“Novice buyers often fall in love with the decorative staging or the lakefront view of a for-sale unit,” said Sara E. Benson, a Chicago real estate broker and appraiser with more than 30 years of experience.

“However, you need more high-tech inside information than typically available on a Multiple Listing Service printout,” advised Benson, CEO of Association Evaluation LLC, a Chicago-based real estate data-analysis firm. (www.AssociationEvaluation.com)

Working as an exclusive buyer’s broker for decades, Benson always did the behind-the-scenes condo-investigation homework for clients. On every deal, Benson dug into the condo documents—budgets, board minutes, history on special assessments, status of reserve funds, and common-area conditions before she let a buyer blindly sign a sales contract.

Why? Because more than half of the 337,000 community associations in the U.S. are facing “serious financial problems,” reported the Community Associations Institute. And, 72 percent of association-governed communities were underfunded in 2013, according to Association Reserves, a California-based company that helps associations with budget and operational issues.

In 2012, Benson utilized her real estate appraisal background to develop a unique algorithm analyzing more than 140 data-points regarding the internal workings of community associations. Using the data, she commissioned a team of computer scientists and programmers to create a new, patent-pending scoring system—the “Private Association Rating”—or PARScore®, a revolutionary new high-tech, data-driven analytics process.

So, how does a condo shopper obtain the often hard to get financial information? The simplest way is just ask for it, and make the deal contingent on getting the information.

“You should insist that your Realtor or real estate attorney attach a special “Condominium Association Inspection Contingency Rider” to the contract to make completion of the deal contingent on receiving important documents and often hidden financial information.

The rider requests the following information: Declaration or Covenants, Conditions and Restrictions (CC&Rs), association rules and fine schedules, current and prior year’s operating budgets, most recent 12 months of board minutes and audits.

The rider also requests most recent reserve study and reserve study review, current reserve and operating account balances statement, lawsuit disclosure statement, owner-occupancy disclosure statement, life safety completion statement, and most recent 24 months of special assessment history disclosure.

The Contingency Rider also requires the seller to pay any expenses related to gathering the documents and providing them to the buyer.

The Contingency Rider also includes a new benefit—a Buyer’s Inspection Notice—which calls for visual examination of the property’s commonly owned elements, such as recreation facilities, swimming pool, fitness center, parking, elevators and common roof deck. The prospective buyer pays for the visual inspection as part of the PARScore® fee.

While surfing the web, a Chicago-area condo shopper found Association Evaluation through a Google search.

The buyer, who plans to move from north suburban Gurnee and hopes to buy a condo in southwest suburban Oak Lawn, downloaded the free “Buyer Kit,” the Condominium Association Contingency Rider, and the HOA Contingency Rider using the following links:

• Buyer Kit: https://associationevaluation.com/buyerkit/

• Condo Rider: https://associationevaluation.com/wp-content/uploads/2014/06/AE-Condo-Inspection-Rider.pdf

• HOA Rider: https://associationevaluation.com/wp-content/uploads/2014/06/AE-HOA-Inspection-Rider.pdf

The buyer also asked Association Evaluation to complete a PARScore® evaluation on the Oak Lawn condominium he plans to buy. He already has received the association’s declaration, bylaws and insurance certificate. “Financial information and other documents listed on the Association Evaluation website have been requested,” he said.

“Today, potential buyers of condos or homes in HOAs have access to digital tools that de-clutter murky data in favor of transparent information that actually empowers the consumer in advance of their purchase,” said Benson.

The Association Evaluation team already has captured more than 50,000 Chicago-area and Illinois condo associations and HOAs in their database, and has completed hundreds of PARScore® reports from Bethesda, MD to Palm Springs, CA.

Through the proprietary algorithm, PARScore® provides a standardized rating between 400 and 900. Every association is assigned a unique Permanent Identification Code (PIC). More than 140 data sets are analyzed and scored against the coded individual associations by using the patent-pending PARScore® point system.

Depending on the number of units in the condo building, the cost of a PARScore® typically ranges from $300 to $850.

Collected data includes direct investigations with association directors and property managers, as well as on-site inspections of the communities. Additional data sources include monitoring corporate filings such as lawsuits, judgments and bankruptcies.

