Nevada Lawmakers Discuss Homeowners Assoc. Bills

A commission on common interest communities had set caps on those fees, but Copening said Governor Brian Sandoval lifted those caps when he took office. "The governor put a cap on all regulations, so it never went into effect."

Copening is not alone in her effort. Republican Assemblyman John Hambrick.

"We have all heard of horror stories of huge fees," said Hambrick. "A $20 late bill, turning into a $5,600 penalty and all that money goes to the collective agencies. Those stories need to stop."

Copening wants a $1,950 cap on homeowners association fees. However, Hambrick said he isn't prepared to put a number on it. "I would like to see a cap, but I don't want to put a specific dollar amount on it yet."

From Fred Fischer: Nevadans share horror stories of HOAs.

Nevadans Share Horror Stories of HOAs

When HOAs are created to satiate government bureaucrats, rather than homeowners, it shouldn't be surprising that many HOA communities are neither well-crafted nor homeowner-friendly. But, the solution to the HOA problem is not more government intervention. It is less. The first step is for government to stop mandating and subsidizing the creation of HOAs. Nick Dranias, Goldwater Institute

State legislators for many years have been getting an earful from property owners over housing association contract governance yet they fail to understand the root causes of the conflicts and act accordingly. It’s the same issues that faced early colonial America until they finally acted and abandoned charter Board governance in favor of something better where “we the people” have a place and vote at the creation table and legislators should do the same.

Privatizing services is one thing but privatizing housing is a whole other animal and without a doubt most likely unconstitutional. Because it first represents the delegation of inalieable rights to others which clearly violates constitutional law. Second it gives the developer and industry member professionals who sit at the contract creation table the right to dictate what they want the behavioral and social standards of the eventual owners to be. Even though they themselves most often do not, will not or ever live in the housing association that they create with voting standards so high that it assures that changes by eventual owners will not likely occur !!!

Mr. Drains is correct that the substantial reforms needed concerning these contractually-created associations probably won’t come from State legislation for two primary reasons. 1) The housing association trade group lobby, which is fully funded by the housing association members has the most access and greatest economic influence upon State legislators. The initial CID legislation of forty years ago that includes a large number of today’s accompanying housing association legislation was authored by the housing association trade members and supported by municipalities. Consequently neither party has an economic or social incentive to either abandon or move away from what they have exclusively created and control for their own benefit. In fact the more conflicts and problems that occur with their created “corporate product” the more the industry prospers economically and politically. 2) The very foundation of the CID housing model is its governance which is based on private contracts. Except are housing associations valid contracts when mandated and created by others as compared to if owners voluntarily create them after development build out ? When did “a meeting of the minds” between the developer and the buyers occur to create the contract? Why are the contracts (declarations) devoid of important disclosures of information that potential buyers into these nonprofit corporations are in titled to know ? When potential buyers consider signing a housing sales contract, is the attached HOA contract genuinely voluntary since refusal to accept its provisions and authority leaves the buyer with only one choice, to walk away? How can this be a “voluntary act” when neither the association nor the homeowners had actual notice or meaningful reflection to accept or reject such a contract given the fact that it was drafted by the developer as required by municipal mandate and then imposed upon the association before the homeowners existed or took control of the Board ?

The endless and “fundamentally unworkable” issues that surround privatized housing when under the authority of private contract governance created by others will continue. Until the property owners have a place, voice and vote at the governance creation table and their constitutional property and other rights returned. Because when housing is privatized, owners are reduced to being renters and only owners in name and this needs to change since contract governance is not the only or best way to govern CID housing !!

Thanks, Fred Fischer

BBC News - South Africa: Toxic water 'threatens Johannesburg'

BBC News - South Africa: Toxic water 'threatens Johannesburg': "Rapidly rising acidic water in the abandoned gold mines under Johannesburg in South Africa could leak out early next year, the water ministry warns."
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Thanks to David McKenzie for the link. Water pollution and water scarcity will be enormous problems in many places in the years to come. Phoenix and Las Vegas, for examples...

FT.com / FT Magazine - Aerotropolis

FT.com / FT Magazine - Aerotropolis: "“[The Koreans] tracked us down, wanted us to build a city in the ocean, and no one else was interested. What was going on here?” Gale said. “Their vision scared everyone else away. It wasn’t until I saw the airport that I understood where they wanted to go with this.” The answer: to China. The sales pitch to prospective tenants is simple: move here and you’re only a two-hour flight away from Shanghai or Beijing. You’re four hours away at most from cities you’ve never heard of, such as Changsha, which happens to be larger than Atlanta or Singapore. Nearly one billion people are a day trip away.

“China alone needs 500 cities the size of New Songdo,” Gale told me, and he hopes to break ground on the next one in Chongqing sometime this year. How many will be umbilically connected to the nearest airport? “All of them.” "
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Thanks to David McKenzie for this link.

Investors snap up cheap homes, new buyers miss out - Yahoo! News

Investors snap up cheap homes, new buyers miss out - Yahoo! News: "WASHINGTON – Home sales are starting to tick up after the worst year in more than a decade. But the momentum is coming from cash-rich investors who are scooping up foreclosed properties at bargain prices, not first-time home-buyers who are critical for a housing recovery.

The number of first-time buyers fell last month to the lowest percentage in nearly two years, while all-cash deals have doubled and now account for one-third of sales."
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And I hear that condo units are popular with this type of buyer. They form a syndicate and buy up many units in the same building so they can control the association and do whatever they want with the property.

When Will the Housing Recession End? A Graphical Illustration Why the Downturn Will Persist Through 2013

This is an interesting web site that offers a pointed opinion on the causes of the current "affordable mortgage depression," as the author calls it.

Condo deals die in shadows of financially distressed buildings

It's not just the borrower who has to be up to snuff, it's the building, too, and in the Chicago area there are plenty of buildings that lenders won't touch.

Among the deal killers: too many renters in a building, pending litigation, inadequate association reserves and delinquent assessments. Those are some of the criteria lenders must look at in order to sell the loan to Fannie Mae or Freddie Mac, the troubled, government-sponsored entities, and the Federal Housing Administration, the first choice for many first-time homebuyers. Combined, the three agencies account for about 90 percent of the secondary loan market.
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But the problem is not that the GSE's won't buy or insure the loan. The problem is that developments like this are in trouble, and the lenders know it, and the buyers should have sense enough to realize that, but they want to buy anyway. Who in his or her right mind would buy a condo unit in a building that has no reserves?

