Friday, December 31, 2010

Contact 13 Investigates: HOA Hall of Shame

Contact 13 Chief Investigator Darcy Spears takes us down that hall, so you can decide whether it's shame on the homeowners or shame on the HOAs. "It's a sickness. It's a cancer on our society," says self-appointed homeowner advocate Jonathan Friedrich.

The concept of an HOA--keeping property values up and neighborhoods looking nice--is a good one, but the reality can be a nightmare. "Extremely, extremely bad," sighs frustrated homeowner Brigitte Porter.

And for Dr. Robin Huhn, "It has tainted the home for me." "It almost becomes like a Gestapo where everybody's spying on everybody else," adds Friedrich.
13 Action News of Las Vegas reports on the goings on in private local government that often resemble something out of Peyton Place and Lord of the Flies.

American English Dialects

American English Dialects:

Check this out. It is amazing.

HOA Drives Down Property Values | RumorMiller

HOA Drives Down Property Values | RumorMiller
An interesting case in point...

Monday, December 27, 2010

The Fallacy of a Pain-Free Path to a Healthy Housing Market - Economic Letter, December 2010 - FRB Dallas

The Fallacy of a Pain-Free Path to a Healthy Housing Market - Economic Letter, December 2010 - FRB Dallas: "The Fallacy of a Pain-Free Path to a Healthy Housing Market"

"As gauged by an aggregate of housing indexes dating to 1890, real home prices rose 85 percent to their highest level in August 2006. They have since declined 33 percent, falling short of most predictions for a cumulative correction of at least 40 percent.[1] In fact, home prices still must fall 23 percent if they are to revert to their long-term mean."

Sunday, December 19, 2010

What's next for minimalist houses? How about a subdivision of tiny houses in Eastern Oregon? |

What's next for minimalist houses? How about a subdivision of tiny houses in Eastern Oregon? | "Now the 50-year-old builder has come up with an idea that may prove both brilliant and quixotic: a subdivision for 50 to 100 pint-sized homes geared to folks hurt by the real estate bust, jobless or on fixed incomes. Increasingly, he's approached by people desperate to cut their living expenses, he said."
Yes, I think an 8 1/2 foot wide house qualifies as tiny.

Saturday, December 18, 2010

Arizona lawmaker proposes barring HOA "auto liens," foreclosures to secure fines

A local homeowners association’s management company is pushing state lawmakers to defeat a legislative bill that would make it impossible to foreclose on a home for non-payment of assessment fines.

The Arizona Association of Community Management (AACM), the HOA political arm of Associated Asset Management (AAM), is lobbying the state Legislature to defeat House Bill 2307, sponsored by Rep. Eddie Farnsworth, R-Gilbert, which is designed to restrict HOAs from foreclosing on a property owner’s home for non-payment of assessment fines using a legal tool called an “auto-lien.”

The auto-lien is a provision in the Covenants, Conditions and Restrictions (CC&Rs under Arizona real estate law. The CC&R is a document that is signed during the closing of sale of a home and states that a homeowner who buys a home in a deed-restricted property must join an HOA. AAM and AACM are also dues-paying members of the Community Association Institute, a national HOA membership organization that oversees the operations of HOAs.
This is an ongoing battle in the Grand Canyon State dating back to at least the mid 1990s involving a familiar legislator (Eddie Farnsworth, who argues the bar on HOAs placing automatic liens for fines protects property rights) longtime HOA member rights advocate Pat Haruff and of course the usual wall of opposition from the private local government lobby. Read the story here.

Sunday, December 12, 2010

Why I haven't been posting for the last few weeks

I am sicker than I have ever been in my life. I've been sick since about November 20. I have pertussis, better known as "whooping cough." And yes, I was vaccinated when I was a kid. But I have learned that these vaccinations wear off, so by the time you are in your teens you need a booster. My shot wore off long ago, I never had a booster, and I was hit so hard that I spent two days in the hospital. I am recovering now but recovery from pertussis takes some time.

If you haven't had a pertussis booster shot, my advice is: run, don't walk, to your local medical center and ask for one. This was once practically eradicated and now it's going around. There are outbreaks in Ohio, Illinois, Texas, and California, and perhaps elsewhere.

Believe me--you do not, repeat DO NOT, want to get pertussis. Just take my word for it.

Saturday, December 11, 2010

Virginia HOA locked into long term contract with telecom provider; Congressman writes FCC

In a letter dated Tuesday, Dec. 7, U.S. Rep. Frank R. Wolf (R-10-VA) reached out to Julius Genachowski, chairman of the FCC, about the informal complaint filed by lawyers on behalf of the 1,117 residents of Southern Walk at Broadlands and its homeowners association. The residents first reached out to Wolf's office in the fall, and have been in communication with him regarding their concerns and their legal efforts since that time.

Wolf's letter states that the concerns of a residents "merit serious consideration" by the commission. "The complaint raises serious concerns about the fairness of a developer committing my constituents to a multi-generational obligation with a pre-selected communications provider," the letter reads.

Leesburg Today has the rest of the story.
There is a way to avoid these kinds of locked in deals. Developers can build open access fiber networks owned by the homeowners rather than a private vendor. Apparently the developer of the HOA involved here didn't go that route -- most likely because there was more money for the developer in having a for profit company provide the service. Another example of why privatizing local government is poor public policy.

Sunday, December 05, 2010

Mounting State Debts Stoke Fears of a Looming Crisis

Mounting State Debts Stoke Fears of a Looming Crisis

Municipal bankruptcies or defaults have been extremely rare — no state has defaulted since the Great Depression, and only a handful of cities have declared bankruptcy or are considering doing so.

But the finances of some state and local governments are so distressed that some analysts say they are reminded of the run-up to the subprime mortgage meltdown or of the debt crisis hitting nations in Europe.

Analysts fear that at some point — no one knows when — investors could balk at lending to the weakest states, setting off a crisis that could spread to the stronger ones, much as the turmoil in Europe has spread from country to country.
Governments in Europe and at all levels in the U.S. are reeling in red ink. While economic observers note consumer confidence and retail spending are up, reports like these as well as continued high unemployment demonstrate the ongoing powerful gravitational drag exerted by the implosion of the real estate bubble into a massive financial black hole in 2008.

Saturday, December 04, 2010

First responders delayed by padlocked gates of Privatopian enclave

HOUSTON – A group of northeast Houston residents say they are holding a rally to protest the mismanagement of their neighborhood’s homeowners association.

The resident’s main concern is the locks that were placed on the subdivision’s gates that possibly created a delay for first responders.

Blouis Gipson, who recently lost his wife to a heart attack, said he wonders what would have happened if the Pine Village North subdivision had a different lock on the gates.

“I tried CPR and I called 911 immediately,” said Gipson.

But help was held up because the homeowners association had the gate chained shut with a lock, he said. A report from the fire department said the crew had to cut the lock off of the gate.

“By the time EMS got here, she had died,” said Gipson

There was a fire a few months ago that destroyed several town homes and the fire department was locked out, the residents said.
Rest of the story here.

Sovereign Privatopia: Arizona HOAs claim jurisdiction over public streets

Homeowners and HOA Headaches

State Representative Nancy Barto describes HOAs as quasi-governments with deep pockets, lots of authority and little oversight. She tried to pass a bill to clarify who owns public streets: cities or HOAs.

"A lot of HOAs are run very well. This is not about most HOAs. This is about many HOAs," says Barto. "It becomes very evident that there's not enough oversight whenever there's a dispute, because homeowners have nowhere to go to solve these problems."

Attorney Scott Carpenter represents 3,000 HOAs and worked against Nancy Barto's bill.

"There is no story or evidence or statistics that I've seen that back up the assertion that associations are using fines for vehicles parked in public streets as a revenue generator," says Carpenter.