Financial reporting includes verification of operating and reserve-account monies. Board minutes are examined for adherence to standard accepted business protocol procedures and to ensure against unexpected and costly special assessments that have been discussed by the association’s directors, but not yet levied at the time of sale.

A check for date of last reserve study and date of last financial audit also serves to greatly reduce risk. News, Internet and media sources are consistently monitored for each association.

For more housing news, visit www.dondebat.biz. Don DeBat is co-author of “Escaping Condo Jail,” the ultimate survival guide for condominium living. Visit www.escapingcondojail.com.

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“Many condo management companies now charge prospective buyers and sellers excessive fees of hundreds or thousands of dollars for providing condo documents that should be free for the selling unit owners to provide through their broker,” noted Sara Benson, president of Association Evaluation, LLC.

Launched in 2012, the Chicago-based real estate data analysis and technology firm developed the Private Association Rating, or PARScore, which provides a standardized high-tech condominium association rating between 400 and 900 via a data-driven proprietary algorithm. Every PARScore report includes a site evaluation of the common areas by a certified association evaluation professional plus a review of the association documents.

Documents necessary for a real estate buyer to review before committing to a purchase include the declaration – or covenants, conditions and restrictions – bylaws, house rules, regulations, board meeting minutes, state mandated disclosures, prior and current year budgets, and the reserve study.

“Doc fees can range from $50 to $250 per document, so the price can really add up depending on the number of documents requested,” said Benson (right). “On average, fees run approximately $500 for electronic delivery for a complete set needed for a condominium sales transaction.”

Reviewing condo documents is critical, consumer advocates say, because buyers need to know well in advance if the association being bought into is on the brink of bankruptcy or fiscally fit and a sound investment.

“You wouldn’t want to get hit with that $50,000 special assessment six months after the closing, would you?” Benson asked.

Most governing instruments and state statutes were created long before online delivery was a possibility, consumer advocates note. They allow for a “reasonable cost” of copying association-related documents.

However, in the age of the Internet, association documents are often stored electronically and can be shared with a simple click of a mouse. There are no paper, ink, or shipping costs. There is no manpower time associated with copying documents and sending them to the buyer by USPS or FedEx.

“Despite this, many management companies – and some boards – are using the documents as a literal profit center,” Benson said. “These are new expenses conjured up by property managers, charging fees for materials that are owned by the sellers or documents that are a public record.”

“Realtors and condo buyers and sellers are beginning to wonder if this is a ‘reasonable cost’ when delivery is paperless.”

Benson recently formed a Broker Advisory Board that is dedicated to improving the lives of current and future residents in association-governed communities by fostering transparency, accountability, credibility, and best practice governance in community associations nationwide.

Several members of the advisory board strongly questioned the ethics of the relatively new practice of some management companies to market condominium documents to buyers and sellers, creating a lucrative income stream for the management firm while representing a not-for-profit condo association.

Housing advocates find it surprising and of great consumer concern that the media is not scrutinizing the practice of management companies charging upfront fees for providing the documents and disclosures, and then charging a second fee for the property transfer at the back end of the transaction.

This practice likely is a violation of the Fair Housing Act because the fees amount to hundreds, perhaps thousands, of dollars. This affects affordability and that can be discriminatory.

If these hefty condo and homeowner association fees are tacked onto the closing statement required by the Real Estate Settlement Procedures Act, shouldn’t management companies be subject to all of its provisions?

For more housing news, visit www.dondebat.biz. Don DeBat is co-author of “Escaping Condo Jail,” the ultimate survival guide for condominium living. Visit www.escapingcondojail.com.

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A new national survey by the Coalition for Community Housing Policy in the Public Interest (CHPPI), has found that 81% of community association residents surveyed feel that “lack of transparency” and “poor communication” are major problems of HOA and condo life.

• Some 65.9% are “very dissatisfied” with and 15.1% are “dissatisfied” because of transparency and communication issues.

• A whopping 72.6% of the condo and HOA owners surveyed said they were generally “very dissatisfied” (51.2%) or “dissatisfied (21.4%) with the whole concept of community association living. And, 60.8% of survey respondents urged that community associations should have more government oversight and regulation.

