Puerto Rico Will Default on Government Development Bank Debt - Bloomberg

Puerto Rico Will Default on Government Development Bank Debt - Bloomberg

"Puerto Rico will default on a $422 million bond payment for its Government Development Bank, escalating what is turning into the biggest crisis ever in the $3.7 trillion market that U.S. state and local entities use to access financing...A default on those constitutionally guaranteed bonds would be the first by a state-level borrower since Arkansas missed payments on its debt in 1933. That would likely trigger a restructuring of the commonwealth’s $13 billion of general obligations, which would be the largest-ever in the tax-exempt market."

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This situation has been building for a long time. Puerto Rico has $70 billion in muni bonds, they have been in the grip of a severe recession for a long time, and now they are in the process of defaulting on these bonds, piece by piece. There is an unusual problem in that Puerto Rico is a US territory, not a sovereign nation, so it can't go to the International Monetary Fund or pursue other sovereignty-related remedies. It isn't a state, either, and it can't go bankrupt. Congress passed  law in 1984 saying that US territories can't use Chapter Nine, the bankruptcy provision for local governments. So Puerto is betwixt and between, as the saying goes. They can't pay and they can't discharge or reorganize the debts, so they are defaulting. The Republican-controlled, do-nothing, blame-Obama-for-everything Congress could fix this, but so far they haven't.  Republican Speaker of the House Paul Ryan clearly wants to take action.

LaHood alleges misuse of HOA funds for pool - San Antonio Express-News

LaHood alleges misuse of HOA funds for pool - San Antonio Express-News

"More than $300,000 in homeowner association funds for a swimming pool that was never built are at the center of a criminal case filed against two men with ties to the city of Windcrest.

Bexar County District Attorney Nico LaHood said Robert Colunga and Tom Pittman were indicted by a grand jury in April on the first-degree felony charges. Although a civil lawsuit is pending in the project, LaHood said he believes a criminal case also is warranted against the two men, and possibly others, the case involving plans for a pool to be built in San Antonio’s Stone Oak area."

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Texas is about as laissez-faire as any big state when it comes to regulating what goes on in HOAs. And these private associations have a lot of power over people there. Civil litigation alone doesn't get the job done. With $300K in losses, it isn't hard to see why criminal charges are being filed. The question is, how many other associations have similar problems that haven't come to light?

New Local Law Says Parents of Bullies Must Pay Fines if They Don’t Control Their Kids | LawNewz

New Local Law Says Parents of Bullies Must Pay Fines if They Don’t Control Their Kids | LawNewz

Interesting approach. I'm always intrigued by local ordinances that experiment with unusual approaches to solving problems. There is something called "vicarious liability," where one person is held legally responsible for the conduct of another person, but I've never read about it being applied in this way.  Bullying is a big problem and currently nobody pays for it except the kids who get bullied. Teachers and principals pretend they don't know it is happening, parents deny that their precious snowflake would ever bully anybody, the police pretend that crimes like assault and robbery aren't crimes if they happen in a school, and the bullies get away with it. So here is an effort to fine the parents of the bully. But is it legal to impose fines on parents for not preventing something their kid did when he was at school, supposedly under the control of school officials?

Michigan Lawsuit Shows U.S. Voters May Not Technically Have the Right to Elect Their Mayors - CityLab

Michigan Lawsuit Shows U.S. Voters May Not Technically Have the Right to Elect Their Mayors - CityLab

From the State of Michigan's brief, defending the power of state-appointed emergency managers to take over running a city:



"Here, Plaintiffs are still free to vote in federal and state elections. And they offer no adequate support for the proposition that the right to vote in local elections, once extended, becomes a fundamental right as opposed to simply a right to participate on equal footing. ...Nor do Plaintiffs’ cited cases offer support for a recognized right to participate in local political processes, even where the local unit is a legislative body."



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I've posted about this case before.  The State of Michigan says that as long as there are state and federal elections, the right to vote is not impaired--you have no right to vote for local government officials. If the state "extends," i.e, give you out of the goodness of their heart, that right, then it still doesn't include the right to choose the people who make the real decisions.
The implications go beyond Michigan. Extend the principle to other parts of the local government system. County boards, special districts, school boards, and the rest of the alphabet soup of local government entities.  Do you have the right to choose the people who make the decisions on those bodies? Or can a governor put them in receivership?
As for HOAs, if the state can take away your power to choose the city council and the mayor, making constitutional rights arguments about HOA elections would seem like a lost cause. So this case is significant. It is in the District Court now, meaning the lowest level of federal court where trials are held. But if it goes up on appeal to the Sixth Circuit, it could become a major case on voting rights and autonomy of cities. The Center for Constitutional Rights is co-counsel, challenging the emergency manager law. You can read up on it there.

Colo. Court Case Puts Spotlight on Special Districts That Issue Munis | The Bond Buyer

Colo. Court Case Puts Spotlight on Special Districts That Issue Munis | The Bond Buyer

"A broad ruling by the Colorado Court of Appeals in a case of a developer's egregious fraud has sent lawyers to the state's General Assembly for legislation to protect existing special districts that issue tax-exempt bonds...The case involves a high-profile developer, Zachary Davidson, who used sham contracts to make him and five associates organizers or "eligible electors" who formed a special metropolitan district in Greenwood Village, Colo. that issued almost $35 million of bonds now in default. Davidson included nearby condominium purchasers in the district and obligated them to pay taxes to help pay off the bonds, even though the condo owners were unaware they were in the district or that bonds had been issued. Davidson stole millions of dollars of bond proceeds for his personal use and was eventually indicted on 20 felony counts by an Arapahoe County, Colo. grand jury. He eluded law enforcement for months and ultimately committed suicide by hanging himself from a tree in Withlacoochee State Forest in Florida at age 46. After several years of litigation, the Colorado Court of Appeals issued a ruling on April 21 favoring the condo owners' Landmark Towers Association, Inc., ruling in part that Davidson used sham contracts to give him and his associates control of the special district and the bond issue."



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Here is a link to the opinion.  The court ruled, "In sum, because the TABOR election was conducted illegally —with the participation of ineligible voters and without constitutionally required notice to eligible voters — the District’s taxes to pay the bonds were levied illegally. Pursuant to TABOR’s refund provision, the District must refund all illegal taxes paid with ten percent annual simple interest. Id. at § 20(1). The Landmark buyers are also entitled to an order enjoining the District from levying any further taxes without proper voter approval."



So now the lawyers and people buying these special district muni bonds are afraid that other people will head for court to unwind the tax obligations imposed on them by these special districts.  They want the Colorado state legislature to save them from more litigation. As I have written before in connection with Florida's special districts, some of these arrangements are so undemocratic and autocratic that they make HOAs look like the Golden Age of Pericles.



And the Colorado special district debacle has the potential to shift the national picture on these "dirt bond" districts:  "The Treasury and IRS are now proposing rules to expand that test to add two new requirements. Under rules they proposed February, a political subdivision that can issue tax-exempt bonds, would also have to serve a governmental purpose and be governmentally controlled "with no more than an incidental private benefit. The proposed rules have met with a firestorm of criticism from muni lawyers who have warned they would threaten existing special districts and potentially millions of dollars of bonds."



Stay tuned--this sort of thing flies under the public's radar, so you never know what a state legislature will do with it.

Rauner turns to privatization push during second year in office - Chicago Tribune

Rauner turns to privatization push during second year in office - Chicago Tribune

Illinois Governor Bruce Rauner is a private equity billionaire with no political experience and no idea what he is doing, except that he hates the very idea of government and public employees and unions and wants to destroy all three.  He used his personal wealth and his connections to other fat cats to basically buy the job.  He funneled millions of his own money into a record-breaking tsunami of money and outspent Pat Quinn almost two to one.  He also had the help of the Chicago Tribune, which is relentlessly anti-union and pro-big business, and the Chicago Sun-Times as well (there were some interesting financial connections there).  His big idea is to turn Illinois into a Republican state. He wants to destroy the Democratic Party's political base. Destroy unions, the tort system, public employee pension systems, and the workers' compensation system.  Let cities and school systems go bankrupt so they can break their contracts with unions. Enact term limits to get rid of powerful Democrats in Springfield. It's basically Scott Walker in Wisconsin without the charm.