California Proposed legislation

This just in from Marjorie Murray:

SB561/Corbett Targets Illegal Debt Collector Contracts

California Senate Majority Leader Ellen Corbett has introduced SB 561, a bill designed to
protect both homeowners and association boards during the assessment collection process.

HOA debt collectors routinely strike contracts with associations – or their agents -- that void the
board’s assessment collection DUTIES under EXISTING law. The debt collector then coerces the homeowner into signing a payment plan that voids his RIGHTS under EXISTING law.

SB561 targets both practices. Voiding either board duties or homeowner rights via these
contracts puts the association at legal risk.

How do these debt collection contracts work?

The debt collector coerces the homeowner into “agreeing” that, when s/he makes a payment,
the debt collector can pay himself instead of paying down the assessments owed, as required
by EXISTING law (Civil Code 1367(a). Because the debt collector is paying himself first, the
association typically gets paid last. This is irrational, given that the purpose of hiring the debt
collector in the first place is to recover assessments and give them to the HOA.

Not applying the homeowner payment to the assessment debt --obviously -- puts the owner at
risk of foreclosure.

CCHAL has documented numerous cases in which the homeowner was forced into a
payment plan, because homeowner “consent” is a condition of getting one. SB 561 clarifies
that these practices are prohibited by EXISTING law.

SB561 further specifies that the association cannot foreclose if the foreclosure is based on such
contracts. The bill says: “A waiver by an owner of his or her rights or a waiver by an association
of the association’s responsibilities under the act is void as contrary to public policy, and would
prohibit a foreclosure proceeding from being initiated or proceeding if it is based on an
agreement that is void.”

SB 561 applies to “Any debt collector, agent, or third party acting to collect payments or
assessments on behalf of an association.” This element of the bill is crucial, since debt
collectors often subcontract with other vendors during the collection process; the bill clarifies
that these parties too are bound by California’s assessment collection laws.

CCHAL urges all homeowners, board directors, and advocates to carefully read Senator
Corbett’s legislation at http://leginfo.ca.gov/pub/11-12/bill/sen/sb_0551-
0600/sb_561_bill_20110217_introduced.pdf

Reading and understanding the bill will enable homeowners and board directors in California’s
49,000 associations to counter any campaigns mounted by opponents of SB561 that distort
either its language or intent.

In 2010, the Community Associations Institute (CAI) built its statewide opposition campaign
against the Brownley bill (AB2502) around the fraudulent statement that the bill REQUIRED
homeowners wanting to negotiate a payment plan with the board to meet with the board in an
open meeting to discuss – or dispute – their debt. (AB2502 also dealt with the business
practices of association debt collectors.)

The bill said no such thing.

What AB2502 said was “IF REQUESTED BY THE HOMEOWNER, (this bill would)
require a meeting to discuss a payment plan to be held in an open session.” In other words, if
the homeowner wanted SUNSHINE shed on the negotiations, then s/he could request an open
session; if not, then the homeowner could meet privately with the board in executive session.

It was the HOMEOWNER who made the decision, but CAI claimed AB2502 forced the
negotiations out in the open.

Not true.

A Fact Sheet on SB561 -- prepared by Senator Corbett’s office -- is posted on the CCHAL
website: http://www.calhomelaw.org/doc.asp?id=1312. Use this as a guide to the bill, especially
if you are a board director, so you know what the bill says – and does.

But again, there is no substitute for reading the legislation itself. You can study it at
http://leginfo.ca.gov/pub/11-12/bill/sen/sb_0551-0600/sb_561_bill_20110217_introduced.pdf

Letters of support for the bill can be faxed to Senate Majority Leader Ellen Corbett, fax
916.327.2433. Please also thank Senator Corbett for carrying SB561 because it protects both
homeowners and associations.

Do fax (510.272.9830) a copy of your letter to CCHAL or email a pdf of it to
info@calhomelaw.org

SB561 is co-sponsored by the Center for California Homeowner Association Law (CCHAL) and
the California Alliance for Retired Americans (CARA).

SB561 specifically calls out the devastating effects of the debt collector’s predatory practices on
seniors. These cases have been documented in many NewsBriefs on the CCHAL website, e.g.
Curry v Association Lien Services; Fuller v Association Lien Services; Dacumos v Sunrise
Assessment; Santaella v Angius & Terry, etc.

A contract that one homeowner was forced into signing is on the CCHAL website:
http://www.calhomelaw.org/doc.asp?id=1156. Actually, the debt collector didn’t even demand
that the homeowner sign it: the plan says that just mailing a payment meant the homeowners
was ”consenting” to the debt collector’s plan to collect his profits first before paying down the
assessments.

A downloadable flyer of homeowner rights under EXISTING Californbia law during assessment
collection is on the website at http://www.calhomelaw.org/doc.asp?id=1315. It also lists legal
resources for homeowners.

We will keep CCHAL members posted on SB561 as it goes through the policy committees in
Sacramento.

CCHAL NewsBrief
February 27, 2011
© 2011

L.A. Mayor Antonio Villaraigosa Wants a Six-Foot Security Wall Erected Around His Mansion

It's called the Getty House, and apparently, its stumpy rectangular bushes -- all manicured and Tudor-styled -- are not sufficient protection from the, er, elements of the surrounding neighborhood, described by Wikipedia as "small, historic and wealthy."

But no 'hood is small or wealthy enough to protect his royal highness. Much to the dismay of the Windsor Square Association, whose residents generally abide by the city's 42-inch yard-wall limit, Villaraigosa just applied for a six-footer:
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This lefty man of the people (he even went to People's College of the Law, after which he failed the bar exam four times) has decided that living in a ritzy community isn't enough. He needs a six foot fence to keep out the proletariat.

Nevadans Share Horror Stories Of HOAs

CARSON CITY, Nev. -- Heather Spaniol said she loved living in a neighborhood with a homeowner's association. But she described the past three years as harassment. Her car was towed twice and she was penalized for putting the trash cans out too early.Spaniol was among dozens of witnesses who testified before the Nevada Senate Judiciary Committee on Friday. She and others characterized association boards as "The Gestapo" and "cartels."At least 19 bills addressing homeowner associations have been requested this session.
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Reforms are also under consideration in Arizona where longtime HOA reform activists George Staropoli and Pat Haruff are once again working to counter community association industry lobbying efforts. In California, two bills that would overhaul the Davis Stirling Common Interest Development Act have been introduced.

