Thursday, June 09, 2011
The next foreclosure fight, redux...
I received an email from William Brown of Scottsdale, AZ, asking for a reposting of the above-linked post with its many comments. I agree that it was a great video and discussion, so here it is.
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Tyler Berding continues his arguments in support of foreclosure in his blog today, “It's Your Neighbors, Stupid,” and attempts to justify foreclosure as necessary for the survival of the HOA. His argument runs in direct contradiction to American principles of government where the people, not the state – the HOA – come first. I cannot accept his justification that characterizes the HOA being equivalent to public government tax collections, or that the HOA stands in the same position as a hard money lender like a bank. That is stretching it!
He states, “Do away with community associations and run the project as a committee of the whole? Not likely. That's anarchy waiting to happen.” I guess oppression and coercion by means of grossly unjust cruel and unusual punishment is acceptable in order to save the HOA. Perhaps, if one reads Privatopia again, or for the first time, he cannot escape the realization that the issues raised in Privatopia in 1994 still exist today. It must be the people, not a defective system that relies on coercion and punishment, especially foreclosure, in order to survive.
What has happened to America?
Regrading Tyler Berding's “It's Your Neighbors, Stupid":
Statements like
"But the truth is that the association serves the owners"
rank up there with
"Since HOAs are very local and small, participants are often neighbors and hence have incentive to settle disagreements in a civil manner."
as beyond farcical.
It ignores the real-world in which HOAs serve professional property management companies and law firms (like Mr. Berding's), not the owners themselves. This happens because HOA management companies and HOA law firms profit from abusing homeowners, and they profit from creating strife and conflict.
As any conservative, glibertarian, Republican, or Ayn Randian will happily tell you, the profit-motive is a powerful incentive.
Mr. Berding does hit the nail on the head, as he often does, when he wrote:
"Owners can sue each other directly to enforce the rules but most would rather not do that. It’s messy and expensive and personal. Instead the corporation does it. But that doesn’t change the essential character of the dispute; it just makes it less intimate. Associations, like governments, provide the anonymity and security that prevent street brawls."
However, he does not inform the reader that this structure provides the corporation with moral hazards and perverse incentives to abuse homeowners, for same reasons he stated (plus others he did not).
And does Mr. Berding really believe that disputes and litigation are currently not "messy and expensive and personal"? For the homeowner involved, they are intensely so -- to the point of ruining their lives. But who cares about them? Certainly not the "community association".
In statements published and broadcast, Mr. Berding has blamed the homeowners for apathy and lack of participation as the cause of a communisty association's problems. But on the other hand, such as in this piece, Mr. Berding praises the corporate structure of HOAs for relieving homeowners of the necessity of enforcing their own (so-called) "contracts".
Which is it?
Although Mr. Berding has made some worthwhile contributions to the debate, "It's Your Neighbors, Stupid" does, as he usually does, ignores the role of his own industry in creating the problems. I can no longer give him any benefit of the doubt as to his motives.
The "useful idiots" who were apologists for the failures of Communism made excuses like "Communism is a good system, it's just that people aren't good enough for it" or "Communism would work if only the right people were put in charge."
Similarly, the industry's position can be summed up as "HOAs would be great if it wasn't for the homeowners."
The CAI CEO Skiba seems to miss the point about a fair and just treatment for an association’s members in regard to keeping any recouped assessments from super or priority liens, and returning them to the good paying members. You know, those who paid extra assessment charges to cover the shortcomings as a result of foreclosed homes, or a failure of the HOA to foreclose on bank owners who do not pay their fair share of assessments. Skiba prefers that the state, the HOA, keep them in violation of the “equal assessments for homeowners” covenants.
Understandably, if the HOA continues to be in a ever increasing hole, that the “extra” assessments cannot be returned to the “good guys.” I mean, not until the HOA becomes whole again, whenever that occurs. The point is, these “extra fees” should be treated as HOA debts, like loans, to be paid off. Or, on the other hand in reality as Skiba argues, is the equal assessment of homeowners another myth anytime one or a few don’t make their payments? In other word, guys, the HOA is like a partnership where individual members are responsible to cover the entire HOA budget even if others can’t pay. Wasn’t that explained to the buyer when he bought his home? Yes, the structure of nonprofit membership organizations do not protect the member-owners from personal obligations, because that’s what your CC&Rs say. That document that owners fully and openly agreed to, so says CAI.
Skiba’s reply brings up irrelevant issues like bookkeeping issues, and balancing this budget this year, etc. Like you are not entitled to tax refunds in the following year or years (filing adjusted returns) because we can’t keep proper records. My gosh, from the national educational leader for HOAs. Sounds like excuses to keep other people’s money. Why does it seem that CAI never backs an obvious fair and just treatment of homeowners if the HOA has to give up something, especially something not deserved by the HOA and outside the “agreement?”
I cannot comprehend how Skiba reconciles the CIA pronouncements for creating harmonious, productive and effective HOAs and not treating the good homeowners fairly? Isn’t that one of the mantras for the HOA right to foreclosure? “It ain’t fair for the “good members” to pay for others who violate their agreement to pay assessments.” Apparently, keeping these funds for unspecified uses is fair and just treatment for the good guys.
I wonder why we still have this hostility, this divisiveness, and those problems that CAI was supposed to solve back in 1973 made public in the 1994 Privatopia book, still here today?
See the May 29, 2010 Privatopia Papers post, The Next Foreclosure Fight and Tom Skiba’s June 10th comment (#22).
