Should Condominium Associations Be Permitted to Invest Operating & Reserve Funds? SB 1490 Says Yes! | CALL - Powered by beckerlawyers.com

Should Condominium Associations Be Permitted to Invest Operating & Reserve Funds? SB 1490 Says Yes! | CALL - Powered by beckerlawyers.com

"For years there have been significant legal constraints on a condominium association’s ability to use reserve funds. In addition to the statutory requirement to obtain membership approval for non-designated reserve usage, the prevailing school of thought was that association funds could not be invested since investments can and do fail. A newly filed bill by Senator Jason Pizzo, SB 1490, could create a significant change in terms of an association’s ability to invest the community’s operating and reserve funds in depositories other than a traditional bank or savings and loan. The bill provides as follows: “Unless otherwise prohibited in the declaration, and in accordance with s. 718.112(2)(f), an association, including a multicondominium association, may invest any funds in one or any combination of investment products described in this subsection.”

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Wow. I think this bill is a terrible idea. Lawyers and managers are always trying to convince condo boards that they need to have adequate reserves. The temptation to under-reserve and spare owners higher assessments is strong and ever-present. Now this bill would add the temptation to try to make the money by riskier investments with potentially higher return than CDs. If they lose the reserves in the stock market, then where does the money come from to replace the roof? Answer: the owners' pockets, in the form of a special assessment that many owners might not be able to pay. And that can lead to foreclosures. So I think SB 1490 is a bad idea!

Florida Gov. Ron DeSantis Gave Out VIP Vaccines to rich people in planned communities

Florida Gov. Ron DeSantis Gave Out VIP Vaccines

"But even as McPherson struggled to get an appointment, DeSantis funneled 3,000 extra doses to seniors residing in two targeted zip codes within Lakewood Ranch, a well-off residential community near Bradenton developed by the Uihlein family. The clan’s members include GOP and DeSantis megadonor Richard Uihlein, who gave $900,000 to the governor’s re-election effort in 2018 and 2019, according to the Florida Division of Elections. The Uihleins own Lakewood Ranch’s parent company Schroeder-Manatee Ranch, whose CEO Rex Jensen got a call from DeSantis about delivering the goods, as first reported by The Bradenton Herald. (A spokesperson for Schroeder-Manatee told the Sun-Sentinel Richard Uihlein was not himself a shareholder in the company.) Jensen then contacted Republican Manatee County Commission Chairwoman Vanessa Baugh to help set up the pop-up vaccine site, and she gave the final word on who would get the shots, according to local media reports. She even provided a VIP list to county staff that included herself, some of her friends, and Jensen."

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DeSantis is expected to be a presidential candidate in 2024. He is after the Trump vote, and his loutish, cynical behavior will probably help him with the Republican Party's brainwashed, gubmint-hating, QAnon loving base. 

‘Innovation Zones’ promoted by Nevada governor would create semi-autonomous county at behest of Blockchains LLC | Carson City Nevada News - Carson Now

‘Innovation Zones’ promoted by Nevada governor would create semi-autonomous county at behest of Blockchains LLC | Carson City Nevada News - Carson Now

"A proposal created by Blockchains LLC and circulated in the Legislature describes the fantastical contours of a plan to create a semi-autonomous county that slowly assumes powers of the county it’s based in and is supported by a cryptocurrency known as “stablecoin.” The plan, obtained by The Nevada Independent, includes draft language creating “Innovation Zones,” a concept touted by Gov. Steve Sisolak in his State of the State address last month but that otherwise has not been described publicly in detail. Sisolak touched on the idea as one element of an economic development plan to create close to 200,000 jobs and help Nevada dig out of a crushing, pandemic-driven recession. It comes as the company argues existing rules governing municipalities are too inflexible for the kind of revolutionary project Blockchains LLC hopes to realize.The proposal by Blockchains LLC would create essentially autonomous districts that function as a county-within-a-county, taking over responsibilities such as tax collection, K-12 education and other services normally provided by county governments. Such “zones” could only be created by a private developer who owns more than 50,000 acres of land (such as Blockchains), promises to invest up to $1 billion in the Zone and agrees to levy an industry-specific tax on an “innovative technology” based in the Zone itself. The bill language has not yet been submitted to legislative bill drafters, and could change substantially between the initial version and whatever version is introduced in the Legislature."