This is one of the most nonsensical circumstances I've read emanating from Privatopia. A bill to determine whether municipalities or HOAs own public streets? Clearly the former; curious minds want to know why the state Legislature would be called upon to resolve that question. And why the munis don't take overreaching HOAs asserting bogus claims of jurisdiction over public rights of way to court and get a judge to order them to butt out.

Wednesday, December 01, 2010

HOA Activist Phil Testa murders wife, kills himself

Vegas Man Dies After Shooting Wife, Self - Las Vegas News Story - KVVU Las Vegas: "A Las Vegas man who shot himself after killing his wife was identified Monday as 74-year-old Phil Testa.
Testa died at University Medical Center after he was rushed to the hospital Saturday night.
Authorities said Testa shot his 79-year-old wife, Angelina, at the couple’s home on Maryland Parkway near Flamingo Road. He then called 911, saying he had killed his wife and was going to kill himself, according to police."

And then he did kill himself.

Phil Testa was a long-time Las Vegas area HOA activist who at one time had a radio show there. He was fond of calling people crooks and other names, making thinly veiled threats, and claiming to have some sort of organized crime background. He liked to bum rush the stage whenever he could and snatch microphones from people's hands--things like that.

Sunday, November 28, 2010

UPS Has Homeowners Upset In Seminole Neighborhood - News Story - WFTV Orlando

UPS Has Homeowners Upset In Seminole Neighborhood - News Story - WFTV Orlando: "SEMINOLE COUNTY, Fla. -- Some Seminole County residents are furious that a major U.S. corporation set up shop right in the middle of their neighborhood.
Homeowners in Deer Run say the UPS delivery service has leased a house along Augusta way (see map). The delivery company is now using the home to collect and deliver packages for the entire neighborhood.
You wouldn't know it from the outside but neighbors say the owner of the home might as well put up a big UPS sign right out front."

How convenient. And yes, there is an HOA, and yes, it seems to be a violation of the governing documents. Ho, ho, ho. Merry Christmas!

Saturday, November 27, 2010

Chicago set coyotes loose on the streets to hunt for rats

Chicago set coyotes loose on the streets to hunt for rats

Still, it seems a rather desperate throwback to frontier-style husbandry for a major American metropolis to unleash sharp-fanged predators to roam freely through its streets to contain the growing rat menace. But that's what the city of Chicago has done with its latest, innovative effort in rat control: the coyote solution.

The city's program evidently came to light when numerous concerned citizens reported seeing a coyote running down one of the city's main drags, weaving in, out and around passing vehicles. But the city's animal welfare department told a local media outlet that there was nothing out of the ordinary about this at all.
Somehow I doubt this would fly in Privatopia.

Wednesday, November 24, 2010

Is Your New Neighbor a Squatter? | NBC Los Angeles

Is Your New Neighbor a Squatter? | NBC Los Angeles: "Prosecutors say this is happening across Southern California.
They've caught squatters illegally living in homes in Bel-Air, Marina Del Rey and Winnetka.
'It's a huge problem and growing every day,' says Los Angeles City Attorney Maureen Rodriguez."


New homes sales in another big dip - Nov. 24, 2010

New homes sales in another big dip - Nov. 24, 2010: "New home sales dropped to an annual pace of just 283,000, according to the Commerce Department. That was down 8.1% from a slow September and 28.5% from 12 months ago when the annualized sales rate was at 430,000."
That's pathetic. If we were in a real recovery, instead of this fake one we are being asked to believe in, it would be at least a million units per year.

Monday, November 22, 2010

Think you've read the worst about foreclosures? Read this | McClatchy

Think you've read the worst about foreclosures? Read this | McClatchy: "Hall's foreclosure defense lawyers, in what has become a booming -- and sometimes predatory -- business, charged her more than $20,000 while regularly failing to show up in court. One lawyer charged Hall $2,800 for work he did trying to withdraw himself from the case.

Law enforcement officers are scheduled to come to Hall's house to evict her and her family next week, nearly five years after a mortgage broker showed up on her doorstep unannounced, pitching a stress-free refinance."

According to the story, this woman has fallen into every one of a long series of pitfalls that lie in wait for those who took out subprime loans. If you want to read a real-life horror story, check out Our Lot: How Real Estate Came to Own Us, by Alyssa Katz. She tells the whole story of the subprime catastrophe.

Friday, November 19, 2010

ACLU Announces Free Speech Settlement with Association | Articles & Archives | Community Association Management Insider

ACLU Announces Free Speech Settlement with Association | Articles & Archives | Community Association Management Insider: "The American Civil Liberties Union (ACLU) has reached a settlement on behalf of a San Francisco condo resident who challenged an attempt by a homeowner's association to force him to remove political signs from his windows."

Thursday, November 18, 2010

California Bond Woe Bodes Ill for States -

California Bond Woe Bodes Ill for States -
The normally staid market has grown volatile the past week, posting its sharpest selloff in nearly two years, as investors demand higher interest rates to buy paper issued by states, cities and counties to finance their operations. Localities have been hammered by a drop in tax revenue amid the downturn—and unlike the federal government, most are barred constitutionally from running deficits.
This means state and local governments will be making more service cuts and raising whatever taxes and charges they can.

Tuesday, November 16, 2010

Stern's DAL Enters Forbearance Agreement With Bank of America Over Credit - Bloomberg

Stern's DAL Enters Forbearance Agreement With Bank of America Over Credit - Bloomberg: "A business run by David Stern, the Florida foreclosure lawyer who is under investigation by the state’s attorney general, entered a forbearance agreement with lender Bank of America NA.

The bank agreed not to take action in the period ending Nov. 26 over a default on a revolving line of credit by DAL Group LLC, a unit of Stern’s foreclosure-processing company, DJSP Enterprises Inc., according to a regulatory filing. The credit line, entered into in March, has an outstanding principal balance of about $12 million, DAL said."

I'll let the irony just work its way through the system.

Condo associations may be coming to an end | WBEZ

Condo associations may be coming to an end | WBEZ
Hear crazed professor McKenzie on Chicago public radio today.

Dejected House Dems wipe away tears as GOP celebrates victory - The Hill's Blog Briefing Room

Dejected House Dems wipe away tears as GOP celebrates victory - The Hill's Blog Briefing Room: "Freshman Rep. Debbie Halvorson (D-Ill.), who lost her reelection bid, wiped away tears as she hugged fellow members of the class of 2008, many of whom lost on Nov. 2.

Less than three feet away, ousted Nevada freshman Rep. Dina Titus (D) appeared to brush away some tears in a less obvious manner."

Heart-breaking. To think that these fledgling members of Congress are being evicted from their seats after only two years, before they could dig themselves in like ticks and become unaccountable, perpetually re-elected incumbents like the rest of the House.

Report: Foreclosure mess could threaten banks - Yahoo! Finance

Report: Foreclosure mess could threaten banks - Yahoo! Finance
So says a congressional oversight panel. If you think this is the prelude to Congress doing another great big favor for the big banks, you are right.

Monday, November 15, 2010

Rumors, Rumors. Is Lame Duck Congress Planning A CYA Bill For MERS Mortgage Fraud? | Crooks and Liars

Rumors, Rumors. Is Lame Duck Congress Planning A CYA Bill For MERS Mortgage Fraud? | Crooks and Liars: "When Congress comes back into session next week, it may consider measures intended to bolster the legal status of a controversial bank owned electronic mortgage registration system that contains three out of every five mortgages in the country."
The Mortgage Electronic Registration System saved banks and real estate trusts billions of dollars in recording fees that are supposed be paid when somebody sells the mortgage on a piece of property. The banks set up MERS to avoid paying those fees. They didn't record the changes in ownership. They just passed the mortgages around and kept track of which banks owned which mortgage using this electronic system. That's why they can't prove ownership. Nobody has a valid recorded deed.

