Friday, October 31, 2014

Myrtle Beach area HOA owners complain
Guess what? There was another public meeting about possible legislation at which people living in HOAs and condos complained about developers and board members making their lives miserable.
If I am reading all this correctly, they can be assured that more legislative tinkering will take place at some point in the near future.  That is all.

Thursday, October 30, 2014

Developer buys scores of Detroit's worst houses in $3.2million 'blight bundle'

"Anywhere else, a property developer who buys a bundle of foreclosed houses, abandoned factories and disused churches for a mere $500 a piece would be hailed as a genius.
But this is Detroit. And Herb Strather's $3.2million purchase of 6,350 homes is being called foolhardy.  To be sure, there are plenty of gems in the city's 'blight bundle.' A 170,00-square-foot factory that's still in good shape, a three-story brick home built in 1915 that most recently sold for $185,000, a lovely Tudor-style house that's ready to move into and a five-bedroom that simply needs a new roof.  But city officials tell the Detroit News that 2,000 of the properties are vacant lots. More than 3,000 will need to be torn down immediately...The city put strenuous rules on the buys of the 'blight bundle' requiring the buyer to either demolish and clean up all 6,350 properties within the next six months or offer a development plan. 'Now what we have to do is find out if indeed this group is serious about taking on such a task. And if they're willing to do so, we're willing to listen,' Wayne County Chief Deputy Treasurer David Szymanski told the Huffington Post. 
And at an estimated cost of $10,000 for each demo, the development group could have to pay up to $30 million just to clear the ground--almost ten times their current investment. Is that how things will unfold, or is there a plan to cherry-pick the nicest properties and profit from them piecemeal?  The city is looking at major redevelopment, but private investors may well be thinking about making money off the good stuff.

Monday, October 27, 2014

Flagpole fight attracts attention of Hancock County prosecutor - 13 WTHR Indianapolis

Flagpole fight attracts attention of Hancock County prosecutor - 13 WTHR Indianapolis: HANCOCK COUNTY - There's a new twist in a veteran's fight to keep his flagpole despite threats by his homeowners association. The homeowner says it stands for freedom, but the homeowners association says it violates policy.

The story generated hundreds of comments on WTHR's social media pages. Now it appears the prosecutor in Hancock County could join the front yard feud with a civil lawsuit.

The neighborhood association claimed the flagpole violated the covenants there. They are allowed on the house but not on a flagpole.

This is the first known instance of a local prosecutor jumping into an HOA flag flap amid the usual negative media attention and public comment directed at the HOA. According to the report, the prosecutor's office is giving the HOA until November 1st to back down.

Worst abuse of adhesion contracts ever?

Jimmy John's makes the kids who slap sandwiches together sign a non-competition agreement that effectively makes them unemployable in the  fast food industry for two years after they quit.

Sunday, October 26, 2014

Armored vehicle helps collect civil judgment in small town

Armored vehicle helps collect civil judgment in small town

"When officials in the tiny Town of Stettin in Marathon County went to collect a civil judgment from 75-year-old Roger Hoeppner this month, they sent 24 armed officers. And an armored military vehicle."
The police chief says that while Mr. Hoeppner was not known to be violent, he was "argumentative."  That's why the police are not apologetic for this ludicrous show of military force. The old police motto "To Protect and Serve" only makes sense these days if you realize that the police are protecting and serving themselves much of the time.

Thursday, October 23, 2014

Overmyer v. Frick--new theory for HOA rights?

The Democratic candidate for the US House of Representatives from the 11th District in Pennsylvania is a civil rights attorney named Andy Ostrowski.  He has a theory that HOAs violate a principle he sees in the US Supreme Court case of Overmyer v. Frick, which is linked above.  The issue in the case involved an Ohio law that allowed people--usually debtors trying to get one more chance from their creditor--to give up all their due process rights and confess judgment in advance, if they defaulted one more time.  This was legal under an old doctrine called "cognovit."  The Supreme Court ruled that  cognovit notes were not unconstitutional, provided that the waivers of due process were adequate.  Ostowski thinks that maybe HOAs and condos require inadequate notice and the agreements are unconstitutional.  Interesting theory, but I think it is far-fetched. The problem is that the court ultimately ruled in favor of cognovit.

