owners represent at least 80% of voting interests approving a plan of termination. What if the bulk buyer that controls, say, 75% of voting interests, but then amends the documents to allow for first right of refusal? That would give investors the power to approve sales to straw buyers that will vote in favor of termination, but exempt them from reimbursing owners their full purchase price when that exceeds current fair market value. As written, the bill would not require buyers to be disclosed as affiliates as long as no one buyer acquires at least 20% of the condominium.

And if the bulk buyers control less than 80% of the voting interests, but a percentage sufficient to allow unilateral amendment of the governing documents, this bill does nothing to stop investors or developers from changing the basic rules of the game to their own advantage — even reducing the percentage necessary to approve the termination below 80%, as is permitted by FL Statute.

The loopholes are so obvious, even to non-attorneys and lay people. How can Legislators – many of them educated in law, political science, business, or public policy – justify voting in favor of HB 643?

(South FL Business Journal news release on HB 643)

(unanimous vote of approval)

(full text of HB 643)

(previous blog)

This One Will Absolutely Fry Your Brain!

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Here’s an HOA in Central Florida that will fine you ten thousand bucks if you post a negative online review about the community. And that money has to be paid within ten days.

Not only that, but this fascist HOA leader claims to own all copyrights of all material posted by his Windemere Cay Homeowners Association.

From what store are these idiots buying their supplies of Stupid Juice?

(careful, but this link may actually fry your brain.)