Saturday, April 30, 2005

Legal Tales from Gilligan's Island
This is a law review article. One of the few worth reading. Santa Clara Law Review Volume 39, Number 1 (1998).

Gilligan's Island, a 1960s comedy, ranks among the most influential television shows of all time. Despite the fact that the last original episode aired thirty years ago, the show is more popular now than when it first appeared. Each day, reruns bring the characters back to life, and it is claimed that the show has been presented more often than any other television comedy.
Although the series has been the subject of numerous studies, its legal facets are almost never mentioned. As a result, even the show's most ardent fans are rarely mindful of just how much law appeared in the series. Accordingly, this essay seeks to shed some light on the jurisprudence of Gilligan's Island.
NJ HOA limits flag display despite protective statute, says homeowner

From a reader who wishes to remain anonymous out of concern over retribution. Any New Jersey attorney who would like to help this individual vindicate his/her rights can contact me and I'll facilitate putting you together. For example, a New Jersey CAI attorney who believes in the rule of law and would like to demonstrate that CAI cares about owners, not just boards of directors, might want to do this pro bono.

My Homeowners Association limits public display of the
American flag, despite a NJ law prohibiting such limitation
(45NJSA:22A-48.1). The HOA also acts as judge and jury for anyone who complains that their actions are unfair. There is apparently no legal recourse against a
Homeowners Association in NJ or any state, as these little fiefdoms
have been established as private governments who answer to nobody
but themselves.

Name Withheld
New Jersey
Milwaukee Journal Sentinel Online: Their own set of rules: Cheesehead state wants condo buyers to know what they're getting into

Today, Wisconsin begins an effort to reduce squabbles by requiring condominium associations to provide potential buyers with an "executive summary" of governing principles before a contract is signed. It's the seller's responsibility to get the summary to potential buyers.

You can't hide your lying eyes from devices: thermal imaging to detect lies?
This is kind of creepy.

Friday, April 29, 2005

More HOA reforms near OK--East Valley Tribune
"Your Valhalla Neighbors" kindly sent the link to the story on AZ HOA reforms that I noted earlier--thanks.
Boing Boing: Designer prefab houses coming to Germany
Mystery Reader sent this link to a Boing Boing story on a type of house that I hope stays wherever it is at the moment. Take a look at the picture.
AB 619 Assembly Bill - AMENDED - Action 9 - Action 9: Woman Paid HOA Dues, But They Still Wanted Legal Fees
Yet another story of a homeowner treated like so much garbage by her HOA and the HOA's attorney. According to the story (I have no independent knowledge of what happened), this owner wasn't delinquent and had the receipts to prove it, but the association's lawyer threatened to foreclose if the owner didn't pay the lawyer's fees for the bogus collection effort. Enter the TV station:

CHARLOTTE, N.C. -- Betty Belk said she paid her homeowner's dues on time, but through a clerical mistake, the homeowner's association still wanted to collect on legal fees...Attorneys do have the right to recover fees incurred in the collection of delinquent homeowners dues. But if Belk's dues were never late, then how could the attorney, in this case Victoria Sprouse, still collect her fees? "I said, 'I don't think that's right.' She said, 'You got to pay that or I'll foreclose on your house,'" said Belk. "That's when I got in touch with you." Action 9 contacted attorney Victoria Sprouse. She promised she would talk about what happened but never did.The homeowner's association's management company, Carolina Management Association also wouldn't talk to Action 9. Pat Patterson of Carolina Management told Belk she didn't have to pay the attorney fees.
According to the community association industry, things like this never happen. Sure--maybe there's another side to this. With the association's attorney not speaking to the press I don't know. But when will the Community Associations Institute take a meaningful stand against apparent collections and foreclosure abuse by associations and their attorneys? All I hear are platitudes about how foreclosure should be a last resort and denials that there is a problem. Every case is an "isolated instance." How about some action, such a as a CAI attorney providing pro bono legal assistance to people like Betty Belk so the case can be fully and fairly presented on both sides? Owners can't even get representation because (a) they can't afford it, and (b) even if they could nearly all HOA specialists only represent associations. CAI could remedy this, and they should. And if they don't, legislatures will do something about it, and I think HOA lawyers won't like the outcome of that process.
The most expensive ZIP codes of 2005 - -
Illinois Supreme Court decision allows non-lawyers to handle real estate transactions
There is a major battle underway between the organized bar and mortgage companies over having the lender's non-lawyer employees handle parts of real estate sales transactions. Here in this case the Illinois Supreme Court hands a big loss to the lawyers, despite numerous amicus briefs:

