Saturday, January 07, 2012

Deer Ridge residents oppose homeowners’ association

CHANNAHON — Although many who live in newer subdivisions enjoy the protections outlined in homeowners’ association covenants, residents of the 50 houses in the Deer Ridge subdivision say they do not want one.

All, save one whom residents say wasn’t home when they called, signed a petition they brought to Monday evening’s Channahon Village Board meeting stating they do not want to establish a homeowners’ association in their subdivision.

They were promised there would be no association when they purchased their residences, they told trustees, which is the reason some found the site so attractive. But now, according to the 20 or so residents, the developer, Mark Skaggs, is telling them the village is requiring him to set an association up.

Thousands of words appeared on this blog since last weekend when I asserted HOAs lack acceptance as legitimate local governing authorities and are regarded as intrusive, overbearing juntas of volunteer directors with too much time on their hands aided by managers and attorneys seeking to maximize fee-driven enforcement activities and litigation revenue.

It therefore wasn’t surprising to read of this revolt against an attempt by the village elders of Channahon, Illinois to force 50 properties into an unwanted HOA as the village attorney told opponents an HOA to watch over them would protect their property values. To the HOA opponents, that “protection” is likely about as desirable as protection provided by Tony Soprano and crew.

The revolt against forced HOA governance could be spreading. Note the comment in the story by Channahon Village Board Trustee Debbie Militello, who is quoted as saying she has heard of many residents unhappy with their associations and recently met with a group of homeowners in another subdivision that is fighting a similar annexation into Privatopia.

Argument provokes fatal shooting in Lapu | Sun.Star

Argument provokes fatal shooting in Lapu | Sun.Star
Police believe the attack on Lapaz may have stemmed from an old rift over the collection of association dues. Lapaz, who was aboard her Mitsubishi Montero, had stopped in front of their village gate to call her 20-year-old son, Buenjer Acoril. She instructed Acoril to open the gate, as Villarba was not in the guard house. But as Acoril opened the gate, Villarba, along with Emborong, arrived and allegedly stopped Lapaz’s son. Acoril and Villarba began arguing, with the latter claiming that Lapaz cannot enter the village without a sticker prescribed by the homeowners’ association. Lapaz then joined the argument, allegedly cussing out the security guard and dragging Emborong into her tirade. That’s when Emborong allegedly returned to the guard house, took out Villarba’s shotgun, and shot Lapaz. After shooting the woman, Emborong, along with another security guard, Rodolfo Cavalida, fled from the area.
As I keep saying, if you think things are bad in your HOA, consider how things work elsewhere around the globe--in this case, the Philippines. Thanks to Fred Pilot for this link.

Obama's Consumer Watchdog Targets Mortgage, Payday Lenders - BusinessWeek

Obama's Consumer Watchdog Targets Mortgage, Payday Lenders - BusinessWeek
Consumers may benefit from its reach whenever they take out a payday loan, negotiate a mortgage rate, borrow money for school or pay a credit card fee. For those who think they've been wronged, there will be a complaint system to help them fight back.
The congressional republicans fought bitterly to keep this day from coming--the day when the Consumer Financial Protection Bureau would start operating, two years after it was created. First they filibustered Elizabeth Warren's nomination until Obama finally withdrew it. Then he nominated Richard Cordray in her stead because, he thought, Cordray would be acceptable to the republicans. But they kept his nomination from coming to a vote anyway. They demanded that the enabling legislation for this new agency be changed. The House republicans knew Obama would make a recess appointment, so they refused to agree that the Senate could go into recess, which led to the absurd 30-second sessions being held every few days by one person. Of course, they were on recess, but just pretending that they weren't. Finally Obama just made the appointment on the grounds that the Senate was actually in recess. He called them on their nonsense. This has produced howls of fake outrage from Fox News and AM talk radio.

This is an important agency, at least potentially. American need protection against payday lenders, mortgage companies, mortgage "rescue" scam artists, corrupt and thieving banks, and a host of other social parasites. The house republicans are so extreme in their views that they are blinded to one simple reality: Americans are headed toward debt peonage, and if things don't change soon, at some point there will be a massive political and possibly violent rebellion against the entire system.

The End Of Republican Fusionism? - The Dish | By Andrew Sullivan - The Daily Beast

The End Of Republican Fusionism? - The Dish | By Andrew Sullivan - The Daily Beast
What we're seeing, I think, is Romney as the last, dying gasp of Republican fusionism. The old alliance - free market capitalism, social conservatism and anti-Communism - has morphed into a new one - libertarianism, Christianism and anti-Jihadism. Each faction has become more extreme as they have marinated in their own media complex, and responded to their fantasies about president Obama. And there is therefore no fusion possible between them. Maybe a charismatic figure like Reagan could somehow bind them together again; but such a figure comes along rarely.
Interesting analysis. Ron Paul's followers are almost all young men who are obsessed with libertarianism's simplistic world view that justifies radical selfishness as some sort of higher morality. How they can make common cause with the religious right and the neocons I can't imagine. I mean, are we going to simultaneously punish and legalize prostitution, gay marriage, and abortion? Are we going to both invade and not invade Iran?

