Legislative update
I checked Lexis yesterday and I noted that the Arizona anti-foreclosure bill passed the House, where it originated, and is now in the Senate having been refered to a couple of committees. This is H.B. 2402. It passed the house with a three year waiting period rather than the original seven years, and it requires that the home be sold for "fair market value." There are lots of questions about how this bill would work in practice and perhaps the Senate committees will get into that.
In California, I see two foreclosure-related bills. One is AB 1527, having to do with "actual notice" before foreclosure, and the other is AB 1682, that would make a number of changes in foreclosure and would require that non-judicial foreclosure be for the assessed value of the property.
In Florida, there are two competing bills. One is SB 2984, emanating from the Jeb Bush-appointed HOA Task Force, and the other is H.B. 1223, from Rep. Robaina, chair of the House Select Committee on Condominium Governance. The Task Force bill would require mediation for election and recall disputes and make other procedural changes. The Robaina bill is the ombudsman proposal. It will be interesting to see how these things play out.
Thursday, March 25, 2004
Memo to Scotland: Here is how we do it in the USA.Gun toters halt robbery attempts
Note that these are two separate self-defense situations in the Detroit area. The piece is from the Detroit Free Press.
-------------------------
"Farmington Hills police said a 32-year-old Novi woman, who had a permit to carry a small-caliber pistol in her purse, stopped a man armed with a 9mm semiautomatic handgun from taking her $40,000 diamond ring and Rolex watch.
"Police Chief William Dwyer said the woman, whose name was not released, was in the parking lot of a business at 12 Mile and Drake, where she worked in the accounting department, when a man confronted her Friday morning.
"When he came within about 10 feet, Dwyer said, the woman calmly pulled the gun out of her purse and pointed it at the man -- identified as Carl Walker, 21, of Detroit.
"Walker did not draw his weapon, police said. Instead, he ran to a nearby car and the woman called 911. Police later arrested Walker and recovered a pistol. Two companions, Monique Bell, 26, of Detroit and Daphne Patterson, 28, of Southfield, also were arrested."
...
" Two other men -- a father-son team accused of trying to rob a 65-year-old retiree -- are expected to be arraigned this morning in St. Clair County.
"The men already had robbed one woman before being stopped by the home owner's bullet on Friday, police said.
"The Ft. Gratiot Township home owner answered his door on Keewahdin Road about 8 p.m. and was accosted by a 20-year-old Worth Township man armed with a handgun. When the young man's attention was diverted, police said the home owner grabbed his own .38-caliber handgun and fired.
"'The round ended up coming out of his buttocks, so I'm sure he'll be thinking about that old man every time he sits down for a while,' said Detective Lt. Mike Bloomfield of the St. Clair County Sheriff's Department."
--------------------
See, this is what I call privatization. You take the law enforcement function and you break it down to the individual level, where the individual citizen is trusted with having enough good sense to use force only when and to the extent that it is warranted. Contrast that with the Scottish/British approach, where you have to depend entirely on the government. In other words, self-defense is fully socialized. If they aren't around when you need them, and of course they hardly ever are because crooks don't generally commit robberies in front of police officers, you are supposed to...do what, exactly? Curl up in the fetal position and beg the criminals for mercy?
Note that these are two separate self-defense situations in the Detroit area. The piece is from the Detroit Free Press.
-------------------------
"Farmington Hills police said a 32-year-old Novi woman, who had a permit to carry a small-caliber pistol in her purse, stopped a man armed with a 9mm semiautomatic handgun from taking her $40,000 diamond ring and Rolex watch.
"Police Chief William Dwyer said the woman, whose name was not released, was in the parking lot of a business at 12 Mile and Drake, where she worked in the accounting department, when a man confronted her Friday morning.
"When he came within about 10 feet, Dwyer said, the woman calmly pulled the gun out of her purse and pointed it at the man -- identified as Carl Walker, 21, of Detroit.
"Walker did not draw his weapon, police said. Instead, he ran to a nearby car and the woman called 911. Police later arrested Walker and recovered a pistol. Two companions, Monique Bell, 26, of Detroit and Daphne Patterson, 28, of Southfield, also were arrested."
...
" Two other men -- a father-son team accused of trying to rob a 65-year-old retiree -- are expected to be arraigned this morning in St. Clair County.
"The men already had robbed one woman before being stopped by the home owner's bullet on Friday, police said.
"The Ft. Gratiot Township home owner answered his door on Keewahdin Road about 8 p.m. and was accosted by a 20-year-old Worth Township man armed with a handgun. When the young man's attention was diverted, police said the home owner grabbed his own .38-caliber handgun and fired.
"'The round ended up coming out of his buttocks, so I'm sure he'll be thinking about that old man every time he sits down for a while,' said Detective Lt. Mike Bloomfield of the St. Clair County Sheriff's Department."
--------------------
See, this is what I call privatization. You take the law enforcement function and you break it down to the individual level, where the individual citizen is trusted with having enough good sense to use force only when and to the extent that it is warranted. Contrast that with the Scottish/British approach, where you have to depend entirely on the government. In other words, self-defense is fully socialized. If they aren't around when you need them, and of course they hardly ever are because crooks don't generally commit robberies in front of police officers, you are supposed to...do what, exactly? Curl up in the fetal position and beg the criminals for mercy?
Wednesday, March 24, 2004
Man Who Killed Armed Intruder Jailed Eight Years
This amazing article is from The Daily Scotsman:
"Carl Lindsay, 25, answered a knock at his door in Salford, Greater Manchester, to find four men armed with a gun. When the gang tried to rob him he grabbed a samurai sword and stabbed one of them, 37-year-old Stephen Swindells, four times. Mr Swindells, of Salford, was later found collapsed in an alley and died in hospital.
"Lindsay, of Walkden, was found guilty of manslaughter following a three-week trial at Manchester Crown Court. He was sentenced to eight years’ imprisonment."
------------
Riiiiiiiiiiiiight...I guess those hoary notions of "self-defense" have gone the way of the old home-is-your-castle thing...at least, in Scotland. I'd say William Wallace must be spinning like a top. Maybe if Mr. Lindsay had used a Claymore instead of a samurai sword it would have been a lesser sentence.
This amazing article is from The Daily Scotsman:
"Carl Lindsay, 25, answered a knock at his door in Salford, Greater Manchester, to find four men armed with a gun. When the gang tried to rob him he grabbed a samurai sword and stabbed one of them, 37-year-old Stephen Swindells, four times. Mr Swindells, of Salford, was later found collapsed in an alley and died in hospital.
"Lindsay, of Walkden, was found guilty of manslaughter following a three-week trial at Manchester Crown Court. He was sentenced to eight years’ imprisonment."
------------
Riiiiiiiiiiiiight...I guess those hoary notions of "self-defense" have gone the way of the old home-is-your-castle thing...at least, in Scotland. I'd say William Wallace must be spinning like a top. Maybe if Mr. Lindsay had used a Claymore instead of a samurai sword it would have been a lesser sentence.
Tuesday, March 23, 2004
My ears are burning...somebody must be talking about me.
