Saturday, May 22, 2004

BBC NEWS | UK | Wales | South West Wales | Schoolboy digs up medieval ring
A 10-year-old boy could soon have a boost to his pocket money - after finding a medieval ring in a field in Pembrokeshire. Nathan Duffield, from Milford Haven, was out metal detecting with his father when he unearthed the ring, thought to be 600 years old.

Authorites are waiting to see whether Sauron files a claim on it, and ask that you please report any sightings of Riders in Black.
More oppression of a homeowner: Bruce Willis Told To Put Pants On

Hollywood hunk Bruce Willis has reportedly been told to stop hanging around naked by his Californian neighbours. The Die Hard star has allegedly angered locals near his Malibu home because he keeps walking down the nearby secluded beach without any clothes on. One source tells Britain's Daily Sport newspaper, "Bruce found some not-so-polite notes in his mailbox asking to keep his shortcomings secret."

No word yet if a tyrannical HOA is involved...

Thursday, May 20, 2004

Titus v. Canyon Lake POA: 4th DCA, California
Here's an appellate court decision from California (thanks to Fred Pilot for alerting me to this) that finds an HOA and a security service to have no possible legal liability for wrongful death where a drunk driver ran off the road and hit a tree, all on association property, and killed his passenger. The court sustained these defendants' demurrers where the plaintiff alleged that the association and security service had a "special relationship" to its members giving rise to a duty to protect them by getting the drunk driver--a young man living with his father, who was a unit owner--off the road or out of the community based on knowledge of his previous behavior.

The court says, "...we conclude that the allegations do not support the existence of a special relationship sufficient to justify the imposition of duties to eject or arrest Incorvia." The demurrer was sustained without leave to amend, and the opinion was published, so the case is over and it has precedential value. Significant win for HOAs in general, because it means that having security services doesn't mean you get sued when a crime is committed.
AB 2598 Assembly Bill - AMENDED
This bill passed the California Assembly Committee on Judiciary and was read on the floor for the third time. It has a number of things in it, and also a foreclosure reform, like SB 1682 (see below), but it is much harsher in that it bans nonjudicial foreclosure by HOAs. It will be interesting to see how this works out now that SB 1682 has passed the Senate and gone to the Assembly. Here is a legislative analysis of the bill.
SB 1682 Senate Bill - AMENDED
Here's what I think is the language of SB 1682 as it passed the California Senate. This is the bill that reforms HOA foreclosure.
Missing Money: A News 3 Homeowner's Association Investigation
Here's part one of the investigation referred to in the following post.
Missing Money: HOA Managers Accused of Embezzling Funds
Sixty percent of all people in the Las Vegas Valley live under the rules of some sort of homeowner's association. The mini-governments watch over developments, collect fees and fines from people who break the rules. But as News 3 Investigator Darcy Spears found, the associations can't always be counted on to manage that money properly. You might call the subject of our story a property "mis"manager. He's been hired by many associations over the past 14 years, but has essentially operated under the radar screen. He's had some blips here and there, but nothing that sounded the alarm until now. And that may be the root of the problem. Picture this, a property manager is accused of stealing about $100,000 from a homeowner's association...

Of course, I have no idea whether this is true of this manager, but the story illustrates the basic public policy problem. Community association management is a profession that is (a) new, and therefore lacking in clearly established professional norms; (b) easy to enter, (c) largely unregulated, and (d) loaded with opportunities to handle other people's money. Add that up and you have the potential for abuse. CAI tries to get managers to join and get certified through extensive training, but it seems to me there has to be mandatory state licensing in order to force all people doing CA management to comply with training requirements.

Wednesday, May 19, 2004

Daily Review Online: Kids versus frogs and snakes? An easy call for...EarthJustice!

This is a good example of the kinds of concessions that local governments try to get from developers before they will issue building permits. What I find interesting here is the way matters got more complicated through the involvement of an environmentalist group...EarthJustice! By Michelle Meyers, STAFF WRITER

HAYWARD -- Conservationists who have been blamed for putting millions of dollars of school funding in jeopardy by getting an injunction to halt the Blue Rock Country Club project have offered what they consider a "win-win" solution. EarthJustice attorney Greg Loarie, on behalf of co-plaintiffs Hayward Area Planning Association and the Center for Biological Diversity, proposed a compromise this week that -- if agreed to by the developer -- would allow grading and construction of the Walpert Ridge project's 614 upscale homes and elementary school. The injunction would still block the expansive golf course that crosses into a critical habitat area for the endangered Alameda whipsnake and California red-legged frog. "If the developer is willing, the school and the housing construction can proceed while the court decides the habitat issue," said HAPA chairman Sherman Lewis. Blue Rock developer Steve Miller, who hadn't had much time Tuesday to contemplate the proposal, said initially that "you can't just lop off a piece of the project" without affecting other components like environmental review, mitigation, water runoff and engineering. "The golf course isn't a separate project, it's a part of the total project," Miller said, adding that he couldn't agree to dropping the golf course without getting approvals from all of the related agencies.The school district, along with other community members, recently jumped into the legal fray between the parties because the injunction, as it stands, will result in the loss of $8.7 million in state bond funding for the proposed school.
The school district, along with other community members, recently jumped into the legal fray between the parties because the injunction, as it stands, will result in the loss of $8.7 million in state bond funding for the proposed school. That money is forfeited if the school district can't show the state by June 17 that the project is progressing. The $8.7 million is the difference between a new bare-bones Blue Rock elementary school for 350 students that the developer is required to build, and a much needed new state-of-the-artBlue Rock elementary school for 650 students. The school district is in a state of fiscal crisis, must make $8.5 million in budget reductions to avoid state takeover and is facing a serious overcrowding problem.