But Democrats won big in both houses of the state legislature, and they won't commit political suicide by abandoning the people who voted for them. So how was Rauner to impose his "turnaround agenda" on the state? Simple: refuse to sign budget bills, starving social service agencies and the public education system of funds. That's what he has been doing since the day he was elected. Poor people, the disabled, the elderly, and students will suffer until the legislature turns the whole state over the Rauner and his party. Social service providers are laying people off and going out of business. Chicago State University just laid off 1/3 of it's staff.  And the suffering goes on, and on, and on.



Rauner  is one of these American corporate tough guys who proves how tough he is not by suffering himself, but by enjoying the suffering of the little people.



Now his big idea is to privatize every single state function that he can.  There seems to be no principle behind this--no set of guidelines for which services would be better to privatize and which to keep inside government.  And of course he won't work with the Democratic Party that controls the state legislature, so this is going to be done through executive action.



The risks here are obvious. People may end up paying more for less. The opportunities for corruption increase. Wages will be lowered and people will be laid off, leading to consumers having less purchasing power, which may hurt the state economy.



I wish I could find some silver lining in the so-far disastrous Rauner administration, but I can't. This man is just destroying everything he can't control, and he doesn't seem to care who gets hurt.

Master-Planned Communities Look to Innovative Future - Urban Land Magazine

Master-Planned Communities Look to Innovative Future - Urban Land Magazine

"One of the notions presented to the panel was to offer health care for MPC communities. “If a company has 10,000 employees and can offer insurance to all of them, why can’t an MPC insure the 5,000 people in the community?” Cecilian asked. “When we consider millennials today, the two great concerns are health care and student loans. Why not look at the residential community to provide group health insurance? It’s a very interesting concept, especially with what’s happening in tele-medicine. You could make group health insurance part of the real estate package...Among the other topics considered: raising equity or debt through crowdfunding and providing for driverless cars. Crowdfunding in MPCs could be used to support community amenities, create retail options earlier, or construct revenue-producing venues such as golf courses. “Crowdfunding is coming and hitting real estate very quickly,” said Kaufmann. “Smaller-scale projects could be crowdfunded. There is a lot of money out there and it’s not that hard to organize. You should think about it for some pieces of the community.”

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Notice how the development industry always uses the fuzzy, feel-good word "community" instead of explaining exactly how your HOA, run by unpaid, untrained volunteers, would somehow become responsible for your health insurance.  And crowdfunding instead of assessments to pay for "community amenities" means that your private streets and the pool would be dependent on people chipping in whatever they want by clicking a button on a website.  



What could possibly go wrong with this bright, shiny future? 

Nevada Supreme Court rules in favor of investors, banks in HOA fees case | Las Vegas Review-Journal

Nevada Supreme Court rules in favor of investors, banks in HOA fees case | Las Vegas Review-Journal: "CARSON CITY — The Nevada Supreme Court on Thursday ruled in a long-awaited dispute over homeowner association dues in super-priority lien cases, finding that Nevada law does not allow for the collection of costs and fees in addition to nine months of back-owed assessments.

The unanimous ruling came in an appeal brought by Horizons at Seven Hills Homeowners Association against Ikon Holdings.

The ruling is a major victory for investors, banks and others who acquired the foreclosed properties. It is a big loss for homeowners associations, collection agencies and others who sought additional compensation in the super-priority lien process.

The super-priority lien in Nevada law allows associations to recover nine months’ worth of assessments. But a legal dispute has been ongoing for years over whether fees and collection costs could be included as part of the lien."

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Superlien litigation (and legislation) is hot right now. Lending institutions are slugging it out with the community association industry over the wreckage of people's lives.

Brannon Hill condos allowed 30 days to remove trash | www.ajc.com

Brannon Hill condos allowed 30 days to remove trash | www.ajc.com: "Residents of a trash-filled and partially burned-down condo complex in DeKalb County are being given 30 days to clean up.

The Brannon Hill homeowners’ association and the county agreed in court Thursday to allow the community to remove debris, worn mattresses and tires strewn across parking lots before the government considers stepping in."

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Another crumbling condo development has become a burden on local government to the point where it may be declared a public nuisance.

HOA to Homeowners: The Zombie Must Go

HOA to Homeowners: The Zombie Must Go:

I'm quoted in this.

Miami condo owners confused by election monitor | Miami Herald

Miami condo owners confused by election monitor | Miami Herald

"But what López and others involved in the election did not know was that Hidalgo is not a monitor appointed by the Office of the Condominium Ombudsman. In fact, since 2010 that office stopped assigning Hidalgo as an election monitor after stating that she “blatantly ignored” instructions prohibiting the delegation of responsibilities, misrepresented not being at a meeting and other issues. The ombudsman concluded the March 31, 2010, letter by stating, “your actions, lapses in judgment, and inattention to duty… have seriously undermined and diminished the trust and confidence placed in you and reflects adversely upon the election monitor program administered by this office.” Her identification badge was revoked."

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This is mind-blowing. This individual is still running around charging condominiums for monitoring elections. Here is her excuse. You will love this:  “I never say I am certified. I always say I was certified. Little words that are specific and powerful in any court,” said Hidalgo, who owns Luminary LLC, a company that supervises condo and co-op elections.

China Homeowners Live in Legal Limbo - WSJ

China Homeowners Live in Legal Limbo - WSJ: "SHANGHAI—A land-title dispute in southeastern China is highlighting a major uncertainty over homeowner rights in a nation where the government owns all the land."

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This situation has been the subject of several major revisions in the law over the last twenty years or so. It's a tough one to resolve. The national government wants to have a thriving real estate market, but local governments want to own and lease the land. That is a gross oversimplification but it will have to do for now.

Peterson: East Bay HOA's heavy-handedness leads to bigger conversation, expert says - San Jose Mercury News

Peterson: East Bay HOA's heavy-handedness leads to bigger conversation, expert says - San Jose Mercury News: "The residents of Blackhawk, the upscale East Bay gated enclave, recently received unsettling news from their HOA: Tidy up your landscaping by June 1 or face "aggressive enforcement" that could result in sanctions ranging from a fine to disabling transponders that open gates to your neighborhood.

Where to start? Like a lot of us, some Blackhawkians allowed their lawns to die last summer after Gov. Jerry Brown mandated a 25 percent reduction in residential water consumption. Like a lot of us, some Blackhawkians will be soon be consulting with landscapers."

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I am quoted in this article. I posted something about Blackhawk the other day. There is a state law in California that prohibits HOAs from taking certain enforcement actions when there is a declared drought emergency. Maybe there's some aspect to this particular situation that I don't understand, but based on the facts as stated in these articles, I don't see how "aggressive enforcement" is appropriate. The El Nino conditions did produce some relief, but not enough. "Drought conditions have improved following a wet January and a relatively wet March, which raised water levels in many reservoirs to roughly average for the current date. However, this winter’s rain and snow levels have not been sufficient to end one of the state’s worst droughts in recorded history." 

Homeowners’ Associations and the First Amendment: Are your 5 Freedoms Guaranteed? – Independent American Communities

Homeowners’ Associations and the First Amendment: Are your 5 Freedoms Guaranteed? – Independent American Communities:



Deborah Goonan weighs in on the issue of civil liberties in HOAs.

5 Reasons You Hate Your HOA

5 Reasons You Hate Your HOA

I'm quoted in this Kiplinger article, but I didn't say anything about hating anybody.



McKenzie tells me “there are very few avenues for individuals to take on their associations.” There are elected seats on the board, usually filled by home owners, but manipulating that internal political process is “harder to do than it sounds." And getting bylaws changed? Forget about it. "The problem is those governing documents were intentionally set up to be very hard to change," McKenzie says. "This has always been like this, back into the ‘60s. They want to know that the product isn’t going to change, so they made the declarations very hard to amend.”



Resorting to a lawyer is another route, but a tricky one, says McKenzie. Judges won’t smile down on you. “They look at you like you’re complaining about something you agreed to; you accepted the rules.”

Sea change for Florida's 60,000 homeowners associations - Sun Sentinel

Sea change for Florida's 60,000 homeowners associations - Sun Sentinel

"On July 1, Florida law was amended to give condominiums, cooperatives and homeowners' associations throughout Florida the right to conduct membership votes online. While online voting has been permitted for some time in other states, this new law represents a sea change for Florida's more than 60,000 community associations. For communities with a large percentage of investor and snowbird owners, online voting gives these owners a newfound opportunity to participate in important membership votes in their association. Currently, many of these owners are unable to timely return voting materials and they are disenfranchised as a result. Even for owners who are local but do not wish to attend meetings or send in a proxy, online voting may spark an increase in their participation."

