LA Downtown News Online: Conversion Confusion--Concerns Arise When a Rental Complex Goes Condo

Nancy Levy sent this on, and it includes a little from me:

...residents said the process so far has been difficult, with confusion over the precise timing of the transition. While representatives from building owner Hammer Ventures defend their work and say care has been taken to keep everyone informed, the situation exposes the Achilles heel of condo conversions: miscommunication and rumors...Evan McKenzie, a political science professor at the University of Illinois at Chicago, and the author of a book on homeowners associations and urban developments, said that when an apartment building goes condo, many tenants feel as if they are being kicked out, although myriad state and local laws strictly forbid such a practice. In fact, condo conversions require approval from the city, at least a nine-month process in Los Angeles. McKenzie said that rumors start when tenants aren't up to date with housing laws or the terms of their lease. "Sometimes they don't understand what their rights are," said McKenzie. "A lot of times this is confusing because people don't read things or understand them."

Condo developer arrested in securities fraud, theft case - OrlandoSentinel.com
Thanks to Nancy Levy for this link:

An Isleworth resident and condominium developer has been arrested on state charges of securities fraud and grand theft in a $60 million real-estate scheme targeting seniors nationwide. Patrick B. Kirkland, who boasts Orlando Magic player Grant Hill as one of his neighbors, is being held at the Orange County Jail with bail set at $1 million. His secretary, Laura Wade, was being held at the jail with bail set at $250,000. They were arrested late Thursday.

'There was no compassion for my kids':Joliet HOA evicts woman, 3 children over $262
But...but...the industry says this never happens! (Thanks to a reader in Olympia Fields who sent this link.)

A Joliet [Illinois] subdivision's homeowners association turned a woman and her three young children out onto the street this week over $262 her estranged husband owed in fees.

Comments disabled temporarily
I have disabled comments because some semi-literate individual thought this blog would be a great place to post insulting comments about people. I will re-activate comments when I get that stuff off. In the future I will moderate the comments.

Westlake wins reimbursement for services
Fred Pilot sent along this link to a New Jersey story that illustrates how the Condo Services Act (also known as the Municipal Services Act) works in that state. The law requires municipalities to reimburse condos and HOAs for the cost of certain specified muni services that the residents pay for like everybody else (through property tax) but don't receive because, for example, the trash trucks can't drive down the private streets.

Jackson officials have settled the township’s debt with residents of the Westlake adult community for more than a quarter million dollars. That is the amount owed in reimbursement from 2000-05 for unused municipal services. Under the terms of an agreement provided by Township Attorney Kevin Starkey, a total of $279,112 will be remitted in installment payments to Westlake Master Association Inc. to cover reimbursement of street lighting and snow removal that residents paid for through dues to their homeowners association as well as in their property tax payments to the township.

Rockwall Herald-Banner (Texas)--City limits HOAs
Take a look at the language I put in bold print. I keep telling people that cities are driving the spread of HOAs. Read wihat Councilman Mike Scott said. This story is from Fred Pilot.

The City Council recently approved an amendment to the subdivision ordinance that allows for review of homeowners association documents. The provision allows Rockwall an opportunity to check for conflicts with city regulations, including the use of city rights-of-way and public easements — namely streets. Most cities, including Rockwall, usually review homeowner association regulations to check for maintenance agreements for common areas, Planning & Zoning Director Robert LaCroix said. “They’re horribly written most of the time,” Scott said. “I went to law school, and I don’t understand half of them when I read them.” Scott suggested a couple of other amendments. No association could prohibit homeowners from displaying yard signs advocating political candidates, political parties, bond elections “or similar matters of public importance.”...“Some people have gone nutty with these HOAs,” he said. “If you’re going to form an HOA in the city of Rockwall — which, by the way, we require everyone to do — we’re not going to create a monster for future citizens.”