The (mandatory) green grass of Privatopia

Homeowners who suffer from brown lawns are being told to dye their lawn green. If they don't, they are in violation of the homeowners association's rules and restrictions, and there could be consequences.

Neighborhood resident Bev McLain said, "We were very surprised that we would have to do this. I've never heard of dying your lawn green. This is our second notice; with the third they threaten to take you to court."
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As the perfessor said, you can't make this stuff up. It really happens. Looks like another HOA -- this one in Arizona -- is going to get its turn in the harsh glare of negative media coverage.

News Brief from California Center for Homeowner Association Law re foreclosure prevention workshop

This just came in from Marjorie Murray at the California Center for Homeowner Association Law:

Hi, Evan: Please post CCHAL’s NewsBrief on its foreclosure prevention workshop held Thursday at the University of California Riverside. We had a great turnout!



More than 60 homeowners, Legal Services and private bar attorneys, homeowners, housing counselors and federal officials from the U.S. Department of Housing and Urban Development (HUD) came to CCHAL's workshop “Protecting Homeowners from Association Debt Collectors and Foreclosure” on Thursday. Also in attendance was an attorney from one of the biggest association industry law firms in the state -- Fiore Racobs Powers.

The workshop focused on the nuts-and-bolts of the association lien: who records it and why. The association lien has now become an obstacle to homeowners attempting to get a loan modification on their first mortgage. Big lenders like Chase and Bank of America are telling homeowners that unless they get the assessment lien removed, they can’t even get in line to request a loan modification.

A key tool for getting the lien removed can be an affordable payment plan. But one HUD housing counselor reported that she couldn’t get the association lawyer to respond to her multiple requests for a payment plan, much less to give the homeowner an affordable one.

CCHAL routinely gets requests for one-on-one tutorials in the assessment lien from housing counselors and Legal Services attorneys working with HOA homeowners. The goal of Thursday’s workshop was to educate both homeowners and counselors as a group in strategies for removing the lien and/or negotiating an affordable payment plan.

Assessment liens are also an obstacle to short sales [Keyword: SHORT SALES on the CCHAL website.]

What few people understand – whether homeowners or counselors – is that the assessment lien may come to haunt the owner even if the bank forecloses. Workshop trainer Attorney Dan Mulligan explained that, if left unpaid, the assessment debt becomes a personal debt of the homeowner long after the home has been lost.

CCHAL sent a NewsBrief recently about the homeowner sued by Angius & Terry Collections for $11,000 in assessments and collection costs on a home she lost to foreclosure two years ago. The bulk of the figure is actually collection costs – not assessments due the association.

Association debt collectors routinely levy collection costs that are 5-10 times the amount of the assessments owed. There are no statutory caps on collection costs and assessment debt collectors are not regulated.

We hope that the attorney from Fiore Racobs Powers brings this message back to the HOA industry as a whole: its collection practices are injuring homeowners and creating more obstacles to economic recovery. If they themselves don’t reform their business practices, then somebody else might do it for them.

The workshop was held at the University of California Riverside Extension Center. We will soon be posting photos from the workshop on the CCHAL website: www.calhomelaw.org in the photo gallery.

CCHAL foreclosure defense workshops are made possible through the support of the California Attorney General's office.

CCHAL NewsBrief
February 20, 2011

Annandale civic association elects dog as president

Annandale civic association elects dog as president:
Dogs have many good qualities. Most of them are loyal, like people, and are housebroken. Can the same be said for all the humans who serve on boards like this?

I wish the Hillbrook-Tall Oaks Civic Association a good year under their new canine overlord. Woof.

Homeownership loses its luster

The economic downturn and stricter mortgage standards are driving much of that decline, but economists say there's also a growing belief among many that they can live better by renting rather than straining their finances to buy a house.

Adding to that is a sense among many younger adults that they will need to move for their careers, making them hesitant to buy lest they be forced to sell at a loss.

"We're becoming more of a renting/sharing society," said David Sleeth-Keppler, a psychologist who tracks consumer sentiment for Strategic Business Insights. "People are staying less bogged down, in case something bad happens."
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The pundits are saying people are so traumatized by the enormous volatility in residential real estate during the previous decade that they see homeownership as too risky an investment. However, as long as mortgage interest remains income tax deductible, that tax policy will provide an abiding incentive to own rather than rent and a hedge against downside investment risk.

Nevada PAC wants cap on HOA collection fees

A Nevada organization called CHAMP (Concerned Homeowners Association Members PAC) describes itself as "a broad-based group of concerned Nevadans that includes homeowner associations, residents, investors, credit counselors, business organizations, labor unions, chambers of commerce, minority groups, and many others" and advocates a cap on fees charged by HOA collection companies.

The name CHAMP seems familiar and the organization may not be a new one. It appears connected to an issue that exploded this past summer in Las Vegas, where investors looking for good deals on foreclosed properties within HOAs complained they were being hit up with excessive collection fees levied by HOA collection companies for delinquent assessments unpaid by the erstwhile owners. The fight is in the courts as noted on this blog in September.

Nevada HOA inmates rally against "bully boards," call for legislative curbs

Used to be some odd symbol of “belonging”—or for some, status—to be a part of an HOA (no trailer trash here!) neighborhood. What with all the cookie cutter neatness, lack of individuality and security gates, it’s the facade of a picture perfect community. And a mere facade it’s seemingly become for some folks in Nevada—with a rather ugly behind-the-scenes picture.

An article in the Las Vegas Review-Journal shares what basically boils down to a case of schoolyard bullying—only the playground is now the development, and the bullies are the HOA boards. Those who feel they’ve been bullied (e.g., one homeowner was unjustly fined for the transgression of erecting a fence for which the HOA had previously approved the plans) have now joined voices, if not forces, to rally last Monday against HOA “bully boards”. They’re mad as hell and they want the folks in Carson City to do something about it.

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After several years of silence, Silver State HOA inmates are letting their voices be heard in Carson City. I imagine Phil "The Ghostbuster" Testa, who organized a similar revolt a dozen years ago, is cheering them on from the grave.

HOA reform group targets law that allows Texas associations to repossess homes over HOA rules

Activists seeking to retool the way homeowner associations operate in the state headed to Austin today to do their thing like so many other special interests do.

But this group is particularly cohesive and adamant about current state laws that allow associations or lenders to repossess a home for infractions of association rules.

“And we now have our first lobbyist, Robert Doggett, who is helping us pro bono,” Beanie Adolph, who has been a tireless solider in the battle, said in an interview with Texas Watchdog. Among the things that the group is fighting for this session is to make HOAs subject to the state’s open records and open meetings laws.