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Ordinarily I'm in favor of making voting easier in all elections. I hear from young people all the time that they want to vote in public elections with their smart phones.  But here we have the issue of whether absentee/investor owners have a different set of interests than the resident owners who actually live in the community. If so, making it easier for non-residents to vote changes the balance of interests in elections. Attorney Donna Berger is the author of this article and she is all for this change, and her firm is selling a software voting package.  We will have to see how this works out in practice.

Stapleton HOA that blocked radon mitigation is now charging legal fees - 7NEWS Denver TheDenverChannel.com

Stapleton HOA that blocked radon mitigation is now charging legal fees - 7NEWS Denver TheDenverChannel.com



DENVER - The Stapleton Homeowners Association that blocked a homeowner from installing a radon mitigation system is now sticking her with the legal fees before she sells her house.



"It's so ludicrous," said homeowner Melissa Crowder. "I am sure they are absolutely embarrassed, and that's their way of getting back to me."

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I won't get into the merits of this particular dispute, but speaking in general, fee-shifting provisions in CC&Rs and the statutory and contractual lien powers of associations carry with them the potential for abuse. It is an aspect of HOA/condo activity that needs to be subjected to more careful judicial oversight.

Homeowners' Associations Could Face Liability for Bear Attacks | Lowndes, Drosdick, Doster, Kantor & Reed, P.A. - JDSupra

Homeowners' Associations Could Face Liability for Bear Attacks | Lowndes, Drosdick, Doster, Kantor & Reed, P.A. - JDSupra



I didn't know there were so many black bear sightings in Florida. I thought all they had were Burmese pythons, boa constrictors, alligators, piranha, walking catfish, and wild boar. Who knew they had anything normal that could kill you.

Michigan Lawsuit Shows U.S. Voters May Not Technically Have the Right to Elect Their Mayors - CityLab

Michigan Lawsuit Shows U.S. Voters May Not Technically Have the Right to Elect Their Mayors - CityLab

"Public Act 436 seeks to put local governments on better financial footing. It does this by appointing an [emergency manager] in jurisdictions where the Governor and State Treasurer have determined that the local government was experiencing a financial emergency. The Act does not take away a fundamental right to vote, because such a right has never been recognized by the courts."

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So said Federal District Court Judge George Steeh, in an order that is on appeal.



Most Americans view the right to vote as fundamental, as they understand that word. And they believe that self-government at the local level is a fundamental right that is at the core of popular sovereignty. But most Americans don't understand the constitution very well.  Listen to the utter nonsense that comes from "sovereign citizens," militia goons, property rights extremists, gun rights absolutists, Cliven Bundy, and a host of other fanatics, who come up with their own bizarre interpretations of a constitution that they don't remotely understand. For them, it means whatever makes them feel good.



The word "fundamental" has special meaning in the context of civil liberties jurisprudence. Some liberties and rights are viewed as being essential to constitutional governance, and laws that infringe on those liberties and rights are viewed with "strict scrutiny" by the courts.  When it comes to the right to vote, what is the scope of that right, and how "fundamental" is it?  In the context of the emergency manager law, is the right to vote merely the right to trot off to the polls and vote for people of your choice, or does the right to vote require that the people you vote for have the power to govern your community?  Because people in cities that had been taken over by governor-appointed emergency managers could still vote for city officials. It's just that the municipal officials they voted for no longer had any power to govern.



Related to this is Dillon's Rule, which is the old doctrine saying that local governments are just creatures of state law and state constitutions, with no constitutional right to exist except insofar as state law permits. Home rule statutes were a response to this principle, but ultimately those are just state laws, too, by which states delegate sovereignty to cities. That means state laws can take it away again.



To me, the right to vote is fundamental, and it should include the right to local self-determination. Operationalizing that can involve a lot of detailed issues, of course. But I don't like this emergency manager system, and I think the racism that underlies it is obvious. As the article explains, quoting a legal brief, there is a scoring system to determine whether to appoint an EM, and:  "...six out of seven communities (85%) with a majority population of racial and ethnic minorities received [emergency managers] when they had scores of 7. At the same time, none of the twelve communities (0%) with a majority white population received an EM despite having scores of 7 or higher."  

Hidden Harbor Homeowner's Association President indicted | WTVC

Hidden Harbor Homeowner's Association President indicted | WTVC: "Detectives investigated an allegation that Markee, who was the President of the Hidden Harbor Home Owner's Association, had embezzled monies from the association. Detectives presented their findings to the Hamilton County Grand Jury who returned the indictment."



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As I keep saying, there needs to be more visibility and more oversight of condo and HOA financial activities.

KFOX14 Investigates: Residents continue battle with Oasis Ranch HOA | KFOX

KFOX14 Investigates: Residents continue battle with Oasis Ranch HOA | KFOX: "Some residents living in the Oasis Ranch neighborhood in east El Paso are continuing their protest against their Homeowner's Association board.

KFOX14Investigates reported last week some residents stopped paying their $20 monthly HOA fees, saying they're not getting the maintenance services they pay for.

Dana Properties, who manages the neighborhood, said the HOA can't do needed maintenance because they don't have the money since people have quit paying the fees."

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Not paying HOA assessments is always a risky tactic. You can find yourself facing a lien on your home that can be released only by paying the assessments plus thousands of dollars in attorney fees and penalties.

Family watches in horror as dog mauled to death in their own home - 680 NEWS

Family watches in horror as dog mauled to death in their own home - 680 NEWS: "Tuesday night his little Havanese named “April” was mauled to death on the floor of his condo by a neighbour’s pit bull that got loose in the hall and muscled its way through his front door...



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I have no idea why people want to own aggressive dogs.

Bloomfield neighborhood by-laws show outdated, racist language

http://www.wxyz.com/news/bloomfield-neighborhood-by-laws-show-ban-on-blacks?utm_content=bufferab45e&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

Here's another old HOA with a race restrictive covenant. These covenants are part of the hidden history of HOAs that nobody wants to remember. One of the main reasons HOAs started to spread in the years after WWI was the ability to ban anybody other than Caucasians from residential neighborhoods.

CAI TV Commercial on Vimeo

CAI TV Commercial on Vimeo:

Victoria homeowner horrified after tenant lists condo on AirBnB | CTV Vancouver Island News

Victoria homeowner horrified after tenant lists condo on AirBnB | CTV Vancouver Island News:



Cheeky of him.

CanLII - 2016 ONSC 2565 (CanLII)

CanLII - 2016 ONSC 2565 (CanLII): " This is an application for a declaration that the respondents have breached section 117 and 119 of The Condominium Act, 1998, SO 1998, Chapter 19 (the Act) by failing to permit the applicant to enter the respondent’s (Mr. Lu’s unit) to carry out repairs required as a result of flooding in the unit, and an order permitting the applicant to enter the unit as necessary to:

(a)         inspect the unit and common elements and determine the repairs required as a result of flooding in the unit, and;

(b)         to carry out the required repairs to the unit and common elements."



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Which it turns out the owner should not have done: " In the circumstances I find that the respondents should be responsible for costs in the amount of $12,000, payable immediately.

Goldman Sachs Agrees to Pay More than $5 Billion in Connection with Its Sale of Residential Mortgage Backed Securities | OPA | Department of Justice

Goldman Sachs Agrees to Pay More than $5 Billion in Connection with Its Sale of Residential Mortgage Backed Securities | OPA | Department of Justice: "“This resolution holds Goldman Sachs accountable for its serious misconduct in falsely assuring investors that securities it sold were backed by sound mortgages, when it knew that they were full of mortgages that were likely to fail,” said Acting Associate Attorney General Stuart F. Delery.  "



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But this is a civil case. What about throwing some of these crooks in jail? Here's an intriguing line from down in the press release: "“This resolution holds Goldman Sachs accountable for its serious misconduct in falsely assuring investors that securities it sold were backed by sound mortgages, when it knew that they were full of mortgages that were likely to fail,” said Acting Associate Attorney General Stuart F. Delery."