The parties have identified several issues for our review: (1) whether a mortgage lender that uses nonlawyers to prepare loan documents for the lender's loans engages in the unauthorized practice of law when the lender charges the borrower a fee for preparation of the documents; (2) whether a private right of action to recover money damages exists under the Attorney Act (705 ILCS 205/0.01 et seq. (West 2002)); (3) whether plaintiffs' complaints stated a cause of action under the Consumer Fraud Act; (4) whether a private right of action for money had and received due to fees charged in this case exists and whether the voluntary payment doctrine bars plaintiffs from seeking restitution; and (5) whether federal law preempts plaintiffs' state law claims against defendant national bank and federal savings associations.

In summary, we hold that where the defendant lenders prepared the subject loan documents, through their employees, they did not engage in the unauthorized practice of law by charging a fee. We also hold that no private right of action exists under the Attorney Act for damages for the unauthorized practice of law. We further hold that plaintiffs' restitution claims in the Jackson and Porter cases are barred by the voluntary payment doctrine. Accordingly, for the reasons stated, we affirm the judgments of the appellate court.

Why is this significant, apart from the continued threat to the income of attorneys? Because of the rise of common interest housing and the inclusion in housing sales of a package of privatized services, responsibilities, and restrictions--all of which need to be fully understood by the buyer, which requires a lawyer to explain them. I think buyers need to be fully informed of how CC&Rs and an HOA or condo association will affect their expectations of home ownership. I'd like to see more lawyer involvement in explaining these documents, not less. These non-lawyer employees are not qualified, or allowed, to interpret or explain things. Having mortgage company employees doing what lawyers would otherwise do just increases the pressure to get the whole transaction over with as speedily as possible without bothering to secure full understanding by the buyer of what he or she is getting into.

Thursday, April 28, 2005 - Homeowners association sells woman's house
But all the CAI lawyers say this never happens...I guess somebody isn't telling truth. Who do you suppose it could be?

Pamela Bernhardt was close to completing renovations on a house she owned and hoped to sell. She had installed a new roof, new granite tops in the kitchen and new tiles in the bathrooEarlier this month, she arrived at the house on the 14200 block of Swallowfield in southwest Houston and found a small, yellow note stuck to the front door. The handwritten note said that the house had been sold at a foreclosure sale seven months earlier. The local homeowners association had sold the house, valued at about $250,000, saying Bernhardt failed to pay a $420 assessment fee.


Home's green roof has a slant to it
Ah, the pleasures of fee simple ownership. Try doing this in your HOA:

Green roofs are sprouting up all over, but most of them are on flat surfaces and can't be seen from street level. But Lois Vitt Sale -- always one to shout worthy ideas from rooftops -- wanted her elevated garden to be visible. So she planted it on the peaked roof of the garage of her Downers Grove home.

Chicago Tribune | Police chief of Berwyn is indicted
Think HOA elections get contentious? Check out this story of election related violence in the Chicago suburbs, written by my friend and former editor, the inimitable Brett McNeil.

Berwyn Public Safety Director Frank Marzullo and four other men--including Marzullo's son, who is an assistant Cook County state's attorney--were indicted by a Cook County grand jury Wednesday on charges they beat a man April 5 outside a Forest Park steakhouse, authorities said.

Chicago Tribune | Poor seniors take on plans of condo giant
Mystery Reader sends along this link to an unusual twist on the familiar situation of tenant displacement due to condo conversion:

Dozens of immigrants from the former Soviet Union are getting a first-hand lesson in capitalism and market value as one of the biggest players in the Chicago real estate market gets a crash course in dealing with people who need government aid to find a place to live. More than two dozen elderly residents of Ontario Place, mostly Russians who immigrated to the U.S. a quarter century ago and have lived at the prime address since with the help of housing vouchers, picketed the building Tuesday to protest a deal that could send them packing. "This is our home," Leona Gaysinsky, a resident, said. "We know no other place. This is our community."Ontario Place, like many other downtown buildings, is going condo. American Invsco, the new owner of Ontario Place at 10 E. Ontario St., says it has done everything it can to help the residents find new housing nearby, but it now fights accusations by senior-rights groups that it is a Goliath throwing the elderly out into the street.