The state effort is part of a national move to police HOAs, which activists allege have become political fiefdoms and sometimes profitable machines for real estate and development companies.
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For the rest of the story by Texas Watchdog and to learn the identity of the HOA inmate activist sued by a community assocation industry plaintiff and solon, click here.

Modesto Neighborhood May Hire Armed Guards To Cut Down On Crime « CBS Sacramento

Modesto Neighborhood May Hire Armed Guards To Cut Down On Crime « CBS Sacramento: MODESTO (CBS13) – Residents in a Modesto neighborhood are so concerned about crime they may bring in armed security guards.

The residents are members of the College Area Neighborhood Alliance.
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I gather that this "alliance" is a voluntary neighborhood association. Normally this sort of thing fails because of the free rider problem: not enough people contribute to pay for the services. The free rider problem gets solved in HOAs by mandatory membership, the power to assess for common expenses, and the sometimes-Draconian assessment collection methods. That solution, however, leads to all the abuse of power issues that we see so often.

Philly Homeowner Declares He's 'Foreclosed' on Wells Fargo - The Consumerist

Philly Homeowner Declares He's 'Foreclosed' on Wells Fargo - The Consumerist:
Thanks to Mystery Reader for this "man bites bank" story. We need more of this.

Facing Foreclosure Without Missing A Payment: One Couple's Housing Nightmare

Facing Foreclosure Without Missing A Payment: One Couple's Housing Nightmare: "No one, the Parkers say, told them their loan had been sold. With no word from the new servicer, New Jersey-based PHH Mortgage, the Parkers sent their first payment to the original bank, which mailed the check to PHH, according to documents the Parkers provided to The Huffington Post. But that check went missing. The Parkers say that despite the fact that they made every other payment, that missing check led to foreclosure proceedings, and a wrecked Kendra Parker's credit rating.

Soon, the mortgage company informed the Parkers that they were three months past due and owed over $3,000."
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Nice system we have in place here. Maybe we could prevent things like this by making it a crime to foreclose without cause and putting some of these bankers in jail. Just a thought.

California Attorney Fees in HOA actions

Here's a link to a blog on California attorney fee cases concerning HOAs. Who gets their fees paid?

Daniels 1, Obama 0 - The Daily Dish | By Andrew Sullivan

Daniels 1, Obama 0 - The Daily Dish | By Andrew Sullivan:
Mitch Daniels may run for the Republican presidential nomination, and he is combining fiscal responsibility with moderation on social issues. Once upon a time there were quite a few Republicans like that. It will be interesting to see how he fares in the primaries. There are plenty of right-wingers lining up.

Villagers outraged after police order them not to protect garden sheds | Mail Online

Villagers outraged after police order them not to protect garden sheds | Mail Online: "Residents in Surrey and Kent villages have been ordered by police to remove wire mesh from their windows as burglars could be injured."

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Property rights don't count for much in the UK anymore...

The HOA Murders by Leon Robertson in Mystery & Crime

The HOA Murders by Leon Robertson in Mystery & Crime: Thanks to Fred Pilot for letting me know about this new novel. Haven't seen it yet.

Obama proposals on mortgages worry real estate pros | McClatchy

Obama proposals on mortgages worry real estate pros | McClatchy: "MIAMI — Mortgage rates could rise and the federal government would play a much smaller role in the housing market, according to proposals outlined in a much-anticipated report released Friday by the U.S. Treasury Department.

In South Florida, foreign investors and all-cash buyers have played a disproportionate role in the housing market in the past year, as a tight credit market, high unemployment and a foreclosure crisis have turned traditional home buyers into a minority."
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And elsewhere around the country, other unconventional, all-cash buyers such as newly-formed real estate syndicates are buying up many properties. They are purchasing blocks of condo units and taking over associations. This is creating some interesting situations for the remaining owners who actually live there.

Aside from those problems, consider how disrupted the housing market still remains, going on five years after prices began to tank and three years after the economic crash began. Housing prices are still falling. Mortgage rates are rising. Banks are reluctant to lend, despite having been given access to virtually free money from the Fed. New housing starts are near historic lows around the country. Unprecedented numbers of owners are underwater on their mortgages. Sales of foreclosed properties make up the bulk of the market in many places, and there are many more foreclosures to come this year. The real estate development industry is in disarray. There are zombie HOA subdivisions and condo buildings, unfinished and largely empty, all over the nation. Untold (because there are no public records) thousands of condo associations and HOAs around the country are failing. Local governments still haven't awakened to the reality that mandating CID housing is a bad idea and no doubt plan on continuing to do it when they can.

I am not opposed in principle to re-privatizing Fannie and Freddie in some fashion. I see how it would limit taxpayer exposure to loss from bad mortgages, which is a good thing. But I don't see how it will fix the horrific situation of the housing market, and it could very well make things worse if it causes mortgage interest rates to spike, which I think it will.

And consider recent history. From 1995 to 2008, the relationship between public and private entities in real estate is exactly what crashed the housing market and the economy.
Now, what exactly do the Obama people want Fannie and Freddie to do? What do they want private corporations to do? How are they going to get them to do it? What is the model? They don't know. They have three different proposals, all of them equally vague.

I see only a few certainties:

1. As it stands, the taxpayers still will have to bail out Fannie and Freddie to the tune of at least $150 billion, on top of all the other bailouts we are responsible for (and will spend a generation or two paying off). Depending on how long this redesign takes (and I think it will be much longer than the 5-7 years they are talking about), that amount could grow enormously.

2. If private banks and mortgage companies are going to be operating with less of a federal safety net, they will raise mortgage interest rates and other charges. This is inevitable.

3. This is a long-term policy. It will take many years for risk-averse private lending institutions to get into the business of buying mortgages from the initial lenders and doing all the other insurance and securitizing and off-loading things that Fannie and Freddie do.

4. Therefore, the policy will not be coherent. It will eventually be taken over by Republicans, who will want to push it in different directions than the Democrats. It will end up being a huge political football. This is an $11 trillion dollar market.

5. And all of that means there will be many unintended consequences, and we are headed into a Brave New World in which the federal role in the housing market is being completely reconsidered.

A ray of hope in Arizona for HOA abolitionists

For at least the last dozen years or so, there have been two camps of displeased Privatopians: Those who want to take on the community association industry and try to reform HOAs to make them more democratic and more accountable to those owning property within their jurisdiction. And those who see HOAs as essentially FUBAR with abolition the only way to deal with them.