EDITORIAL: Who leaked details in the HOA probe? | Las Vegas Review-Journal

EDITORIAL: Who leaked details in the HOA probe? | Las Vegas Review-Journal

This just reeks--we have a Nevada Supreme Court Justice named as a leaker, reports of Department of Justice personnel leaking to the conspirators, and a federal judge who sealed it all up at the request of...the Department of Justice. As the Review-Journal says:



"The public obviously has a greater interest in learning whether the employees of their federal justice department engaged in misconduct that could have affected a massive public corruption case than those same employees have in keeping their personal indiscretions secret. The public has a right to know if a thorough and competent investigation of alleged wrongdoing was conducted, and why no one was ever held accountable for the alleged leaks."

Homeowners want changes to HOA transfer fees - 7NEWS Denver TheDenverChannel.com

Homeowners want changes to HOA transfer fees - 7NEWS Denver TheDenverChannel.com

Ka-ching, ka-ching, goes the cash register at the property management firm.

Bill Text - AB-1799 Common interest developments: association governance: elections.

Bill Text - AB-1799 Common interest developments: association governance: elections.



Yesterday I had a long phone conversation with Marjorie Murray of the Center for California Homeowner Association Law.  She told me about a new Assembly bill that is now in committee.  California has detailed statutes regarding procedures that HOA and condos must adopt for elections, to ensure that they aren't rigged, including independent election inspectors, handling and preservation of ballots, recounts, etc.  This bill, AB 1799, would create an exemption from that law for uncontested elections. This is a problem.  For example, boards could disqualify potential challenger candidates by charging them with rule violations, and in effect manufacture an uncontested election, which they could then rig with impunity.  They can also just discourage challengers by other means--"hey, why are you costing us all money by running for the board?" In any event, allowing any HOA or condo elections to operate outside the law is a terrible idea. I suppose the idea is that it is a waste of money to have an inspector for an uncontested election. But I would want to know how many ballots were cast anyway, and I don't like the idea of creating an incentive for associations to save money by not having contested elections.



The bill is sponsored by the Republican leader in the Assembly, Chad Mayes. The California legislature is run by Democrats and Jerry Brown is the Governor, so I hope this thing gets killed in committee. But please don't hesitate to send emails to the Committee.



Here is the operative language:



"(f) Directors shall not be required to be elected pursuant to this article if the governing documents provide that one member from each separate interest is a director, or if the election of directors is uncontested. For purposes of this subdivision, an election is uncontested if the number of candidates for election does not exceed the number of directors to be elected at that election."



The bill is in the Housing and Community Development Committee and will be heard on April 13, Marjorie tells me.

As Water Infrastructure Crumbles, Many Cities Seek Private Help

As Water Infrastructure Crumbles, Many Cities Seek Private Help

"More than 2,000 municipalities have entered public-private partnerships for all or part of their water supply systems, according to the National Association of Water Companies, which represents private water companies like Veolia North America and American Water. Partner municipalities include San Antonio; Akron, Ohio; and Washington, D.C. Miami-Dade County is considering partnerships for three water facilities, including one built in 1924. And Wichita, Kansas, is starting to study the issue."

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The problem is that voters don't want to pay taxes to maintain existing infrastructure. They can be more easily persuaded to approve bonds and borrow to build something new than to maintain what they already have. When it comes to boring old maintenance, they don't want to approve the borrowing and spending. So municipal infrastructure is in serious decline in this country, to the tune of at least $3.6 trillion needed by 2020. But of course people want top quality infrastructure--clean water, safe bridges and dams, smooth roads and highways--they just don't want to pay for it. And this is where PPPs (private-public partnerships) and investment banks come into the equation.  It's another way to say "privatization." And the record of bad, bad deals in the name of these complex arrangements is quite impressive.  There's always some cool way of financing the whole thing--investment banks, sovereign wealth funds, private equity firms, vendors, concessionaires, derivatives, interest rate swaps... The deals usually get negotiated in secret by the city mayor or chief executive of the county, then fast-tracked through city councils or county boards without sufficient study or any right to change it--up or down, now, or it's off--and foisted off on the public as brilliant ways to get something for nothing. Ask the people of Jefferson County, Alabama.  They got taken to the cleaners so badly using interest rate swaps to pay for a new sewer system that the county had to go bankrupt. J. P. Morgan took care of everything, don't you know.

Donald Trump Made Up Stuff 71 Times In An Hour

Donald Trump Made Up Stuff 71 Times In An Hour:

"On Wednesday, The Huffington Post assigned five and a half reporters to look into a roughly 12,000-word transcript of Trump’s town hall event on CNN the night before. It took us hours, but in all, we found 71 separate instances in which Trump made a claim that was either inaccurate, misleading or deeply questionable. That’s basically one falsehood every 169 words (counting the words uttered by moderator Anderson Cooper), or 1.16 falsehoods every minute (the town hall lasted an hour, including commercial breaks)."



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Of course, this means nothing to his followers.

Larry J. Sabato's Crystal Ball » The Electoral College: The Only Thing That Matters

Larry J. Sabato's Crystal Ball » The Electoral College: The Only Thing That Matters:



Larry Sabato is the just about the best at this prediction business, and he has a Clinton-Trump matchup turning into a route: Clinton 347 electoral votes, Trump 191. Trump is toxic for the Republican Party, which is why they are trying to derail him in Wisconsin. With the RNC chair and the Speaker of the House both being from Wisconsin, with Trump's goon campaign manager being brought up on battery charges, and with Trump saying he wants to jail women who have abortions, it seems likely that he will lose Wisconsin. But we shall see what the voters have to say.

14 Million Americans Live in Extremely Poor Neighborhoods | FOX40

14 Million Americans Live in Extremely Poor Neighborhoods | FOX40:

"Suburban neighborhoods fell into deep poverty at more than double the rate of cities, according to Brookings. Almost three times as many people lived in concentrated suburban poverty in 2010-14 than in 2000. Also, a growing number of suburban neighborhoods are on the cusp of extreme poverty.

Lower income Americans have been flocking to the suburbs in recent years, following the jobs in construction, retail and restaurants that relocated there. But the suburbs lack the transportation, social services and affordable housing to help lift poor residents up the income ladder, Kneebone said. And those who lose their jobs become stuck in poverty there."



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Thanks to Fred Pilot for this link. Being poor is hard, but being poor and living in a neighborhood of concentrated poverty is much worse. And non-whites who are poor tend to be concentrated in poor neighborhoods:  "Whites make up 44 percent of the nation’s poor, but account for just 18 percent of the poor people living in concentrated poverty. Poor blacks are almost five times as likely to live in extremely poor neighborhoods as whites, and poor Hispanics are more than three times as likely."  Poor people have been "flocking to the suburbs" for several decades, moving to small municipalities where there is little or no government of non-profit support structure for poor people. This has created crisis conditions in a number of places here in the Chicago, including south-of-Chicago suburbs  such as Harvey, Dolton, Markham, and a number of others.

Driverless Taxi Pods to Come to Gurgaon, An Indian City Run by Private Industry - CityLab

Driverless Taxi Pods to Come to Gurgaon, An Indian City Run by Private Industry - CityLab

Libertarians are excited about this city because it grew like crazy and has virtually no government or public infrastructure, and no regulation--Privatopia, in other words. Unfortunately, it is an environmental hellhole, and that's only the beginning.  If you are rich and living in a luxury skyscraper, I guess life is pretty sweet. But if you are poor, not so much.

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"Gurgaon may be a bustling metropolis, but it lacks infrastructure, which means there’s no citywide system for water, electricity, or sewage. Private companies handle those, the economists write: Trucks that haul away waste dump it on public land, tap water is often delivered by private trucks, and reliable electricity often comes from diesel generators that pollute the environment."

Urban Revival? Not For Most Americans | Jed Kolko

Urban Revival? Not For Most Americans | Jed Kolko:

"In recent years, numerous studies and media reports have documented that college-educated young adults have been drawn to urban centers. At times some have claimed a broader demographic reversal in which cities grow faster than suburbs, and even the end of the suburbs.

But, in fact, the U.S. continues to suburbanize. The share of Americans living in urban neighborhoods dropped by 7%, from 21.7% in 2000 to 20.1% in 2014. Even looking at only the densest urban neighborhoods where about one-third of the urban population lives, the share of Americans living in these neighborhoods fell by 5%, from 7.4% in 2000 to 7.0% in 2014. (See note at end of post for details on data, methodology, and definitions.) Headlines about educated young adults flocking to Brooklyn and San Francisco aren’t wrong – but they are far from the whole story and are unrepresentative of broader trends. Other demographic groups are suburbanizing faster than the young and rich are piling in to cities.