Here is Ostrowski's statement of how he thinks this applies:

And here is the court's explanation for upholding the cognovit provision. You be the judge.

"Even if, for present purposes, we assume that the standard for waiver in a corporate-property-right case of this kind is the same standard applicable to waiver in a criminal proceeding, that is, that it be voluntary, knowing, and intelligently made, Brady v. United States, [405 U.S. 174, 186]   397 U.S. 742, 748 (1970); Miranda v. Arizona, 384 U.S., at 444 , or "an intentional relinquishment or abandonment of a known right or privilege," Johnson v. Zerbst, 304 U.S. 458, 464 (1938); Fay v. Noia, 372 U.S., at 439 , and even if, as the Court has said in the civil area, "[w]e do not presume acquiescence in the loss of fundamental rights," Ohio Bell Tel. Co. v. Public Utilities Comm'n, 301 U.S. 292, 307 (1937), that standard was fully satisfied here.
"Overmyer is a corporation. Its corporate structure is complicated. Its activities are widespread. As its counsel in the Ohio post-judgment proceeding stated, it has built many warehouses in many States and has been party to "tens of thousands of contracts with many contractors." This is not a case of unequal bargaining power or overreaching. The Overmyer-Frick agreement, from the start, was not a contract of adhesion. There was no refusal on Frick's part to deal with Overmyer unless Overmyer agreed to a cognovit. The initial contract between the two corporations contained no confession-of-judgment clause. When, later, the first installment note from Overmyer came into being, it, too, contained no provision of that kind. It was only after Frick's work was completed and accepted by Overmyer, and when Overmyer again became delinquent in its payments on the matured claim and asked for further relief, that the second note containing the clause was executed.
"Overmyer does not contend here that it or its counsel was not aware of the significance of the note and of the cognovit provision. Indeed, it could not do so in the light of the facts. Frick had suggested the provision in October 1966, but the first note, readjusting the progress payments, was executed without it. It appeared in the second note delivered by Overmyer's own counsel in return for substantial benefits and consideration to Overmyer. Particularly important, it would seem, was the [405 U.S. 174, 187]   release of Frick's mechanic's liens, but there were, in addition, the monetary relief as to amount, time, and interest rate.
"Overmyer may not have been able to predict with accuracy just how or when Frick would proceed under the confession clause if further default by Overmyer occurred, as it did, but this inability does not in itself militate against effective waiver. See Brady v. United States, 397 U.S., at 757 ; McMann v. Richardson, 397 U.S. 759, 772 -773 (1970).
"We therefore hold that Overmyer, in its execution and delivery to Frick of the second installment note containing the cognovit provision, voluntarily, intelligently, and knowingly waived the rights it otherwise possessed to prejudgment notice and hearing, and that it did so with full awareness of the legal consequences.
Insurance Co. v. Morse, 20 Wall. 445 (1874), affords no comfort to the petitioners. That case concerned the constitutional validity of a state statute that required a foreign insurance company, desiring to qualify in the State, to agree not to remove any suit against it to a federal court. The Court quite naturally struck down the statute, for it thwarted the authority vested by Congress in the federal courts and violated the Privileges and Immunities Clause."

Delaware ombudsman office getting started

This legislation is only a few months old. One more state goes the ombudsman route, giving unit owners someplace to turn other than the courts. It is a necessary reform, but not sufficient to address the unmet needs.

You need this condo pony

And to think I never knew there was such a thing as a condo pony.

Wednesday, October 22, 2014

Property manager accused of stealing $180,000 from HOAs

"A Chamblee property management company owner is accused of stealing tens of thousands of dollars from homeowner’s associations. 
So far, police in Dunwoody and Chamblee tell Channel 2 Action News reporter Mike Petchenik they’ve filed charges against Michael Sisson, and they say more charges are possible. Darwin Johnson told Petchenik his Midtown condo association hired Sisson a few years ago to manage their property near Piedmont Park."
There have been so many such incidents around the country that I have  lost count. Industry representatives  invariably say these are "isolated incidents," which would be true if you stretch the meaning  of  "isolated" to include every state where you find a significant number of HOAs and/or condos.