With respect to “Anonymous, June 1, 2011 10:58:00 CDT” and not the other 12 ‘Next Foreclosure Fight’ anonymous posts (61.90% of the 21 posts to date), some commentators’ use of a nom de guerre, nom de plume or anonymity is driven by the too-often ugly mean-spirited “shoot and/or impugn the messenger” response to fair and substantive questions whether made to their association, on interactive message boards, to this or other blogs, in the media or other forums that provide for the exchange of ideas, comments, observations and experiences.
Absence a Carnac-esque ability to divine that which may be in another’s mind it would be charitable not to comment on CAI’s Chief Executive Officer’s “I normally don’t respond to comments from Anonymous sources as anyone who is (sic) so afraid or insecure to stake a claim to their own thoughts and opinions isn’t generally worth the time. But, there are a couple of interesting points here nevertheless.”
Notwithstanding anonymity (do any readers of this blog know the anonymous sources, “1984, Communisty Associations Institute, pvtgov, Da Judge, seashell or any of the majority of anonymous contributors to The Privatopia Papers”), the substantive questions, “Will the corporate association…reimburse ‘those who pay’ for those that do not pay. Will satisfying the ‘super lien’ simply devolve into the association’s newly ‘found money (OPM),’” remain substantively unanswered.
Whether lien priority secures the association’s income stream, reduces potential future assessment increases or funds any association account (generally insufficiently funded reserve accounts) from which “the entire community reaps the benefits,” might most homeowner members agree that the fair and equitable disposition of association funds (regular and/or special assessments, ancillary fees, funds collected by foreclosing a “super lien” or other consensual lien securing payment of a delinquent owner’s unpaid assessments) should be either or but not both…either collect the unpaid assessment (“super lien” or other) or have the “other owners pay extra,” but not both?
Should not the fair and equitable collection of assessments, recovery of unpaid assessments by foreclosure and/or other ancillary fees (transfer, capital improvement fund, enhancement, preservation and/or other equally creative fees) pay the association’s operating costs, fund its maintenance and reserve accounts, reduce or eliminate assessments (regular/special) $1.00 for $1.00?
Is $2.00 collected for $1.00’s expenses fair and equitable or will the “extra” $1.00 simply devolve into the association’s “new found money (OPM)’?”
Anonymous
instapundit.com/122320
EMPTY TRASH. BUY MILK. Forge History. I like this bit:
One of the lists Dennison looked at came about when the owners of the estate became suspicious of the amount of clothing their serfs owned. A decree was issued, which accused the serfs of having, as Dennison put it, “several changes of the nicest clothing while at the same time being in arrears on their taxes.” An inventory of all the serfs’ clothing was established and new rules enacted that put strict limits on the number of headscarves, coats, etc. that any family could have if they had not paid their taxes in full.
Expect a similar proposal from the Obama Administration any day now . . . .
* * *
But if HOAs enacted similar rules for their delinquent serfs, libertarians would continue to praise The Privatized Toll Road To Serfdom. Because in Libertopia, homeowners who have not paid their HOA dues, or any arbitrary fine and fee imposed by their superiors, deserve whatever bad things are done to them.
With respect to “Anonymous, June 1, 2011 10:58:00 CDT” and not the other 12 ‘Next Foreclosure Fight’ anonymous posts (61.90% of the 21 posts to date), some commentators’ use of a nom de guerre, nom de plume or anonymity is driven by the too-often ugly mean-spirited “shoot and/or impugn the messenger” response to fair and substantive questions whether made to their association, on interactive message boards, to this or other blogs, in the media or other forums that provide for the exchange of ideas, comments, observations and experiences.
Absence a Carnac-esque ability to divine that which may be in another’s mind it would be charitable not to comment on CAI’s Chief Executive Officer’s “I normally don’t respond to comments from Anonymous sources as anyone who is (sic) so afraid or insecure to stake a claim to their own thoughts and opinions isn’t generally worth the time. But, there are a couple of interesting points here nevertheless.”
Notwithstanding anonymity (do any readers of this blog know the anonymous sources, “1984, Communisty Associations Institute, pvtgov, Da Judge, seashell or any of the majority of anonymous contributors to The Privatopia Papers”), the substantive questions, “Will the corporate association…reimburse ‘those who pay’ for those that do not pay. Will satisfying the ‘super lien’ simply devolve into the association’s newly ‘found money (OPM)’” remain substantively unanswered.
Whether lien priority secures the association’s income stream, reduces potential future assessment increases or funds any association account (generally insufficiently funded reserve accounts) from which “the entire community reaps the benefits,” might most homeowner members agree that the fair and equitable disposition of association funds (regular and/or special assessments, ancillary fees, funds collected by foreclosing a “super lien” or other consensual lien securing payment of a delinquent owner’s unpaid assessments) should be either or but not both…either collect the unpaid assessment (“super lien” or other) or have the “other owners pay extra,” but not both?
Should not the fair and equitable collection of assessments, recovery of unpaid assessments by foreclosure and/or other ancillary fees (transfer, capital improvement fund, enhancement, preservation and/or other equally creative fees) pay the association’s operating costs, fund its maintenance and reserve accounts, reduce or eliminate assessments (regular/special) $1.00 for $1.00?
Is $2.00 collected for $1.00’s expenses fair and equitable or will the “extra” $1.00 simply devolve into the association’s “new found money (OPM)’?”
Anonymous
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