Over at "HOAs", Mika Sadai's Yahoo group that owner activists frequent, a min-debate about me popped up amid the serious discussions they are having on the legislative front--(and by the way, if you haven't checked out that group, along with George Staropoli's "hoanet" you ought to).
The issue was that I practiced law for ten years, including six years in civil litigation when I did mostly HOA representation. Does that mean that my views on the subject--in this case my opinion that HOAs need to have some recourse to foreclose--are suspect?
This is an interesting predicament when you think about it. If you have never worked in the industry you are morally pure, but on the other hand you don't really know what's going on behind the curtain. If you have done legal work for associations, you are tainted forever, but you have a body of knowledge that can only be acquired by experience. This is similar to the issue that broke up the friendship between Sartre and Camus. Sartre believed philosophers should get their hands dirty by being involved in practical politics (which in that case meant revolution), and Camus said he would stick to writing. So--which is better--the knowledge you gain from actual involvement with an imperfect system, or the moral purity you keep by never doing the work? Hard to say.
As for me, I think I was lucky to have the best of both worlds. I stumbled into HOA practice from the construction defect side, and I never did any covenant enforcement or collections work, and never wanted to. I was a litigator, better known as a trial attorney. My job was representing the association against the developer or against an insurance company, or some variation on that theme.
But of course from doing this, I learned a lot about how associations work and how lawyers do covenant drafting and enforcement along with association general counsel work. I certainly began to see very quickly how the cards are stacked against the owners. I noticed among other things how the lawyer works with the BOD, and how the owners are shut out of the loop most of the time, and how a great deal depends on how the lawyer views the owners. Some attorneys want to keep the owners informed and supportive, but others think the mushroom theory is the way to go (keep them in the dark and give them just enough BS to keep them alive). It became obvious to me that the best lawyers understand that it is much better in the long run to keep the owners involved.
So I'd say that I had the best of both worlds in that I learned about this industry without having to go up against individual owners. I saw good board members and control-freak nut cases, and saw the same kind of variation with the owners--some were terrific, others were...not. Good and bad lawyers, board members, and owners. Kind of like people in general. The problem is an unbalanced system that has little or no protection for owners against the misbehavior of lawyers and board members, while there are all kinds of checks against owners getting away with anything improper.
I think this experience did influence my views on many things. As for foreclosure, to me it is an extremely harsh remedy that should only be available as a last resort and with greatly increased limitations and protections for the owner. I want to stop these foreclosures for $250 and $2500 in attorney fees, and I think nonjudicial foreclosure should be legally prohibited.
But to take away the foreclosure power completely is the wrong way to go, it seems to me. Banning HOA foreclosure is premised on the illusion that there is somebody else to pay the bills, some pocketbook or cash trove somewhere that will pay the pool cleaning company and resurface the streets. But there isn't. There is no getting around the fact that when you buy into an HOA you take on a major financial responsibility. If the association doesn't pay its bills, then IT will become the debtor, and IT will be getting attacked by collection agencies.
The way things are shaping up I think even with foreclosure power many more associations are going to be in wobbly shape in the near future. If associations can't keep the flow of assessments coming in because people feel they have no teeth, it will be that much harder.
And if you are pro-owner, if you want owners to be happy, you don't want their association to be in financial trouble. I just can't see how increasing the financial fragility of HOAs is good for owners, and if somebody can, please explain it to me. The biggest problem potentially facing owners--one I think the owner groups should think about fixing legislatively--is what I call the "bottomless pit" liability of individual owners for corporate debts and liabilities. The law is shaping up so that the owners are going to be stuck with the bills for BOD-generated liabilities, non-dischargable in corporate bankruptcy--(see Le Parc and Oak Park Calabasas). That would include debts and tort judgements. This is a frightening prospect indeed. Jim Lingl, an attorney who does a lot of legislative work in California, is trying to get a bill passed that would protect owners against this sort of thing. If you have a story to tell him about such an incident, send him an e-mail at lingllaw@aol.com
Over at "HOAs", Mika Sadai's Yahoo group that owner activists frequent, a min-debate about me popped up amid the serious discussions they are having on the legislative front--(and by the way, if you haven't checked out that group, along with George Staropoli's "hoanet" you ought to).
The issue was that I practiced law for ten years, including six years in civil litigation when I did mostly HOA representation. Does that mean that my views on the subject--in this case my opinion that HOAs need to have some recourse to foreclose--are suspect?
This is an interesting predicament when you think about it. If you have never worked in the industry you are morally pure, but on the other hand you don't really know what's going on behind the curtain. If you have done legal work for associations, you are tainted forever, but you have a body of knowledge that can only be acquired by experience. This is similar to the issue that broke up the friendship between Sartre and Camus. Sartre believed philosophers should get their hands dirty by being involved in practical politics (which in that case meant revolution), and Camus said he would stick to writing. So--which is better--the knowledge you gain from actual involvement with an imperfect system, or the moral purity you keep by never doing the work? Hard to say.
As for me, I think I was lucky to have the best of both worlds. I stumbled into HOA practice from the construction defect side, and I never did any covenant enforcement or collections work, and never wanted to. I was a litigator, better known as a trial attorney. My job was representing the association against the developer or against an insurance company, or some variation on that theme.
But of course from doing this, I learned a lot about how associations work and how lawyers do covenant drafting and enforcement along with association general counsel work. I certainly began to see very quickly how the cards are stacked against the owners. I noticed among other things how the lawyer works with the BOD, and how the owners are shut out of the loop most of the time, and how a great deal depends on how the lawyer views the owners. Some attorneys want to keep the owners informed and supportive, but others think the mushroom theory is the way to go (keep them in the dark and give them just enough BS to keep them alive). It became obvious to me that the best lawyers understand that it is much better in the long run to keep the owners involved.
So I'd say that I had the best of both worlds in that I learned about this industry without having to go up against individual owners. I saw good board members and control-freak nut cases, and saw the same kind of variation with the owners--some were terrific, others were...not. Good and bad lawyers, board members, and owners. Kind of like people in general. The problem is an unbalanced system that has little or no protection for owners against the misbehavior of lawyers and board members, while there are all kinds of checks against owners getting away with anything improper.
I think this experience did influence my views on many things. As for foreclosure, to me it is an extremely harsh remedy that should only be available as a last resort and with greatly increased limitations and protections for the owner. I want to stop these foreclosures for $250 and $2500 in attorney fees, and I think nonjudicial foreclosure should be legally prohibited.
But to take away the foreclosure power completely is the wrong way to go, it seems to me. Banning HOA foreclosure is premised on the illusion that there is somebody else to pay the bills, some pocketbook or cash trove somewhere that will pay the pool cleaning company and resurface the streets. But there isn't. There is no getting around the fact that when you buy into an HOA you take on a major financial responsibility. If the association doesn't pay its bills, then IT will become the debtor, and IT will be getting attacked by collection agencies.
The way things are shaping up I think even with foreclosure power many more associations are going to be in wobbly shape in the near future. If associations can't keep the flow of assessments coming in because people feel they have no teeth, it will be that much harder.