And what about the billions they owe the counties all across this nation?

Watch for the lame duck Congress to bail out the banks, once again.

Sunday, November 14, 2010

HOAs give lenders ultimatum; Florida courts bless strategy

In too many cases, lenders are failing to foreclose on troubled assets, regardless of whether the owner is a troubled borrower or a secondary lien holder. In many cases, they are either waiting for the market to clear so they can sell the distressed assets at a better price, or they don't want to pay the dues and/or assessments required from owners.

Whatever the reason, lenders that drag their feet are leaving associations in the lurch. But with the Mortgage Terminator maneuver, says Association Law Group partner Solomon, associations can take the title to the property and then force the primary lien holder to initiate its own foreclosure proceeding or release its mortgage so the association can sell the unit to cover what it is owed.

Three times now, Florida courts have upheld the tactic, which Solomon calls "a legal strategy that finally gives banks a legal ultimatum."


Click here for The L.A. Times story.

So in addition to REOs, now we'll have HAOs (Homeowner Association Owed) properties. The legal strategy has national implications, The Times reports, since it is not based on state law.

I'm guessing HOAs don't want to hold distressed properties either since that adds to their financial burdens. Taking over these limbo zone properties won't remedy the fact they aren't generating assessment revenue. That circumstance and the need for income to cover the cost of holding HAOs could compel HOAs to become landlords and place these properties on the rental market. But that could also have negative implications for HOAs given secondary mortgage market rules that disfavor purchasing loans in HOAs with too many rental units. So they'll probably quickly dispose of them at fire sale prices as the Times article suggests.

Money and the Midterms: Are the Parties Over? Interview with Thomas Ferguson » New Deal 2.0

Money and the Midterms: Are the Parties Over? Interview with Thomas Ferguson » New Deal 2.0
Profound but disturbing take on national politics.

Saturday, November 13, 2010

Election Spells Doom for Fannie and Freddie -

Election Spells Doom for Fannie and Freddie - "The Republican landslide that swept through the House ensures that the outcome will be a radical policy change that will rely much more on the private sector, especially lenders and investors, and less upon Federal support. Fannie and Freddie will certainly cease to exist in their current forms and government exposure to the risks involved in financing mortgages will be reduced."
If that happens, mortgage interest rates will go through the roof.

Friday, November 12, 2010

The Monkey Cage

The Monkey Cage: "The replacement effect of the 2010 Midterm Elections is unlike anything in recent memory. The shift in the House median is two and a half times what was observed after the 1994 Election, wiping out the effect of Democratic gains in the previous two elections and then some. The 111th was the most liberal Congress in the past three decades; the 112th will be the most conservative.... The 2010 Elections [also] had a profound effect on congressional polarization. Not only will the 112th House be the most polarized on record; 2010 will surpass 1994 as the most polarizing election cycle."
And this Congress is the one that has to pull the country's chestnuts out of the fire.

Foreclosure Lawyers Put Second Mortgages on Clients' Homes -

Foreclosure Lawyers Put Second Mortgages on Clients' Homes - "“We thought, ‘Why don’t we use a bit of ingenuity to find an affordable way to represent them?’ ” said Peter Ticktin of the Ticktin Law Group in Deerfield Beach, Fla. “It’s a new model, a new paradigm.”

Foreclosure defense is a new legal specialty whose strategies and techniques are still being worked out. Mr. Ticktin, who has some 3,000 foreclosure clients, says his plan to collect fees by taking another mortgage on his clients’ properties has already been copied by other firms."

On your left: the frying pan.
On your right: the fire.

Take your pick.

Michael Gerson - Blue-state budget crises spell more trouble for Democrats

Michael Gerson - Blue-state budget crises spell more trouble for Democrats: "Having experienced the revolt of red America, Democrats must now deal with the fiscal crisis of blue America."
Yes, because a number of the states that the Democrats continue to run are economic basket cases. And what will those voters be thinking of the Democrats in 2012? Here in Illinois the state legislature and Governor are still Democrats. Tax hikes are on the table. Where are the spending cuts? The unwillingness of Democrats to cut spending, and their enthusiasm for tax hikes, may mean that these states will be in a "throw the bums out" mind set when Obama comes up for re-election. On the other hand, presidents who seek a second term usually get it. The GOP has to come up with a strong candidate. That may prove impossible if the loony right continues to be the dominant force in the party. Lunatic fringe ideas are fine for winning congressional districts in some places, but at the state level you need substance.

Punches fly in Privatopia

HOUSTON - Bet you've never seen a Homeowner Association Meeting like this one. This homeowner says he's speaking for the majority of residents who live in the Catalina Square Subdivision.

All the board members were voted out and told to immediately turn over all records and any other property belonging to the Catalina Square Improvement Committee.

"Our president came towards him to try to shut him down and told him he couldn't do that," homeowner Pat Martin said.

Suddenly the meeting turns violent.

"They got physical, our president (William Harris) swung at one of the homeowners," Martin said.

Fox 26 in Houston has the story. And it reports it is looking into lots of HOA horror stories here.

Sadly, we're likely to see more fisticuffs in Privatopia amid growing tensions brought on by assessment shortfalls as the seemingly never ending train of foreclosures keeps rolling down the tracks.

Thursday, November 11, 2010

O Canada: HOA flag flap erupts north of the border

An Ontario couple said they will not give in to their neighborhood association's demand to remove a Canadian flag from their garage unless ordered by a judge.

Brian Cassidy, 63, and wife Linda-Lee Cassidy, 61, of the Mill Retirement Community in Lakeshore, said the homeowners' association told them the flag must be removed from its perch in front of their garage because neighbors had complained about the 8-foot flagpole "changing the architecture" of the house's exterior, a violation of neighborhood bylaws, the Windsor Star reported Thursday.

The homeowners' association said the couple will not be allowed to vote at meetings until the flagpole is removed, but Brian Cassidy said he will not be swayed.

"I put that flag up to stay up," he said. "It's not coming down. I take pride in my country and my flag."
So there! Rest of the story here.

What part of PRIVATE in private local government don't you understand?

A law giving a state agency purview to resolve disputes between property owners and their homeowners associations is illegal, the Arizona Court of Appeals has ruled.

The judges said the Legislature never gave the Department of Fire, Building and Life Safety regulatory authority over homeowners associations. In fact, the judges said, lawmakers provided no such oversight by any state agency.

That, they said, makes unconstitutional a 2006 decision by legislators establishing a hearing process to deal with conflicts between homeowners associations and the governing boards of their planned communities.

Unless overturned by the Arizona Supreme Court, or unless the problem is fixed by the Legislature, the ruling leaves no administrative-review process for such disputes. That makes filing a lawsuit - a far more expensive process - as the only remaining option.

The implicit public policy statement being made here by the Arizona Court of Appeals is "What part of PRIVATE in private local HOA government don't you understand?" The court is saying that private local government means just that: no public oversight or regulation from the executive branch. HOA exceeding its authority? Lawyer up and tell it to the judge.

Read more:

Owners fight the condo blues with go-go dance and grit | WBEZ

Owners fight the condo blues with go-go dance and grit | WBEZ
I am interviewed in this story about a busted condo association that does some creative fund-raising.

Unfortunately, a Bleak Winter Ahead for the Housing Market: Zillow Q3 Real Estate Market Reports | Zillow Blog - Real Estate Market Stats, Celebrity Real Estate, and Zillow News

Unfortunately, a Bleak Winter Ahead for the Housing Market: Zillow Q3 Real Estate Market Reports | Zillow Blog - Real Estate Market Stats, Celebrity Real Estate, and Zillow News
And on top of this, in the worst housing price crash since the Great Depression, the President's commission on solving our national budget woes wants to cut or eliminate the mortgage interest deduction.

