Saturday, March 31, 2012

Homeowners, legislators want HOA rules to move forward for Myrtle Beach area

For Pat Howard, a Murrells Inlet homeowner, it’s been one issue after another with his homeowners’ association.

From money being spent on items the community wasn’t aware of, to an increase in late fees, to an insurance amendment without homeowners’ approval -- the list of complaints goes on and on.

It’s time, he says, for the state to step up and start overseeing homeowners associations.

Howard’s situation is one of numerous complaints some residents have about homeowners associations and how those groups use their power. They and local legislators say there’s a need to govern HOAs in South Carolina, which doesn’t oversee the groups.

It's the same story that has been playing out in various states for at least the past two decades. HOA reform is stuck the familiar wash, rinse, repeat cycle.

'There is nothing to scrutinize' - Lowell Sun Online

'There is nothing to scrutinize' - Lowell Sun Online

"In other states, courts are scrutinizing whether the foreclosing party has the right to foreclose and concluding that in most cases (they haven't) demonstrated that right with proper documentation,

said Debra Fortenberry, a Colorado Springs attorney who helped draft the initiative with Brunette and the Colorado Progressive Coalition. "In Colorado, there is nothing to scrutinize," she said.
No other state allows for a foreclosure without the lender first proving it is the right entity to do so. Colorado allows foreclosure lawyers to sign a "statement of qualified holder," which basically says they think their client owns the note or mortgage without ever actually seeing it -- a practice some states have labeled as "robo-signing."
Colorado law allows a foreclosure to continue even if the lawyer gets it wrong -- and doesn't hold anyone accountable for the mistake. It's a crime in Nevada, one of the states to use deeds of trust like Colorado. 
Great example of public policy makers letting the banks and mortgage servicers make whatever public policy they want. Now maybe the people will change it.

Is Conservatism Our Default Ideology? - Miller-McCune

Is Conservatism Our Default Ideology? - Miller-McCune
 “When effortful, deliberate responding is disrupted or disengaged, thought processes become quick and efficient,” the researchers write in the Personality and Social Psychology Bulletin. “These conditions promote conservative ideology.”
This explains a lot. If you stop to think about it.

Don't question your HOA or you might get arrested - Friday, March 30, 2012 | 2 a.m. - Las Vegas Sun

Don't question your HOA or you might get arrested - Friday, March 30, 2012 | 2 a.m. - Las Vegas Sun

Frank and Stebbins accused two board members of “forgery” — essentially knowingly signing a false statement — which was probably also imprudent. According to a police affidavit, Frank told the investigator a “flagrantly false” board resolution related to the surplus was “used to deceive the community membership and government agencies concerning the improper disposition of millions of dollars of overcharged/surplus homeowner assessments.”
After an investigation, Henderson Police exonerated the board members and then arrested … Frank and Stebbins.

Thanks to Rodney Gray and others for sending me this link.  It turned out that Frank and Stebbins were right about the position the IRS would take on the surplus, although that issue, amounting to a tax liability of $1.35 million, is disputed and is still being negotiated. In the meantime, the cops arrested them and they were charged with making a false police report. Say what?  Eventually the case against Frank and Stebbins was dropped, but as reporter Coolican says, "This seems to be a curious use of government resources." What is the nature of the relationship between the HOA board of directors and the Henderson police and city government, that such a thing would happen? Strange days, indeed.

Gazette.Net: Lawsuit could impede HOA debt collection

Gazette.Net: Lawsuit could impede HOA debt collection

Fontell, a former accountant who now is unemployed and past president of the Norbeck Grove I Condominium Association, has been fighting a $236.71 condominium fee that dates back to 2003 — ignoring letters and calls claiming she had to pay, according to court records. She said she already had paid the assesment and The Management Group, Inc., which oversees operations of the Norbeck Condominiums, made a billing error. In 2008, the Norbeck condominium association successfully sued Fontell in a Montgomery County District Court, a ruling she successfully appealed in circuit court, where the condominium association filed the lien against her in hopes of collecting its debt, according to court records. Circuit Court Judge Robert A. Greenberg ruled in 2010 the association had waited too long to seek its money, violating the state’s three-year statute of limitations on such claims.
Since the 2010 lien, Fontell said she’s been unable to work as an accountant, a field where credit checks often are part of job applications, or sell her Olney condominium.
Last year, staff with the state’s Attorney Grievance Commission informed Fontell the lien against her and the other liens filed by The Management Group Associates, Inc.’s president, Jeff Gatling, constitute an unauthorized practice of law as they should have been filed by an attorney, not Gatling.
Fontell, who is representing herself after being unable to find a lawyer willing to take on her case pro bono, is seeking compensation under the U.S. Fair Debt Collections Practice Act.
Very interesting case, now before a federal court.  Thanks to Fred Pilot for the link.