TARTER v. BENDT | No. 1 CA-CV 19-0703. | By MORSE | 20210128004 | Leagle.com

TARTER v. BENDT | No. 1 CA-CV 19-0703. | By MORSE | 20210128004 | Leagle.com

Wow. This is an unpublished (not to be cited as precedent) appellate court opinion from Arizona.  There was an HOA election, with the Tarters on the winning side and the Bendts on the losing side. According to the opinion, the Bendts then began attacking the Tarters online and in other ways, making the claims about the Tarters that are described below. The Tarters sued the Bendts for defamation. The eye-watering verdict against the Bendts:  over $1.5 million, including $1 million in punitive damages. In this opinion, the Court of Appeals of Arizona, Division One, affirms the verdict, meaning that the Bendts will have to pay, unless they appeal to the Arizona Supreme Court and win.   

The opinion has a number of interesting aspects. First is affirming a huge verdict against people who engaged in online verbal attacks against their HOA leadership, which is something that happens often. This verdict suggests that HOA dissidents need to think about the consequences of their rhetoric, stick to facts and issues, and avoid defamatory language. Second, the court found that as HOA leaders, the plaintiffs were "limited public figures," which raises the bar for them and requires them to prove "actual malice," i.e., that the defendants either knew their statements were false or acted with reckless disregard for the truth. But, third, the plaintiffs DID prove actual malice on these facts, which should be a sobering thought for people who are tempted to claim that they are just expressing personal opinions when they say things like this (see below) about their HOA leaders.  My final thought: In my experience, HOA and condo association disputes have a tendency to become nasty and personal. I have been involved in a number of disputes as an attorney or expert witness where that has happened, and I've heard or read about others. I'm not sure what to do about that, except to say that I continue to believe in the value of open but civil discourse in condo and HOA affairs.  

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From the opinion:

"The Tarters' complaint identified many disparaging statements made by Mrs. Bendt in her July newsletter. The Tarters alleged that Mrs. Bendt's assertions were defamatory and caused her readers to falsely believe that: (1) Mr. Tarter lacked ethics and/or behaved unethically or illegally; (2) Mr. Tarter concealed material financial information from the HOA members; (3) Mr. Tarter misled HOA members and acted unlawfully; (4) Mr. Tarter conducted and facilitated "secret" Board meetings; and (5) Mr. Tarter wrongfully over-spent HOA funds which would cause an increase in monthly HOA fees. Based on our review, at trial the parties focused on: (1) whether Mr. Tarter was asked to resign from the Board; (2) an $8,000 payment to an exterminator; (3) a tree removal; (4) the Board's executive sessions; (5) $40,000 in alleged overspending; and (6) the monthly HOA fees. The Tarters introduced evidence that Mrs. Bendt called Mr. Tarter "idiot," "fool," "spineless," "disgusting," "chicken shit," "lowlife," "low-class sneak," "unethical," "lazy," "weak," and "a complete fake" in front of fellow HOA members. Additionally, Mrs. Bendt wrote emails calling Mrs. Tarter, whom she had never met, "a bitch" and a "drinking dog walker." Mrs. Bendt also disparaged Mr. Tarter's legal education, insulted his alma matter, referred to him as a habitual liar, and unethical. Mrs. Bendt accused Mr. Tarter of violating his attorney ethical obligations, and wrote that he could be disciplined by the Arizona State Bar and investigated by the Attorney General ("AG"). After an eight-day trial, the jury awarded the Tarters $150,000 for reputational harm, $350,000 for emotional harm, and $1 million for punitive damages. The superior court awarded a further $20,120.42 in taxable costs."

The People the Suburbs Were Built for Are Gone

The People the Suburbs Were Built for Are Gone

"Previous mainstays of suburban life are now myths: that the majority of people own their homes; that the suburbs are havens for the middle class; or that the bulk of people are young families who value privacy over urban amenities like communal spaces, walkability, and mixed-use properties.  This mismatch has led to a phenomenon called “suburban retrofitting,” as documented by June Williamson, an associate professor of architecture at the City College of New York, and Ellen Dunham-Jones, a professor of architecture at the Georgia Institute of Technology. They have a new book out this week: Case Studies in Retrofitting Suburbia: Urban Design Strategies for Urgent Challenges".