Friday, January 06, 2012

So it begins: Chicago vacant condo program -

2012 housing outlook: Chicago vacant condo program -
Within the city of Chicago, armed with an almost 2-year-old law, those efforts have moved beyond pen and paper. In such neighborhoods as West Woodlawn, Austin and Rogers Park, areas where condominium foreclosures have left entire buildings empty and created eyesores, the city has taken steps to turn condo units into apartments by selling entire buildings to investors and developers who will rehab them for rental.

The program is the result of amendments to the state's Condominium Property Act that took effect in January 2010. The changes allow a municipality to petition a Circuit Court to allow a receiver to sell the distressed building as a whole. Owners of the units, which typically are lenders, receive a fractional share of the proceeds from a sale after liens are erased. After taking bids, a judge decides who the buyer of the building should be, a decision based not just on price but on the buyer's financial resources, track record and building plans.

This is the first article I've seen on the Distressed Condominium Property Act as it is working out in Chicago. This is an Illinois state statute that allows the city to petition the circuit court to appoint Community Investment Corporation as receiver for a failed condo project. CIC then gets all the banks who own the units together on one page, deconverts the project by dissolving the condo ownership structure and CC&Rs, and then sells the building to an investment group to operate as an apartment building.

To date there are 150 projects somewhere in the deconversion process, out of a total of 250 that CIC has identified as good candidates. About 30 are already under court order for deconversion.

This is an easy way to solve two problems: first, get rid of failed condo projects that are a blight on urban neighborhoods; second, restore the proper level of rental housing that went way out of balance during the subprime insanity.

Now--if we can start doing something about all those unnecessary HOA projects. The Federal Reserve's new white paper on the housing market says, "Reducing some of the barriers to converting foreclosed properties to rental units will help redeploy the existing stock of houses in a more efficient way. Such conversions might also increase lenders’ eventual recoveries on foreclosed and surrendered properties."

Bottom Line - Subprime suicide: Notorious broker found dead

Bottom Line - Subprime suicide: Notorious broker found dead
A disgraced securities broker who was one of the subprime mortgage market's chief magicians was found dead of an apparent suicide in his South Florida condo this week. Cliff Popper seemingly created wealth out of thin air — until it all collapsed in 2007. His firm pocketed commissions of more than $16 million in just three years, but when investments backed by risky mortgages turned sour, Popper lost $100 million of investors' money.

When he died, Popper was waiting for a federal judge to hand down a decision in a civil fraud trial brought by the the Securities and Exchange Commission.

Brookstreet Securities, where Popper was a head trader, imploded when the subprime mortgage market crashed. Investors, many of whom had sunk their life savings into the subprime mortgage-backed securities Popper peddled, were left with nothing. Two years later, the SEC charged Popper and nine of his former colleagues with fraud, and he declared bankruptcy in July of that year.


Wednesday, January 04, 2012

Fred Fischer on the "Do owners believe CC&Rs are contracts?" debate

Fred Fischer weighs in:

You may share the following with anyone. The following is my response comments to the Privatopia story of, Monday, January 02, 2012 Do owners believe CC&Rs are contracts, part trois...

For CID housing to continue to exist into the future and be sustainable will require a major shift away from its present use of adhesion contracts imposed upon property buyers. Therefore a legal shift needs to occur at build-out from the original intent of the developer to manage and sell his properties. To the owner/members so that they can manage and sustain what is then their properties and responsibility.
We have long understood as Tyler stated,….the real problem which is that community associations are created mostly for the benefit of municipalities and developers… Which has resulted in property owners sending a loud message of un-support for the private governance imposed upon them by their local municipalities that burdens them with high liability and no protections. By striping members of their basic liberties and the use and enjoyment of their own properties that treats members like renters and children who have to ask permission to do anything. Even though the member’s private properties are not owned by the HOA entity yet the contract authorizes the HOA absolute control over many aspects of it.
To say that all housing associations should be abolished is not doable presently especially for complex types of CIDs which have utilities company’s, private streets, golf courses, high rise condos, apartments, airparks and commercial property etc. . However they could be converted to help reduce the substantial conflicts and liabilities that automatically and inherently come with privatized housing governance in a few basic ways. First existing and new non complex CIDs could be converted to special districts or other governance forms that are less expensive to operate while retaining the member’s property and other rights. Second the absolute control over the private properties must be largely eliminated in order to reduce the liabilities and conflicts. Third only CC&Rs that truly ‘touch and concern the land” such as structural or permanent changes should be created instead of subjects like refuge containers, signs, animals etc. Fourth require State oversight and licensing of association management firms and others. So CID members can hold accountable those who collect and manage member’s funds and provide advice and servicers to Boards.
Now maybe we can get past the obvious that CC&Rs are enforceable and that most people understand that they are obligated to pay for many of the amenities and services found in their CIDs. Furthermore I agree with Tyler that we need to spend far less time fretting over many of the HOA issues that we already well understand and start making some substantial reforms that will make CID housing, property owner friendly and financially solvent today and into the future. Which will require the property owner’s participation at the creation table to include their best interests and not just those of the municipalities, developer and others. Tyler is also correct when he said that …all of us should be discussing how to help owners save whatever remaining equity they have, and then second, how to convince government to quit mandating for sale housing that will inevitably become obsolete because it has a form of governance that cannot fund its operations--just for the sake of additional property tax revenues.