So, we have multiple agencies and a school district all making demands on a developer, and here comes EarthJustice! to jump into the middle of it, Lorax-style, and try to squelch the golf course. I suppose that is one of the major selling points of the development, so the developer doesn't want to build without it. And the school district needs that money or they get taken over by the state. But, hey, let's get our priorities straight. Kids can learn, even with 50 or 60, even a hundred, to a classroom. And maybe the houses will sell just well with a swamp instead of a golf course. The main thing is, how can we even imagine a world without lots of Alameda whipsnakes and California red-legged frogs slithering and hopping around?

Here's how the American Homeowners Research Center, an HOA owner-activist group, is billing the passage in the California Senate of SB 1682:

Community Association Institute(CAI)lawyers suffered a major blow today when the California Senate voted unanimously in favor of Senate Bill 1682. This bill prohibits the use of non-judicial foreclosure for unpaid assessments in homeowner associations for amounts less than $2,500. Homeowner advocates were both happy and cautious. They praised the skill and dedication of the bill's author, Senator Ducheny, in securing passage through the Senate. However, they cautioned that CAI will be waiting for the bill when it goes to the Assembly. CAI is already on a high state of alert, having sent a newsletter to all its members asking them to buttonhole their representatives...

This has to be seen as a victory for the owners-rights activists, but we'll have to see how it fares in the Assembly. The impetus for this bill was the foreclosure on a retired Calaveras County couple last year over a lousy $120 in late assessments. I know it is bad manners to say, "I told you so," but...I told you so. Many times, and for over fifteen years, I have been telling the industry that unless they rein in the collections lawyers who abuse the foreclosure process, they will get hammered by state legislators. And it won't stop here. The press is ready, even eager, to publicize these incidents. When the fit hits the shan, it does no good to say that these are isolated incidents, and that most community association lawyers don't behave like this. That's true, but that defense won't work after it's on the front page, anymore than it is working for the Bush administration defending the Iraqi prisoner abuse scandal. No, I'm not equating them--foreclosure is legal, prisoner abuse is not (I do think losing your home might be worse than having panties put on your head, but I haven't experienced either so I can't say for sure). But if the President of the USA, and Leader of the Free World, can't get a scandal off the front page by saying it was only 7 soldiers out of 135,000 (which apparently is true), how can the industry successfully defend against these foreclosure incidents by saying, year after year, that people hardly ever really lose their homes (which is also true)? Here's the bottom line (no pun intended): there are enough real cases to keep the pot boiling, and once the cases are in the media, they are fodder for the state legislature, especially in an election year.

If the industry won't take these abusers to task, formally or informally--and everybody knows who they are--then what other course is there except to put legal limits on the foreclosure power? What else can you expect the state legislature to do? Somebody from the industry, please tell me where I'm wrong here. Because I don't see any other course open to them, once these cases hit the press and stay there. Are the people's elected representatives supposed to publicly condone having seniors kicked out of their paid-for homes onto the street for a couple of hundred dollars in late assessments?

This bill could light a fuse that could burn all the way from California to Florida. I'll be watching the Assembly action closely.

April Home Prices Set Southland Record
From the Los Angeles Times:
Southern California home prices in April soared more than 25% — the largest annual increase in more than 16 years — to a record high as surging mortgage rates pushed buyers into the housing market before rates and prices head higher, according to a real estate report today. April's red-hot real estate market, however, is expected to cool off later this year as mortgage rates are projected to continue to move up from record lows, according to industry analysts.The median price of all houses and condominiums sold in Southern California in April hit $307,000, on a 7.3% increase in sales, according to DataQuick Information Systems, a real estate research firm. The 25.7% year-over-year increase in the median sales price was the largest since DataQuick began tracking the information in 1988.

Note that the median price of $307,000 includes both houses and condos, and it includes all of southern California. With prices like this, that often include 50-mile-plus trips to work, no wonder people are moving to Nevada and Arizona (not that there aren't other perfectly good reasons for moving to those states).
MAJOR DEVELOPMENT: Property owners win one in Senate
Bill limits homeowners association foreclosures
By Jim Wasserman, Associated Press

SACRAMENTO -- A bill greatly restricting the use of home foreclosures to collect late homeowner association assessments passed the Senate without opposition Tuesday, representing a major initial victory for homeowner activists in more than 36,000 privately governed California neighborhoods.