And if you are pro-owner, if you want owners to be happy, you don't want their association to be in financial trouble. I just can't see how increasing the financial fragility of HOAs is good for owners, and if somebody can, please explain it to me. The biggest problem potentially facing owners--one I think the owner groups should think about fixing legislatively--is what I call the "bottomless pit" liability of individual owners for corporate debts and liabilities. The law is shaping up so that the owners are going to be stuck with the bills for BOD-generated liabilities, non-dischargable in corporate bankruptcy--(see Le Parc and Oak Park Calabasas). That would include debts and tort judgements. This is a frightening prospect indeed. Jim Lingl, an attorney who does a lot of legislative work in California, is trying to get a bill passed that would protect owners against this sort of thing. If you have a story to tell him about such an incident, send him an e-mail at lingllaw@aol.com
Sunday, March 21, 2004
Big push for 'reform' sidesteps real issues
Here is attorney Scott Carpenter's counterpoint to the issues Pat Haruff addresses in the article linked below. Carpenter is a big supporter of HOA foreclosure powers.
Here is attorney Scott Carpenter's counterpoint to the issues Pat Haruff addresses in the article linked below. Carpenter is a big supporter of HOA foreclosure powers.
Time to rein in folks who prey and profit
This is an article by Arizona's CHORE activist Pat Haruff about HB 2402, a bill in the state legislature that would restrict HOA ability to foreclose on liens.
This is an article by Arizona's CHORE activist Pat Haruff about HB 2402, a bill in the state legislature that would restrict HOA ability to foreclose on liens.
baltimoresun.com - Barking loudly as CA watchdog is alliance's goal
Columbia is one of the largest planned communities in America and has had a lot of good press over the years, but it was recently the subject of a series of newspaper articles that mainly focused on problems.
Columbia is one of the largest planned communities in America and has had a lot of good press over the years, but it was recently the subject of a series of newspaper articles that mainly focused on problems.
Another Case of Guilt by Association
More HOA violence, this time with a 78 year old woman as the victim. Here's a passage from the article by columnist Dana Parsons"
"When people sense that the person lording power over them is being unreasonable, the resentments and frustrations build. Sometimes, they explode with disastrous consequences. Homeowners association board members can satisfy themselves simply by saying that violence is the fault of the perpetrator. It is, to be sure. But if only for their own preservation, why not take a moment and ask why that violence sometimes comes looking for them."
That's a surprisingly unsympathetic take on a man allegedly thumping an elderly woman, I'd say. Sounds a bit like the old "She had it coming" philosophy on rape. I wonder how the victim feels, reading that in the Los Angeles Times. Similar sentiments are popping up in owner activist newsgroups, with some people calling her vulgar names. They don't know her, of course--they are just slandering her because she is an HOA director and that's enough.
So, do some people want an open season on BOD members?
More HOA violence, this time with a 78 year old woman as the victim. Here's a passage from the article by columnist Dana Parsons"
"When people sense that the person lording power over them is being unreasonable, the resentments and frustrations build. Sometimes, they explode with disastrous consequences. Homeowners association board members can satisfy themselves simply by saying that violence is the fault of the perpetrator. It is, to be sure. But if only for their own preservation, why not take a moment and ask why that violence sometimes comes looking for them."
That's a surprisingly unsympathetic take on a man allegedly thumping an elderly woman, I'd say. Sounds a bit like the old "She had it coming" philosophy on rape. I wonder how the victim feels, reading that in the Los Angeles Times. Similar sentiments are popping up in owner activist newsgroups, with some people calling her vulgar names. They don't know her, of course--they are just slandering her because she is an HOA director and that's enough.
So, do some people want an open season on BOD members?
Saturday, March 20, 2004
Interlude...Night of the Living Lobsters...
Frozen Lobsters Brought Back To Life
Jay Lindsay, Associated Press
Thursday, March 18, 2004
BOSTON -- Call it cryonics for crustaceans. A Connecticut company says its frozen lobsters sometimes come back to life when thawed.
Trufresh began freezing lobsters with a technique it used for years on salmon after an offhand suggestion by some workers. It found that some lobsters revived after their subzero sojourns.
Now, Trufresh is looking for partners to begin selling the lobsters commercially. The company was scheduled to attend the International Boston Seafood Show, which began Sunday, armed with video showing two undead lobsters squirming around after being frozen stiff in a minus-40 degree chemical brine for several minutes.
Read it for yourself...and fear the lobster tank...
Frozen Lobsters Brought Back To Life
Jay Lindsay, Associated Press
Thursday, March 18, 2004
BOSTON -- Call it cryonics for crustaceans. A Connecticut company says its frozen lobsters sometimes come back to life when thawed.
Trufresh began freezing lobsters with a technique it used for years on salmon after an offhand suggestion by some workers. It found that some lobsters revived after their subzero sojourns.
Now, Trufresh is looking for partners to begin selling the lobsters commercially. The company was scheduled to attend the International Boston Seafood Show, which began Sunday, armed with video showing two undead lobsters squirming around after being frozen stiff in a minus-40 degree chemical brine for several minutes.
Read it for yourself...and fear the lobster tank...
"Meeting turns violent; two arrested"--down in sunny Florida, where people retire to enjoy a life of serenity...I have highlighted a couple of the juicy details and taken out people's names, replacing them with letters. Kafka-like of me, don't you think?
By Lee Helscel © South Marion Citizen
03/19/2004
(what follows is the first few graphs of the story--link to the whole thing follows)
A meeting of approximately 135 homeowners to discuss issues they have with the developer of Cherrywood Estates and to explore forming a homeowners association ended abruptly March 11. Before it ended tempers flared, a man was given the bum's rush and two men were arrested by Marion County Sheriff's deputies.
About 35 minutes into the 6 p.m. meeting, one of the organizers, C, spotted the developer's field superintendent, H, in the audience. At the time, C had finished speaking, and co-organizer of the meeting, B, was at the podium in the community room at Queen of Peace Catholic Church.
C walked to the back of the room and asked H to leave. When the non-Cherrywood resident declined to go, C and the crowd gathering around them began demanding that he leave, with shouts of, "You don't belong here."
When residents discovered C's tape recorder on the table, the men around the 41-year-old man began to get angry and demanding that he leave. At least one man placed his hands briefly around H's neck.
H, who remained passive during the incident, later said two men, at different times, grabbed him around the neck with their hands. A Sheriff's report notes a one-and-a-half-inch abrasion on the left side of H's neck was consistent with being grabbed around the neck.
During the scuffle a man identified as T allegedly picked up a chair, as if to hit H with it, the report charged. There were two or three persons between H and the man with the chair, and did it didn't appear as if the man was able to swing the impromptu weapon. He set it was set aside.
H's tape recorder was taken from him and the half-dozen men around him were becoming more vocal and adamant about getting the perceived intruder out the meeting. Collectively they got him out of his chair as a woman, identified as K, positioned herself between H and the crowd as he made his way to the door.
The Cyber Citizens for Justice web site has the whole story--things definitely got out of hand.