Wednesday, November 10, 2010

Millions of homeowners keep paying on underwater mortgages -

Millions of homeowners keep paying on underwater mortgages - "...payments on mortgages that are underwater could absorb billions of dollars that might be used for other forms of consumer spending — a drag on family finances, the housing market and the overall economy."
So hurry up and lose your home so you can divert that underwater mortgage payment to buying a plasma TV? That's the socially productive course of action?

Saturday, November 06, 2010

Bradenton couple finds thousands of bees in their backyard

Bradenton couple finds thousands of bees in their backyard

The homeowners association said they plan to check on all the trees to make sure there aren't any more of those hives.

And a letter will likely be issued to property owners harboring giant beehives warning of daily fines if the hives remain.

Freddie Mac posts $4.1B loss for Q3 - Business -

Freddie Mac posts $4.1B loss for Q3 - Business -
And on it goes. If you want to see where the whole housing market catastrophe started, here it is.

Tuesday, November 02, 2010

News Brief From Center for California Homeowner Association Law

From Marjorie Murray at CCHA:
Since we’re going to the polls today,   we thought this would be a good time to post the lawsuit brought two weeks ago by the ACLU to force a homeowner association and its property manager to keep their mitts off the HOA resident exercising his constitutional right to post political signs.

Here’s the link to the ACLU lawsuit on the CCHAL website:  Keep this link handy in case someone tells you that you can’t post a political sign during an election.

Hassling homeowners over political signs could easily happen again.  The entire association industry was opposed to the Longville bill, AB1525, when it was going through the policy committees in the California Legislature.  Here’s the list of registered opponents from the Senate analysis right before the bill went to the Governor’s desk:

OPPOSITION: (Verified  8/25/03)

Community Associations Institute, unless amended
Executive Council of Homeowners, unless amended
California Association of Community Managers

On the list are the three trade groups that collect homeowner money and then use it to lobby against homeowner rights in Sacramento – like homeowners’ right to constitutionally protected free speech.

If the trade groups want to lobby in Sacramento on behalf of their members, we absolutely support their constitutional right to political free expression.  

But we sure wish they’d quit using homeowner money in Sacramento to dismantle the Bill of Rights.  

CCHAL NewsBrief
November 2, 2010

Marjorie Murray, President
Center for California Homeowner Association Law
1305 Franklin Street, Suite 201
Oakland, California 94612

Monday, November 01, 2010

HOAs don't enjoy blanket immunity for maintenance decisions, California Court of Appeal rules

In a ruling filed filed Oct. 29 in Affan et al v. Portofino Cove Homeowners Association, G041379, the Fourth District of the California Court of Appeal overturned a trial court ruling dismissing claims brought against a condo HOA and its management company by an owner alleging the defendants breached their duty to maintain and repair the common area plumbing, causing sewage to back up into the plaintiff's unit.

The trial court dismissed the suit citing a 1999 ruling by the California Supreme Court in Lamden v. La Jolla Shores Clubdominium Homeowners Assn. (1999) 21 Cal.4th 249. In that case, the California high court applied the business judgment rule to HOAs, holding that courts are to defer to the "presumed expertise" of HOA boards when it comes to their decisions on maintaining common areas. That means these decisions by HOA boards are not subject to second guessing by the courts when owners challenge them.

But in Affan, the Court of Appeal found the HOA failed to establish the factual prerequisites for applying the deference rule. In addition, it held, since the HOA manager is not the HOA, the rule does not apply to the manager.

Here's a key excerpt from the ruling:
It is important to note the narrow scope of the Lamden rule. It is a rule of deference to the reasoned decisionmaking of homeowners association boards concerning ordinary maintenance. It does not create a blanket immunity for all the decisions and actions of a homeowners association. The Supreme Court's precise articulation of the rule makes clear that the rule of deference applies only when a homeowner sues an association over a maintenance decision that meets the enumerated criteria.
The full decision can be read here.

Team 4: Debt Collectors Accused Of Fake Courtroom, Judge - News Story - WTAE Pittsburgh

Team 4: Debt Collectors Accused Of Fake Courtroom, Judge - News Story - WTAE Pittsburgh

I expect this idea may catch on soon with the HOA/condo bill collector law firms.

Saturday, October 30, 2010

Getting balmy in Palm Beach

— To some people they were just ducks. To Robert and Blain Aymond they were feces-spewing, orchid-eating disease bags with wings.

The webbed-foot menaces tore up the lawn and pool screens at their lakefront home in the Frenchman's Landing community near Palm Beach Gardens, defecating, copulating and squawking with brazen aplomb.

The horror! If it seems that people who live in Privatopia have too much time on their hands and need to get a life, this story only reinforces that perception. Where else do neighbors fight each other over a bunch of ducks?

Read the rest of this story here.

Monday, October 25, 2010

There better be skin: Nudist HOA claims resident clothed too much

LUTZ, Fla., Oct. 25 (UPI) -- The homeowners association of a Florida nudist park wants to evict a disabled resident said to be disruptive and not nude often enough.
You can't make up some of the stuff like this that comes out of Privatopia. Read the rest of the story here.

Saturday, October 23, 2010

Residential mortgage market meltdown: the Halloween sequel

The first part of this story involved lenders issuing mortgages without adequate underwriting, producing a lot of non-performing loans. When those loans were packaged and sold as securities, financial markets realized that lots of paper bags filled with excrement were ablaze on their doorstep. That largely prompted the financial market meltdown in 2008 from which the economy is still struggling to recover.

Just in time for Halloween comes the sequel in this financial horror story. As this New York Times article points out, the devil is in trying to unwind these bad debts and repossess the underlying properties. No easy feat considering that those stinky sacks of crap passed through a lot of hands, making it very difficult to sort out the individual notes in each bag.

Update 10/29: American Public Media's Marketplace radio program did a segment on today's show on the difficulty matching the notes in these troubled mortgage backed securities to the actual properties securing them, effectively rendering these securities worthless "zombie bonds" and setting the stage for litigation brought by understandably unhappy investors. Check out Marketplace's story here accompanied by lots of Halloween screams and howls.

Psychologist defines the HOA Syndrome caused by oppressive HOAs � HOA Constitutional Government

Psychologist defines the HOA Syndrome caused by oppressive HOAs � HOA Constitutional Government
Sounds like a pandemic. But is it contagious? I also see that some Florida HOA attorney is making fun of this situation. George Staropoli wants to have him keelhauled or at least disbarred for insensitivity, but I think making attempted jokes with no punch line is a worse offense.

The big picture, though, is grim for the condo sector, in Florida and elsewhere. The association lawyer-lobbyist crowd is getting desperate because on one hand they have to fight off state legislators and on the other hand they are watching condo developments melt down all around them. So far most of the demands for state regulation have been based mainly on abuse of power and incompetence by boards and their hired guns. Soon the issue in state legislatures--and maybe even federal agencies--may be what to do about the economic collapse of condo associations and HOAs.

Who knows? Soon some of these attorneys may have to find a specialty where they actually have to go up against other lawyers, instead of beating up on unrepresented homeowners.

Friday, October 22, 2010

NC may examine powers of HOAs next year

Candidates would consider limiting powers of homeowner associations

A local lawmaker and state senate candidate say they want to look at issues involving homeowners associations during the next General Assembly session, which begins Jan. 26.

“I suspect we will be looking into that because we’ve got some homeowners associations that are completely out of control,” said Rep. Danny McComas, R-New Hanover. “I do feel that finding a means to control some of these HOAs is going to be necessary.”
This is a wasted endeavor at best and a cynical political ploy at worst.

If legislators and candidates truly believe that non condo HOAs have the power of municipalities without checks and balances on their powers, they should deprivatize them and take them out of state nonprofit corporations codes and instead bring them under government codes.