Chicago currently has about 12,235 condo and homeowner associations containing approximately 305,000 residential units, according to a comprehensive directory—the “2016 Association Evaluation Report on Illinois Condominiums and Homeowner Associations.” Association Evaluation, LLC, is a Chicago-based real estate technology firm that rates the livability and stability of condo and homeowner associations. Visit: www.AssociationEvaluation.com.

“Our 2017 CHPPI survey, which rates the level of concern on more than 50 commonly reported topics and issues, found that a broad spectrum—from voting and election procedures to power of the board to fine owners—were viewed as major problems within condo associations and HOAs by respondents,” said Sara E. Benson, a CHPPI advisory member and president of Association Evaluation.

“Regarding transparency, a shocking 67.4% of community association residents say that prior to closing on their home they were not told that an HOA or condo association has a legal right to foreclose on the property if the owner becomes delinquent on assessments, fees, dues and fines,” noted Shu Bartholomew, a CHPPI advisory member and host and producer of “On The Commons,” a weekly radio show broadcast from Fairfax, VA. Visit: www.onthecommons.com.

“I am not aware of any state that requires associations to disclose to a buyer that an HOA or condo association has the power to foreclose on a homeowner to collect alleged money due,” Bartholomew said. “These amounts may be legitimate dues, but also fines, attorney’s fees or other junk fees. Housing consumers should be told before they complete the sale.”  

“Some 59.1% of survey respondents reported that they did not even know prior to closing that their condo or HOA board had the power to issue fines,” Bartholomew said.

The on-line, opt-in survey’s preliminary results were gathered from more than 500 owners residing in condominium and HOA communities in Illinois, Texas, California, Florida, Arizona, Nevada, Missouri and Kansas, and a host of other states coast-to-coast.

The survey will conclude on January 31, 2017. Visit: www.CHPPI.org, the organization’s home page, take the survey and see details of the initial 2015 CHPPI survey report.

According to the Community Associations Institute (CAI) there currently are more than 337,000 homeowners associations where more than 68 million people reside across the United States. CAI is a trade association and special interest group that primarily represents attorneys and property management companies servicing homeowner associations.

In a survey on community association success published by CAI in 2016 it was reported that only 12% of respondents are dissatisfied with their HOA. However, that suspiciously low percentage still translates into 8.2 million very unhappy residents.

One of the biggest attractions of shared-community ownership is the so-called “carefree living” aspect. There are no yards to maintain, grass to cut, snow to shovel, windows to wash, decks to stain or roofs to repair. All an owner has to do is sit back, pay his or her monthly assessment, and enjoy the recreational amenities.

And, condo ownership also can be a good lifestyle choice for singles—especially single women seeking security—retirees and smaller families not in need of larger spaces.

Another attraction of condo and HOA living is the hefty tax breaks—federal and state tax deductions for mortgage interest and property taxes that are handed to owners.

However, critics of community associations say owners really are “subject to double taxation” because they not only pay real estate taxes to local municipalities, but also are required to pay monthly assessments for common areas.

For example, owners in a private community association must pay for snow plowing and upkeep of private roads, maintenance of private streets and lighting, upkeep of storm-water retention basins, and other common-area amenities within the HOA or condo association’s jurisdiction.

A rare chance to rate your condo association or HOA

If you love your condo association or Homeowner Association or hate it, now’s your chance to rate it as part of a new 2017 National HOA Survey conducted by the Coalition for Community Housing Policy in the Public Interest (CHPPI). To take the survey, visit www.CHPPI.org, the organization’s home page. Your input will remain anonymous. Final results will be published in Inside Publications after the January 31, 2017 deadline.

For more housing news, visit www.dondebat.biz. Don DeBat is co-author of “Escaping Condo Jail,” the ultimate survival guide for condominium living. Visit www.escapingcondojail.com.

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Every day I hear or read about outrageous events in Association Governed Housing Communities. And I see the same issues over and over again.

These are not “isolated incidents” as the HOA industry would have the public believe.

Two very common issues I encounter:

• disputes over who should pay for substantial repairs to exterior elements in condominiums and
• failure to disclose important information to homeowners and homebuyers.