The latter group will undoubtedly be pleased to learn proposed amendments to an Arizona bill, S.B. 1326 this week would ban new detached unit CIDs going forward. (Condos are not within the scope of the bill). This is a very important development because to my knowledge, it is the first piece of state legislation that would bar future formation of CIDs with mandatory membership HOAs -- and the restrictive covenants upon which they are based.

This is also an important development because it could be a harbinger of an emerging realization in Sunbelt states like Arizona -- where practically all new freestanding homes built of the past 15-20 years are within CIDs with mandatory HOAs -- that privatizing local government may be great in theory but suffers from inherent defects in the real world.

The chances of S.B. 1326 moving forward are slim given that it would likely face a solid wall of opposition from residential developers, local governments and of course the so-called "community association" industry. But the fact that legislation that would effectively close the door on the future expansion of Privatopia in Arizona is even being considered shows "the times they are a changin."

Thanks to Pat Haruff for the link.

Donald Bren's legacy

Donald Bren's legacy

The L.A. Times profiles one of the founding fathers of Privatopia and the creator of the one of the earliest and biggest mass market CIDs in the nation.

Obama housing plan to end Fannie, Freddie - The Hill's On The Money

Obama housing plan to end Fannie, Freddie - The Hill's On The Money: "Under the administration's plan, there would be no future Fannie and Freddie providing broad, full guarantees in the housing market, according to senior administration officials.

While the administration's report calls for the winding down of Fannie and Freddie, it does not reach a single conclusion as to what the housing market should look like at the end of the transition. Rather, it provides three options, with varying roles for the government to play."
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I notice once again that the Obama administration is big on proposing sweeping changes to huge sectors of the economy, but small on saying exactly how they expect it to be done. Same thing with health care reform--they left it up to Congress. The House passed one version, the Senate passed a different one, and then when Scott Brown got elected and the Democrats lost their filibuster-proof majority in the Senate, they passed up conference committee entirely and had the House ram through the flawed Senate bill (it doesn't even have a severability clause). Now, here they go with this huge plan to "wind down" Fannie and Freddie, but there is a menu of approaches for doing it. Somebody else is supposed to take responsibility for deciding how this can be done.

And how about that great mortgage reformation plan the Administration came up with that didn't work?

Geithner's casual la-de-da attitude toward this is typical of him.

If I made major decisions this way, people would say I was nuts. If you decide to do something, the "how" is everything. It isn't an afterthought. If you have decided to do away with the current massive federal government role in the housing market, you need first to know exactly HOW you are going to do it. If there isn't a clear "how," then it is time to go back to the drawing board--not to start the process of change.

This is like having a surgeon who says, "I am going to do an operation on you that has never been done before. We have come up with three different ways to do it. We will start the operation, and then I will let the surgical team decide which one of them to use." Wouldn't you suspect that the surgeon actually doesn't know how to do this at all? And that maybe the whole thing will result in muddling through and maybe causing a disaster?

Obama Calls For End Of Fannie Mae, Freddie Mac

Obama Calls For End Of Fannie Mae, Freddie Mac: "NEW YORK -- The Obama administration plans to wind down bailed-out Fannie Mae and Freddie Mac over the next five to seven years, Treasury Secretary Timothy Geithner said Friday.

The taxpayer-owned mortgage giants, which were effectively nationalized in 2008, guarantee nine of every 10 new mortgages along with other government agencies. Delinquencies on home loans backed by the two companies have cost taxpayers more than $150 billion."
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As I said below, this is a herculean task. "Winding down" Fannie and Freddie? Somehow the private sector is just going to take over the multi-trillion dollar responsibility of buying, securitizing, and "guaranteeing" 90% of the mortgages in the US?

Well, at least it will be a good practice round in case nationalization of health insurance collapses and they have to get the private insurance industry to take it back.

Fannie, Freddie reform won't halt more huge taxpayer losses - Feb. 11, 2011

Fannie, Freddie reform won't halt more huge taxpayer losses - Feb. 11, 2011: "NEW YORK (CNNMoney) -- When the dust settles, the federal bailout of Fannie Mae and Freddie Mac will be the most expensive government rescue of the financial crisis -- it already stands at $153 billion and counting."
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The Obama administration is considering ways to have private corporations take over most of what Fannie and Freddie are doing, which right now amounts to backing up 90% of the housing market. Good luck. This is going to be a major challenge.

Home Owners Association Takes Home Over Legal Fees

Home Owners Association Takes Home Over Legal Fees: "The smile on Hillary's face masks a dark secret she doesn't share with customers. She's owned this southwest side condo since 2005. Her youngest son's father paid cash for it and put it in Hillary's name.

But it's not her property anymore. Why?

She was late in paying monthly maintenance fees to her homeowners association."

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Another one of those "isolated examples" that keep happening. And in this case, she paid the maintenance fees. She lost her home because she didn't pay the attorney fees.

At Lincoln House: The housing reset

At Lincoln House: The housing reset: "The housing bust left many things in its wake, but some of the most troubling detritus are the “zombie” and obsolete subdivisions sprawled across peripheral areas – approved and platted, some partially built but most just lots, unimproved roads and the occasional lone lamppost – all over the country but particularly prevalent in the South and Intermountain West."
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This is the weblog of the Lincoln Institute of Land Policy. They have some ideas about what may happen to the zombie subdivisions.

The Smart Set: Water View - January 25, 2011

The Smart Set: Water View - January 25, 2011: "The time for sea living is here, and Dennis Chamberland — star of the recent VBS.TV episode “The Aquatic Life of Dennis Chamberland" — intends to be its pioneer. This underwater dominion will be named Aquatica. “We are the first humans who will move there and stay with no intention of ever calling dry land our home again,” he writes on his Atlantica Expeditions website. “We represent the first generation of a people who will live out their lives beneath the sea.”
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And of course there is a web site.

Restless in Texas: HOA inmates rally for reform

Here's a link to the HOA Reform Coalition's Feb. 15 rally in Austin.

AZ Supreme Court accepts George Staropoli's amicus brief in challenge to HOA statute « HOA Constitutional Government

AZ Supreme Court accepts advocate’s amicus brief in challenge to HOA statute « HOA Constitutional Government: "The Arizona Supreme Court has accepted my amicus curiae brief in support of constitutionality of the DFBLS/OAH due process statutes (Gelb v. DFBLS, CV 10-0371-PR). The Court has yet to decide if it will hear the Petition from the homeowner. Neither party objected to my brief, not even the CAI HOA law firm that received harsh treatment. I had presented background facts and arguments in an effort to assist the Court in understanding the disgraceful state of affairs with HOAs."