Finally at the end of the day no one can say we don’t understand why housing association governance is economically collapsing or so controversial. Because when basic liberty and the use and enjoyment of one’s property becomes absolutely controlled by others, to the point that a door knocker or flower pot can’t be installed without committee approval with the consequence of a fine and foreclosure if disobeyed. We have just created a new form of tyranny masqueraded as a housing association so that others can earn an income or profit over the conflicts and this needs to end NOW. Or CID housing will continue to economically and socially collapse and then tens of millions of property owners will possibly be living on the streets.

Thanks, Fred Fischer

George Staropoli on the "Do owners believe CC&Rs are contracts?" debate

From George Staropoli comes this response to the Pilot/Berding discussion:

Finally, a debate, a firm discussion of one of my favorite issues — the legitimacy of the HOA regime. As the unmentioned, chief protagonist asserting the illegitimacy of private local governments that are unaccountable under the Constitution, I offer my comments. Because of the length of my response, I’m forced to provide an excerpt here on The Privatopia Papers, and the full response can be found at Legitimate HOA Government.
Berding dismisses concerns over “the legal structure of community associations as if that were somehow a fundamental problem.” He maintains that “It isn’t, it’s largely academic, and in the big picture, it isn’t important.” You know, what I’ve been writing about as the defective HOA legal scheme founded upon the 1964 “bible” for HOAs, The Homes Association Handbook. Berding asks, in apparent astonishment, How one would respond to the statement that, “Homeowner associations are not legitimate forms of government?” He rejects the reading the Constitution as circular reasoning. But, there is more to constitutional doctrine than found in the Constitution, so please read on Mr. Berding.
McKenzie reaches the opinion:
I conclude that for the most part, despite having some reservations and misgivings about privatized local government, the overwhelming majority of Americans will continue to act as if they believe condo and HOA actions are legitimate contracts.
(But, surely, shouldn’t our policymakers and legislators care?)
And what is the fundamental criterion of legitimacy? Constitutional doctrine says that a legitimate government is based on fair and just laws. But this issue has not been discussed in this exchange of posts, or anywhere else!
With respect to HOAs as private organizations, I ask, Has the legislature delegated authority to these entities to act as an unregulated private government? And the answer is unquestionably, NO! (Recall that in Arizona, its appellate court found the question of improper delegation of regulatory authority to an agency, no less than to a private entity, was sufficient for statutes allowing ALJ adjudication to be declared unconstitutional.) Case law abounds with such statements as:

“We think such power to determine who shall have the right to engage in otherwise lawful enterprise may not be validly delegated to a private organization”; “the Legislature cannot constitutionally delegate to the private parties governmental power . . . contrary to the public interest”; “The Legislature may not surrender its authority to a body [to further] the interest of a group which may be antagonistic to the public interest”; and “legislative bodies may not abrogate their responsibility . . . by delegating this responsibility to private parties ‘uncontrolled by any standard or rule prescribed by legislative action.” (Administrative Law, Section 1.3.2, 2nd ed., Aman & Mayton, West Group 2001).

In my view, the primary reason for this state of affairs has been the avoidance and refusal of those who should know better to raise basic questions pertaining to our social contract under the Constitution.

Landscape Absurdism: Las Vegas - Design - The Atlantic Cities

Landscape Absurdism: Las Vegas - Design - The Atlantic Cities
Take a look at the way some developers and cities have decided to lay out subdivisions.

Tuesday, January 03, 2012

Billions needed to upgrade America’s leaky water infrastructure - The Washington Post

Billions needed to upgrade America’s leaky water infrastructure - The Washington Post
Rapidly deteriorating roads and bridges may stifle America’s economy and turn transportation headaches into nightmares, but if the nation’s water and sewer systems begin to fail, life as we know it will too. Without an ample supply of water, people don’t drink, toilets don’t flush, factories don’t operate, offices shut down and fires go unchecked. When sewage systems fail, cities can’t function and epidemics break out.