Tuesday, October 19, 2010

HOA developers cut long term deals with Internet service providers at inmates' expense

Living in Privatopia could mean paying for telecommunications services provided by your HOA, even if you choose another provider as this item explains.

The problem is developers sign long term contracts with a single Internet Service Provider instead of putting in open access fiber owned by the HOA. Good for the developer prince but not the HOA serfs. An open access fiber to the premises infrastructure would give residents a true choice of ISPs since any number could choose to offer services to the residents.

HOA takes issue with homeowner's landscaping

HOA takes issue with homeowner's landscaping

FOX 35 asked the HOA president, Bill Herring what was wrong with O'Connor's landscaping. "Look at all the dead stuff, dead vines dead limbs in the trees," said Bill Herring. "We didn't find any of that," said FOX 35 Reporter Holly Bristow. "Well you ain't looking very well," said Herring who then said to contact the HOA attorney. The HOA's attorney has not yet returned our call. According to Mo O'Connor, the HOA attorney wants to go to formal mediation with her. She says she's already done informal mediation with the HOA . Mo O'Connor says since state statute protects her Florida friendly lawn, she's not changing it.
Yet another episode of ambulance chasing, HOA style. Film at 11.

Monday, October 18, 2010

Payments average 18 months past due on Palm Beach County's foreclosed homes

Payments average 18 months past due on Palm Beach County's foreclosed homes

And that county has almost 46, 000 homes in foreclosure. How's that for a recovery? Let's just give these policies some time to work, OK people?

Seriously--the cyclical aspect of this recession ended a year ago according to all the experts. What we have now is something else, and I've shifted over to the camp that says the policies of this administration may be preventing the employment situation from improving and holding the housing market back. At this point there won't be a cyclical recovery at all. Something has to change in Washington. We may have divided government starting in January, and that will produce either compromise (maybe a good thing) or gridlock (probably disastrous). A great deal may depend on personalities. Just getting that gavel out of Nancy Pelosi's hand would make a big difference.

Sunday, October 17, 2010

Buyers of foreclosed homes may face big problems

Buyers of foreclosed homes may face big problems:
"“Anyone who’s purchased a foreclosed property in the last three years should really be concerned,” says George Babcock, a Providence lawyer who represents homeowners who have been foreclosed on."
This is why banks are freezing the foreclosure process. If the mortgagee uses sketchy practices to to prove they have the right to foreclose, then sells it to a new owner, that new owner may not really have title to the property. Lawyers being the opportunistic types they are, you can then have an interesting situation. What if the former owner (the original mortgagor) shows up and claims the house? Title insurance should protect the new owner, but this is yet another permutation in the unfolding weirdness of the post-crash housing market.

Friday, October 15, 2010

Delusional Thieves Caught Stealing Entire Mansions - The Consumerist

Delusional Thieves Caught Stealing Entire Mansions - The Consumerist: "A ring of confused folk in Georgia are stealing entire million-dollar homes, deeding themselves the property with bogus paperwork and squatting inside."
I'm not sure "confused" is the right word. Thanks to Mystery Reader for this fascinating story.

As Mountain Of Foreclosure Fraud Evidence Grows, National Media Has Decided It's Really More Of An "Oops!" | Crooks and Liars

As Mountain Of Foreclosure Fraud Evidence Grows, National Media Has Decided It's Really More Of An "Oops!" | Crooks and Liars
This link from Mystery Reader asks why banks can commit what appear to be crimes and nobody goes to jail, and in fact the national media don't seem to see much of a problem.

Banks Hired "Burger King Kids" To Process Mortgages - The Consumerist

Banks Hired "Burger King Kids" To Process Mortgages - The Consumerist
Mystery Reader strikes again. You wonder when the people who did these things will end up behind bars.

Bankers: We Wouldn't Hire Unqualified Robo-Signers If You Just Paid Your Mortgage - The Consumerist

Bankers: We Wouldn't Hire Unqualified Robo-Signers If You Just Paid Your Mortgage - The Consumerist
Thanks to Mystery Reader for this educational link. Why don't we just see the error of our ways and fall prostrate before the financial gods?

20 Unusual Houses That Are Now Tourist Attractions (PHOTOS)

20 Unusual Houses That Are Now Tourist Attractions (PHOTOS)
And no HOAs.

Yet another HOA flag flap -- film at 11

Fan takes flack for flying sports flag

ALBUQUERQUE (KRQE) - A flap over a flag is brewing in an Albuquerque neighborhood after the Ventana Ranch Homeowners' Association ordered a resident to take down his Pittsburgh Steelers flag.

Ronnie Martinez said he couldn’t believe it when he got a violation notice, or “friendly reminder,” in the mail two weeks ago.

“They're saying it’s a friendly reminder but,” Martinez said

That friendly reminder is ordering him to fold up a flag bearing the name of his favorite NFL team, the Pittsburgh Steelers, because signs are forbidden under Ventana Ranch HOA’s covenant.

Tuesday, October 12, 2010

Homeowners association sues its own members, racks up $80,000 legal bill

Homeowners association sues its own members, racks up $80,000 legal bill

SAN ANTONIO - A fight between a Northeast Side homeowners association and their members has turned into an all-out war. It led to a lawsuit that has already cost more than $80,000 in legal fees. These fees will have to be paid by the HOA.

To some in the neighborhood the president of the Ventura HOA, Lisa Pfeiffer, is a bully. Eight of her neighbors say she is suing them because they tried to kick her out of office. It all started when they called a special meeting to kick out board president Pfeiffer after they became unhappy with how she was running things for the HOA.

“It's a classic example of intimidating -- picking a few people to intimidate the rest of the association, so that no one challenges them any further,” said Brenda Johnson.


It's been said that in a democratic government, voters and not guns determine who governs. Apparently the latter is called upon to decide in Privatopia -- not weapons but hired guns in the form of attorneys.

Robo-signers: Mortgage experience not necessary

Robo-signers: Mortgage experience not necessary

NEW YORK – In an effort to rush through thousands of home foreclosures since 2007, financial institutions and their mortgage servicing departments hired hair stylists, Walmart floor workers and people who had worked on assembly lines and installed them in "foreclosure expert" jobs with no formal training, a Florida lawyer says.

In depositions released Tuesday, many of those workers testified that they barely knew what a mortgage was. Some couldn't define the word "affidavit." Others didn't know what a complaint was, or even what was meant by personal property. Most troubling, several said they knew they were lying when they signed the foreclosure affidavits and that they agreed with the defense lawyers' accusations about document fraud.

The Great Depression began in October 1929 with the collapse of the stock market bubble, inflated by everyone and their cousin buying stock on easy credit with the expectation that the market could go no where but up.

The current economic downturn -- often compared to the 1930s -- will likely be remembered similarly. Mortgage lenders tossed underwriting standards out the window and extended mortgages to anyone who could fog a mirror holding the same "sky's the limit" expectations of residential real estate. The sad story continues to unfold, with mortgage servicers reportedly setting minimal qualifications for those who process foreclosures.

Friday, October 08, 2010

BofA halts foreclosure sales in 50 states

BofA halts foreclosure sales in 50 states

Charlotte, N.C.-based Bank of America Corp., the nation's largest bank, said Friday it would stop sales of foreclosed homes in all 50 states as it reviews documents used to process foreclosures. A week earlier, the company had said it would only stop such sales in the 23 states where foreclosures must be approved by a judge.

"We will stop foreclosure sales until our assessment has been satisfactorily completed," company spokesman Dan Frahm said in a statement. "Our ongoing assessment shows the basis for our past foreclosure decisions is accurate."