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There's no doubt that American households aren't what they were when the suburban model was developed. Look at all that real estate given over to parking lots, shopping malls, and golf courses. How do those land uses fit with the changes that are taking place in the way we work, play, and live?

Condominium Governance and Law in Global Urban Context - 1st Edition -

Condominium Governance and Law in Global Urban Context - 1st Edition -

I have a chapter in this outstanding collection of articles, written by an all-star cast and edited by Randy Lippert and Stefan Treffers. Here's the writeup, and you can find more by following the link to the publisher's website:

"This book examines condominium, property, governance, and law in international and conceptual perspective and reveals this urban realm as complex and mutating. Condominiums are proliferating the world over and transforming the socio-spatial organization of cities and residential life. The collection assembles arguably the most prominent scholars in the world currently working in this broad area and situated in multiple disciplines, including legal and socio-legal studies, political science, public administration, and sociology. Their analyses span condominium governance and law on five continents and in nine countries: the United States (US), China, Australia, the United Kingdom (UK), Canada, South Africa, Israel, Denmark, and Spain. Neglected issues and emerging trends related to condominium governance and law in cities from Tel Aviv to Chicago to Melbourne are discerned and analysed. The book pursues fresh empirical inquiries and cogent conceptual engagements regarding how condominiums are governed through law and other means. It includes accounts of a wide range of governance difficulties including chronic anti-social owner behaviour, short-term rentals, and even the COVID-19 pandemic, and how they are being dealt with. By uncovering crucial cross-national commonalities, the book reveals the global urban context of condominium governance and law as empirically rich and conceptually fruitful."

Private Metropolis — University of Minnesota Press

Private Metropolis — University of Minnesota Press

This is the new book, coming out later this year, that Dennis Judd, Alba Alexander, and I edited.  Here's the writeup, and you can read more by following the link to the publisher's page on the book:

"Examines the complex ecology of quasi-public and privatized institutions that mobilize and administer many of the political, administrative, and fiscal resources of today’s metropolitan regions In recent decades metropolitan regions in the United States have witnessed the rise of multitudes of “shadow governments” that often supersede or replace functions traditionally associated with municipalities and other local governments inherited from the urban past. The essays in Private Metropolis grapple with the difficult and timely questions that arise from this new ecology of governance, provoking a long-overdue debate about the future of urban governance."

Rich Americans Are Increasingly Looking for Second Passport

Rich Americans Are Increasingly Looking for Second Passport

Having wrecked the American economy and political system by supporting policies that caused skyrocketing inequality and the erosion of the middle class, rich people are now looking for someplace else to live. 

New York coronavirus exodus fuels Maine real estate boom

New York coronavirus exodus fuels Maine real estate boom

"Prospective renters and buyers were desperate, according to brokers on the front lines. “People have called and said, ‘Get me any house in Maine,’ ” said Gwyneth Freeman of Better Homes & Gardens, The Masiello Group. A strong economy and low interest rates made 2019 a historically good year for Maine real estate, resulting in 40 percent less inventory in 2020. When frantic out-of-staters began looking to escape the pandemic, housing demand exceeded supply, pushing prices up and accounting for a large volume of closed sales."

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By gorey.

Real estate prices are about to drop 10%

Real estate prices are about to drop 10%

"The wholesale disruption of COVID-19 is taking a toll on the real estate market. A new survey suggests that offices will remain under capacity for months, retail and hospitality will continue to struggle, and, despite some increases in single-family home values, real estate across the board will see its value fall around 10% next year. These are some of the main findings of “Emerging Trends in Real Estate 2021,” a new report from the Urban Land Institute and PwC."

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I've been wondering whether or not the industry would start to get nervous about the impact of COVID on real estate markets and prices. Here's a large-scale study based on interviews with professionals that sees significant negative impacts, except perhaps in suburban residential property.