By Lee Helscel © South Marion Citizen
03/19/2004
(what follows is the first few graphs of the story--link to the whole thing follows)
A meeting of approximately 135 homeowners to discuss issues they have with the developer of Cherrywood Estates and to explore forming a homeowners association ended abruptly March 11. Before it ended tempers flared, a man was given the bum's rush and two men were arrested by Marion County Sheriff's deputies.
About 35 minutes into the 6 p.m. meeting, one of the organizers, C, spotted the developer's field superintendent, H, in the audience. At the time, C had finished speaking, and co-organizer of the meeting, B, was at the podium in the community room at Queen of Peace Catholic Church.
C walked to the back of the room and asked H to leave. When the non-Cherrywood resident declined to go, C and the crowd gathering around them began demanding that he leave, with shouts of, "You don't belong here."
When residents discovered C's tape recorder on the table, the men around the 41-year-old man began to get angry and demanding that he leave. At least one man placed his hands briefly around H's neck.
H, who remained passive during the incident, later said two men, at different times, grabbed him around the neck with their hands. A Sheriff's report notes a one-and-a-half-inch abrasion on the left side of H's neck was consistent with being grabbed around the neck.
During the scuffle a man identified as T allegedly picked up a chair, as if to hit H with it, the report charged. There were two or three persons between H and the man with the chair, and did it didn't appear as if the man was able to swing the impromptu weapon. He set it was set aside.
H's tape recorder was taken from him and the half-dozen men around him were becoming more vocal and adamant about getting the perceived intruder out the meeting. Collectively they got him out of his chair as a woman, identified as K, positioned herself between H and the crowd as he made his way to the door.
The Cyber Citizens for Justice web site has the whole story--things definitely got out of hand.
Monday, March 15, 2004
...and still more on foreclosure...
I have received numerous e-mails from people about my foreclosure posts. Here's an answer I drafted this morning to one of them, from an Arizona resident who informed me that the legislative proposal for a 7 year waiting period to foreclose has been cut to 3 years. She is against it and she's right--it's still a bad idea. Here's why:
---as I said this morning to my correspondent from AZ...
There certainly need to be limits on the power of foreclosure, but they should not be arbitrary or overly burdensome. This three year time limit is both. This time limit proposal puts the burden for correction on the homeowners who pay their assessments. That is just plain ridiculous, because they are not the problem. The highly-publicized disastrous examples that spawned this legislative reaction are the result of procedures that allow for abuse. The problem is not that HOAs foreclose too soon--the problem is that there are lawyers who abuse the process. I would prefer a monetary limit rather than a time limit, along with other procedural reforms (see below).
This 3 year limit would be very hard on the conscientious owners who pay, and especially in the small developments (fewer than 100 units) that form the bulk of recent development. For small associations with few members, waiting three years means that for the entire term, those who pay are carrying on their backs those who don't. That is a lot to ask of people who are, after all, usually of the same general economic status as the non-payer.
And if there is an emergency that requires a special assessment, the burden gets much worse--not only do they have to come up with a big lump sum for their own unit, but they have to pay a share of their neighbor's as well. The "snowballing" or "tipping" or "critical mass" nature of this is obvious--it will increase the likelihood that more and more people will go into arrears, increasing the burden on those who remain, etc., until the whole financial capacity of the association collapses.
The timing of these proposals couldn't be worse. This is absolutely the worst possible time to start limiting the powers of associations to meet their financial obligations. Here's why.
As association property ages, the need for major repairs becomes a certainty--it is literally just a matter of time, and the clock is ticking on an enormous amount of common interest housing constructed in the 1980s and 1990s. There are usually insufficient reserves to pay for these major repairs. That means special assessments and borrowing become necessary. The biggest "sleeper" issue facing common interest housing is unlimited "bottomless pit" financial liability for major repairs that would fall ultimately on the individual owner--I repeat: on the individual owner.
The Le Parc case and the Oak Park Calabasas case in California are great examples of this, where association boards incurred multi-million dollar liabilities (in the form of contract and tort judgments) in disputes with contractors over major repairs, and then the HOA corporation files for bankruptcy because they can't pay. The bankruptcy judges said that the creditors can proceed directly against the assets of the individual owners for the liabilities of the corporation.
This is potentially a huge problem. If associations can't foreclose for three years on those who don't pay, the ultimate burden falls on those who are paying--without any limit, because these massive association liabilities can't be discharged in bankruptcy.
Who would want to buy a unit of common interest housing knowing all this? Knowing that you are not only agreeing to limits on the use of your property, and to pay your share of assessments--but to pay a share of your neighbor's as well, and that it could end up costing you everything you have? Of all the times to impair associations' financial capabilities, this is absolutely the worst. What next? A law mandating that all these possible financial obligations--for neighbors who don't pay, and for association culpability--be disclosed to prospective purchasers? Is the intent to kill the market completely? I know that's what many HOA activists want, but does the legislature want that, too?
The other main reason legislative blocking of foreclosures is a bad idea has to do with the banking and mortgage insurance businesses. These proposals would make common interest housing a riskier investment for mortage lenders and mortgage insurers, because the association's ability to maintain the common property (which is of course part of the value of the mortgage) would be greatly reduced. Most associations run on a shoestring as it is. Increased risk means increased costs for the owners.
The real problem is not the existence of the foreclosure power--it is abuse of the process by some unscrupulous attorneys who can't get people into foreclosure fast enough.
I think a better set of reforms would include:
1. Eliminating nonjudicial foreclosure, leaving only judicial procedures; it is in the NJF process that most of the abuses have been uncovered. Judicial supervision would prevent most of this. Taking people's homes away is serious business, and it should be approved by a judge before it happens.
2. Limit attorney fees, especially for trivial, automated tasks like sending a computer generated letter
3. Allow foreclosure for the amount of the assessments and late charges only, not the attorney fees. Let the attorney go after personal assets. The justification for allowing foreclosure is to keep the association solvent, not to make the lawyer rich.
4. Monetary limits, rather than time limits, to prevent foreclosure for tiny amounts of assessments and thousands in attorney fees. What should the amount be? I would think at least $1000 in assessments should be at stake, but that would need to be talked about.
5. Procedural restrictions to guarantee that this is a real, good-faith, non-payment situation and not a ripoff, such as requiring the HOA to prove up due diligence in offering a payment plan before foreclosing, and proving that it is not one of these cases where the delinquent owner was turned away when he/she tried to pay because the check was off by fifty cents or some such nonsense.
I could go on, but the point is that foreclosure should be reformed--just not with this time limit approach. The problem is a small number of predatory lawyers who abuse the process, and sleepwalking boards of directors who do whatever the lawyer tells them to do. Fix that problem. Change the procedures to make them fair.
I have received numerous e-mails from people about my foreclosure posts. Here's an answer I drafted this morning to one of them, from an Arizona resident who informed me that the legislative proposal for a 7 year waiting period to foreclose has been cut to 3 years. She is against it and she's right--it's still a bad idea. Here's why:
---as I said this morning to my correspondent from AZ...