This appears to be the beginnings of a foreclosure holiday with lenders finally realizing that mass foreclosures aren't benefiting anyone and may well exacerbate and extend weak economic conditions, leading to even more non performing mortgages in a classic unvirtuous cycle. The legal brouhaha over the validity of foreclosure documents provides a convenient and face saving rationale for a hiatus on foreclosures. Lenders may also be realizing that their notes could be more easily recoverable and worth more in the future when the legal and economic climate is less uncertain.

The other foreclosure crisis gets more press

Fox Business: Can my homeowners association really foreclose on my home?

In California, for example, associations may begin the foreclosure process only 75 days after a missed payment was first due, while a tax collector must wait five years before beginning the foreclosure process for a tax lien. Associations are not required to go through a court to foreclose, as a property owner would to evict a tenant. Also, homeowners do not receive the benefit of the homestead exemption when their house is foreclosed upon by an association, as they would in the case of any other money judgment.
Yes, it can. The mortgage foreclosure crisis has gotten a lot of press. Now so are foreclosures by HOAs, which by comparison to lender foreclosures come far faster and less mercifully -- and well before the tax man comes calling for delinquent property taxes.

Nonprofits Unable To Keep Up With Growing Suburban Poverty, New Reports Say

Nonprofits Unable To Keep Up With Growing Suburban Poverty, New Reports Say: "two analyses released this week by the Brookings Institution show suburban poverty has skyrocketed in recent years and the way in which social services are lagging behind this shift."
Nobody likes the suburbs except suburbanites...who are the majority of the US population.

Obama won't sign bill that would affect foreclosure proceedings

Obama won't sign bill that would affect foreclosure proceedings: "At least 10 states - with Iowa and Delaware being the latest - are seeking to expand a voluntary freeze on foreclosures by some of the nation's largest mortgage lenders to include more companies and more regions. And calls have increased for a nationwide moratorium - a move that could deal a blow to the earnings of big banks and grind to a halt the sale of millions of properties in foreclosure."
I hear from real estate attorneys that banks have been holding off on foreclosing because they have too much REO property already and they can't sell it, so they don't want to acquire more and put it on the market, which would only drive prices down further. But even with that voluntary restraint, the foreclosure process is hopelessly glutted and gridlocked.

Thursday, October 07, 2010

Suburbs take hit as US poverty climbs in downturn

Suburbs take hit as US poverty climbs in downturn

More than half, or 57, of the 100 largest U.S. metro areas had substantial increases in poverty. They were most evident in Sun Belt suburban areas including Modesto and Riverside, both in California, as well as Lakeland, Fla.; Orlando; Miami and Tampa, which had seen large population gains during the housing boom.
That's Privatopia and this negative trend may at least partly explain why lots of HOAs are coming up short on assessments.

Wednesday, September 29, 2010

Madison: Gated City?

Madison: Gated City?

Madison Mayor Mary Hawkins Butler’s recent strategy to keep outsiders from attending a city festival is consistent with the city’s history of enforcing strict neighborhood covenants and zoning regulations that restrict rental properties in the city. Madison has long promoted itself as more of a club than a city, but last week, after Hawkins Butler cited Franklin, Tenn., as a model city for a residents-only festival, Franklin officials said they had never heard of such a practice.

Hawkins Butler told the Madison County Herald Sept. 18 that the city was cancelling this year’s annual family fall festival, FreedomFest, because of unexpected budget expenditures and the high number of non-Madison residents who attended the event in the past.

Another example of what the perfessor would say illustrates how municipalities are adopting restrictive, HOA-like behaviors.

Tuesday, September 28, 2010

Privatization as a plutocratic plot: They Want To Privatize Everything | California Progress Report

They Want To Privatize Everything | California Progress Report

One of the most important trends afoot right now is the move to privatize as many government services as possible. Billionaires like Bill Gates, along with hedge funds, are pushing an agenda of privatizing public schools, and funding a PR push in support of that cause with films like "Waiting for Superman" and the NBC "Education Nation" that included a panel with the title "Does Education Need a Katrina?".

This trend is fueled by the desire of the richest Americans to seek new income streams. Instead of spending their cash hoard on innovating new products or businesses that can create jobs and lasting economic activity, they're engaged in a process of rent seeking, which has no productive value. By taking tax dollars that currently provide public services and channeling them to the private sector, which contracts to provide the service at lower cost - and therefore at lower quality - these wealthy individuals can add new income streams while also blunting any effort to raise their taxes to provide these services.

Friday, September 24, 2010

Police: Conn. man stole flag, put up hippo toy

Police: Conn. man stole flag, put up hippo toy

WATERBURY, Conn. – Call it the case of the flying hippo. Connecticut police said a man stole an American flag from Waterbury's Town Plot Park and hoisted a stuffed hippopotamus toy in its place. Twenty-three-year-old Jeffrey Kovic, of Waterbury, was arrested and was being held in lieu of $100,000 bail on misdemeanor larceny, criminal mischief and conspiracy charges.

Good thing he didn't fly the hippo from a pole in Privatopia or he would have faced both public and private prosecution.

Monday, September 20, 2010

Ozone layer 'is no longer disappearing and will return to full strength by 2048' | Mail Online

Ozone layer 'is no longer disappearing and will return to full strength by 2048' | Mail Online
"The ozone layer is no longer disappearing and could be back to full strength by the middle of this century, UN scientists have confirmed.

The phasing out of nearly 100 substances once used in products like refrigerators and aerosols has stopped the ozone layer being depleted further, although it is not yet increasing, according to a new United Nations report released last week.

Read more:
About time we had some good news, isn't it?

Friday, September 17, 2010

Banks win delay in demolition of abandoned Fort Lauderdale condo complex

Debris is strewn across the 58-unit complex along the north fork of the New River. The doors and windows have been stripped away. Vandals have destroyed walls and ripped out copper wiring and plumbing. The city has been paying for metal shutters to keep away squatters.

Ever wonder what happens when an association goes defunct? It is not pretty.
And what happens to all those property values that were being protected?

Thursday, September 16, 2010

When a municipal election resembles Privatopia

Here's a story of a city council election out of Isleton, California, population 820, that might just as easily been about an HOA election. The incumbents are running unchallenged because the few candidates who considered running were apparently not sufficiently motivated to serve to even make sure their candidacy papers were in good order.

Wednesday, September 15, 2010

Yellow mailboxes latest symbol of anti-HOA protest

Mailbox battle in Chesterfield's Brandermill brings protest

Day by day, more of the yellow boxes are popping up. In fact, one more for our camera early this morning. They are standing out in a community making a big visual statement about a decision that hits their wallet. But it's a decision that the community association board says has been publicized for months, like in the community newspaper.

They are hard to miss -- one yellow box after another. When-Dee Morrison spearheaded this protest. "They definitely stand out. It doesn't go with our park-like setting," Morrison said. This, just days after the Brandermill Community Association decided each home in this community must get this new mailbox. Those boxes would cost $155.
As political scientists are wont to do, Evan McKenzie, the owner of this plot of cyberspace real estate, has labeled the yet unorganized political movement that rejects the authority of private HOA governance (but oddly doesn't lobby states to repeal HOA enabling statutes) as the Pink Flamingos.

That token of expressing discontent and defiance arose out of HOAs going after inmates who dared to plant the tacky pink plastic avian decorations on their front lawns, potentially driving down property values faster than a trailer park full of deteriorating double wide FEMA trailers.

Now another symbol of protest against dictatorial, unresponsive Privatopian government has emerged: the yellow mailbox. Perhaps not coincidentally the same color of the Gadsen "Don't Tread on Me" flag that has become the symbol of a somewhat more organized political movement called the Tea Party.

Monday, September 13, 2010

Rule breakers, beware: New law gives homeowners' associations more muscle - Home & Garden -

Rule breakers, beware: New law gives homeowners' associations more muscle - Home & Garden -
Fred Pilot sent this link-seems that Florida is giving HOAs fining and even foreclosure power for rule violations.