“All the big cities have these problems, and to me it’s the unseen catastrophe,” Hawkins said. “My humble view is that the industry we’re in is the bedrock of civilization because it’s not just an infrastructure that is a convenience, that allows you to get to work faster or slower. At least with bridges or a road, people have some idea of what it is because they drive on them and see them. ”

And just like roads and bridges, the vast majority of the country’s water systems are in urgent need of repair and replacement. At a Senate hearing last month, it was estimated that, on average, 25 percent of drinking water leaks from water system pipes before reaching the faucet. The same committee was told it will take $335 billion to resurrect water systems and $300 billion to fix sewer systems.

You know, don't you, what will happen? Wall Street will offer creative ways to finance these repairs, which will end up costing ten times what they should. Ask Jefferson County, Alabama.

Typewriter repairman keeps busy in high-tech age - Houston Chronicle

Typewriter repairman keeps busy in high-tech age - Houston Chronicle
Anybody out there still have one of these? For many years I hung onto my Adler portable, which was built like a tank. I bought it in the late 1970s and only got rid of it a few years ago. Maybe after the world runs out of oil and we are all working by tallow candlelight I will wish I had kept it.

Occupy Bank of America? - Credit Slips

Occupy Bank of America? - Credit Slips
It explains a lot about the state of our legal system if the Romneys of the world honestly believe that small claims court is a the way middle class folks can receive justice.
Remember Romney's ridiculous suggestion that people who are being wrongfully foreclosed on should use small claims court to challenge that? Law prof Adam Levitin makes the point that this is...a ridiculous suggestion.

New Class At Columbia Focuses On Occupy Wall Street « CBS New York

New Class At Columbia Focuses On Occupy Wall Street « CBS New York
Columbia University will offer a new course for upperclassmen and grad students next semester. An Occupy Wall Street class will send students into the field and will be taught by Dr. Hannah Appel, a veteran of the Occupy movement.

The course begins next semester and will be divided between class work at Columbia’s Morningside Heights campus and fieldwork that will require students to become involved with the Occupy movement outside of the classroom.

The course will be called “Occupy the Field: Global Finance, Inequality, Social Movement” it will be run by the anthropology department.

Thanks to Marc Plastrik for this link. I think this crosses the line between teaching the respected anthropological method of participant-observation and mandated activism. Obviously the students who take it will be pro-OWS, but I think with undergrads professors shouldn't force things like this on them. And you have to wonder what the professor will do if a student does the fieldwork and then writes an anti-OWS paper.

Monday, January 02, 2012

Do owners believe CC&Rs are contracts, part trois...

Tyler Berding tried to comment my long post in response to the Pilot/Berding exchange, but Blogger rejected it as too long. I am posting Tyler's response here:

From Tyler Berding:

I agree with Evan that the vast majority of buyers of property within a common interest development do understand that there are covenants running with the land that impose certain restrictions on its use and financial obligations on them. Maybe not in those terms, but certainly they know that the roof isn’t maintained by the city, that you can't leave wrecked cars on their front lawn, that the property is managed by a board of directors, and that there is a community pool that isn't maintained for free. If they are truthful they will also tell you that they recognize that the assessment statement that arrives every month is to collect money to pay for something other than the annual Christmas party.

To suggest otherwise would be insulting to most owners. People do understand that there are obligations that must be met, and a high percentage meet those obligations and would look at you blankly if you told them that somehow they didn't have to pay the monthly assessment because it was not fully explained that they bought a home with covenants. The fact is that very few believe that--so we should get off of the "They were duped" soapbox. Yes, not only are CCRs covenants which can be enforced by the courts as can any contract, it is a business proposition that most people understand until they choose not to. So, no I don't agree that people fail to see their obligation to pay assessments for example, as a contractual obligation, just as most people don't fail to see their car payments, feeding the parking meter, property taxes, and mortgage payments also as binding obligations.

Now having said that, it is also clear that if any contract provision is extracted through deceit it can be deemed by a court to be without the owner's consent and hence unenforceable--as in, no contract ever existed. Courts have found provisions of CCRs imposed unilaterally by developers to be "unconscionable" and therefore unenforceable for that very reason--no consent. The courts of many states, for example, have invalidated such things as binding arbitration provisions imposed by developers. So if an owner can prove that they actually had no idea that they were buying a home which was bound by covenants, and can offer sufficient evidence to prove that they were misled, they might have a claim against their seller, and maybe a case for rescinding the contract and returning the house--but remember, that takes proof, not just a short memory, and no, you can't rescind the contract and also keep the house.