This post looks at the change in urban living for detailed demographic groups, using individual-level data from the Census. The findings are consistent with analyses of the most recent county data and of detailed neighborhood data, both of which confirm that the American population overall continues to suburbanize. What’s new is that individual-level data show us how skewed the urban revival is toward rich, young, educated Whites without school-age kids."



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That whole "middle class returning to the city" thing kind of flopped.  Young rich people are doing it, but when they have kids it is off to the suburbs even for them. The people who predicted the end of the suburbs couldn't have been more wrong.

Crack down on condo association abuses | Miami Herald

Crack down on condo association abuses | Miami Herald

This is unintentionally hilarious. They "revealed" this in the sense that Columbus "discovered" America. In both cases, there were a lot of people there ahead of them.



"Allegations of fraud by condominium associations in South Florida is nothing new, but the latest case to come to light is shocking in its scope. And it reveals something else: That investigation into such abuses by local authorities is too infrequent, and many condo residents are left frustrated without the help of the agencies created to protect them."

Condo owners face financial losses under receivers’ watch | Miami Herald

Condo owners face financial losses under receivers’ watch | Miami Herald

"Tropical Point is one of many Miami-Dade condos whose directors went to court to request the appointment of a receiver to help them regain their financial stability. In theory, the receivers take over units that are vacant or have defaulted on their mortgages, rent them and pass the income to the owners' association to make up for the owners who are not paying their maintenance fees. In exchange, the receiver is allowed to pocket a set percentage of the rent. During the 18 months that Caridad Alina Ortega, the receiver appointed by Judge José Rodríguez, was in charge of Tropical Point, some of the owners paid thousands of dollars for maintenance and their debts, as well as special assessments. But conditions never improved, according to the testimony of several residents of the complex, which also faced a lien by the city of Miami. The electricity and water bills were not paid, and elevators and fire alarm and sprinklers were not repaired."

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The Miami Herald is discovering that a whole lot of people are profiting from bad governance and inadequate capitalization of condominiums.

State must improve policing of condo fraud | Miami Herald

State must improve policing of condo fraud | Miami Herald

Gee--do you think?  Actually there are about 50 states that should improve their policing of condo and HOA fraud. But perhaps a person could be pardoned for being a bit skeptical about any state or local government's intention to actually do something about it. Local governments have been using CIDs as cash cows for decades, and the profits come from collecting property taxes and not providing services. Criminal investigations and prosecutions for white collar crime are expensive. Got to the police or prosecutors with a condo fraud issue and they tell you it's a civil matter.

Multiple South Florida condos under state investigation for election fraud | Miami Herald

Multiple South Florida condos under state investigation for election fraud | Miami Herald

"Frustrated condo residents say they have few options. Local police agencies say that most of the complaints do not involve criminal activities and can be handled in civil courts. Prosecutors say police or the DBPR are responsible for enforcing the laws, but the state agency argues that it cannot investigate complaints about actions that fall outside its jurisdiction or that lack sufficient evidence. After receiving several complaints in recent months from residents alleging financial mismanagement, lack of transparency and electoral fraud in condominiums, el Nuevo Herald and Univisión 23 launched an investigation. Their findings included at least 84 fraudulent signatures on ballots for the board of directors at The Beach Club. From the more than 500 complaints filed with the DBPR by condo owners in Miami-Dade in 2015, the investigative team focused on the 81 cases still under state investigation. Of those, 27 involved alleged irregularities in elections to boards of directors — people who approve lucrative contracts for the condos and 31 involved a lack of access to information that owners have a right to obtain under state laws. Another nine cases involved allegations of financial mismanagement. The rest involved the unauthorized use of reserve funds, disputes over fines and other issues."

Deposition says HOA fraud figure was warned about FBI raids by State Supreme Court Justice Saitta | Las Vegas Review-Journal

Deposition says HOA fraud figure was warned about FBI raids by State Supreme Court Justice Saitta | Las Vegas Review-Journal



"Nevada Supreme Court Justice Nancy Saitta “tipped off” a key government target to FBI-led raids in an investigation of massive homeowners association fraud, according to a sworn deposition obtained by the Las Vegas Review-Journal. In the deposition, Lisa Kim, who ran a company that managed HOAs linked to the long-running investigation, testified that the FBI’s target, the late lawyer Nancy Quon, told her about the tip on Sept. 24, 2008, the first of two days of court-approved law enforcement searches across the valley...Saitta, who was first elected to the Supreme Court in 2006, presided over construction defect cases while she was a Clark County District Court judge. Quon often appeared before her."

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Ever since the news of this investigation broke, there were stories about alleged connections between judges and prosecutors and the HOA fraud ring, especially construction defect attorney Nancy Quon. Some stories suggested that such connections explained why the Nevada US Attorney's Office was kicked off the case, which was taken over by a special white collar crime unit from Washington, DC. All the documents on that, though, are tippy-top, hush-hush, secret.   To wit:  "The epic federal case wrapped up in January with more than 40 convictions, but the government continues to keep a lid on a super-secret investigation into the leak allegations that did not result in any criminal charges. Kim, who pleaded guilty and cooperated with prosecutors, said in the June 9 deposition that Quon also told her a member of the U.S. attorney’s office had tipped her to the investigation months before the raids. Quon did not identify her source at the office, which then was overseeing the high-profile prosecution...Quon told Kim she was warned by a government source to watch her back. “She said that someone in the U.S. attorney’s office had told her that there’s this big HOA thing going on and that things were going to be bad really soon … and that I don’t know what you’re doing with Benzer, but just be really careful,” Kim testified."



Jeff German of the Las Vegas Review-Journal has done an incredible job on this case for several years. This story is a blockbuster, and I strongly urge you to follow the link and read the whole thing.

Why the system of rail privatisation in the UK has been a disaster | British Politics and Policy at LSE

Why the system of rail privatisation in the UK has been a disaster | British Politics and Policy at LSE

Why? Because these infrastructure privatization schemes in Britain and the US are set up as gigantic ripoffs of the public sector and taxpayers that enrich private investors. All the significant risks are borne by the taxpayers, while the investors get the profits and can walk away any time they want.



"Some of the problems of the privatised rail system are well known. Perhaps best known is the systematic gaming of the train operating franchise system. Franchisees – as in the catastrophic case of the East Coast Line – can walk away from the franchise without serious penalties when the ludicrously unreal projections that won the contract in the first place turned out to be fantasies. Less known, and systematically documented in the CRESC report, is the extent to which the train operators have been able to manipulate the licensing system so that they effectively pay dividends to shareholders from direct public subsidy; between 1997 and 2012 on the West Coast Mainline, Virgin Trains paid out a total of £500 million in dividends and received a direct subsidy of £2.5 billion. Worse still, the report highlights the large, hidden and indirect subsidies to train operating companies which have completely wrecked the balance sheet of the quasi-public Network Rail company that provides infrastructure."

Why Reston, Virginia, Still Inspires Planners 50 Years Later - CityLab

Why Reston, Virginia, Still Inspires Planners 50 Years Later - CityLab



Reston is one of the original New Towns that inspired many imitators, most of them on a much smaller scale.  For those who don't like CIDs, you may reflexively hate the idea that anybody would admire Reston.  The ideas--his own and those of others--that he implemented at Reston have shaped suburban development ever since.  Private planning, private funding, private government, mixed use development...and on and on.  But Simon, who I met years ago, was something of a utopian visionary who sincerely wanted to create the ideal place to live. He reminded me of Ebenezer Howard, who invented the whole "Garden City" idea back in 1897, with his plans to build entirely new cities on undeveloped land.  Few developers try to build Reston-sized communities these days, because the risk is so enormous. Reston, Columbia, Radburn, Rancho Bernardo, and a few other huge private communities are still around after many decades.

In France, a Retirement Co-op Ensures Seniors Are Not Treated as Commodities

In France, a Retirement Co-op Ensures Seniors Are Not Treated as Commodities

"They didn't want to end up in a traditional retirement home. They wanted to remain the actors in their own lives. Seven years after their first discussions about how to age well, a group of retired people is starting to build the first co-op for the aging. Non-speculation, democracy and environmental concern are the foundations of the "Chamarel-Les Barges" project, located in a neighborhood of Vaulx-en-Velin, east of Lyon, France. The project is so inspiring that the bank has even conferred a 50-year loan to the founders, who are in their 60s."