There certainly need to be limits on the power of foreclosure, but they should not be arbitrary or overly burdensome. This three year time limit is both. This time limit proposal puts the burden for correction on the homeowners who pay their assessments. That is just plain ridiculous, because they are not the problem. The highly-publicized disastrous examples that spawned this legislative reaction are the result of procedures that allow for abuse. The problem is not that HOAs foreclose too soon--the problem is that there are lawyers who abuse the process. I would prefer a monetary limit rather than a time limit, along with other procedural reforms (see below).
This 3 year limit would be very hard on the conscientious owners who pay, and especially in the small developments (fewer than 100 units) that form the bulk of recent development. For small associations with few members, waiting three years means that for the entire term, those who pay are carrying on their backs those who don't. That is a lot to ask of people who are, after all, usually of the same general economic status as the non-payer.
And if there is an emergency that requires a special assessment, the burden gets much worse--not only do they have to come up with a big lump sum for their own unit, but they have to pay a share of their neighbor's as well. The "snowballing" or "tipping" or "critical mass" nature of this is obvious--it will increase the likelihood that more and more people will go into arrears, increasing the burden on those who remain, etc., until the whole financial capacity of the association collapses.
The timing of these proposals couldn't be worse. This is absolutely the worst possible time to start limiting the powers of associations to meet their financial obligations. Here's why.
As association property ages, the need for major repairs becomes a certainty--it is literally just a matter of time, and the clock is ticking on an enormous amount of common interest housing constructed in the 1980s and 1990s. There are usually insufficient reserves to pay for these major repairs. That means special assessments and borrowing become necessary. The biggest "sleeper" issue facing common interest housing is unlimited "bottomless pit" financial liability for major repairs that would fall ultimately on the individual owner--I repeat: on the individual owner.
The Le Parc case and the Oak Park Calabasas case in California are great examples of this, where association boards incurred multi-million dollar liabilities (in the form of contract and tort judgments) in disputes with contractors over major repairs, and then the HOA corporation files for bankruptcy because they can't pay. The bankruptcy judges said that the creditors can proceed directly against the assets of the individual owners for the liabilities of the corporation.
This is potentially a huge problem. If associations can't foreclose for three years on those who don't pay, the ultimate burden falls on those who are paying--without any limit, because these massive association liabilities can't be discharged in bankruptcy.
Who would want to buy a unit of common interest housing knowing all this? Knowing that you are not only agreeing to limits on the use of your property, and to pay your share of assessments--but to pay a share of your neighbor's as well, and that it could end up costing you everything you have? Of all the times to impair associations' financial capabilities, this is absolutely the worst. What next? A law mandating that all these possible financial obligations--for neighbors who don't pay, and for association culpability--be disclosed to prospective purchasers? Is the intent to kill the market completely? I know that's what many HOA activists want, but does the legislature want that, too?
The other main reason legislative blocking of foreclosures is a bad idea has to do with the banking and mortgage insurance businesses. These proposals would make common interest housing a riskier investment for mortage lenders and mortgage insurers, because the association's ability to maintain the common property (which is of course part of the value of the mortgage) would be greatly reduced. Most associations run on a shoestring as it is. Increased risk means increased costs for the owners.
The real problem is not the existence of the foreclosure power--it is abuse of the process by some unscrupulous attorneys who can't get people into foreclosure fast enough.
I think a better set of reforms would include:
1. Eliminating nonjudicial foreclosure, leaving only judicial procedures; it is in the NJF process that most of the abuses have been uncovered. Judicial supervision would prevent most of this. Taking people's homes away is serious business, and it should be approved by a judge before it happens.
2. Limit attorney fees, especially for trivial, automated tasks like sending a computer generated letter
3. Allow foreclosure for the amount of the assessments and late charges only, not the attorney fees. Let the attorney go after personal assets. The justification for allowing foreclosure is to keep the association solvent, not to make the lawyer rich.
4. Monetary limits, rather than time limits, to prevent foreclosure for tiny amounts of assessments and thousands in attorney fees. What should the amount be? I would think at least $1000 in assessments should be at stake, but that would need to be talked about.
5. Procedural restrictions to guarantee that this is a real, good-faith, non-payment situation and not a ripoff, such as requiring the HOA to prove up due diligence in offering a payment plan before foreclosing, and proving that it is not one of these cases where the delinquent owner was turned away when he/she tried to pay because the check was off by fifty cents or some such nonsense.
I could go on, but the point is that foreclosure should be reformed--just not with this time limit approach. The problem is a small number of predatory lawyers who abuse the process, and sleepwalking boards of directors who do whatever the lawyer tells them to do. Fix that problem. Change the procedures to make them fair.
Sunday, March 14, 2004
Beware Dihydrogen Monoxide!
City falls victim to Internet hoax, considers banning items made with water
The Associated Press
Last Updated 3:40 a.m. PST Sunday, March 14, 2004
ALISO VIEJO, Calif. (AP) - City officials were so concerned about the potentially dangerous properties of dihydrogen monoxide that they considered banning foam cups after they learned the chemical was used in their production.
Then they learned that dihydrogen monoxide - H2O for short - is the scientific term for water.
Isn't Aliso Viejo in Orange County, CA, ground zero for CID housing?
City falls victim to Internet hoax, considers banning items made with water
The Associated Press
Last Updated 3:40 a.m. PST Sunday, March 14, 2004
ALISO VIEJO, Calif. (AP) - City officials were so concerned about the potentially dangerous properties of dihydrogen monoxide that they considered banning foam cups after they learned the chemical was used in their production.
Then they learned that dihydrogen monoxide - H2O for short - is the scientific term for water.
Isn't Aliso Viejo in Orange County, CA, ground zero for CID housing?
Saturday, March 13, 2004
More on foreclosure
Some people in the anti-HOA activist ranks are angry because I said yesterday that, although I think nonjudicial foreclosure should be banned, associations need to have recourse to foreclosure to collect unpaid assessments (but not fines--that's a different issue). That means judicial foreclosure, where the association has to file a lawsuit and a judge makes the final decision after hearing from both sides. I'm talking about a last resort, with procedural protections against abuse and with limits on attorney fees.
Some of these anti-HOA activist comments make good points about issues like homestead protection, how long should statutes mandate before foreclosure is allowed, and so forth. All good points. They have answers, and in many states such protections and time limits already exist. The problem with NJF is that there is no lawsuit and no judge and no protections--it is a draconian practice that should be banned because it can't be fixed to make it fair.
But the loudest complainers, as usual, show the same characteristics. One is the typical tone--uncivil rage, peppered with insults and vulgarity. Another is the refusal to deal with inconvenient facts or arguments, better known as "reality." A third is the lack of any alternative that would allow HOAs to continue functioning, and advocating instead for positions that would almost certainly destroy common interest housing and leave millions of people in major financial trouble. That, of course, is the hidden agenda of some of these folks.