The Senate voted 34-0 to end a widespread practice of allowing homeowner associations to foreclose on homes when owners get slightly behind on assessments, which has provoked growing opposition in California and nationally. The new bill requires that for amounts less than $2,500, most associations must take the matter to small claims court or put a lien on the property.

This is big. And as Jim Wasseman says, there are national implications.

Tuesday, May 18, 2004

Mika Sadai's comments on newspaper article about her litigation

Mika Sadai sent me the following proposed op-ed piece that the Arizona Daily Star declined to publish. The op-ed represents Mika's reaction to an article that the Star published on April 23 about her litigation with her HOA. In an e-mail to me, Mika said she would "send you in a separate email my rejected Op-Ed, and request that you give it publicity in your blog, together with the exposure of the Arizona Daily Star policy. I know that I don't have to convince you that the subject IS interesting..."
The reference to the "Arizona Daily Star policy" concerns the decision not to publish it, which they justified by saying the op-ed was "not very interesting."

So, here it is. I have no personal knowledge of any of the facts contained in the op-ed, but it should interest a good number of people, in that there are many bitterly disputed elections in HOAs, in AZ and elsewhere. This piece presents Mika's side of the disputed election issue in detail, and her beliefs concerning the relevance of that issue to the entire lawsuit.

I commend the Star for its front page story ("$200,000 Neighborhood Dispute", April 23) about the rarely covered subject of homeowners associations in general and my legal fight in particular. Oddly, despite the fact that more than one million Arizonans (60 million Americans nationwide) are subjected to HOAs’ regime and the reality that almost all new construction comes with an attached mandatory HOA package, the issue of those private mini-governments takeover of our landscape and lives is hardly ever brought to light or discussed publicly. Unfortunately, this article cannot encompass this highly important subject and is limited to a response to your last Friday story.

Reading your story, one might get the impression that what your reporter has characterized as a "neighborhood dispute" is about a garbage can or some other petty items. Although HOA busybodies are known for their relentless obsession with garbage cans, in reality my lawsuit is about illegal elections that were conducted by my HOA six years ago, and in fact no garbage can has ever even been mentioned during the past six years of litigation.

In a nutshell, A small group of HOA zealots (known in my neighborhood as the "Loud Minority"), who were unhappy with the results of the annual election in 1998 that put them out of power, with the support of a fired management company and its attorney, attempted to undo the election by recalling the board and holding a custom-made special election. The procedure employed, at the direction and instructions of the management’s attorney, was replete with violations of the HOA bylaws and Arizona statutes, and those violations are the essence of my lawsuit.

The reporter mistakenly stated that I was recalled at the special election, whereas in fact the recall attempt failed for insufficient votes. Nonetheless, at the direction of the attorney the association held elections of new directors, in clear violation of the law, and the newly-elected board took over the governance of my association, returning the control and power to the "Loud Minority" gang and reinstating the fired management company.

Fair elections and proper election procedure are fundamental to democracy and public affairs. In a board-controlled homeowner association, elections are the only means for the members to affect their destiny, and violation of the election procedure is a flagrant denial of homeowners rights. My lawsuit requested the court to issue a declaratory judgment as to the legality of the 1998 election and the validity of its outcome.

In six years of litigation, with huge piles of paperwork and a total of more than $500,000 expended by both sides, the court has not yet addressed the illegal election. The association has made numerous attempts during these past years to dismiss the claims on various grounds, instead of adjudicating them on their merits in a trial by jury. Your article mistakenly stated that the suit was eventually dismissed but was filed anew. In fact, the suit that was dismissed was not the original but the new supplementary lawsuit, but was reinstated after said dismissal was reversed by the Court of Appeals.

The failure of the court to address the illegal election has created a monstrous litigation vortex. The HOA, through its illegal board and its insurance-financed attorneys, are making all efforts to avoid a jury trial and adjudication on the merits, because they know they are likely to lose.

Due to the reluctance of the State to interfere with HOAs’ affairs, viewing them as private disputes, litigation is the only means a homeowner has for correcting the wrongs and enforcing the law upon a violating HOA. When a court of law fails to address such violations, it effectively sets HOAs above the law and leaves the homeowners powerless with no means of redress.

Most homeowners are apathetic and disinterested in their HOAs’ affairs since they never actually chose to be members of those mandatory associations that were set up by land developers. Ironically, the State sanctions those private associations and provides them extraordinary unsupervised powers and controls over their subjects – the homeowners – in total disregard of the very few rights provided by law to the homeowners.

Power corrupts, and it’s the duty of the court to prevent such corruption. When the court fails to fulfill its duty, it gives a green light to more corruption and further violation of law. The issue is not a garbage can; the real issue is: Are HOAs above the law?