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Housing cooperatives are not popular with the real estate industry, bankers, or title companies. They love condominium ownership because it creates many individual units that can be bought and sold, creating a whole lot of business for everybody involved in real estate transactions.  But most of the people who live in co-ops find them a good living and ownership arrangement. In a co-op, each resident has a proprietary lease that entitles them to exclusive occupancy of their unit, and also a share of stock in the corporation that owns the entire property. In other words, each resident is a tenant, and collectively they are their own landlord. There is only one blanket mortgage on the whole property. And in order to sell a share, the new prospective owner has to be approved by the co-op board.  Usually co-op shares are not viewed primarily as investments, as many condominium units are, so there is more permanence and less selling at the slightest sign of falling real estate prices. There seems to be less conflict in co-ops than in condominiums, and on the whole they survived the crash better than condominiums, or at least that seems to be the predominant opinion.

N.J. men accused of stealing more than $75K from condominium | NJ.com

N.J. men accused of stealing more than $75K from condominium | NJ.com



Yesterday I was contacted by somebody who is interested in making more people aware of this situation through various means.  The person says it is a much larger story than the article indicates. I am not authorized to give out this person's contact information, but if anybody wants to follow up and learn more about the case, send me an email at ecmlaw@gmail.com and I will pass your contact info along to the person in question.



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Three men allegedly stole at least $75,000 from a Jersey City condominium, pocketing money intended for repairs, loan repayments and other costs.  Raymond Gonzalez and Raul Miranda, of Hackensack-based property management company, RPM Group, and Jose Astuto, owner of Queen Remodeling Corp., in North Bergen, have been charged with conspiring to steal between $75,000 and $500,000 from the Berkeley Carteret Condominium Association, according to an indictment provided on Wednesday by the Hudson County Prosecutor's Office. They allegedly stole money from residents of the Jersey City community--located at 53 Duncan Ave.--intended for general property maintenance, loan repayment and other purposes. Representatives for the condominium could not immediately be reached for comment.  The three men are charged with money laundering and conspiracy, according to the indictment. Gonzalez and Miranda face additional theft by deception and theft by failure to make required disposition of property received charges, according to the indictment. Assistant Prosecutor Gene Rubino would not provide additional information on the allegations against the men. The men did not immediately return calls for comment on Wednesday.

The next housing crisis is here - Yahoo Finance

The next housing crisis is here - Yahoo Finance

See my post below about new housing starts staying very low since the recession.  Here's one view saying that there are few new starter homes on the market, the ones that exist are getting bought up by investors, and mortgage lenders are still picky about making loans. That's all supply side.  But I think at the core of the housing market problems is one simple demand side fact: an awful lot of young people can't afford to buy starter homes. That's why developers aren't building them. Millennials are saddled with student loans, many of them are working in jobs that don't pay much so they can't save a down payment, and government is doing bupkis to address these problems. So lenders don't see them as good credit risks.

Thanks to Fred Pilot for this link.



"Following the mid-aughts housing bubble that saw homeowners across the country get themselves upside down in homes and mortgages they couldn't ever afford to repay — a crisis that was as much about too much supply as it was about too much bad financing — the market has gone the complete other direction. First-time homebuyers are crowded out, with Trulia's chief economist Ralph McLaughlin writing Monday that the number of starter homes on the market has declined 43.6% in the past four years. Homeowners who want to move from a starter home to something better can't afford the next step. McLaughlin notes that the number of "trade-up" homes on the market is also down about 40% over the same period. Meanwhile, mortgage lenders, despite record-low rates, are still reluctant to extend credit to less-than-superb borrowers. And as investors look for places to earn whatever return on capital they can muster, the low end of the housing market has almost ceased to exist as the investor class has bought up homes with the plan to flip them."

Housing starts never recovered from the Great Recession

This chart shows housing starts from 1960 to the present, with recessions shown as gray vertical lines. As you can see, housing starts nearly always decline just before the recession officially begins, and housing starts go up fast as the recession ends.  You can see the enormous overbuilding of the 1990-2005 years.  Then housing starts fell like a rock for three years before the Great Recession started. Then they stayed flat, at historically low levels, for several years after the recession ended. They have been crawling up the last few years, but still haven't reached average levels, even given that the US has a much larger population than before.  The real estate development industry was transformed by the housing boom and the housing bust. Nearly all the small and medium-sized developers were wiped out, and now the industry is dominated as never before by a few giant, publicly -traded corporations.  When they do residential development, they build virtually nothing except CIDs.  They are national or international firms that are able to dictate terms to small suburban municipal governments, as in "take it or leave it--we do it our way or we go someplace else."

Neighborhood gate opens up HOA troubles--Georgia - Story | WAGA

Neighborhood gate opens up HOA troubles - Story | WAGA

"The installation of a security gate opened the neighbors' eyes to just how closed off they feel they are to the management of their community. Even the HOA treasurer, the man in charge of the finances, says he no longer has a say in how the money is spent. 

 The treasurer says Brighton Village shelved an $80,000 gate proposal because they didn't have the money. But then after new board leadership arrived, he says, a gate was going in and the price was going up.  "And we're now at $135,000," he told the Fox 5 I-Team. 

 Alarmed, Montgomery sent a letter warning his neighbors that "no decision was voted on by the board." Neighbors chimed in wanting to know more. "We want to see the contract. We want to see the financial," said homeowner Zakia Funchess The Fox 5 I-Team has tried to talk to board president Michael Pillow about the mounting tensions since he took the post.  When I asked him, "Can we talk to you about the ill will between the board and some of the neighbors," he kept walking. "

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He seems nice.  State laws need to mandate disclosure of association financial information, and most of all there needs to be an enforcement mechanism short of filing a civil suit or waiting for the next BOD election.

Disabled vet concerned HOA fees dispute will lead to foreclosure

Disabled vet concerned HOA fees dispute will lead to foreclosure

SAN ANTONIO -- A disabled Air Force veteran who lost nearly all his hearing after going through treatment to remove a tumor said he is concerned he will now lose his home over a two-year-old dispute with his homeowners association regarding back dues. "I have my problems, but I have to try to help myself," said Northington Butler, Jr., who was sued by the Westover Crossing Homeowner's Association in March 2014. Butler and the HOA entered into a settlement agreement last July that required Butler to pay $100 a month to cover more than $2,300 in back dues, interest and attorney's fees. Certified money order records provided by Butler show he has made the monthly payment each month. However, Butler said he stopped receiving invoices for his regular HOA dues. When Butler wrote the HOA's attorney about the invoices last month, he received a letter back accusing him of not fully complying with the settlement agreement because he had not signed the paperwork."

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I hope the association sees the light--the article says somebody at the management company says they don't intend to foreclose.

Lowcountry neighbors sue HOA, Hargray for alleged illegal kickback deal | WSAV-TV

Lowcountry neighbors sue HOA, Hargray for alleged illegal kickback deal | WSAV-TV

"Some Lowcountry neighbors are taking their cable company, Hargray, and homeowner’s association’s (HOA) officers at D.R. Horton to court. They’re suing the two companies, accusing them of an illegal kickback deal. Neighbors of the D.R. Horton-built communities claim the company acted “unjustly” in making the said agreement with Hargray to charge homeowners “unfair” prices."

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The privatization of political rallies | Political Insider blog

Where Georgia is ahead of the curve: The privatization of political rallies | Political Insider blog



"The incident at Burt’s Pumpkin Farm in Dawsonville was, in fact, a precursor to a new, defining feature of politics in 2016 – the privatized presidential rally. Other candidates have engaged in culling potential disruptors – whether inconvenient reporters or suspected counter-demonstrators — from their mass gatherings. Prior to Georgia’s primary earlier this month, two black college students were ejected from a Hillary Clinton rally at Atlanta City Hall by police, for scrawling “Black Lives Matter” on the back of a campaign sign. But it is the Republican campaign of Donald Trump that has carried crowd (and press) control to a new extreme. Two things you can always count on at his raucous rallies: Loud music, and the disembodied male voice that makes it clear that “this is a private event paid for by Mr. Trump.”