Here are some of the inconvenient facts: (1) The vast majority of associations are under-reserved already. (2) As housing built during the 1980s and 1990s ages, the need to maintain, repair, and replace commonly owned property is increasing every day, leading to major special assessments (see below) all over the nation. (3) People typically spend as much on a house as they can possibly qualify for, which means more house than they can really afford, so they are often house-poor. (4) We are in a soft employment market that could last for years, in which white collar workers are losing jobs and staying unemployed longer than before. (5) When money gets tight, the first homeowner expense people try to shirk is their HOA assessments. If push comes to shove, they will make their house payment and their property tax payment and their homeowner insurance payment (both of the latter often escrowed into their house payment anyway), and not pay their HOA assessment. (6) When people don't pay their assessments, the rest of the owners get stuck paying in their stead. That makes the non-payers "free riders" on the backs of those who are paying. (7) Real property deteriorates quickly if it isn't maintained--the cost of necessary repair snowballs fast when water starts coming in.
All the above is basically simple math and common sense, and everybody who knows anything about common interest housing knows it is all true. Property and debt collection laws vary from state to state, but all I can say is I don't think associations can remain solvent if all they can do is go after people's wages and personal assets--cars, boats, bank accounts, and so forth. Like it or not, there are people who get very good at not owning things that can be attached by judgment creditors. HOAs would end up competing with all the other creditors--credit card companies, tax collectors, etc.--for the money they need to fix the roof this month. Net result: the existing owners bear the burden for the non-payers.
That is a completely unsustainable situation. The owners who pay would go deeper in the hole covering for those who didn't, and then more of them would stop paying the increased assessments, increasing the burden on those who still do, who would then stop. This is what we call a "tipping" or "critical mass" phenomenon, and you can cound on it happening.
So, knowing all this, why do people say that associations should not be allowed to foreclose, no matter how far in arrears an owner goes?
Simple. The obvious intent some people have is to create a legal environment in which HOA owners can ignore all the obligations that are contained in their governing documents, tell their board to sod off, and live exactly as they would if they had bought conventional single family housing. No assessments to pay, no rules to follow. They would make association obligations voluntary instead of mandatory. If you have no commonly owned property to maintain, that might be just fine with most owners and that's why some associations with no common property have just sort of disappeared. But if you do have common property, it's not fine at all.
That situation would, of course, leave the entire burden of paying assessments and following rules and maintaining commonly owned property to those who voluntarily chose to do so. They would carry the burden--in this case, the assessment burden--for all the unit owners. That would never work, for the reasons described above. Soon nobody would pay or obey because it would be economically irrational to do so.
I've always been against associations having dictatorial power. I'm also against going to the opposite extreme and leaving them powerless. If we go from banana republics to failed states, most people won't like the latter any better than the former, and somebody will have to pick up the pieces of failed CIDs. Who will that be?
But maybe that is exactly what will happen. Maybe this will be the year when associations take their biggest hit in state legislatures. It is an election year, and legislators have proven themselves to be capable of most anything at such times. There have been so many outrageous and highly publicized abuses of the foreclosure power by unscrupulous lawyers that there may well be a kind of legislative over-reaction. I have been warning the industry about this sort of reaction for years, with very limited success, but it's not something I want to be right about at long last, because a lot of ordinary HOA residents may be the ones to suffer.
I don't want to be right about assocation abuses leading to bad reforms. I also don't want to be right about what those reforms will bring about.
Some people in the anti-HOA activist ranks are angry because I said yesterday that, although I think nonjudicial foreclosure should be banned, associations need to have recourse to foreclosure to collect unpaid assessments (but not fines--that's a different issue). That means judicial foreclosure, where the association has to file a lawsuit and a judge makes the final decision after hearing from both sides. I'm talking about a last resort, with procedural protections against abuse and with limits on attorney fees.
Some of these anti-HOA activist comments make good points about issues like homestead protection, how long should statutes mandate before foreclosure is allowed, and so forth. All good points. They have answers, and in many states such protections and time limits already exist. The problem with NJF is that there is no lawsuit and no judge and no protections--it is a draconian practice that should be banned because it can't be fixed to make it fair.
But the loudest complainers, as usual, show the same characteristics. One is the typical tone--uncivil rage, peppered with insults and vulgarity. Another is the refusal to deal with inconvenient facts or arguments, better known as "reality." A third is the lack of any alternative that would allow HOAs to continue functioning, and advocating instead for positions that would almost certainly destroy common interest housing and leave millions of people in major financial trouble. That, of course, is the hidden agenda of some of these folks.
Here are some of the inconvenient facts: (1) The vast majority of associations are under-reserved already. (2) As housing built during the 1980s and 1990s ages, the need to maintain, repair, and replace commonly owned property is increasing every day, leading to major special assessments (see below) all over the nation. (3) People typically spend as much on a house as they can possibly qualify for, which means more house than they can really afford, so they are often house-poor. (4) We are in a soft employment market that could last for years, in which white collar workers are losing jobs and staying unemployed longer than before. (5) When money gets tight, the first homeowner expense people try to shirk is their HOA assessments. If push comes to shove, they will make their house payment and their property tax payment and their homeowner insurance payment (both of the latter often escrowed into their house payment anyway), and not pay their HOA assessment. (6) When people don't pay their assessments, the rest of the owners get stuck paying in their stead. That makes the non-payers "free riders" on the backs of those who are paying. (7) Real property deteriorates quickly if it isn't maintained--the cost of necessary repair snowballs fast when water starts coming in.
All the above is basically simple math and common sense, and everybody who knows anything about common interest housing knows it is all true. Property and debt collection laws vary from state to state, but all I can say is I don't think associations can remain solvent if all they can do is go after people's wages and personal assets--cars, boats, bank accounts, and so forth. Like it or not, there are people who get very good at not owning things that can be attached by judgment creditors. HOAs would end up competing with all the other creditors--credit card companies, tax collectors, etc.--for the money they need to fix the roof this month. Net result: the existing owners bear the burden for the non-payers.
That is a completely unsustainable situation. The owners who pay would go deeper in the hole covering for those who didn't, and then more of them would stop paying the increased assessments, increasing the burden on those who still do, who would then stop. This is what we call a "tipping" or "critical mass" phenomenon, and you can cound on it happening.
So, knowing all this, why do people say that associations should not be allowed to foreclose, no matter how far in arrears an owner goes?
Simple. The obvious intent some people have is to create a legal environment in which HOA owners can ignore all the obligations that are contained in their governing documents, tell their board to sod off, and live exactly as they would if they had bought conventional single family housing. No assessments to pay, no rules to follow. They would make association obligations voluntary instead of mandatory. If you have no commonly owned property to maintain, that might be just fine with most owners and that's why some associations with no common property have just sort of disappeared. But if you do have common property, it's not fine at all.
That situation would, of course, leave the entire burden of paying assessments and following rules and maintaining commonly owned property to those who voluntarily chose to do so. They would carry the burden--in this case, the assessment burden--for all the unit owners. That would never work, for the reasons described above. Soon nobody would pay or obey because it would be economically irrational to do so.
I've always been against associations having dictatorial power. I'm also against going to the opposite extreme and leaving them powerless. If we go from banana republics to failed states, most people won't like the latter any better than the former, and somebody will have to pick up the pieces of failed CIDs. Who will that be?