A few months ago, I wrote about Mallard Lakes Condominium Association in Selbyville, Delaware, where several condos were damaged by Superstorm Sandy 4 years ago. A group of condo owners are currently locked in a battle with their Association over who will pay to elevate their condo units as required by FEMA and Sussex County, Delaware.

To refresh your memory, or if you’ve missed it, here’s the link to the Previous blog:

4 years after Sandy, it’s a no-win situation at Mallard Lakes

Over the past few months, there have been some new developments.

Another lawsuit at Mallard Lakes

John and Jennifer Mingora, condo owners who purchased their unit in 2013, have filed a lawsuit against the seller, their real estate agent, and Mallard Lakes Condo Association.

Mingoras allege that important (material) facts about their recently remodeled condo unit were not disclosed to them.

According to public court documents, here’s a summary:

Mallard Lakes has 477 townhouse condo units. 30 of those condo units are located in five buildings on a barrier island.

Superstorm Sandy slammed the island condos at Mallard Lakes on October 29, 2012, causing coastal flooding, and damage to the first floor of several units.

On April 24, 2013, Mallard Lakes Association opened a claim with FEMA. On May 14, 2013, Sussex County designated Mallard Lakes units as “substantially damaged.” To meet the definition of “substantially damaged,” the cost to repair must exceed 50% of current estimated value of the property.

Both FEMA and Sussex County Flood Control Ordinances require “substantially damaged” structures to be raised to prevent damage from a future flood. Until a “substantially damaged” structure is raised to the required elevation, no certificate of occupancy can be issued.

The formal complaint also states that Mallard Lakes Association failed to timely follow FEMA procedures when applying for funding, therefore, the Association received very little money to use toward extensive repairs.

The Association is required by law to raise 24 condo units to a higher elevation, but there’s not enough money to do the job.

After the owners of those 24 units were told they could return – despite the lack of a certificate of occupancy – they were then told they must contribute $60,000 each to cover the cost of  construction to elevate their condo buildings. (4 buildings with 6 units each)

One of those units was owned by Charlotte Hurley of NC. Hurley sold her unit to John and Jennifer Mingora on October 13, 2013.

(In a separate lawsuit, attorneys for Mallard Lakes owners argue that all 477 members of the Association must share in the cost of elevating affected units, see previous blog.)

The Realtor representing both buyer and seller, Cynthia Spieczny of Resort Quest Real Estate in West Fenwick (DE), has sold many properties in Mallard Lakes and owns a unit in the condo association.

However, Hurley, Spieczny, and Mallard Lakes all failed to disclose to the Mingoras that the condo they purchased did not have a valid certificate of occupancy. The buyers were also not told that, as new owners, they might have to pay a $60K special assessment to cover their share of the cost of elevating the building.

Non-disclosure of material facts involving a real estate sale is against state law.

In late September of this year, Mingoras filed the following legal complaint. In the exhibits, see if you can spot misrepresentations in the seller disclosure. The complaint lists seven counts against the defendants, including breach of contract, fraudulent misrepresentation, and civil conspiracy between Spieczny and Mallard Lakes Association.

Mingoras paid $114,900 for the Mallard Lakes property. They seek reimbursement of their purchase price and related costs.

Legal complaint – non-disclosure of material facts

https://cldup.com/cc8OwXJRzB.pdf

Association tries to silence condo owners

Melissa Golden and other condo owners are stuck with condos they cannot legally occupy. They want to set the record straight with their neighbors, because Mallard Lakes Association has misrepresented or omitted key facts in official correspondence with their members. This has led to resentment toward victims of Super Storm Sandy.

But when damaged condo owners tried to communicate with their neighbors, or call attention to the issue at board meetings, Mallard Lakes Association filed a court order to prevent condo owners from speaking out in public.

The gag order was a blatant attempt at stifling free speech, one that was thankfully denied by a Judge this summer.

Judge won’t put gag order on Sandy-damaged condo owners

James Fisher , The News Journal 12:12 p.m. EDT July 22, 2016

A bitter disagreement over Superstorm Sandy damage to a set of Selbyville-area condo buildings won’t be tamped down by a court-imposed gag order, a Court of Chancery judge has ruled.