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Interesting--let's see what effect it has on the court.

Good Legal Advice or Confidence Game? You Decide.

Good Legal Advice or Confidence Game? You Decide.: "An over-reaching attorney, who uses the lure of a “free seminar” to get access to the directors of a community association and, once in the door, threatens the board with personal liability if they don't immediately hire him and his consultants to investigate and pursue a construction defect claim. This scenario is not fiction. It is apparently happening with alarming frequency in the current over-heated market for construction defect legal work. Let's analyze it."

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Thanks to Fred Pilot for forwarding the link to this advice from attorney Tyler Berding. I have seen things like this happen.

Police Arrest Squatters of Foreclosed Home | Articles & Archives | Community Association Management Insider

Police Arrest Squatters of Foreclosed Home | Articles & Archives | Community Association Management Insider: "Police detectives in Newport Beach, Calif., recently arrested a couple for illegally squatting in a $2.6 million, ocean-view home. The couple had previously admitted they had entered the house, changed the locks, and put the utilities in their names, even though they did not own the property or have the owner's consent."
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Several people sent me this, so thanks to all of you, and as it happened I ran across it myself. Given that 11% of US homes are unoccupied and 16.1% of the labor force are unemployed or can't find full-time work (per the U-6) maybe this is the way things are going to be from now on. Sort of a pre-Apocalyptic warmup.

F. A. Hayek, Liberal | Bottom-up

F. A. Hayek, Liberal | Bottom-up: "One of the more pernicious influences of Rand and Rothbard on the libertarian movement was their tendency to treat every policy problem as almost reducible to a logical syllogism. Too many libertarians act as though they don’t need to know very much about the details of any given policy issue because they can deduce the right answer directly from libertarian principles."

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That's a pretty good statement of what's wrong with the libertarian view on HOAs. I found this link originally at Andrew Sullivan's blog

Home Ownership—Nearly 11 Percent of US Houses Empty - CNBC

Home Ownership—Nearly 11 Percent of US Houses Empty - CNBC:

Overbuilding during the housing boom, young people holing up with their parents instead of buying a condo (or even renting one!), other people living with relatives after being foreclosed on, bank-owned properties rotting on the market...I love this economic recovery, don't you?

HOA meeting canceled after threat rumors

HOA meeting canceled after threat rumors:
Seems that rumors circulated about some unspecified person supposedly making threats about bringing a gun to the meeting and shooting people. So the meeting was canceled and the Mesa police were called, but they found no evidence of any such plot aside from the rumors. Everybody is hoping that's all there is to it...

Thanks to Pat Haruff for the link.

Financial Crisis Inquiry Commissioner's dubious theory on root cause of crisis

Read my take on this at my Deflation Watch blog.

Holy reptilians, Batman! Giant lizard terrorizes condo complex

The 5-foot Monitor lizard wandering around a condo complex in the city of Riverside was way bigger than animal control officer Jenny Selter could have imagined.

"She said she saw it and almost jumped back in her truck," said John Welsh, spokesman for Riverside County Animal Services. "The residents were freaking out because here's the Godzilla-like creature walking down the sidewalk."
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The whole story is here.

Jack LaLanne dies at home at the age of 96

Jack LaLanne dies at home at 96
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Jack LaLanne was one of my heroes. He was a great guy who never cared that much about money, so when he invented most of the exercise equipment you see in gyms today, he didn't bother to patent it. Cables, pulleys, adjustable weight machines...he was doing all this in the 1930s. He was telling people not to eat sugar and white flour when doctors were still smoking cigarettes. And he was working out every day right up until the day he died...at home, at the age of 96.

Goodbye, Jack--you won't be forgotten.

HOA recall election sparked over roofing choice

Roofing material OK spurs recall effort

EL DORADO HILLS — Waterford Village Homeowners Association board members face a recall vote following their approval of composition roof in the otherwise tile- and shake-shingled El Dorado Hills neighborhood.
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It seems that the HOA board touched a political third rail of sorts by messing with a distinguishing component of higher end California homes: the tile roof.

Dueling locksmiths: Lawyer advises foreclosed clients to become squatters

Lawyer advises foreclosed clients to break back into their homes

The 58-year-old attorney admits to breaking into homes at least half a dozen times, including one before with the Earls, leaving the clients to squat in their homes while he defends their legal right to possession. His unconventional methods have gotten him fined by a judge in San Diego, arrested in Newport Beach and threatened with contempt — and jail — in Ventura.
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Wonder if we'll see this resistance tactic spread to HOA foreclosures?

Jimmy John's founder contemplates moving headquarters out of Illinois | News-Gazette.com

Jimmy John's founder contemplates moving headquarters out of Illinois | News-Gazette.com

"Jimmy John Liautaud told The News-Gazette on Tuesday that he is angry about the moves, which boosted the individual income tax from 3 percent to 5 percent and the corporate income tax from 7.3 percent to 9.5 percent."
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And so it begins--the exodus of businesses/employers from the state of Illinois.

New website: HOA Busters

Check it out:

www.hoa-busters.com

The Cheerleading For State Bankruptcies And Municipal Defaults Is Downright Ghoulish

The Cheerleading For State Bankruptcies And Municipal Defaults Is Downright Ghoulish:

Maybe. But this underscores one of the main differences between real governments and CIDs. Real governments have a support network in the political system and in a wide range of public and private institutions. CIDs don't. The difference isn't theoretical. It has huge consequences for the millions of people who own HOA and condo units. For example, there is a profession called "public administration" that trains people to serve in government jobs, and it includes university departments, academic journals, a hundred years of published research, and major professional organizations in nations all over the planet. CIDs have the Community Associations Institute. Cities do national searches for the best city manager they can find. HOAs take their chances in their local area and may end up with a real winner, or they may get a crook or an incompetent. I could go on, but I think you get the point.

One of those consequences is clear from the current discussion of municipal bankruptcy. Cities and counties can go bankrupt under Chapter Nine, and now Republicans are agitating to include states within that provision as well. If they win big in 2012, you can bet that this will happen. When a government goes bankrupt, they can restructure their debts, including their agreements with their employees and their unions if any. That includes their employees pensions, which are a gigantic liability that has resulted from public officials making incredibly stupid sweet deals with public employee unions. But if you are a taxpayer in one of these cities, you get out from under what would otherwise be a crushing tax increase. You, as a citizen, can be relieved of a burden that your elected officials put on your shoulders, if whoever is overseeing the Chapter Nine proceeding decides it is the only way to keep the city going.