As Evan knows, I think that the debate over the legal nature of the relationship between a homeowner and their homeowners association is largely a distraction from the real problem which is that community associations are created mostly for the benefit of municipalities and developers, with very little insistence by government on a financial model that can remotely meet the expectations of the eventual homeowners. Community associations are dying financially. Their business model is fundamentally flawed and many will eventually become obsolete and fail. That is the real issue--not whether a board’s authority to enforce the governing documents is a legitimate exercise of police power, or of contract, or of whatever other legal or moral hook you choose to hang your hat on. And before anyone gives me a big thumbs down for that comment, consider another of Evan’s blog posts, the one today about a city threatening to shut down an association and evict the owners because they haven’t paid their water bill.

If you think that situation is an anomaly, then you have been spending too much time reading the Constitution and not enough time looking at the budget. Community associations are a financial disaster in normal times, and when hidden or unexpected damage or expenses arise, most associations lack the financial reserves to meet the demand. The water bill case is just one example. The average association does not have half the financial reserves it needs to properly maintain the expected issues—and they have zero funding for the unexpected.

So I guess my response to your post, Evan, and to Fred’s position, is this: While I think that community associations are creatures of contract--I also think we spend too much time debating such things as the legal structure of community associations as if that were somehow a fundamental problem. It isn’t, it’s largely academic, and in the big picture, it isn’t important. I can appreciate that it generates a lot of heat, but unfortunately not too much light. That’s because there is no conclusion—and there never will be because the reasoning is largely circular. “Boards of directors abuse owners because homeowner associations are not legitimate forms of government” Where would anyone start to respond to that? And please don’t tell me to check the U.S. Constitution. That truly would be circular.

But worse, that debate, while stimulating and capable of taking up many kilobytes of blog space, diverts us all from the more immediate discussion of how best to protect owners and preserve what little value remains in many of their homes. If large scale underfunding cannot be rectified, and I believe that with most existing condo associations, it cannot be, then it won’t matter whether the form of government is constitutional or not, or who created it, or if the governing documents were found in a Cracker Jacks box. Better, all of us should be discussing how to help owners save whatever remaining equity they have, and then second, how to convince government to quit mandating for sale housing that will inevitably become obsolete because it has a form of governance that cannot fund its operations--just for the sake of additional property tax revenues. Sustainability is an objective for which we might actually get consensus!

As always, thanks for the opportunity to enter the discussion.


Tyler P. Berding, Esq.

$56K water bill could force condo residents out

COLLEGE PARK, Ga. —A longstanding dispute over a water bill in College Park could end up with the Yorktowne Condominiums shutdown and everyone evicted by Tuesday morning.

The city of College Park said it will shut off water service to the complex at 9 a.m. on Tuesday unless the homeowners association comes up with part of a $336,000 dollar debt the complex has run up in recent years.

Things are so dire the complex is seeking charitable contributions to stay afloat.

Please stop sending repetitive posts

I am getting numerous copies of the same, or virtually the same comment that I have put up more than once already. Please stop. If you have something new to add to the situation in Pennsylvania, fine. But I am not going to keep posting the same thing over and over. There is a point where it just becomes spam.

Legal Blog Watch

Legal Blog Watch
So here you have some wag's take on the "three burning legal questions of the day."

NYC's foreclosures continue slow avalanche | Crain's New York Business

NYC's foreclosures continue slow avalanche | Crain's New York Business
The rate of foreclosures may be stabilizing in most big American cities, but that's not the case here, according to new data.

In the New York metro area, the foreclosure rate rose to 7.5% in June, up 2.1 percentage points from the previous peak in December 2009, according to, a joint project by the Local Initiatives Support Corp., the Urban Institute and the Center for Housing Policy. The rate is up 3.7 percentage points from March 2009, when the group started tracking the data in 100 U.S. metro areas.

“New York is a judicial state, so it takes a long time for properties that enter foreclosure to exit the process,” said Rob Pitingolo, a research assistant for Urban Institute. “The backlog of foreclosures in the system is driving the foreclosure rates up.”

Read more:

Since when did speed become the overriding virtue of the judicial system?

Do Americans consider CC&Rs Contracts, Revisited

I have been thinking about an issue raised in a post by Fred Pilot recently, and responded to by Tyler Berding in a comment. I will do both of them the injustice of oversimplifying their arguments so I can rush to make my own, and I invite them (and others) to reply and continue the conversation.