HOA could be sued in Trayvon Martin civil suit |

HOA could be sued in Trayvon Martin civil suit |

ST. PETERSBURG, Fla. -- The residents who live in the gated community where Trayvon Martin was killed could soon find themselves in a legal battle.
Several attorneys say if Martin's parents file a civil suit, the homeowners association for the Retreat at Twin Lakes could be named in the case, meaning residents of the community could end up paying big money for the 17-year-old's death.
Fred Pilot sent some links along on this issue. As you can imagine, I've been thinking about this possibility since I first heard that the case involved some sort of alleged neighborhood watch program in a gated community.   It seems likely that such a lawsuit will happen unless Zimmerman is prosecuted and acquitted.  If so, I don't know how this will play out because the facts aren't clear yet., and I don't want to prejudge it.  The critical issue is the nature of the relationship between Zimmerman and the HOA.  Another story says this:

A civil lawsuit in the Martin case, legal experts said, would be predicated on establishing a relationship between Zimmerman and the Retreat at Twin Lake association, as well as establishing a relationship between Twin Lakes homeowners and a crime watch group that Zimmerman led. The homeowners association acknowledged Zimmerman and the neighborhood crime watch in a February newsletter, according to the Associated Press. The newsletter encouraged residents to contact Zimmerman in case of an incident, it said. "If you've been the victim of a crime within the community, after calling the police, please contact our captain, George Zimmerman ... so we can be aware and help address the issue with other residents," the newsletter said.

That suggests a connection between Zimmerman and the HOA.  There are several questions that have been raised or that come to mind:
  • What documentation, if any, exists that confirms or defines the nature of this "captain" role that Zimmerman was playing?
  • Did the HOA know that Zimmerman was armed when we was out and about acting as "captain"?
  • What training, if any, did Zimmerman have to do this? And what steps did the HOA take to make sure that their "captain" was trained properly?
  • Neighborhood Watch programs are registered with the National Sheriff's Association.  This one wasn't. Why was this HOA operating an unregistered program? . Here's what they have to say about this:  "The alleged action of a “self-appointed neighborhood watchman” last month in Sanford, FL significantly contradicts the principles of the Neighborhood Watch Program,” stated NSA Executive Director Aaron D. Kennard, Sheriff (ret.). “NSA has no information indicating the community where the incident occurred has ever even registered with the NSA Neighborhood Watch program.” 
  • Had there been any complaints brought to the HOA about Zimmerman's behavior in this role? What did they know?
  • What should they have known?  What level of supervision or oversight did the HOA have over Zimmerman, and was it consistent with the standard of care and practice that prevails in this industry.
  • The industry, by the way, has already taken steps in the wake of this tragedy to advise associations that they should avoid any such responsibilities.  Here's what CAI has to say, in a press release: "I would not advise board members to inject themselves into the role of telling members how to set up a neighborhood watch. The board cannot be the eyes and ears that the owners or neighbors can be," says Beth A. Grimm, a Pleasant Hill, Calif., attorney who is a member of CAI's College of Community Association Lawyers (CCAL).
And that leads to another question.  If it turns out that the HOA is civilly liable in this case, who would pay the judgment?  If the HOA has a liability insurance policy, which I assume they do, undoubtedly they will turn to that carrier for a defense and indemnification up to the policy limits, which is usually $1 million.  But does that policy cover the actions of volunteers, or just directors and officers of the association?  As association attorney Donna Berger says, "The vast majority of homeowner associations do not have insurance policies that cover the acts of their volunteers, according to Berger. If that is the case with Retreat at Twin Lakes, the residents could be responsible for satisfying any judgment against the association, said Berger, the community associations lawyer not involved in the case."

 That would leave the association potentially facing an uninsured judgment that could involve a great deal of money.  Who would pay that judgment?  Some readers of this blog know that I have been writing about this for some time.  The answer is, "the unit owners." This situation has come up several times in California in the Le Parc case, and in the Oak Park Calaveras saga. I talk about these cases in my latest book, Beyond Privatopia

By the way--try and find that responsibility in your CC&Rs. We constantly hear from the industry and the courts that you are stuck with the terms of the governing documents because you should have read and understood them. Fine. But here is an obligation that nobody knows about:  responsibility for uninsured debts and judgments of the association.