Vice Chancellor Sam Glasscock III ruled against the condominium association at Mallard Lakes, which had asked the court to stop some unit owners from speaking publicly about a dispute – and lawsuit – over whether Sandy-damaged structures have to be elevated and who will pay if they must be.

Read more:

http://www.delawareonline.com/story/news/local/2016/07/22/judge-wont-put-gag-order-sandy-damaged-condo-owners/87379894/

**Reposted with permission from Independent American Communities blog http://independentamericancommunities.com/

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Alan P. Gold reportedly had signature authority on Edgewater Condo Association accounts, but allegedly misused that authority to overpay himself for management services and other services not rendered.

According to reports, thefts occurred between 2010-2014. AP Gold Realty and Management’s license was revoked in 2014.

According to the criminal complaint, AP Gold may have managed up to 600 units located in 50 different client associations.

Condo association fees were deposited into nine different bank accounts, of which seven were under the sole control of Alan P. Gold, as sole proprietors of his management business. Also according to the criminal complaint, up to nine victim condo associations (VCAs) allowed Gold access to both their operating and reserve accounts for their respective associations. VCA board members report not receiving copies of actual bank statements for years.

Gold was in the habit of providing after-the-fact “owner statements of account” to condo board members by U.S. Mail. For example, in one association, the complaint notes that 22 “owner statements” reported inflated bank account balances and omitted multiple withdrawals that were made from both the association’s operating and reserve accounts.

The discrepancies were discovered in 2014 by the Treasurer of one VCA, who compared the actual bank statements with owner statements that had been mailed to him by Gold.

Charges in this case include mail fraud. If convicted, Gold could serve up to 20 years in prison.

This case is another reminder that owners should never defer unsupervised control of finances and bank accounts to an association manager or any one individual. Furthermore, at least two board members must obtain signature authority over all association bank accounts, and all board members should be receiving original bank statements for monthly review.

Property Manager Charged with Fraudulently Pocketing Fees from Chicago Condominium Association

**Reposted with permission from Independent American Communities blog http://independentamericancommunities.com/

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When a condo owner is faced with damages caused by the board’s actions or failure to act, legal expenses can quickly exceed $100,000. That prevents many owners from fighting for their legal rights in court. In some cases, a condo owner is forced to simply walk away from a damaged or uninhabitable unit.

That’s exactly what happened to Lisa Carlson, a former condo owner at Spanish Court II Condominium in Chicago. When a leaky roof caused damage to her unit in 2007 following a rain storm, Carlson’s insurance carrier refused to pay for repairs. Her insurance carrier made a determination that Spanish Court II was liable for the extensive water damage. But the Association’s insurance carrier, State Farm, refused to cover the claim as well. The board dug in its heels and informed Carlson she would have to pay for repairs to the interior of her unit herself.

Carlson stopped paying her assessments, and embarked on a seven-year legal battle with her Condo Association that wound up at the Illinois Supreme Court, where the Court made a landmark ruling that assessments must be paid No Matter What the circumstances – even if the association fails to hold up its end of the agreement to maintain and repair common areas, or to pay for damages caused to the interior of a unit because of that breach of fiduciary duty.

Additionally, according to Lerum, a condo board’s liability in cases involving breach of fiduciary duty are significantly limited by “exculpatory clauses.” In layman’s terms, that means that the bar for proving violation of fiduciary duty is set unusually high for a condo association board – a plaintiff must prove malice, gross negligence, or fraud. In the eyes of the law in Illinois and most other states in the U.S., a condo board member’s decisions and actions are presumed to represent the best interests of all owners, except in the most egregious cases. The legal burden is on the plaintiff to prove otherwise.

Following the Supreme Court decision, Carlson had racked up a debt of $400,000, including $200,000 of her own legal expenses and $108,000 of the Association’s legal expenses, which she was ordered to pay after she did not prevail on her case. The case was later refiled in the 19th Judicial Circuit, where a Judge awarded Carlson $195,000 in partial compensatory damages, due to “bad faith” errors and omissions by then Board President Maria Cassabaum, but Carlson still had to spend more than $200,000 to fight Spanish Courts II for seven years, all because the association failed to repair a leaky roof.