Inside the climate battle quietly raging about US homes | US news | The Guardian

Inside the climate battle quietly raging about US homes | US news | The Guardian

"On one side are the city and state officials trying to go greener, and on the other are real estate developers and the natural gas industry. The International Code Council, which like the World Series largely concerns Americans, met this week on updating the baseline codes that most states and cities adopt for new buildings. The council is reviewing about two dozen proposals that would, for example, require builders to install electrical outlets near gas stoves that may one day be replaced with electric ones; and to wire enough power to garages where people may one day want to plug in electric cars...With the stakes high, climate advocates last year launched a campaign to make sure that more climate-minded officials – the ones that set energy and environment rules, in addition to those who enforce code – were involved in the normally obscure process."

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The real estate development industry is accustomed to having veto power over major building code changes, which is why they are so freaked out over having people with more of an environmental orientation involved in making the rules.

DOJ Designates New York City as an “Anarchist Jurisdiction” – NBC New York

DOJ Designates New York City as an “Anarchist Jurisdiction” – NBC New York

"New York City is one of three places that "have permitted violence and destruction of property to persist and have refused to undertake reasonable measures to counteract criminal activities," leading to its designation as an "anarchist jurisdiction," the Justice Department said Monday. Rather than idle words, the designation has potential financial consequences. President Trump issued a memo earlier this month directing the DOJ to identify jurisdictions that, in its view, were not enforcing the law appropriately. Designated cities could lose their federal funding. Trump's order gives the director of the Office of Management and Budget 30 days to issue guidance to federal agencies on restricting eligibility for federal grants for the cities on the DOJ list. Such grants make up a huge portion of NYC's already strapped annual budget -- more than $7 billion in fiscal 2021 alone, or 7.5% of the city's projected total revenue."

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The only anarchist jurisdiction in this country today is the White House.

Placer County CA homeless people find a house in the suburbs | The Sacramento Bee

Placer County CA homeless people find a house in the suburbs | The Sacramento Bee

"As cities around the country struggle with a growing homeless population and few solutions beyond temporary homeless shelters or single-occupancy hotels, Placer County has been placing some of its homeless population on quiet suburban streets. It’s an attempt to fully integrate formerly homeless people into the community without the extreme costs of building permanent affordable housing...In interviews with The Bee, neighbors also said the existence of the home could threaten their property values, and that erratic behavior, loitering, drinking and smoking in public are unwelcome in their neighborhood.

But for the formerly homeless people who occupy the homes, they’ve found a new sense of comfort without the hassles of living in shelters, on church doorsteps, or the street."

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Thanks to Fred Pilot for this link.  This is a difficult issue for suburbanites, who tend to believe that they have moved away from social issues such as homelessness. But doing it this way is much less expensive than building new housing for the homeless: "The unique arrangement in Placer County contrasts starkly with the extraordinary per-person costs of developing new housing for homeless people in California. At the Capitol Park Hotel downtown, for example, development costs will reach more than $445,000 per unit for apartments that are tiny — about 250 square feet. With the program in Placer County, six people live in each of the four houses — purchased for about $600,000 each — a significantly lower per-person cost than new affordable housing developments."

The Fed Now Owns Nearly One Third of All US Mortgages

The Fed Now Owns Nearly One Third of All US Mortgages

"The Fed has snapped up $1 trillion of mortgage bonds since March. It bought around $300 billion of the bonds in each of March and April, and since then has been buying about $100 billion a month.  The Fed now owns almost a third of bonds backed by home loans in the U.S.  Buying the securities has pushed mortgage rates lower, with the average 30-year rate falling to 2.91% as of last week from 3.3% in early February. Morgan Stanley analysts pointed out in late March that the buying was running at eight times the pace seen in prior episodes of Fed purchasing under programs known as quantitative easing."

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Californians are buying their own fire trucks on Craigslist - SFGate

Californians are buying their own fire trucks on Craigslist - SFGate

"One seller is hoping to get $15,000 for a 53-year-old Ford 150 fire truck.  He confesses that he "was told the pump needed some seals," but suggests that "with these lightning complex fires going on, maybe you could use it." Over the last few years, as wildfires have become more common, there has also been a rise in a small but growing number of wealthy residents hiring private firefighting crews to watch over their acres. Cal Fire has discouraged attempts to defend one's own property during an evacuation order. “People don’t understand the veracity of these fires that we’ve been dealing with the last five or so years,” Cal Fire Fire Captain Scott McLean told SFGATE. “They’re very unpredictable and you can’t project what the fire’s going to do.”