USATODAY.com - Metro home price gains soar to record
WASHINGTON — Home prices in 72 metropolitan areas showed double-digit increases in the fourth quarter last year, a record that was probably the peak in this real estate cycle, the National Association of Realtors said Wednesday. The number of metro areas with double-digit price increases surpassed a previous record of 69 areas with double-digit price gains in 2003's third quarter. The hottest area at the end of last year was the Phoenix-Mesa-Scottsdale region of Arizona, where the median home price soared 49% to $286,400. As a state, Florida held five of the top 10 markets with the fastest price appreciation, led by the Cape Coral-Fort Myers area with a 48% jump in the median home price. "I don't want to say this is the last hoorah, but it certainly reflects the peak of the boom in terms of price appreciation," said David Lereah, the NAR's chief economist. "It wasn't the highest quarter for price appreciation, at 13% (nationwide), but it covered a big part of the country – 72 metros is enormous." But he cautioned that the market is cooling fast. ..

Banner day for home rule
Couple not buying `For Sale' sign ban
Nancy Levy sent this link to another New Jersey story on freedom of expression, of a sort, in an HOA:

Planting a "For Sale" sign on the front lawn is one of the first things people do when they decide to sell their homes. It's practically the American way. But Joan and Kenneth Tencza, who live in the Locust Hill adult community in Hamilton, can't. Their homeowners association won't allow it. So after receiving two threatening letters from the association's management company -- one for posting a "For Sale" sign in their front window and another for a sign they put on Yardville-Hamilton Square Road, just outside the entrance to the development -- the couple has found an innovative way around the rules. They've hung a festive red and white flag outside their home to let people know the house is on the market.

Chicago Flame gives shameless plug!
Nancy Levy found this link to a student newspaper right here at UIC that ran a story on the Twin Rivers case. Now, why didn't I find that, considering that there are fifty gazillion copies of the paper right next to the classroom I just taught in?

Don Nordeen's blog has Twin Rivers links and commentary
Check out Don's blog,Governance of Property Owners Associations for a roundup of links and commentary on the Twin Rivers case. Thanks, Don.

EDITORIALS: Free speech in suburbia
Thanks to Nancy Levy for this link to a great New Jersey newspaper editorial lauding the Twin Rivers ruling. The last paragraph makes the main point well:

The decision may not affect the power of homeowners' associations to regulate such mundane activities as bike riding or choice of housepaint color, but it takes aim at clear violations of the right of expression. In 2003, for example, Ralph and Dori McIlvaine of the Evergreen development in Hamilton were fined $1,000 by their homeowners' association for disobeying the association's order not to fly a POW-MIA flag after Army Pvt. Jessica Lynch was taken prisoner in Iraq. In 2004, George Shafer of the Village Grande community in Bordentown Township was forced by his association to pay $600 for putting a Bush-Cheney campaign sign on his lawn. It's to be hoped that the court's ruling eventually will put an end to this kind of anti-democratic limitation on free speech.

CAI's take on the Twin Rivers decision


Here is what CAI has to say:
While CAI believes that associations should be reasonable in creating rules regulating the free expression of homeowners in their associations, the breadth of the opinion in the Twin Rivers case could be problematic

Let's cut through the PR. CAI filed an amicus curiae brief in this case in support of the association. They were behind the association and against the owners all the way. This "while CAI believes associations should be reasonable" business is part of CAI's ongoing effort to, on the one hand, appear to be the voice of reason while, on the other hand, they argue at every turn in every state legislature for virtually unlimited board authority over the residents. It is an attempt to let CAI portray itself as supporting limits on association abuses, while in fact the organization opposes just about any form of oversight or regulation that would actually serve as a real limitation on unfettered BOD discretion. "Be reasonable" without any oversight is just another way of saying that owners shouldn't have any rights, and association boards should be free to do whatever they want, without any meaningful oversight and with nobody to hold them accountable to any standard other than their own view of what is "reasonable." Some associations disregard not only the law, but their own governing documents. The Hanrahan report that is discussed in the Twin Rivers case talks about these out-of-control associations, and the lack of any way to rein them in.

The Twin Rivers case is about an association government that limited display of political signs, kept the insurgents out of the meeting room, and turning the development's newspaper into a one-sided platform where the challengers were regularly (and viciously) vilified. That, and more. All this had the effect of keeping people from effectively challenging the ruling elite. And CAI sided with them. Does that seem reasonable to you?