Wednesday, April 27, 2005

Philippine News Online: Condo sales lead property boom
MANILA – Filipinos are making the switch, with growing numbers of urbanites now preferring to live in residential buildings instead of single detached units. This, according to the chairman of one of the biggest property developers in the country.

Los Angeles Daily News:Condo market surges--
High demand, prices fuel construction, conversions

In the San Fernando Valley during March the median price of a condo soared an annual 19 percent, to a record $352,000, but sales rose 32.2 percent, to 493 transactions, the third-highest monthly total ever. By comparison, the median price of a single-family home hit a record $525,000.
Every time I see these SoCal prices I have to look twice to make sure it says what I saw the first time. The median price of a CONDO is $352,000?? And sales are up by almost one-third? I would not want a variable rate mortgage on one of those. When the economy slows condos are the first properties to suffer, and if interest rates go significantly higher the combination of those two circumstances could spell trouble for a lot of people living in the Valley.

Tuesday, April 26, 2005

U.S. Prison Population Soars in 2003, '04 - Yahoo! News
Speaking of gated communities...

WASHINGTON - Growing at a rate of about 900 inmates each week between mid-2003 and mid-2004, the nation's prisons and jails held 2.1 million people, or one in every 138 U.S. residents, the government reported Sunday.

Case No. 1-03-0378, Mikulecky v. Bart
Interesting opinion from the First District Appellate Court here in Illinois (that's the one that covers Cook County, including the city of Chicago). Issue: If a seller of a condo unit knows that the condo board is planning to approve a big capital expenditure, such as a major repair, that will require borrowing and levying a special assessment, but the BOD hasn't approved the plan as of the time of disclosure and even of the actual sale to the buyer, does the seller have to disclose that information to the buyer? Answer: You betcha; even though the expense wasn't approved, it was "anticipated."

Condos are creatures of statute. Section 22.1 of the Illinois Condominium Property Act says exactly what has to be disclosed, and it includes "anticipated" capital expenditures. Does "anticipated" mean "approved," as the seller argued? No, says the court. "Anticipated" has a commonly understood meaning. The fact that the seller knew about the planned expenditure through a letter from the BOD and also from going to a finance committee meeting was enough, and it should have been disclosed.
My Way News:Herd of Buffalo Disrupt Traffic in Md.

PIKESVILLE, Md. (AP) - A herd of buffalo somehow got loose and wandered around an upscale neighborhood Tuesday, disrupting traffic and alarming homeowners before officers managed to corral them in a tennis court.

Submitted for your consideration: Suburbia, once believed to have the best of urban and rural worlds, now officially has the worst of both worlds. Big city residents always gloat when there is an urban-type crime or other problem in a suburb. It is a schadenfreude carnival whenever there is a drive-by shooting in a suburb. "See?" they say, "Suburbanites can't escape bad schools/crime/fiscal collapse/traffic etc..." But now suburbia gets rural problems as well--a dad gum buffalo stampede. What's next? Potato blight? Boll weevils? Locusts?
Contrarians at the Gates Go to Some Heights to Make a Point
Fred Pilot forwarded this--you gotta love it...

Ten-foot-tall "viewing platforms" erected outside three gated communities are showcasing one Los Angeles group's social viewpoint. Guerrilla artists have erected gaudy, orange-painted towers next to the fences of private neighborhoods in Brentwood, the Fairfax district and Los Feliz to protest what they say is a proliferation of private, gate-guarded residential enclaves.
From the East Valley Tribune on-line edition

More HOA reforms near OK
By Le Templar, Tribune
The Arizona Legislature is close to adopting a new set of homeowners association reforms that would make it easier to remove board members, replace proxy voting with absentee ballots and tell potential home buyers in plain English about certain rights they give up when joining an association.
A series of proposals approved by the House of Representative has been combined into a single measure, HB2154, awaiting debate in the Senate. Key lawmakers say the bill likely will pass because of widespread support from reform advocates and the HOA industry, two sides that usually are at each other's political throats. "This one is a little staggering with the ease that it has passed," said Sen. Jim Waring, a Republican whose district includes western Scottsdale, Cave Creek and Carefree. "Frankly, you just dont see that on (HOA reform). It is always contentious." But there's still plenty of frustration out there. Many HOA reform advocates are angry that key lawmakers never allowed committee votes on more sweeping changes they claim would provide homeowners further protection from abuses of power by associations and their management companies.