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Well, of course Trump uses "private property rights" to silence freedom of speech. He's a real estate developer, after all, and they figured out that game a long time ago. This is why so many CID residents get in trouble for political expression--they are on private property and under the rule of a private government, courtesy of a real estate developer and a local government that (wink wink) knew nothing, nothing.

You know what is really funny?  There are some people who consider themselves homeowner activists who support Trump.  How clueless is that?

CAI supports federal legislation to give income tax deduction for association assessments

CAI Government Affairs Blog

"U.S. Representatives Anna G. Eshoo (D-CA) and Mike Thompson (D-CA) introduced a measure that would allow homeowners in community associations who earn $115,000 or less in annual income to deduct up to $5,000 of their association fees and assessments from their federal tax liability. Community Associations Institute (CAI) has expressed support for the bill. The federal legislation will benefit many of the more than 66 million Americans who live in homeowners associations, condominium communities, cooperatives and other planned communities."

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Stay tuned--let's see if this Democrat-sponsored bill goes anywhere in a Republican-dominated, Tea Party-crazed, House of Representatives.

Thoughts on micropolitics and macropolitics

When I first started writing about CIDs, I realized that there were two sets of issues I wanted to write about, and I divided them into micropolitics and macropolitics. Micropolitics means all the things that go on inside associations that are ruled by private governments, and for me the most important issues have to do with the relationship between unit owners and their BOD. Macropolitics refers to the relationship between associations and the rest of society, such as governments and developers. One important issue of macropolitics is to what extend this type of real estate development contributes to segregation--by race, income, age, and other factors.

Both these issue areas are important.  Unfortunately, many people are intensely interested in issues of micropolitics, but don't care about the macropolitics issues at all.  This is really too bad.  It speaks to a lack of political awareness that undermines a lot of the activism people are involved with. When people trot off to the state capitol to make impassioned pleas for the rights of CID unit owners, claiming oppression at the hands of BODs and professionals, they run into legislators who may be unsympathetic.  Why? Because they are thinking of these activists as over-privileged homeowners who have voluntarily isolated themselves from the rest of society in exclusive enclaves, and who now want to remake the deal they agreed to.When I tried to interest foundations in studying this subject and doing adult education, I ran into the same stereotype there.

Over the years I have done everything I could to dismantle that perception. I have written and talked about municipal mandates, adhesion contracts, lack of choice in the housing market, conscripting moderate and even low income people into condos and townhomes, and so forth. But the perception is still there.

I think if owner activists tried to link their causes with those of other interest groups that have larger concerns and broader constituencies, such as consumers, seniors, affordable housing advocates, for example, it would make their activism more effective. It would help to dispel the spoiled rich suburbanite/gated community stereotype.

I also think that people need to give more thought to association finances. This is both micro and macro politics. How can you claim to be an advocate for owner interests if your burning passion is to see associations disintegrate financially from being unable to collect overdue assessments?  The owners you claim to care about are the ones who would get hurt. The issue is not whether they should be able to collect assessments from every owner. Of course they should, because the owners who pay end up carrying the burden of those who don't. And defunct associations hurt all the owners and the surrounding communities, with some level of local government left with the problems. The issues that need attention are about how and what associations should be able to collect--what practices are unfair or abusive, how should assessment levels be determined, what fees and charges should be permissible, etc.

Finally--this type of housing is not going away. It is here to stay. In fact, it has been spreading all over the world. Spending time and energy trying to abolish CID housing is unproductive and reveals a lack of understanding of why this is happening. Local governments are not going to go back to the days when they used taxing and bonding capability to build and maintain the infrastructure needed to support private residential development. They are too busy trying to find money to fill potholes and keep bridges from collapsing. Developers, state legislators, lenders, and federal bureaucrats have institutionalized CID housing and will continue to be the norm in new construction in the years to come.

Woman convicted of looting homeowners associations in Simi Valley, Calabasas

Woman convicted of looting homeowners associations in Simi Valley, Calabasas: "The owner of a now-defunct management company in Thousand Oaks has been convicted of systematically looting hundreds of thousands of dollars from two homeowners associations in Simi Valley and Calabasas.

Kristin Davis, 46, was found guilty this month by a Ventura County Superior Court jury of stealing from the Big Sky Homeowners Association in Simi Valley and the Oak Park Calabasas Homeowners Association, which her company managed."



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One of these, Oak Park Calabasas, was involved in numerous mega-lawsuits a few years ago arising out of insurance claims and breach of contract disputes.

Dozens of Lowcountry homeowners associations sue property manager | News, Weather, Sports, Breaking News | WCIV

Dozens of Lowcountry homeowners associations sue property manager | News, Weather, Sports, Breaking News | WCIV: "CHARLESTON, S.C. (WCIV) — "More than 50 homeowners associations from Seabrook to Summerville filed a lawsuit this week alleging that a property manager billed at least some of them for services that weren't provided.

The nearly five dozen plaintiffs filed the lawsuit Monday in Charleston County Circuit Court alleging that Marshland Communities and its owner, Karen Colie, misappropriated funds from at least some of them."



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The manager says she "made some terrible mistakes in an effort to stay afloat and it has caught up with me."  The temptation to do these things has proven too great for many managers and officers, who have helped themselves to association funds in one way or another. With owners often not paying much attention, and little if any government oversight, it is easy to see why this happens to often.

Inside the "Disney for Adults" That Could Help Deliver Florida to Donald Trump | Mother Jones

Inside the "Disney for Adults" That Could Help Deliver Florida to Donald Trump | Mother Jones:

"The largest retirement community in the United States is home to 49 golf courses, dozens of restaurants, a college, an app, and three movie theaters spread across three counties in an area larger than Manhattan. Since the first trailers popped up in cattle country an hour north of Orlando, Florida, four decades ago, the Villages has swelled to a population of more than 114,000 people; almost all are over the age of 55, white, and drive around the community in golf carts that can be outfitted to resemble taxis, fire trucks, or tanks. Residents refer to the place as "Disney for adults." In addition to being one of the most quintessentially Florida places on Earth, the Villages is one of the most Republican places in Florida. For years its politics were dominated by H. Gary Morse, the late conservative megadonor who built the community and helped send Marco Rubio to the Senate six years ago and Mitt Romney to the nomination in 2012. On Tuesday night, voters there will go a long way toward determining who comes away with the state's 99 delegates. Rubio, who spoke to an overflow crowd at a rec center here on Sunday, is staking his political future on a strong showing. But lately, everything is turning up Trump."

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The Villages is a monster retirement community in Florida that has a number of HOAs within it, but they all operate under the ultimate power of a special district that is about as undemocratic as any jurisdiction can be. I did a paper on it last year that will be a book chapter soon. But the interesting angle in this article is that a recent straw poll indicates The Villages is overwhelmingly pro-Trump. If the general election vote in Florida is close, what happens in The Villages could tilt the election to Der Drumpenfuhrer. Why is it Trump Country? "In many respects, the villages is a kind of Donald Trump Fantasyland, a world devoid of Muslims or almost any people of color, where the golf is always free and America has always been great."

Trump Announces Rally at UIC Next Week, Thousands RSVP to Protest - University Village - DNAinfo.com Chicago

Trump Announces Rally at UIC Next Week, Thousands RSVP to Protest - University Village - DNAinfo.com Chicago

As many of you know, I have taught political science at UIC since 1994. This event is creating quite a stir around campus. There is a protest being organized on Facebook and other social media.  There was also a movement to cancel the event that was immediately rejected by the Chancellor, and I agree with him. Let Trump speak at UIC, and let the protesters have their say as well.



And let me say this--when he shows up at UIC on Friday, his followers may be in for a big surprise. I wonder how much Trump's organizers knew about UIC and the surrounding area when they chose this site.  UIC is in the heart of Chicago, near Greektown, Little Italy, the Latino neighborhood called Pilsen, and the African-American west side and south side. It is the most diverse university in the most diverse general area that you can imagine.   UIC has over 29,000 students. As the University reported in September, 2015, "UIC’s well-known diversity continues, with a racial and ethnic makeup of its student body that is 37.7 percent white, 18.4 percent Asian, 20.8 percent Hispanic/Latino and 7.9 percent African-American. Undergraduate enrollment is 33.7 percent white, 28.2 percent Hispanic/Latino, 22.2 percent Asian, and 8.1 percent African-American."  It will be interesting to see what the ratio is of protesters to supporters.