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The ultimate in privatization. You buy your own fire truck and hire your own firefighting crew.

San Francisco Real Estate - Complicated Market Conditions - Compass

San Francisco Real Estate - Complicated Market Conditions - Compass

"As illustrated below, the San Francisco market currently reflects a variety of both positive and negative indicators. Among Bay Area markets, the city is seeing the softest recovery from the initial shelter-in-place plunge in activity in early spring, while some other counties - less expensive, more suburban or rural - are experiencing extremely high demand. (See table near the end of this report.)  Within San Francisco itself, supply and demand conditions have diverged dramatically between house and condo markets, with the latter being far weaker and rapidly climbing into "buyer's market" territory."

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Here is the report that the article I linked to below was based on.  The market for condos is showing signs of weakness, which always seems to happen when a downturn in the real estate market begins. Condos are hit first. Does that mean that other parts of the real estate market will go down? Not necessarily, but we shall see. Some analysts think the suburban market for single family homes will benefit from the forces that are hurting the condo market. COVID, unemployment, civil unrest...

SF condo inventory spikes, with price reductions skyrocketing

SF condo inventory spikes, with price reductions skyrocketing

"As buyers become pickier and shelter in place orders exacerbate the need for private outdoor space, the San Francisco condo market has been beset by rising inventory and declining prices, according to new data compiled by Compass. The young people who would have been shopping for condos may be more likely to be impacted by layoffs, according to the report. There's also increasing demand outside of the city, with those staying showing a vast preference for single-family homes, which have not seen the same level of declining demand. "Within San Francisco itself, supply and demand conditions have diverged dramatically between house and condo markets, with the latter being far weaker and rapidly climbing into 'buyer's market' territory," according to the report."

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Another data point supporting the notion that demand for center city real estate is beginning to drop, while demand for housing in the suburbs is going up.

Late-Stage Delinquencies are Surging, Especially Those With FHA Loans

Late-Stage Delinquencies are Surging, Especially Those With FHA Loans

"The overall rate of loans 30 or more days past due increased during the second quarter to a seasonally adjusted 8.22 percent of all outstanding one-to-four-unit mortgages. This was up 386 basis points (bps) from the first quarter of the year and 369 bps year-over-year. MBA includes loans in forbearance in its delinquency numbers."

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Mortgage delinquencies are generally accompanied by not paying HOA and condo assessments, which is bad news. Banks can survive these situations a lot better than associations that operate on a shoestring budget and have no source of income but assessments.

Steve Bannon Arrested on Superyacht Owned by Chinese Billionaire – Robb Report

Steve Bannon Arrested on Superyacht Owned by Chinese Billionaire – Robb Report

"[Guo] Wengui, an exiled Chinese billionaire, has business ties to Bannon. He was not arrested yesterday, but there are warrants out for his arrest in Beijing, where authorities have accused Wengui of crimes including bribery, kidnapping, money laundering, fraud and rape. He fled to the U.S. in late 2014 and lives in self-imposed exile in Manhattan. He is also a member of President Trump’s Mar-A-Lago club in Florida."

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Guo Wengui is a great example of Privatopia. He is essentially stateless by choice, a citizen of nowhere who moves through a world of private institutions and private wealth, protecting his wealth from taxation and living above the civil and criminal laws of all nations. And here is Steve Bannon, Mr. Nationalism, the architect of Trump's nativist-themed campaign, palling around with him. The hypocrisy is pretty obvious. Most of Trump's anti-government, pro-privatization moves have been scams of some sort. Bannon's fake border wall-building fund raising was a scam. The effort to destroy the US Postal Service is another.

Urban Exiles Are Fueling a Suburban Housing Boom Across the U.S.

Urban Exiles Are Fueling a Suburban Housing Boom Across the U.S.

"In the Covid era, the single-family houses that are the stock in trade for Previti’s Frontier Communities are a hot commodity. Armed with the lowest mortgage rates in history, buyers are increasingly shunning urban centers, settling instead where they can live at a safe distance from their neighbors. “Is this the little runup before everything runs off the rails?” asks Previti, chief executive officer."

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I've seen a number of articles saying the same thing, but I'm holding off on believing it for another year or so. There are too many unknowns about COVID-19, the state of the economy, and the November election.