Fred argues that the American public generally does not consider CID declarations and other governing documents to be contracts. Fred has long held that Americans do not accept the basic concept of residential private governance. He believes that the general home-buying public rejects the notion that there is any real legitimacy in the decisions made by condo associations and HOAs. If I understand his position correctly, he is saying that Americans do not consider CID documents and decisions to be legitimate either in a public or a private sense. They are not viewed as the actions of de facto quasi-local governments, and they are not viewed as obligations people are bound to by private contract. They fall between two stools, as the saying goes.
Tyler responds that they are contracts, period, because that is what courts universally say they are. This is in large part beyond dispute: like it or not, condo associations, HOAs, and housing cooperatives are recognized by federal and state law, and CC&Rs and other CID governing documents are fully enforceable, subject to a few exceptions, in every court in the nation. What, then, is the point of claiming that people reject them as illegitimate? Isn’t that akin to saying that you reject the law, which you have to obey regardless of how you feel about it?
This is an important conversation, and I have been thinking about it for many years. At the outset, it has to be pointed out that it is logically possible for both positions to be true. Perhaps the American public believes that homeowner and condo associations have no legitimacy, but they obey their rules for the most part simply because they know those rules are enforceable. However, I think the truth is more complicated than this.
I agree with Tyler, as I must, that CID governing documents and the decisions based on them are legally enforceable under contract and real property law. This has been true for many decades, even centuries, and in my first book on this topic I relate some of the early legal history that laid the foundation for enforcing these documents.
However, I think that Fred raises an important point. Is it true, as he claims, that these documents and decisions have no legitimacy in the eyes of the public, notwithstanding their enforceability? And if this is true, does it imply that there could conceivably be sufficient opposition to CID regimes to bring about dramatic change, such as local government opposition to CID construction, developer decisions to move toward other ways to build, market rejection of CID housing, judicial rulings that undermine CID power, or state legislative action that would reverse the overwhelming trend in favor of CID construction?
How would we measure the level of rejection of the concept of CID living? How about the following questions:
1. Do people keep buying them? Yes. This is the predominant form of new housing construction and until the market collapsed people couldn’t buy units in condo associations and HOA fast enough.
2. Do people generally obey their rules and make their assessment payments without having to be sued? Yes. You can dispute the meaning of “voluntary” if you like, but the level of voluntary (not specifically coerced) compliance with CID regimes is very high. When the HOA president tells you to stop parking your car in the driveway overnight, nearly everybody moves it into the garage. Period. End of story.
3. Is there nonetheless a substantial amount of conflict, and even litigation, over fundamental issues, such as obeying rules and paying assessments ? By all accounts, yes, especially when associations tread on areas that are perceived as not generally within the purview of public local governments and within the scope of owner dominion and control. This problem is well documented in the literature.
4. Have some owners organized themselves outside their association structure to oppose particular actions of their association, to reform the laws generally, and even to abolish CID housing? Yes. Lawyers and property managers routinely portray these folks as chronic malcontents, social misfits, and neighborhood cranks. Such people do exist, and I have met some of them. But if you have met as many “Pink Flamingo” movement people as I have, you cannot help but see that many of them are just ordinary home owners who have been driven into opposition by lawless, self-serving, arbitrary, and/or predatory behavior on the part of their BODs and the professionals who advise them. I believe that the lack of governmental oversight of CID activities leads to a whole lot of unnecessary problems.
5. Is it hard for many associations to find sufficient volunteers to serve on BODs? Yes, and it is said all the time in industry conferences and publications. This is beyond dispute, and it is a major problem, because it is hard to imagine how CIDs can exist without a sufficient supply of volunteers.
6. Have state legislatures become involved in law reform out of concern (among other things) for the way associations sometimes treat owners, and the general level of discontent they believe exists? Yes, in a number of states, and over a number of issues, including assessment collection and foreclosure, rule-making, elections, access to records, budgets, meetings, architectural review, and on and on.
7. Is the industry concerned about the public perception of CID living? Undoubtedly, and they spend a whole lot of time trying to convince the press and the public on that score, including paying for surveys that purport to show how much people like their associations. Would they bother to do this if the underlying point were really so obviously true? I think not.
So, on the specifics of CID life I suppose there is evidence on both sides, but that isn’t the end of the argument. What do we know about American political culture that would help us answer this question? I think several things need to be pointed out. Public opinion polling over the years makes some things abundantly clear.
1. Americans’ support for the institutions of national government goes up and down all the time, as measured by the best polling available. So what? That doesn’t mean we reject the concept of Congress (currently at about 12% approval), or the Presidency, or the Supreme Court, or representative democracy. The same is true for condo and HOA decisions. If things are going well, we accept and approve. When things are bad (special assessments, litigation, etc.) we get mad. But…see #2 below…
2. For the most part, Americans are an obedient, rule-following, moralistic, pious lot who do what they are told by people in authority, regardless of whether it is the private mall cop or the local police. I do not expect widespread disobedience in CIDs. I do expect huge financial problems, but that is another issue. I realize that there are constitutional questions to be raised about the use of private entities to do public tasks. I have written about it at some length. However, most Americans are not bothered by such issues, so they do not reject private governance out of hand.
3. The American public overwhelmingly believes in the sanctity of private property and the obligations of contract. They believe that individuals are largely responsible for their lot in life. In fact, that is one of our distinguishing characteristics as a people. Nowhere on earth is there this obsession with competitive individualism. (This is why it is so easy for Fox News and Rush Limbaugh to blame the entire subprime mortgage crisis on Barney Frank and home buyers who got greedy and bought more house than they could afford—a claim that is so far beyond ridiculous that it can only be called a huge lie.) People here believe that if you bought a property with 200 pages of documents attached, then a deal is a deal and you are on the hook for obeying all of it. Sure, you can talk about adhesion contracts, and I do—but most people really
And when I add the CID-specific facts to the things we know about American political culture, I conclude that for the most part, despite having some reservations and misgivings about privatized local government, the overwhelming majority of Americans will continue to act as if they believe condo and HOA actions are legitimate contracts. Even when they go into conflict with their BOD they will do it in the language and context of contract law. I think, as I argue in my new book, that this form of housing is now part of the fabric of local governance, for better or worse.