I don't have the URL for the whole article, but it seems that AZ is going to get another round of reform on top of the bills passed last year. banning renters in AZ HOAs
Fred Pilot found this detailed account of HOA efforts to ban renters. This is all the rage in Illinois following an Illinois Supreme Court decision holding that this can be done by rule change, without even amending the declaration.

Sunday, April 24, 2005

Homeowners test the power of their own association
Here is a detailed account of the Twin Rivers case, and thanks to Dianne McCarthy for forwarding it. The case was argued in the court of appeals just last Tuesday. This could be a blockbuster if we win (I served as expert witness for the plaintiffs, the Committee for a Better Twin Rivers, who are seeking to bring the HOA under certain limits of the New Jersey Constitution).
The lawsuit filed by a handful of Twin Rivers residents seeks to subject community associations to one of the biggest checks on the power of municipalities: the risk that a court can declare its actions unconstitutional. It is the latest in a long line of cases to pit the rights of property owners against those of individuals. When fundamental rights are at stake -- particularly rights of free speech -- courts have required the property interests of company towns, farm owners, private universities and regional shopping malls to yield. So far, however, no court has protected homebuyers against restrictions imposed by associations. A major issue in the Twin Rivers case is whether homeowners voluntarily accepted restrictions by purchasing their homes. They are required to sign contracts agreeing to pay their association fees and abide by association rules.

...and see the comments on foreclosure from attorney David Kahne...
From the article linked below:

David Kahne, a Houston attorney who represents homeowners, has been at the forefront of a Harris County-based movement to curb overzealous homeowner associations. Some homeowners accused Houston law firms of operating foreclosure mills...Kahne helped pass legislation in 2001 that prevented associations from initiating a foreclosure solely on the basis of deed restriction fines and attorneys' fees. But some associations then paid disputed fines with funds intended for annual assessments. The remainder of the check would be short of the assessment amount, he said, and the association would use that as an excuse to initiate foreclosure. Sen. Jeff Wentworth, R-San Antonio, has introduced a bill that says payments shall first be applied to delinquent assessments, then current assessments. Only after assessments are paid can the association apply payment to fines. The attorney gets paid last. Kahne, who testified in favor of the bill before the Senate Intergovernmental Relations Committee, is optimistic it will pass. The bill came out of committee without amendments, has picked up four co-authors and has a companion bill in the House.

Texas lawyer specializes in HOA foreclosure
I notice that recently CAI attorneys have been busily denying that any of them get wealthy doing foreclosure actions over delinquent assessments. That's to offset the charge that the HOA foreclosure practices tend to benefit attorneys more than HOAs or owners. Well, here's an example of a foreclosure specialist who seems to be doing pretty nicely. It also refutes the charge that hardly any foreclosure actions lead to actual foreclosure:

When it comes to collecting delinquent property association fees from homeowners, Tom L. Newton Jr. handles far more accounts than anyone else in Bexar County. In 2004, his signature was on the notice of foreclosure in almost 90 percent of all cases. By his own declaration, Newton says, "I'm just the best at it." Dozens of homeowner associations call on Newton when their efforts to collect dues and fees are unsuccessful. If the accounts get delinquent enough, the association can actually foreclose on the house. Newton files hundreds of lawsuits each year for "debt and damages," or for "notice of foreclosure." Of the 370 notices of foreclosure filed in 2004, according to Real Estate Foreclosures Inc., 53 actually went forward to a county auction. In most cases, the houses became the property of the homeowner association.

Walk your dog 3 times a day or be fined - Pets -
Another HOA gone mad? No. This is the city of Turin, Italy. I think any government agency is capable of meddlesome lunacy unless some areas of life are put off limits. That's why the basic structure of American government works so well--all powers of government are subject to a set of "off limits" rules called civil liberties. HOAs--and Italian towns--would work better if they were limited in the same way.
Dog owners in Turin will be fined up to 500 euros ($650) if they don’t walk their pets at least three times a day, under a new law from the city’s council.People will also be banned from dyeing their pets’ fur or “any form of animal mutilation” for merely aesthetic motives such as docking dogs’ tails, under the law about to be passed in the northern Italian city. “In Turin it will be illegal to turn one’s dog into a ridiculous fluffy toy,” the city’s La Stampa daily reported.