Friday, March 30, 2012

Don’t question your HOA or you might get arrested

Frank and Stebbins believed the board was piling up excess reserves -- more than $3 million -- when that money should have been returned to homeowners. Not returning it placed the money at risk of IRS tax liability, they insisted.

Frank and Stebbins built their case and then sought advice from friends in the legal community to avoid a boomerang lawsuit from the HOA board. They were advised to bring the issue to local law enforcement, meaning Henderson Police. Bad advice.

Frank and Stebbins accused two board members of “forgery” -- essentially knowingly signing a false statement -- which was probably also imprudent.
Indeed. It's understandable that most HOA inmates can't afford to lawyer up to go after the board or don't have the inclination or ability to file a pro se court petition. But calling the cops to sort out HOA issues probably isn't the best move.

Homeowner's Association: Remove Our Name From Facebook Page Or We'll Sue - The Consumerist

Homeowner's Association: Remove Our Name From Facebook Page Or We'll Sue - The Consumerist
 A Tennessee woman says she's being bullied by her homeowner's association, all because she used the name of her subdivision to create a private Facebook page for residents. 

Thanks to Mystery Reader for this example of what happens to anybody who tries to create a sense of community in a "community" association. 

Bank of America Sold Card Debts to Collectors Despite Faulty Records - American Banker Article

Bank of America Sold Card Debts to Collectors Despite Faulty Records - American Banker Article
 Bank of America has sold collections agencies rights to sue over credit card debts that it has privately noted were potentially inaccurate or already repaid.
The biggest domestic problem this country faces is not the federal budget deficit or overall government debt.  It is the crushing debt burden that has been imposed on the middle class and the poor.  And nobody is doing anything about it.  The Obama administration is desperately concerned about the health of the big banks, the Republicans are shamelessly flacking for the rich and powerful, and the Democrats are floundering around trying to decide whether they should be Republican Lite or make a teensy-weensy move back from the moderate right to what used to be the center. In the meantime, home mortgage debt (secured by homes that aren't worth a damn), consumer debt, medical bills, and student loans leave most of us struggling and one layoff away from filing Chapter 13. 

Wednesday, March 28, 2012

Man tags own home: Neighbors dislike graffiti — and message | San Antonio

Man tags own home: Neighbors dislike graffiti — and message | San Antonio

KENS 5 asked McClain if he would say that he tagged his own home. "Yes I did," answered McClain.
The message reads "To the mother f----- that stole my truck. You are a dead man."
McCain says he didn't mean it as a death threat. "I would just like my stuff back," he added.
The message also reads "2K NQA." McClain explained that means he is offering a cash reward of $2,000 for information, no questions asked...According to the San Antonio Police Department, McClain is not breaking the law. SAPD spokesman Matt Porter said McClain did not use profanity, because he did not spell out the expletive. Also, he says according to homicide detectives, McClain did not threaten anyone specifically. Finally, the city is not allowed to regulate what people paint on their homes.
 For some reason the neighbors have a problem with this.

Condo Owner In Fight Over Mezuzah On Doorpost -

Condo Owner In Fight Over Mezuzah On Doorpost -

A homeowner who faces a fine of $50 a day for hanging a glass mezuzah on her doorpost, and who is threatening to take legal action against her Stratford-based condo association, has gained the support of the Anti-Defamation League.
The California Condo Association, 40 California St., allows unit owners to display religious items on the outside of doors, but not on their doorposts, the frame around the door.
The Connecticut branch of the Anti-Defamation League says such a by-law is an attack against the Jewish faith.
Crosses:  OK.  Mezuzah?  No way.  Now--you tell me how you think this will play out in court.

Tuesday, March 27, 2012

Jury Awards Couple $3.8M in Molokai Condo Dispute

"A Maui jury has awarded a couple $3.87 million in damages for enduring what their attorney described as “the equivalent of a John Ford Western where an isolated town is run by a villain and his collection of thugs” at a West Molokai condominium."
Thanks to Shu Bartholomew for this link. 