Compare that with a CID. When the HOA or condo association goes belly up, the owners remain liable for the debts of the association, including multi-million dollar judgments resulting from bad decisions made by the BOD. The limit of any individual owner's debts? The equity they have in their unit. If the board refuses to levy a special assessment to pay the debt, a judgment creditor can have a court appoint a receiver. The receiver levies the assessment and secures it with liens on the units. Owners who don't pay lose their homes in foreclosure. (Sound familiar?) See the Le Parc, Oak Park Calabasas, and Kingsbury Court cases for a description of how these judgments are handled.

So, while people certainly have lost their homes for not paying their property taxes, just like they lose them for not paying their assessments, there is a floor, or a safety net for them. How about for all these millions of CID residents? Not so much. HOA bankruptcy really doesn't accomplish much for the owners, who remain financially responsible, in most cases right up to the point of their own fiscal ruin.

Limited HOA reforms likely in North Carolina

The study committee's recommendations would provide more protections for homeowner by requiring that no liens lead to foreclosure unless assessments have gone unpaid for at least 90 days. Homeowners would also be allowed to pay late assessments in installments and must be mailed a copy of an offer to make the late payments.

Homeowners would be given more power to force homeowner association boards to meet openly and remove board members who fail to abide by the law or association bylaws. Associations financial records would also be open to review.

The catch is that state lawmakers can't force these rules down the throats of existing homeowners associations if current contracts and covenants call for something different. The regulations, if they become law, would only apply in total to new homeowners associations or those that agree to accept them.

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Read more about the state's pending "HOA reform lite" here.

Clackamas County considers ban on signs, added restrictions

Clackamas County considers ban on signs, added restrictions: "A local expert in constitutional law believes that Clackamas County will have to significantly alter its draft resolution that proposed banning signs, clapping and personal insults, while giving “authority to enforce reasonable restrictions” on the times the public would be allowed to speak, and on the use of video recording equipment."
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Another example of cities emulating HOAs?

Condo Owners: pay up!

BostonHerald.com - Blogs: Getting Real» Blog Archive » Condo owners beware: pay up!: "Sid Shulman, homeowner at International Village, has taken matters into his own hands.

Near the mailbox of each condo building he posted a list of residents delinquent on their maintenance fees, with the message “Pay up or move out” and the same in Spanish, Pague O Mudese. He also tried, unsuccessfully, to get the cable company to cut off service to nonpayers.

The association has gone so far as to install a fingerprint scanner at the entrance to its community center, in order to keep non-payers from gaining access."
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Thanks to Fred Pilot for this link. Pay or else.

California HOA cracks down on hoarders

Once a hoarding complaint is filed, an inspection could be ordered. The board must get residents' permission to enter units. Residents who refuse inspections will be called before the board for a disciplinary hearing.

If the board determines the hoarding policy has been violated, the resident would have 15 days to remove the clutter. If a resident refuses, the board could seek a court order to force the resident to remove the clutter, fine the resident, suspend the resident's privileges in the community or proceed with eviction.

Read the story here.
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The HOA better get permission. The California Court of Appeal ruled a dozen years ago that another Southern California HOA could not enter the unit of a merchant marine while he was away at sea to police what it saw as an excessively cluttered unit, which the appellate court equated to nanny state governance.

The coming muni meltdown--Charles Gasparino - NYPOST.com

The coming muni meltdown--Charles Gasparino - NYPOST.com:
"The municipal-bond market is in crisis, with prices fall ing and investors running for cover -- and for good reason. Munis -- bonds sold by states, cities, counties and other localities to finance government operations -- are in trouble because the Ponzi scheme of Big Government is coming unglued. The markets are merely reflecting this reality, as they always do. The $3 trillion muni market was once regarded as the safest of all investments because the bonds are backed by government taxes. Now it's showing all the earmarks of the 2007-08 meltdown."

Read more: http://www.nypost.com/p/news/opinion/opedcolumnists/muni_meltdown_10IepFWdpphKZrTnoxftBK#ixzz1BJhQQEj2

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But the economy is recovering. Just ask Ben Bernanke.

SIDE STREETS: HOA at Satellite Hotel is veering out of orbit

Ugly allegations have surfaced as residents fight for control of the homeowners association that runs the Satellite Hotel, a “futuristic” 14-story, three-winged hotel/condo hybrid built in 1969.

The HOA president and her officers portray board newcomer Hayward Rigano as a bully who has used threats and intimidation in his quest for power over the 300 or so who live in the Satellite’s 241 condos.

Rigano denies the allegations, describing himself as simply trying to do what’s right for the Satellite, which sits along South Academy Boulevard at Airport Road.

Read more: http://www.gazette.com/articles/vogrin-111178-side-streets.html#ixzz1BFux6kuD

Secret GOP plan: Push states to declare bankruptcy and smash unions | Analysis & Opinion |

Secret GOP plan: Push states to declare bankruptcy and smash unions | Analysis & Opinion |:

Long economic downturn paints grim future for Privatopia

As the owner of this blog has observed, there's years more excess to be wrung out of the real estate bubble that burst five years ago.

Before it's done, it could take down a lot of HOAs with it. Witness the "the fading fortunes of gated communities and condominiums" in Florida as the Palm Beach Post put it in this article, where desperate HOAs have resorted to locking out inmates behind on their assessments and removing the doors of their mailboxes.

Hot topics for community associations in 2011 - chicagotribune.com

Hot topics for community associations in 2011 - chicagotribune.com:
Pamela McKuen of the Chicago Tribune focuses on the financial problems of associations. Thanks to my student, Brittany Ryan, for this link.

Over 1 million Americans seen losing homes in 2011 - Yahoo! News

Over 1 million Americans seen losing homes in 2011 - Yahoo! News: "The bleakest year in the foreclosure crisis has only just begun. Lenders are poised to take back more homes this year than any other since the U.S. housing meltdown began in 2006. About 5 million borrowers are at least two months behind on their mortgages and industry experts say more people will miss payments because of job losses and also loans that exceed the value of the homes they are living in. '2011 is going to be the peak,' said Rick Sharga, a senior vice president at foreclosure tracker RealtyTrac Inc. The firm predicts 1.2 million homes will be repossessed this year."
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Bucking the trend, I managed to conclude the refinancing of my home yesterday. I feel like the guy who gets onto the spaceship last just before the door closes, and it flies away, and the meteor crashes into the earth.