Homeowner's Association Uses Chopper To Find Violations - Local 2 Investigates News Story - KPRC Houston

Homeowner's Association Uses Chopper To Find Violations - Local 2 Investigates News Story - KPRC Houston
I'm posting this because an anonymous poster copied and pasted a huge part of the story into a comment. I'm deleting the comment and posting the link to the story.

Folks, we need to be a lot more careful about using big blocks of text from copyrighted on line news stories. There is a "fair use" doctrine that allows posting a little bit of these stories and then commenting, but just putting in all or most of a news story is copyright infringement. There are lawsuits going on against bloggers right now, for doing exactly that--even if the source was cited.

So please avoid this, OK? Keep the story snippets short and always include the source and hyperlink.

Big Brother is searching you - Computerworld

Big Brother is searching you - Computerworld

"The town of Riverhead on Long Island usedGoogle Earth to search all back yards in the town for illegal swimming pools.

They found about 250 pools built without permits and collected about $75,000 in fines."


This came from Mystery Reader. I remember prosecuting drug cases where the search warrant was based on aerial surveillance, and the Supreme Court ruled on issues such as how high the plane had to be, etc. But now government can use Google Earth and zoom right in. / US / Economy & Fed - US state steps in to meet city’s debt cost / US / Economy & Fed - US state steps in to meet city’s debt cost
The state of Pennsylvania has stepped in to help its capital city Harrisburg avoid a default by advancing next year’s state aid so that the money can be used to make a $3.3m bond interest payment due this week.
It seems to me that the policy makers of this country and the educated population ought to be figuring out how to restructure the financing of state and local governments, before we have a housing-industry-style, sector-wide, meltdown. Doesn't seem to be a major concern, though.

Sunday, September 12, 2010

SIDE STREETS: HOA acting squirrelly at Lexington Park and everyone appears to be nuts

SIDE STREETS: HOA acting squirrelly at Lexington Park and everyone appears to be nuts

It sounded too wild to be true: A woman claimed her efforts to rescue a squirrel had incited the wrath of her homeowners association board and led to harassment, hundreds of dollars in fines, and even allegations of felony theft lodged against her with police.

So I contacted the president of the Lexington Park Townhomes HOA figuring I’d clear it up and move on.

But Chad Farris, the HOA president, declined to talk to me. Ordered me not to use his name. Wanted me to meet him “in a public place with my attorney present.”

Hmm. Maybe the squirrel lady isn’t nuts, after all.

Indeed. And kudos to the writer of the headline for this tale of HOA insanity.

Friday, September 10, 2010 - Cities Increasingly Turn to 'Trash Police' to Enforce Recycling Laws - Cities Increasingly Turn to 'Trash Police' to Enforce Recycling Laws

In a growing number of cities across the U.S., local governments are placing computer chips in recycling bins to collect data on refuse disposal, and then fining residents who don't participate in recycling efforts and forcing others into educational programs meant to instill respect for the environment.

From Charlotte, N.C., to Cleveland, Ohio, from Boise, Idaho, to Flint, Mich., the green police are spreading out. And that alarms some privacy advocates who are asking: Should local governments have the right to monitor how you divide your paper cups from your plastic forks? Is that really the role of government?


I'd say, "no."

Wednesday, September 08, 2010

Cars on blocks. Knee-deep grass. Going to seed. Around a neglected above-ground pool. In the front yard. Chartreuse-and-fuchsia repainting jobs. Beds of silk plants. Bordered by pinwheels acquired at a dollar store end-of-the-season closeout sale.

The horror. The horror.

Apocalyptic prospects

The remote chance that one or some combination of these apocalyptic prospects could come to pass on your block is why deed restrictions and their enforcement arm - the homeowners association - evolved. It turns out, apparently, after Woodstock and Vietnam, we no longer trust one another to tend to our corner of the American dream as fastidiously and tastefully as June and Ward Cleaver (the 1980s Clair and Cliff Huxtable notwithstanding).


To that, the HOA abolitionists cry "HOA apocalypse now!"

HOA residents told garbage pick up their problem

Subdivision residents appeal for service they didn't get

Meredith Baker was happy and excited on the day in June when she and her family moved into their new house in the Country Meadows subdivision in the Village of Hamburg — until she found that there was no one to pick up the garbage.

“I called the village the next day and said, ‘What day is our garbage pickup?’ ” she said. “They said, ‘What are you talking about? We don’t pick up your garbage.’ ”

Then she called Ryan Homes, the builder of her house, and asked whether the homeowners association picked up the garbage, and she was told she would have to buy the service herself.

Financial crisis hits condo associations Amy Hoak's Home Economics - MarketWatch

Financial crisis hits condo associations Amy Hoak's Home Economics - MarketWatch: "The current problems only exacerbate what's been an issue for years, some say. Many condo associations aren't prepared for major maintenance jobs due to ill-funded reserves and insufficient planning, said Evan McKenzie, a political science professor at the University of Illinois at Chicago, who has written about homeowner associations."

CONSUMER FINANCE: Condo Owners Trade Lawn Mowers For Spread Sheets -

CONSUMER FINANCE: Condo Owners Trade Lawn Mowers For Spread Sheets -
This McKenzie guy is spouting off again.

Paying the tax man when Privatopia craters

Paying the tax man when Privatopia craters

The crippled Las Vegas housing market has triggered a legal battle pitting investors buying foreclosed homes against homeowners associations, with millions of dollars at stake.

The key issue — and what will probably be dragged out all the way to the state Supreme Court — is collection companies tacking on their fees to the delinquent HOA dues they have been trying to collect, in many cases for longer than a year. If associations lose and can’t get past-due fees, assessments on paying homeowners will probably increase.

That additional charge for collections has run several thousand dollars in some cases and exceeded what the investors sometimes had to pay in delinquent HOA dues. With collection costs averaging about $2,000 per foreclosed home, investors said the amount owed could easily surpass $50 million.

When local government privatizes, so does the task of collecting property assessments. Private local government collection costs are just too doggone high, claim investors who are being hit up for past due HOA assessments on thousands of Las Vegas REO properties. The community association collection industry counters with dark warnings that HOAs will go into receivership and assessments will increase if the assessment collectors don't get their due.

This is one of the drawbacks of privatizing local government. The tax collectors aren't paid by the taxpayers but rather via private contracts to act as the HOA's proxy. As this Las Vegas Sun story illustrates, that can lead to some nasty litigation.

Tuesday, September 07, 2010

Questions raised about tombstone removal from small historic cemetery in Holmdel | | Asbury Park Press

Questions raised about tombstone removal from small historic cemetery in Holmdel | | Asbury Park Press: "'The tombstones of children who passed away in the 1800s and those of their family members were unceremoniously destroyed. This was essentially sanctioned vandalism at the behest of a board.'

But Beau Ridge Association president Edward Esler said everything was done by the letter of the association's laws.

'There's no story here,' Esler said. 'By the bylaws of our organization, we are required to maintain that area, which was done when the place was built 25 years ago and is being done now. Everything we've done has been done to the letter of the law.'"
The HOA charm campaign contines.

Monday, September 06, 2010

FloriDUH: HOA charging $600 for a mailbox

FloriDUH: HOA charging $600 for a mailbox

Now the association is trying to turn the neglected neighborhood around by charging fees to new buyers lured by low home prices. They think homeowners who didn't pay mortgages or dues for years should not be allowed to just walk away and leave behind an eyesore, reports

The community started charging buyers a $400 transfer fee, then a $225 fee to release liens against the property. There is also a $250 charge to prepare a letter detailing the fees owed. If buyers or sellers opt to do the work themselves, there is a $75 fee for the association to review the work, reports

And $600 for a mailbox.