But maybe that is exactly what will happen. Maybe this will be the year when associations take their biggest hit in state legislatures. It is an election year, and legislators have proven themselves to be capable of most anything at such times. There have been so many outrageous and highly publicized abuses of the foreclosure power by unscrupulous lawyers that there may well be a kind of legislative over-reaction. I have been warning the industry about this sort of reaction for years, with very limited success, but it's not something I want to be right about at long last, because a lot of ordinary HOA residents may be the ones to suffer.
I don't want to be right about assocation abuses leading to bad reforms. I also don't want to be right about what those reforms will bring about.
Friday, March 12, 2004
How about "Lexusville"?
L.A. Considers Selling Its Name
Friday, March 12, 2004
LOS ANGELES — It’s home to fun, sun and Hollywood glamour -- and now the city of Los Angeles may be lending its name and image to the highest bidder.
Leaders of the cash-strapped city are considering selling the naming rights for Los Angeles to a variety of products. Coke or Pepsi could be the city’s official soft drink, for instance, and Lexus or BMW the official automobile.
Lawmakers say the choice for a budget-crunched city like Los Angeles comes down to raising taxes or finding other ways of raising necessary funds. New York and San Diego are already in the sponsorship game and are making millions.
.......
Read the rest so you won't think I'm making this up.
L.A. Considers Selling Its Name
Friday, March 12, 2004
LOS ANGELES — It’s home to fun, sun and Hollywood glamour -- and now the city of Los Angeles may be lending its name and image to the highest bidder.
Leaders of the cash-strapped city are considering selling the naming rights for Los Angeles to a variety of products. Coke or Pepsi could be the city’s official soft drink, for instance, and Lexus or BMW the official automobile.
Lawmakers say the choice for a budget-crunched city like Los Angeles comes down to raising taxes or finding other ways of raising necessary funds. New York and San Diego are already in the sponsorship game and are making millions.
.......
Read the rest so you won't think I'm making this up.
The plain truth about HOA foreclosures...
Homeowner Association Foreclosures: California Senate Housing Committee HOMEOWNER ASSOCIATION FORECLOSURE HEARINGS
(My comments on foreclosure follow this is except from a BACKGROUND PAPER on
"HOMEOWNER ASSOCIATION FORECLOSURE: DOES THE PUNISHMENT FIT THE OFFENSE?"
by Mark Stivers - Chief Consultant - California Senate Housing & Community Development
-----------------excerpt begins----------
...
Statistics show that homeowner associations foreclose on members homes for relatively small amounts of delinquent assessments in comparison to non-CID creditors. A 2001 study done by Sentinel Fair Housing conducted an evaluation of foreclosures in Alameda, Contra Costa, San Mateo, Santa Clara and Sacramento counties. The analysis reported that median amount owed in homeowner association foreclosures was $2,557; the median amount in all other cases was $190,000. The recent example of the Copperopolis family who lost their home for $120 could be seen as a extreme example but it demonstrates the legal authority that associations posses to foreclose for negligible amounts.
Associations primarily use non-judicial foreclosure which does not require review by a court. The California Civil Code stipulates that non-judicial foreclosure must be afforded basic due process and must be conducted "with fairness, openness and scrupulous integrity and the trustee must exercise sound discretion to protect the rights of all interested parties and obtain the best possible price." Several legal cases have asserted that the courts will scrutinize all non-judicial foreclosure sales for fairness and for a gross inadequacy of price . Although there are existing legal protections for the homeowner, in reality it is difficult for individual property owners to challenge the actions of the homeowner associations through the legal process after the fact.
Individuals who lose their home via the CID non-judicial foreclosure process often lose a significant amount of their equity due to the small amounts at which the homes are sold in auction. The minimum bid at sale is the amount owed to the homeowners association, regardless of how much the home is worth. In contrast, the judicial foreclosure process mandates that the minimum bid at foreclosure sale cover the amount owed, any junior liens, and the homestead amount which ranges from $50,000 to $150,000.
Alternatives to Non-Judicial Foreclosure
CID non-judicial foreclosures are unique in comparison to the process that most creditors must follow to collect on debts. Most creditors must go through the judicial process in a attempt to garner a judgement; once a judgement is obtained the court has the sole authority to stipulate the appropriate recourse to collect. Claims that are less than $5,000 could be handled in small claims courts which alleviates many of the legal and monetary obstacles to using the judicial process. Judgements can then be enforced through wage garnishments, liens on property and, ultimately, by judicial foreclosure.
In a judicial foreclosure the lender must file a lawsuit in the superior court of the county in which the property is located. The property owner must be served with a copy of the summons and complaint for foreclosure; a judicial foreclosure can take up to three years to complete. Foreclosure on a property under these provisions is subject to the homestead exemption, which protects the homeowner's equity in the property. The homestead exemption equals $50,000 for an individual, $75,000 for a family, or $150,000 for a person who is a senior or disabled.
...
----------------excerpt ends--------------
My comments:
So, what should be done? In my opinions, HOAs should not be allowed to use nonjudicial foreclosure. The practice is being abused by a small number of collections attorneys who have invaded the field of community association law but who in reality wouldn't recognize "community" if it walked up and bit them on the butt. These folks are community destroyers--the HOA version of divorce lawyers. Their goal is foreclosure, not collection of delinquent assessments.
But I do believe that HOAs need to have recourse to judicial foreclosure as a last resort. Associations need to get paid. They must be able to defend themselves against chronic deadbeats, or disaster will result for those who are paying their assessments as they are forced to carry the load for the free riders. Associations don't have the resources to cushion them for years of non-payment by a significant number of residents.
Leaving associations only with recourse to debtors' personal assets--garnishment, attachment, and so forth--will crush many innocent, dues-paying members, and eventually lead to association insolvency. At least, that's the way it looks to me.
Homeowner Association Foreclosures: California Senate Housing Committee HOMEOWNER ASSOCIATION FORECLOSURE HEARINGS
(My comments on foreclosure follow this is except from a BACKGROUND PAPER on
"HOMEOWNER ASSOCIATION FORECLOSURE: DOES THE PUNISHMENT FIT THE OFFENSE?"
by Mark Stivers - Chief Consultant - California Senate Housing & Community Development
-----------------excerpt begins----------
...
Statistics show that homeowner associations foreclose on members homes for relatively small amounts of delinquent assessments in comparison to non-CID creditors. A 2001 study done by Sentinel Fair Housing conducted an evaluation of foreclosures in Alameda, Contra Costa, San Mateo, Santa Clara and Sacramento counties. The analysis reported that median amount owed in homeowner association foreclosures was $2,557; the median amount in all other cases was $190,000. The recent example of the Copperopolis family who lost their home for $120 could be seen as a extreme example but it demonstrates the legal authority that associations posses to foreclose for negligible amounts.
Associations primarily use non-judicial foreclosure which does not require review by a court. The California Civil Code stipulates that non-judicial foreclosure must be afforded basic due process and must be conducted "with fairness, openness and scrupulous integrity and the trustee must exercise sound discretion to protect the rights of all interested parties and obtain the best possible price." Several legal cases have asserted that the courts will scrutinize all non-judicial foreclosure sales for fairness and for a gross inadequacy of price . Although there are existing legal protections for the homeowner, in reality it is difficult for individual property owners to challenge the actions of the homeowner associations through the legal process after the fact.