One final point. CAI correctly picks out the key paragraph of the Association's brief:

The Twin Rivers Homeowners' Association argued to no avail that subjecting the association to constitutional standards would "alter the very nature of planned developments, create chaos, erode private property rights, limit the freedom to contract, discourage new development, cause associations to lose their flexibility, and infringe the rights of the majority."

That is really the essence of the association's (and CAI's) argument. They tried to scare the justices into believing that if they allowed people to post political signs the sky would come crashing down around us all. Now, does anybody besides CAI find it unusual that this ridiculous argument was "to no avail"? How could any rational human believe that forcing associations to respect the simple expressive liberties that this country was founded to protect could possibly bring about this parade of horribles? This case is about power, and that silly argument is just part of the usual effort to dissuade courts from limiting the power of association directors (aided by their attorneys) over the residents.

I don't know whether this appeal to the New Jersey Supreme Court will actually happen. Of course, the decision is up to the Twin Rivers HOA and their attorneys (there were three of them taking my deposition). But CAI may fear losing the case in front of the highest court in a major state. At this point I suppose they can continue to criticize the decision as an aberration from a "liberal" panel (whatever that means), and go on doing business as usual. But losing it in the court of last resort (for New Jersey law and the New Jersey Constitution) would put a stop to that once and for all.

ps:
As I have said many times, I believe that CAI performs valuable functions in its capacity as an organization that supports the professionals who work for community associations. Training lawyers and managers is extremely important, and CAI is the pre-eminent organization in that capacity. It is also important as a networking organization for these professionals. Certification of managers, who in most states aren't even licensed, is valuable as well. But in its activities as a lobbying organization, I think CAI continues to take positions that are very troubling and are inconsistent with CAI's own stated views on local democracy. In my opinion, if CAI believes in local democracy within community associations, as it always says it does, the organization should be filing its amicus briefs in support of expanding expressive liberties for owners, instead of supporting the power of BODs to restrict those liberties. Without free and open discourse, democratic procedures are just a hollow shell. As we all know, they had meaningless elections in Iraq before the fall of Saddam. They had meaningless elections in the USSR. No, I don't think community associations are that bad. But the principle holds. You can't argue that association boards should be able to restrict expression according to what they think is "reasonable" and then argue that association elections are a meaningful expression of local democracy, and therefore no outside oversight is needed. The opposite is true. If we could be sure that the elections in associations were based on free and open debate, with fair procedures and protections for minority rights, then there would be less need for outside intervention in the affairs of community associations. The underlying structural problem is that CAs are corporations. We are delivering local government services through an organizational form that is designed for top-down direction and efficiency, not democracy. The challenge is to make them more democratic without producing paralysis, endless debate, and inefficiency. But too much democracy in HOAs is not the problem right now and I think we can cross that bridge if we ever come to it.

Windsor-Hights Herald - 02/10/2006 - Twin Rivers residents win battle; board to continue war
Nancy Levy sent this link to a good article on the aftermath of the Twin Rivers appellate court ruling. The HOA, despite having lost, says nothing is going to change. Their lawyer says if the plaintiffs don't like things the way they are, they should move. Charming. If I were going to appeal to the state Supreme Court, as the HOA says it will, I'd be a little more respectful of the judiciary. But this highlights is a major problem: HOAs routinely ignore their legal responsibilities. That's why owner-activists are so negative toward the entire institution. It always seems that there is no law HOA boards and their attorneys won't just ignore if it suits their purpose. That's because they are used to shooting fish in a barrel. 99% of the time these lawyers go up against unrepresented owners who can't enforce their legal rights. This situation breeds arrogance.


EAST WINDSOR — A group of Twin Rivers residents won a constitutional argument this week related to a lawsuit challenging, among other things, restrictions on posting political signs and a voting system based on property values.
But their lawsuit against the homeowners' association has yet to be finalized as it has been remanded to a lower court and the association plans to appeal to the state Supreme Court.
"If they're not happy with these policies," said association attorney Barry Goodman, "they should look elsewhere to live."... "Twin Rivers will continue to operate the way it has," he said. "It doesn't matter what standards apply, the Twin Rivers' regulations will be upheld."
------