Monday, March 26, 2012

Another Attorney Connected to HOA Scandal Found Dead

Another Attorney Connected to HOA Scandal Found Dead
 LAS VEGAS -- David Amesbury, the attorney who cut a deal with federal prosecutors in a far-reaching homeowner's association scandal, was found dead Sunday at his brother's home near Sacramento...Amesbury and [Nancy] Quon are the third and fourth people connected to the HOA investigation to be found dead. Former Metro Lieutenant Chris Van Cleef killed himself shortly after he was named in the investigation, and late last year, former Vistana HOA board member Robbie Castro died from an apparent suicide in Northern Nevada.
I have never heard of an investigation with four suicides.  Have you?  What is going on here?  Thanks to Shu Bartholomew for this link.

Sunday, March 25, 2012

JPMorgan Claims No. 1 for Government Debt After Jefferson County - Bloomberg

JPMorgan Claims No. 1 for Government Debt After Jefferson County - Bloomberg

"JPMorgan, which emerged from the worst financial crisis since the 1930s as the most profitable U.S. bank, has parlayed crisis-era loans to cities and states and a willingness to outbid other firms in local government bond auctions into becoming the top underwriter of municipal debt last year, according to data compiled by Bloomberg. It was the first time the firm held that rank.
The turnaround was a milestone for JPMorgan’s municipal- bond department, which has been marred by its involvement in two of the biggest scandals in the history of U.S. public finance: a so-called pay-to-play scheme in Jefferson County, Alabama, that contributed to the biggest-ever U.S. municipal bankruptcy, and a federal probe that uncovered bid rigging of municipal-bond investment products. It also underscores state and local officials’ willingness to overlook bankers’ past abuses when they set out to borrow money in debt markets."
As Matt Taibbi says"A friend of mine sent this article from Bloomberg, along with the simple comment: "Perfect." What's perfect? That the banks that have been caught repeatedly ripping off communities and munipalities -- banks that have paid hefty settlements for rigging bids, bribery and other sordid misdeeds -- keep winning the most public business. Apparently, our public officials aren't concerned about whom they hire to serve as the people's investment bankers."

Few condo associations certified for FHA loans - Lansner on Real Estate : The Orange County Register

Few condo associations certified for FHA loans - Lansner on Real Estate : The Orange County Register
" William Sasser is chairman and CEO of The Management Trust in Tustin, which manages more than 1,600 homeowner associations in California and five other Western states. In Southern California, the firm does business as TransPacific Management. Sasser says that as of September, fewer than 10% of U.S. condo associations were FHA certified so that members could get FHA loans."
Thanks to Fred Pilot for this link. This is part of what one law professor called the "death spiral" of many associations.

Struggling Izumi-Sano plans to lease its name : National : DAILY YOMIURI ONLINE (The Daily Yomiuri)

Struggling Izumi-Sano plans to lease its name : National : DAILY YOMIURI ONLINE (The Daily Yomiuri)

IZUMI-SANO, Osaka--The municipal government of Izumi-Sano, Osaka Prefecture, which is on the verge of bankruptcy, has decided to lease the naming rights for the city and a range of public works.
Companies will be able to change the city name under a contract that will last from one to five years. The city will accept applications from domestic and foreign companies from June to the end of November. Applicants will be required to propose the amount they will pay the city for naming rights.
The sale of naming rights began in the United States in the 1990s to raise funds for the operation of sports facilities. In 2003, Tokyo Stadium in Chofu, Tokyo, had its name changed to Ajinomoto Stadium, after the food company Ajinomoto Co., the first such case in the country. Recently, the naming rights to other public works, such as pedestrian overpasses and dams, have been sold to companies. 
 So once again the US leads the way.  Sure, we lead the way in letting corporations turn the world into one great big repulsive billboard, but still...

NH Woman Plants Flowers, Gets Sued - Kimberly Bois battles her condo board

NH Woman Plants Flowers, Gets Sued - Kimberly Bois battles her condo board
  "The grounds around Kimberly Bois' condo are filled with daisies, bearded irises, lavender, and hydrangeas … a piece of floral serenity that's getting Bois sued. The Atlantic Pointe condo association wants her to pull up the perennials, and since Oct. 24 has been fining her first $25 per day and then $50 per day for every day the flowers remain. But the New Hampshire woman says she planted the flowers with permission from the developer, before there was a condo board at the Portsmouth complex."
Sure. Why not? Here's another article with a photo of the nightmarish defilement of the sacred common areas. Definitely worth a $4500 lien--fines, attorney know the drill.