Individuals who lose their home via the CID non-judicial foreclosure process often lose a significant amount of their equity due to the small amounts at which the homes are sold in auction. The minimum bid at sale is the amount owed to the homeowners association, regardless of how much the home is worth. In contrast, the judicial foreclosure process mandates that the minimum bid at foreclosure sale cover the amount owed, any junior liens, and the homestead amount which ranges from $50,000 to $150,000.
Alternatives to Non-Judicial Foreclosure
CID non-judicial foreclosures are unique in comparison to the process that most creditors must follow to collect on debts. Most creditors must go through the judicial process in a attempt to garner a judgement; once a judgement is obtained the court has the sole authority to stipulate the appropriate recourse to collect. Claims that are less than $5,000 could be handled in small claims courts which alleviates many of the legal and monetary obstacles to using the judicial process. Judgements can then be enforced through wage garnishments, liens on property and, ultimately, by judicial foreclosure.
In a judicial foreclosure the lender must file a lawsuit in the superior court of the county in which the property is located. The property owner must be served with a copy of the summons and complaint for foreclosure; a judicial foreclosure can take up to three years to complete. Foreclosure on a property under these provisions is subject to the homestead exemption, which protects the homeowner's equity in the property. The homestead exemption equals $50,000 for an individual, $75,000 for a family, or $150,000 for a person who is a senior or disabled.
...
----------------excerpt ends--------------
My comments:
So, what should be done? In my opinions, HOAs should not be allowed to use nonjudicial foreclosure. The practice is being abused by a small number of collections attorneys who have invaded the field of community association law but who in reality wouldn't recognize "community" if it walked up and bit them on the butt. These folks are community destroyers--the HOA version of divorce lawyers. Their goal is foreclosure, not collection of delinquent assessments.
But I do believe that HOAs need to have recourse to judicial foreclosure as a last resort. Associations need to get paid. They must be able to defend themselves against chronic deadbeats, or disaster will result for those who are paying their assessments as they are forced to carry the load for the free riders. Associations don't have the resources to cushion them for years of non-payment by a significant number of residents.
Leaving associations only with recourse to debtors' personal assets--garnishment, attachment, and so forth--will crush many innocent, dues-paying members, and eventually lead to association insolvency. At least, that's the way it looks to me.
Bad day in Druid Woods...
Condo residents get sticker shock
Druid Woods board assesses owners $7,650
By CHRISTOPHER QUINN
The Atlanta Journal-Constitution
Published on: 02/29/04
Connie Hansard Perry stopped to pick up her mail Christmas Eve and saw a 77-year-old neighbor in Druid Woods condominiums, open letter in hand, sobbing.
Though Perry had a houseful of Christmas guests to attend to, she took time to try to comfort her friend.
Perry herself soon would need comforting. The letter was from the condo association board.
It said the 140owners in the Decatur complex owed the association $7,650 each. The association needed the money to repair water damage to one of five buildings, and owners had until the end of January to pay.
(Thanks to Shu Bartholomew for sending this along)
Condo residents get sticker shock
Druid Woods board assesses owners $7,650
By CHRISTOPHER QUINN
The Atlanta Journal-Constitution
Published on: 02/29/04
Connie Hansard Perry stopped to pick up her mail Christmas Eve and saw a 77-year-old neighbor in Druid Woods condominiums, open letter in hand, sobbing.
Though Perry had a houseful of Christmas guests to attend to, she took time to try to comfort her friend.
Perry herself soon would need comforting. The letter was from the condo association board.
It said the 140owners in the Decatur complex owed the association $7,650 each. The association needed the money to repair water damage to one of five buildings, and owners had until the end of January to pay.
(Thanks to Shu Bartholomew for sending this along)
Thursday, March 11, 2004
Disneyland becomes a gated community? Say it ain't so, Mickey!
Security Gates Going Up at Disneyland
By Associated Press
March 10, 2004, 6:29 PM EST
ANAHEIM, Calif. -- Reality is coming to Disneyland's fantasy world, in the form of permanent security gates. Bowing to terrorism fears, the Walt Disney Co. plans to build the gates at the Disneyland Resort next fall. The company had resisted security gates around Disneyland and the California Adventure theme park next door, believing the sense of fantasy would be spoiled.
Read the rest.
Security Gates Going Up at Disneyland
By Associated Press
March 10, 2004, 6:29 PM EST
ANAHEIM, Calif. -- Reality is coming to Disneyland's fantasy world, in the form of permanent security gates. Bowing to terrorism fears, the Walt Disney Co. plans to build the gates at the Disneyland Resort next fall. The company had resisted security gates around Disneyland and the California Adventure theme park next door, believing the sense of fantasy would be spoiled.
Read the rest.
Saturday, March 06, 2004
Fla. Condo Owners Spar Over Board Proposal
Punches Thrown During Meeting
UPDATED: 1:23 p.m. EST March 5, 2004
BOCA RATON, Fla. -- Condominium owners upset over a proposal that would require them to purchase country club memberships got into blows with board members at a meeting Thursday night in Boca Raton. Read all about it...
Punches Thrown During Meeting
UPDATED: 1:23 p.m. EST March 5, 2004
BOCA RATON, Fla. -- Condominium owners upset over a proposal that would require them to purchase country club memberships got into blows with board members at a meeting Thursday night in Boca Raton. Read all about it...
Thursday, March 04, 2004
See you in the courts of appeals...
The trial court decision in Twin Rivers is a split decision that favors the defense. The Committee for a Better Twin Rivers has no standing to be in the case, so that leaves the individual committee members as plaintiffs. Both sides get summary judgment on some causes of action, framing the case for appeal on purely legal grounds. We won some causes of action under PREDFA, a state statute, but lost entirely on the main theory, the "functional equivalent of a municipality" theory. So according to Frank Askin we are headed for the appellate courts, where there is probably a better chance of prevailing. I never expected to win this case at the trial court level because those judges have to take all the heat as individuals whereas appellate justices sit in panels, and also it is hard for trial judges to make precedent setting decisions as that is normally seen as the province of appellate justices. As I see it, to quote King Theoden said at the start of the Battle of Helm's Deep, "So it begins..."
The trial court decision in Twin Rivers is a split decision that favors the defense. The Committee for a Better Twin Rivers has no standing to be in the case, so that leaves the individual committee members as plaintiffs. Both sides get summary judgment on some causes of action, framing the case for appeal on purely legal grounds. We won some causes of action under PREDFA, a state statute, but lost entirely on the main theory, the "functional equivalent of a municipality" theory. So according to Frank Askin we are headed for the appellate courts, where there is probably a better chance of prevailing. I never expected to win this case at the trial court level because those judges have to take all the heat as individuals whereas appellate justices sit in panels, and also it is hard for trial judges to make precedent setting decisions as that is normally seen as the province of appellate justices. As I see it, to quote King Theoden said at the start of the Battle of Helm's Deep, "So it begins..."
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