Meanwhile, Spanish Court Condo Association was covered by State Farm insurance policies paid for with assessments of all unit owners. High paid attorneys working for the insurance carrier defended the condo association and its board members at no out-of-pocket cost to them.

That’s why Lerum worked with Illinois House Representative Scott Drury to author and sponsor a condo reform bill that would have allowed owners to recover their legal costs in cases where breach of fiduciary duty can be proven. But House Bill 4489 was not approved for consideration this Legislative session. Lerum and Drury say they plan to reintroduce a “compromise” version of the bill next session.

As usual, the Illinois Chapter of  Community Association’s Institute (CAI) opposed the bill, taking the stance that the amendment would increase the incidence of litigation a therefore, increase legal costs for condo associations.

CAI consistently fails to acknowledge that the legal scales are unbalanced in favor of its industry stakeholders. But that is to be expected from an industry trade group.

The larger concern is why state Legislators seem more interested in protecting the interests of Community Association board members, management companies, and attorneys to the detriment of condominium owners and housing consumers in general.

Supporters of stalled condo board bill will try again next year

By Steven Dahlman

22-Aug-16 – Supporters will keep trying to get a bill passed that they say will help unit owners who are suing their condominium association.

House Bill 4489, along with two related amendments to the Illinois Condominium Property Act, was introduced on January 22 by 58th District Representative Scott Drury and assigned to the eleven-member Judiciary-Civil Committee but on March 2 it lost a motion, 3-8, for recommendation to the full House.

Chicago attorney Norman Lerum, who wrote preliminary versions of the bill, says Drury is “speaking with a number of members of the…committee in the hope of making compromises on the bill and doing something that would be acceptable to the majority and then perhaps reintroducing it in the next session.”

Among the changes to the Condominium Property Act, the bill would allow a unit owner to recover legal fees if breach of fiduciary duty by a board member is proven.

Read more: http://www.loopnorth.com/news/condo0822.htm

References:

Unit owners urge state lawmakers to help with condo board disputes

http://www.loopnorth.com/news/condo0304.htm

State bill to help with condo board disputes stalls

http://www.loopnorth.com/news/disputes0612.htm

**Reposted with permission from Independent American Communities blog http://independentamericancommunities.com/

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This week, we discuss how condo and homeowner associations are addressing the rampant bedbug problem infecting the nation.

Bedbug Compliance Mandated

The city of Chicago passed an ordinance in 2013 to help quell the growing problem of bedbugs in multifamily housing. With input from the Chicago Department of Public Health, the ordinance requires governing associations of condominium and cooperative buildings to prepare a pest management plan for the detection, inspection, and treatment of bedbugs. The ordinance also requires landlords to provide a brochure on bedbugs to tenants when they are signing a new lease or renewing an existing lease.

New York City now requires owners and managers of properties where bedbug infestations have been identified to inspect and treat units on either side of, above, and below and bedbug-infested unit. They must also use a licensed pest control professional to treat the infestation and employ a variety of treatment strategies rather than depending on chemical pesticides alone.1

If bedbugs persist or occur in multiple apartments in the same building, the department of health will require owners to take additional pest removal steps, including notifying residents that bedbugs have been identified in the building, and also to develop and distribute a building-wide pest-management plan to all residents.

Penalties for noncompliance can quickly add up. Violations will require an owner or manager to appear at a hearing before the city’s Environmental Control Board, where fines may be issued and noncompliant owners may actually end up with liens on their buildings. This is serious stuff – and a process to be avoided at all costs. The US Department of Housing and Urban Development (HUD) ha also published bedbug guidelines for owners and occupants. The guidelines may be found on the HUD website.

Bedbug Treatment

Treating bedbugs is difficult, but not impossible, and depends on the extent of the infestation – whether it’s in one unit or dozens. Treatment options include the application of extreme temperatures, such as freezing or high heat, high-powered vacuuming, steam, and pesticides, or a combination. Many bedbug strains have grown resistant to the pesticides available to treat them. Prices may range from a few hundred dollars to several thousands of dollars for larger infestations.

Contrary to popular belief, bedbugs are not an indicator of poor sanitation. However, excessive clutter provides them with more places to hide and makes them more difficult to treat.