New Illinois Condominium & HOA Report Reveals 50,000 Associations - Evanston Review

New Illinois Condominium & HOA Report Reveals 50,000 Associations - Evanston Review

"The state of Illinois currently has more than 50,000 active condominium and homeowner associations containing nearly 600,000 residential units, new comprehensive research by Association Evaluation, LLC has revealed. The Community Associations Institute, a respected national organization, lists a total of 18,250 condominium and HOAs in Illinois as of 2015." Our research team was surprised to learn that thousands of condominium and HOA associations were uncounted in Illinois," said Sara Benson, president of Association Evaluation, LLC, a Chicago-based real estate data-analysis firm...Association Evaluation is marketing its condominium and HOA data to condo service providers such as attorneys, property management companies, landscapers, and remodeling and repair tradesmen including roofers, plumbers and contractors."

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CAI's estimates have been used by just about everybody because the Census Bureau can't be bothered asking questions about this, and most state and local governments are happy to just let CIDs proliferate without much oversight, even to the point of not keeping track of how many there are. Sara and her organization have a different methodology than CAI uses, and they came up with a much higher number.  I don't know which is more accurate at this point, although of course I want to find out.  I'm not clear on the methodology Sara's organization is using, and the Trib article doesn't explain it very well: "The data was gathered from physical reviews and Google rooftop checks of thousands of condo and HOA properties, and an analysis of the Secretary of State records."  You have to be careful with Secretary of State searches because they lump all corporations and LLCs together and you have to decide which is an HOA or condo association. Often it is clear, sometimes it is not (see for yourself).



I also don't see any motivation for CAI to understate the numbers. But it does lead me to wonder--if it is true that CAI's numbers for Illinois are low, then are their numbers for other states and their national numbers also understated? For example, in their latest Statistical Review. CAI says there are 333,600 associations nationwide, with 26.7 million units of housing and 66.7 million people. Sara says that CAI's Illinois numbers are way low. CAI finds 18,250 association and Sara says there are 270% more than that.  So they claim that CAI only found 36.5% of the association in the state. That is an enormous difference in estimates--if you extrapolate from the claims about Illinois, then do we have close to one million associations in this country?  To be continued.

Is your home at risk for takeover? State law allows for condos to be forcibly taken - ABC15 Arizona

Is your home at risk for takeover? State law allows for condos to be forcibly taken - ABC15 Arizona

"The Arizona Condominium Act (ARS33-1228)  allows for an HOA to disband if 80 percent of the members agree to it. In this case the investors were the 80 percent. Forcing the remaining owners to sell at what they called market value set at $75,000.  That number was determined by an appraiser, hired by the investor-run HOA according to the termination agreement filed with the county. These folks say it was just enough to pay off their mortgages and left nothing to even put toward a down payment."

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I get lots of comments and emails from people saying they want owners to have the power to dissolve their HOA, and sometimes that's the sensible thing to do. But that can also be done by an investor-owner with 80% of the voting interests, who can then force the remaining owners to sell.

What Will Become of Levittown, Pennsylvania? - CityLab

What Will Become of Levittown, Pennsylvania? - CityLab: "The archetypal postwar suburb has less socioeconomic diversity—and hardly more racial diversity—than it did in the 1950s."

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Race restrictive covenants and burning crosses on lawns will tend to cut down on racial diversity. These days there are less obvious ways to accomplish the same objectives.

The rise of American authoritarianism - Vox

The rise of American authoritarianism - Vox

"Hetherington and Weiler published a book about the effects of authoritarianism on American politics. Through a series of experiments and careful data analysis, they had come to a surprising conclusion: Much of the polarization dividing American politics was fueled not just by gerrymandering or money in politics or the other oft-cited variables, but by an unnoticed but surprisingly large electoral group — authoritarians. Their book concluded that the GOP, by positioning itself as the party of traditional values and law and order, had unknowingly attracted what would turn out to be a vast and previously bipartisan population of Americans with authoritarian tendencies...Trump, it turns out, is just the symptom. The rise of American authoritarianism is transforming the Republican Party and the dynamics of national politics, with profound consequences likely to extend well beyond this election.

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Authoritarianism is the best predictor of liking Trump.

A Country Breaking Down by Elizabeth Drew | The New York Review of Books

A Country Breaking Down by Elizabeth Drew | The New York Review of Books: "The near-total failure of our political institutions to invest for the future, eschewing what doesn’t yield the quick payoff, political and physical, has left us with hopelessly clogged traffic, at risk of being on a bridge that collapses, or on a train that flies off defective rails, or with rusted pipes carrying our drinking water. Broadband is our new interstate highway system, but not everyone has access to it—a division largely based on class. Depending on the measurement used, the United States ranks from fourteenth to thirtieth among all nations in its investments in infrastructure. The wealthiest nation on earth is nowhere near the top."



'via Blog this'

HOA HOMEFRONT: Take care when selecting board members - Press Enterprise

HOA HOMEFRONT: Take care when selecting board members - Press Enterprise: "Yes, amazingly, no education or license is required to manage California associations and no education is required to serve on California HOA boards. Florida in 2013 began requiring HOA directors to certify they had read the governing documents and promise to uphold them, or to take an HOA certification course. Nevada’s CAI Chapter created a “Dedicated Community Association Leader” (“DCAL”) distinction, in which the volunteer receives about 30 hours of training. That is presently voluntary, but hundreds of Nevada volunteers have already attained their DCAL certification. In 2008, the Community Associations Institute in California sponsored AB 2806, which would have required volunteer directors obtain at least three hours of education. During the legislative process, the bill was diluted from a mandatory to a voluntary education law and then was vetoed by the Governor, who said voluntary laws are not helpful."

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Board members and officers who don't know how to do their jobs--there is so little oversight that nobody has any idea how bad the situation really is.

Condo residents warned against purchasing electric cars - WHEELS.ca

Condo residents warned against purchasing electric cars - WHEELS.ca:

"Residents of a west-end high-rise condominium just got the following message in a letter from their management board president:“Don’t buy an electrically powered vehicle in the expectation that you can have it recharged or powered on our premises … for now, thinking about buying an electrically powered vehicle may not be a practical thing.”"



'via Blog this----------------



Well...this is disappointing. When will building practices catch up with the demand for electric cars?

Police in Condos | Michelle Kelly's Condo Law Blog

Police in Condos | Michelle Kelly's Condo Law Blog:



'via Blog this'



"What does the board have to do if the police attend with a warrant? What if they don’t have a warrant? When should the condominium contact the police because of an incident that occurred on the property? In the past these questions were not easy to answer. While the condominium’s lawyer could provide general advice, there wasn’t really much case law to support the advice. Fortunately, in the past few years there have been cases that give some guidance. The courts have confirmed that residents have a reasonable expectation of privacy in the common areas of a condominium. Here are a few court of appeal decisions in the area: R. v. White (2015), R. v. Labelle (2016), and R. v. Drakes (2009). "



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These situations are complicated by the individual interest/common interest property ownership arrangement, building entry controls, and board responsibility for owner safety.

What does it say about the GOP that Trump is the white supremacists’ candidate? - The Washington Post

What does it say about the GOP that Trump is the white supremacists’ candidate? - The Washington Post

"Maybe the Republican Party cracked the seal on this kind of thing in 2014, when it elevated Rep. Steve Scalise (R-La.) to the top tier of the House Republican leadership. Scalise, as a state legislator, once addressed a white supremacist convention of the European-American Unity and Rights Organization. He says he had no idea that it was a racist group, but a local reporter says he also told her at the time that Louisiana voters should think of him as “David Duke without the baggage.”

Know Your Fascist Dictators

Know Your Fascist Dictators

"As long as we're on to the subject of fascist dictators and Donald Trump being compared to Adolf Hitler in major urban newspapers, I thought I should speak up on behalf of fascist dictator Benito Mussolini as the true proto-Trump."

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From Josh Marshall at Talking Points Memo, a more precise analysis of fascist dictators.  See also Dana Milbank on the same comparison, and I could go on.

Former Mexican President Vicente Fox: "We’re ‘Not Paying For That F*cking Wall’

http://www.mediaite.com/online/former-mexican-president-were-not-paying-for-that-fcking-wall/

Beautiful. I love it.  And here's another one I heard:

2016: No way Trump gets elected President!
2017: No way President Trump fires all those nukes!
2018: No we are doing what those apes say!

You have to find humor where you can in these times.