Do homeowner regulations go too far? |

Do homeowner regulations go too far? | "New Hanover County Fire Marshal Matt Davis said investigators don't know whether Darius intended to die in the fire or just wanted to blow up the house because of the ongoing problems with his homeowners association."
That's quite a sentence, isn't it?

Bladder Lane, Bent Street and Butt Hole Road – the street names that reached the end of the road - Telegraph

Bladder Lane, Bent Street and Butt Hole Road – the street names that reached the end of the road - Telegraph: "Dozens of councils across Britain have reported cases of residents changing the names of their street because they dislike the one on the map.
In some cases, the name change has followed years of ridicule.
The inhabitants of Butt Hole Road even had to put up with coach loads of US tourists visiting to have their pictures taken near the road sign, after the street appeared in an American book and on the internet."

This is the opposite of what developers do, where they name streets in a desert something like "Ocean Wave Lane."

Housing Choice - Help Today’s Owners or Future Buyers -

Housing Choice - Help Today’s Owners or Future Buyers - "As the economy again sputters and potential buyers flee — July housing sales sank 26 percent from July 2009 — there is a growing sense of exhaustion with government intervention. Some economists and analysts are now urging a dose of shock therapy that would greatly shift the benefits to future homeowners: Let the housing market crash."
Home values have already dropped 30%. What does "crash" look like, please?

Walter Russell Mead's Blog - The American Interest

Walter Russell Mead's Blog - The American Interest: "Automation, outsourcing and unremitting pressures to control costs are going to squeeze upper middle class incomes.� What blue collar workers faced in the last thirty years is coming to the white collar workforce now.

Yet as their financial prospects darken, students’ educational costs are exploding.� Like the health care system, the educational system is being overwhelmed by rising costs and rising demand.� And as misguided government policies contributed to the real estate bubble by artificially inflating demand, government programs are burdening students with unpayable loans and contributing to relentless and unsustainable inflation in school costs."

Mead is a famous political science professor at Yale and Bard College.

Sunday, September 05, 2010

When the HOA forecloses: This isn't like a tax assessor's sale

When paying the mortgage is not enough

When Becky and Chris Hobbs' home was foreclosed on and the family evicted from it this spring, the couple had not missed a house payment. They had, however, not paid their homeowners association dues. "I had no idea that anyone other than your mortgage company can evict you from your house," Becky Lew-Hobbs said. "It's absurd to me that one late payment can evict you."

Skipping out on homeowners association dues can have extreme, and often unexpected, consequences. Increasing numbers of the neighborhood-based groups are turning to foreclosure proceedings to collect on overdue fees, which the associations use to maintain community clubhouses, pools and the like.
People who have suffered a big loss of income in the economic contraction may figure that as with delinquent property taxes, they can settle up with the assessor's office when their financial situation improves. Wrong. HOAs come knocking years before the tax man for significantly much smaller sums. Since HOA assessments are considered private and not public obligations, private attorneys play the role of tax collectors. And they charge big fees for doing so, often multiples of the underlying amount owed. Good work if you can find it or an appalling scam -- depending upon your perspective.

U.S. housing value down at least $4 trillion | Philadelphia Inquirer | 09/05/2010

U.S. housing value down at least $4 trillion | Philadelphia Inquirer | 09/05/2010: "Since the real estate boom ground to a painful close about 31/2 years ago, the nation's housing stock has shed from about $4 trillion to $7.1 trillion in value."
Ouch. How about this quote from a developer: "The perception of homeownership as a wealth builder has suffered a deep setback." No. Really?

In struggling housing market, buyers and sellers are out of sync

In struggling housing market, buyers and sellers are out of sync: "Across the Washington region and around the country, the expectations of buyers and sellers are out of whack, thwarting deals that could potentially lift the U.S. housing sector from its long funk. The nascent rebirth of the market earlier this year proved to be a mirage."
Sellers think their homes are worth about twice what anybody is willing to pay. An acquaintance of mine just bought a home in foreclosure. It was sold new in 2006 for $370,000. The absentee owner, who bought it as a (really bad) investment, has been trying to unload it and eventually he couldn't even find a tenant for it. The house sat vacant for a while and finally the owner just let the bank take it in foreclosure. At the foreclosure sale the bank wanted about $154,000. Only my acquaintance even bid on it--for one dollar above that figure. He got it.

There are three houses for sale on my street. One has been on the market for almost two years, the others over a year. No action. I'm sure they could be sold, but the prices would have to come down so low the owners either couldn't pay off the mortgage or would consider their lives ruined.

And every TV talking head keeps talking about "the recovery." Yeah, sure.

The Ogallala Aquifer and Its Role as a Threatened American Resource - APEC HRDWG Wiki

The Ogallala Aquifer and Its Role as a Threatened American Resource - APEC HRDWG Wiki
Here's some info on what I refer to below...

The Ogallala aquifer is being used today to supply residential and agricultural communities across eight Midwestern states. For nearly 80 years the nation’s breadbasket has been irrigated from Ogallala groundwater—a practice so unsustainable it severely threatens an aquifer that had flourished for over a million years. Farmlands are already shrinking on some portions of the Ogallala that have been mined of water. As the water table continues to plummet the High Plains will have to take drastic measures, whether communities import costly water or abandon the most profitable farming in the nation. Either way the decision has to be made soon because the aquifer that once held enough water to cover the entire United States under 1.5 feet of water is rapidly running out.

Aral Sea Almost DRIED UP: UN Chief Calls It 'Shocking Disaster'

Aral Sea Almost DRIED UP: UN Chief Calls It 'Shocking Disaster': "NUKUS, Uzbekistan -- The drying up of the Aral Sea is one of the planet's most shocking disasters, U.N. Secretary-General Ban Ki-moon said Sunday, as he urged Central Asian leaders to step up efforts to solve the problem.

Once the world's fourth-largest lake, the sea has shrunk by 90 percent since the rivers that feed it were largely diverted in a Soviet project to boost cotton production in the arid region."

The Aral Sea is one especially horrible example of what is happening to the world's lakes and rivers. Damming rivers for crackpot schemes to irrigate deserts and build cities where only reptiles would be comfortable; industrial pollution; overpumping of ground water that won't recharge for a thousand years; using millions of gallons of water to extract oil from tar sands, and on and on. We are about 10 to 20 years from a global water crisis, and in fact it has already started in some places.

Now, let's bring this down to the US and the housing industry. The western US is sucking rivers dry and draining the aquifers so deep that the ground is subsiding. The Rio Grande is running dry. Some years it doesn't even reach the Gulf of Mexico. The Colorado River is in danger of basically drying up by 2050 or so, by some estimates. The level of the Ogallala aquifer that underlies the midwestern US and supports 1/5 of our agriculture is being overdrawn so badly that is dropping by 1.75 feet per year. It took 6000 years to fill, and the most dire estimates say it will run dry in 25 years. I could go on, but if you take a look at this book or any number of others with a similar message, you will see that the evidence for an impending world water crisis, including parts of the US, is overwhelming.

Now--with that as the background, what are the implications for the American real estate development industry? For example:

1. Should developers be permitted to build new subdivisions in deserts and other places that don't have sufficient water (such as Atlanta, GA)? Is it wise to keep building vast quantities of housing in and around Las Vegas, Phoenix, Tucson, Atlanta, Riverside and San Bernardino, etc., when they are pumping in or otherwise stealing millions of gallons of water already?
2. Should golf courses be permitted at all in such locations? Or is it time to shut them down in order to avoid wasting water?
3. Should local communities be allowed to adopt building moratoriums and keep developers out entirely, on the sole grounds that there isn't enough water?
4. Should HOAs be forced by state law to permit low-water yards, regardless of what the governing documents say?
5. Should state laws impose water conservation measures on cities and HOAs?

What do you think?