QCOnline : Woman sues; says condo association harassed her over 'psychiatric service dog'

QCOnline : Woman sues; says condo association harassed her over 'psychiatric service dog'
CHICAGO (AP) — A woman who relies on a specially trained dog to prevent panic attacks is suing a Chicago condominium association for allegedly harassing her about the 'psychiatric service dog' and forcing her to sell her apartment.

A U.S. district judge ruled this week that Mary Jo Stevens' lawsuit can proceed.

Thanks to Shu Bartholomew for this link. The federal judge is Harry Leinenweber, a distinguished jurist who has assisted with the award-winning Mock Trial Team at the University of Illinois at Chicago (shameless plug) for some time.

Mt. Washington Parking Space Assessed At Nearly $300,000 « CBS Pittsburgh

Mt. Washington Parking Space Assessed At Nearly $300,000 « CBS Pittsburgh
PITTSBURGH (KDKA) — A lot of city property owners are outraged over their reassessments, but one man says his beats them all.

The value of his 18-by-10-foot parking space on Mt. Washington jumped from $5,000 to more than $287,000.

That’s even more than his condo

Amazingly, this happened in Pittsburgh and not Chicago.

Sunday, January 01, 2012

CIOC report.pdf (application/pdf Object)

CIOC report.pdf (application/pdf Object)
This is a direct link to the report on Common Interest Ownership Communities in Pennsylvania that is mentioned in the story linked below. I haven't read it yet, but I love this line, which once again just states something I have been saying for decades: "Unfortunately, Commission staff was unable to provide concrete CIOC data specifically requested in HR 350. The data simply do not exist statewide and it would take significant resources and a commitment from the county and municipal governments to locate the data requested. Furthermore, no single state agency, county, or municipality is required to collect this type of information."

Report: State spurred gated developments |

Report: State spurred gated developments |
Cost and government regulations spurred developers to build homes inside private communities, helping to explain the prevalence of these developments in the Poconos, a new state report shows.

At least 56,422 homes are within private community associations in Monroe and Pike counties.

There have been financial incentives for both municipalities and developers to make communities private, according to the report released by the Joint State Government Commission.

Thanks to Beanie Adolph for the link to this story that states what we have been saying for many years. Maybe somewhere a libertarian will read this and connect with the real world, however briefly, but perhaps long enough to realize that developers and local governments are making this happen--not consumers.

Calculated Risk: Some Housing Forecasts

Calculated Risk: Some Housing Forecasts
"Now there is a growing consensus that new home sales and housing starts will increase in 2012. I think a small increase is likely, even with the large number of distressed homes, and I will be writing about the reasons soon."
I hear that from various sources. Some developers are making rumbles about getting back in action. But I have to think they, and the banks that make construction loans, will be looking at market conditions very closely, especially the supply of foreclosed homes that are put up for sale, many of which are new or nearly new and would drive down asking prices for newly constructed homes. The unknown variables are (1) the number of foreclosures and other surrenders of ownership to banks, and (2) the number of those properties that are dumped on the market in 2012. Courts, foreclosure defense lawyers, and banks all have some direct or indirect control over the supply end of the equation.

The Journey - Tony and the Roundhouse - YouTube

The Journey - Tony and the Roundhouse - YouTube

Number of Southern California fires rises to 39 -

Number of Southern California fires rises to 39 -
"When you have millions of people living with millions of cars in these very dense neighborhoods, this is becoming a new form of domestic terrorism that really has got our community in a very bad spot," West Hollywood Mayor John J. Duran told CNN Saturday.
So does that mean the military will snatch people off the streets and send them Guantanamo to be waterboarded?