Interest rates are going up and the banks are behaving like complete idiots (i.e., taking zillions in cheap money from the taxpayers and then refusing to lend it). During 2011 they will drop the hammer on the huge backlog in foreclosures that accumulated during the "robo-signer" scandal.

Housing and Economy: Housing Market Slips Into Depression Territory - CNBC

Housing and Economy: Housing Market Slips Into Depression Territory - CNBC:
Home values have fallen 26 percent since their peak in June 2006, worse than the 25.9-percent decline seen during the Depression years between 1928 and 1933, Zillow reported. November marked the 53rd consecutive month (4 ½ years) that home values have fallen. What’s worse, it’s not over yet: Home values are expected to continue to slide as inventories pile up, and likely won't recover until the job market improves.
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And in other news, the Democrats who control the Illinois state legislature just raised the state income tax by 67%, corporate taxes by over 40%, and continued their 8 year refusal to address their over-spending.

This is the first of many state and local tax increases to come. California and other big states are going to jack up taxes.

How anybody can talk about economic recovery now is just beyond me. The housing market is still deteriorating, unemployment remains high, and the crisis state of government financing at all levels is getting worse.

Illinois Review: Gov. Mitch Daniels: Illinois tax hikes good for Indiana

Illinois Review: Gov. Mitch Daniels: Illinois tax hikes good for Indiana:
That's because Daniels is the Governor of Indiana. If the Democrats in Springfield raise the personal income tax here in Illinois by 75% (from a flat rate of 3% to 5.25% of income, with practically no deductions or exemptions), and if they raise the corporate income tax by 75% as well (from 4.8% to 8.4%), businesses will relocate to Indiana. This state is run by a corrupt political machine that is arrogant and cynical beyond belief. They are doing this after the election, and before the new legislature is seated. They figure that in two years enough "voters" (and I use the word with some doubt as to whether it really applies) will forget that the Democrats did this. Maybe they are right.

Of course, something has to be done to raise revenues and cut spending because Illinois is insolvent. But the lack of a two-party system here is the main problem. A tax increase was in the cards. You can count on the Democrats for that, and they waited until the election was over to do it so they could keep their control of the legislature. But what about budget-cutting? That's where some Republican influence would make a difference. We need both. Instead the Democrats want to increase the money being shoveled into the maw of the teachers' unions, and because they control the entire state, that's what we will get: more taxes, more spending, and empty promises of budget-cutting to come.

Banks lose key foreclosure ruling in top Massachusetts court | Reuters

Banks lose key foreclosure ruling in top Massachusetts court | Reuters:
In a decision that may slow foreclosures nationwide, Massachusetts' highest court voided the seizure of two homes by Wells Fargo & Co and US Bancorp after the banks failed to show they held the mortgages at the time they foreclosed.
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I am nearing the end of a three month effort to refinance my house. The banks and title companies are over-compensating for their slovenly ways during the housing bubble. Now you have to prove everything about yourself and your house beyond any possible or imaginary doubt. But when they want to foreclose, and they have to produce proof that they own the house, why, then things are different. Suddenly anything goes.

Vegas HOA takes Floyd Mayweather to court

LAS VEGAS, Nevada (AFP) — Unbeaten boxer Floyd Mayweather has been threatening employees of the homeowners association in the development where he lives, according to officials who have gone to court to stop him.

A complaint by Southern Highlands Estates in Clark District Court seeks $10,000 in damages and an injunction to limit contact between Mayweather and employees of the gated community south of the glitzy Las Vegas Strip.

Mayweather, 33, already faces misdemeanor battery charges from a December 16 incident in which he allegedly poked a security guard in the face outside his home over complaints about parking.

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Read story here.

Homeowner tells HOA: You're messing with the wrong Marine

Marine battles homeowners association over flag pole

Merola said he went through the proper channels to ask for permission to put up a 20-foot flag pole, but permission was denied. The HOA told him he was welcome to attach a small flag pole to his house.

An attorney representing the Lakeland Village Community Association said homeowners are encouraged to display American flags, if they want to, but that freestanding flag poles are just not allowed.

Merola said the homeowners association is going too far and has hired his own lawyers.

"Being a marine, this is a battle I’m willing to fight," Merola said.
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UPDATE 1/7/11:

Group plans to take on HOAs over flags

Merola's battle with his HOA could be the last of its kind. A group in Austin tired of hearing about these flag flaps is introducing a flag display bill in the upcoming Texas legislature, stipulating that HOAs cannot prohibit flags on free standing poles.

"From experience in dealing with homeowner associations, if it's not in black and white and it says you must permit or you may not prohibit, then they won't do it," said John Stratton, attorney for American Radio Relay League.

Who you gonna call? HOA Busters!

Are you fed up with your homeowner association?

Feel you're being targeted and fined by people overstepping their bounds and you have little to no recourse?

Homeowners who want to fight back against their HOA's have a new coach in their corner.

It's a group called HOA Busters and they're gearing up for battle in the wake of a Contact 13 investigation.
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The HOA inmates are revolting in Las Vegas. Get the scoop on HOA Busters in this story from KNTV Las Vegas 13 Action News.

GOP gets cold feet on ending bailout of Fannie Mae and Freddie Mac - Yahoo! News

GOP gets cold feet on ending bailout of Fannie Mae and Freddie Mac - Yahoo! News
With the housing market getting soft(er) yet again, it looks like continued government support of Fannie and Freddie will continue at least another year.

Housing Distress Pits Neighbor Against Neighbor - WSJ.com

Housing Distress Pits Neighbor Against Neighbor - WSJ.com
Yes, it certainly does.

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.
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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...

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."

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

What's next for minimalist houses? How about a subdivision of tiny houses in Eastern Oregon? | OregonLive.com: "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."
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Yes, I think an 8 1/2 foot wide house qualifies as tiny.

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.
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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.

A California Bankruptcy, Dictatorship, and the Guarantee Clause - ProfessorBainbridge.com

A California Bankruptcy, Dictatorship, and the Guarantee Clause - ProfessorBainbridge.com
Great post by Professor Bainbridge.

Lakemoor woman can use toilets as planters - Chicago Breaking News

Lakemoor woman can use toilets as planters - Chicago Breaking News
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Justice prevails in McHenry County, IL.

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.

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.
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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.

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.
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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.