I was channeling Ron Paul there for a second.

But seriously--is this an arsonist who is igniting randomly selected cars, or is it some kind of organized effort?

Elimination of redevelopment imperils ongoing projects, stops future developments in their tracks -

Elimination of redevelopment imperils ongoing projects, stops future developments in their tracks -
When the California Supreme Court on Thursday issued a ruling that essentially annihilated local redevelopment agencies, it also killed the single-most important economic development tool that more than 400 cities statewide have, city officials said.

With the ruling that the Legislature can eliminate redevelopment agencies, many San Gabriel Valley and Whittier area leaders wonder how their communities are going to move forward with ongoing projects. And they don't know what to do about future plans now left in limbo.

"It puts everything up in the air," West Covina City Manager Andrew Pasmant said. "It's so far-reaching it's amazing."

Once redevelopment agencies are dissolved, city leaders predict that communities will face drastic consequences, including economic disadvantage, decreased revenues, more blighted areas and vacant buildings, elimination of thousands of job opportunities and reduced affordable housing.

And as Fred Pilot points out, this eliminates one of the tools that local governments could have used to deal with dilapidated condo projects.

Questions surround house demolition - East Side - The Buffalo News

Questions surround house demolition - East Side - The Buffalo News
"My clients had no knowledge of the fire or the demolition and were not notified of either," Berger said in court papers. "Upon discovering the facts, the defendants went to the Bailey Avenue site to find that both houses had been demolished. To their knowledge, there was no damage to 1801 in the fire."

The property owners had insurance, which made a payment toward the fire loss at 1805 Bailey Ave. But insurance wouldn't cover 1801 Bailey.

"Other than a little smoke damage there was nothing wrong with 1801," Berger said.

"The insurance company sent an inspector, and refused to pay because it was not a covered loss. There was no fire damage. The demolition was just something the city did," Berger said.

Submitted for your consideration: two houses, side by side. One burns. The other is not. The city of Buffalo demolishes both of them, then refuses to turn over documents. Oh--and the city wants to be paid $40,000 for demolishing the undamaged one on top of the $40K for the one that burned. Happy New Year.

"Small claims flash mobs" sue corporate defendants

If she's successful in getting others to follow her example, Peters could inspire a whole new litigation strategy in the auto industry and other businesses. Working together but filing lawsuits independently, consumers could force companies to go mano a mano with individual plaintiffs in far-flung courtrooms nationwide.

Call it a small-claims flash mob.
These kinds of organized small claims actions cropping up against vehicle manufacturers could also conceivably target HOAs where HOA inmates are similarly outgunned by HOA corporations and their superior legal resources.

$6.3 Trillion Wiped Off Global Markets in 2011 - CNBC

$6.3 Trillion Wiped Off Global Markets in 2011 - CNBC
Global stock market capitalization dropped 12.1 percent to $45.7 trillion according to Bloomberg data, while the euro ended the year as the worst performing major currency after finally starting to succumb to the continent’s financial and economic woes in December.

Janet Tavakoli: 2011: The Year 60 Minutes Misled Americans About Municipal Bonds

Janet Tavakoli: 2011: The Year 60 Minutes Misled Americans About Municipal Bonds
Way back in December 2010, 60 Minutes did a story on the supposed crisis that was going to hit state and local governments and cause massive muni bond defaults in 2011. They featured a banking analyst named Meredeth Whitney who is regarded by some as a prognosticator. She predicted fifty to one hundred "sizeable defaults" totaling hundreds of billions of dollars. What actually happened was that muni bonds outperformed most other asset classes. Janet Tavakoli says they "beat the S&P, treasuries, corporate bonds and most commodities."

Tavakoli isn't saying that state and local governments are in good shape financially, but her takedown of Whitney and 60 Minutes for their exaggeration is instructive. Real governments have lots of institutional support that let them get through horrible economic times. Private quasi-governments, by contrast, are almost entirely left to get by using their own limited resources. If anybody at 60 Minutes had asked me about local government fiscal crisis I would have told them to pay attention to homeowner and condo associations. There has been some major carnage in neighborhoods all over the nation. While 60 Minutes and Whitney were focusing on Nevada's supposed impending default, what really happened? According to the State Treasurer, "The economy was still tough, but Nevada managed in anticipation of the ongoing crunch. Property tax revenues dropped, but sales tax revenues were up, gambling revenue was up, and business modified tax revenues were up. Her cash position in June 2011 was much better than 2010." And what happened to the condo and HOA projects in Clark County? What little coverage you can find shows a privately-managed housing sector in ruin.