“In an apartment building, the landlord has the authority enforce bedbug services or inspections,” said Sara Kantarovich, technical director and entomologist for Smithereen Pest Management Services in Niles, Illinois. “In a condo building, there’s no one authority who can enforce those kinds of procedures.” Many condo boards and managers won’t even discuss the subject, she said, “They want to keep things quiet. They fear that if word gets out, the value of their property will decrease.”

Association boards must never look the other way when it comes to bedbugs. They must be immediately proactive. The most successful associations will have a strong board that is willing to mandate inspections and remediation. Bedbug control is yet another expense community associations may need to add to their budgets.

1 _{Tom Soter, “What Do You Do When You THINK Your Co-op Has Bed Bugs?” Habitat Magazine, September 29, 2011.}

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This week, we continue our exploration with disturbing stories out of Michigan and New York.

Human Garbage Dump in Michigan

When inspectors checked a unit at the Wingate Condominium Association, just south of Ann Arbor, Michigan, they found rotting meat in plastic bags, decaying animals, animal feces, money strewn throughout the debris, around 30 bicycles, “unknown soft items” in various states of decay, and mold and raw chicken stuffed in the mailbox. Mice and rats were living in the heating vents and ducts of the low-rise property. Because their skin felt like it was being bitten by tiny insects, building officials wore disposable, protective outerwear and respirators while inspecting the home.

“It’s absolutely the worst scene you can imagine, in terms of just the nightmare of decaying food and rodents,” said township attorney Doug Winters. “It’s almost like a human garbage dump.” The condominium association and its property management company had to be ordered by a court to have the abandoned property completely cleaned and cleared.

New York Cleanup  

In one chic Upper East Side co-op, a reclusive owner had lived in the building for 20 years and had never permitted anyone into her apartment. It wasn’t a problem until a water leak began infiltrating the unit below.

“The entire apartment, floor to ceiling – and they were 10.5-foot-high ceilings – was filled with garbage bags,” recalls the board president. The debris was so thick that initially, the plumber could not find the source of the leak.

When the shareholder refused to work out arrangements with the board, they sued for eviction, arguing that the shareholder was in violation of her proprietary lease by failing to keep her unit in a habitable condition. She was given an ultimatum: either clean up or leave.

Suing for eviction was beneficial. The shareholder hired an attorney, whom the board insisted come out and personally inspect the apartment. That did the trick, said the president. The shareholder signed an agreement stipulating that she would remedy the problem within a certain time period, and if deadlines were missed, she would pay a fine. The agreement also gave the board the right to inspect her apartment on a periodic basis.

Is Hoarding Entertaining?

Apparently, Americans find hoarders fascinating. Recent series of reality television shows and documentaries have included TLC’s Hoarding: Buried Alive and A&E’s popular Hoarders. But when a hoarder lives next door or across the hall, it isn’t entertaining in the least. In fact, it’s a healthy and fire hazard.

Whether treasure or trash, compulsive hoarding is characterized by the excessive acquisition of stuff- mostly useless- and the inability to discard it. Hoarding has been associated with health risks, impaired functioning, and poor sanitation, and it negatively impacts personal and familial relationships.

Many hoarders have piles of debris to the ceiling with tiny pathways cutting through the clutter. Others have to climb over mountains of trash in order to move around. Hoarding becomes problematic when it crosses the line into health, safety, sanitation, and welfare issues.

Amid the piles of debris are often found rotting food, maggots, rats, roaches, vermin of every type, and animal feces. Hoarders can be difficult to spot, and an association may not know a problem exists until an emergency erupts.

“Hoarders tend to be antisocial and often won’t let anyone into their units,” said Tom Skweres, president of Wolin-Levin, a Chicago-based property management firm. Symptoms of hoarding may include foul odors, insects or vermin coming from a unit, and window blinds that are always closed.

Miami property manager Gloria Donnelli, owner of Elite Management Associates, said that she has had to call the fire marshal to explain the situation to owners. Her management company posts signs that there will be a fire department inspection on a certain day and time. Upon the department’s inspection, she then has the firemen explain the life safety issues involved with hoarding. They also explain the danger involved and how the situation puts other unit owners at risk.

“In Chicago we deal with this on a frequent basis,” said the late Mark Pearlstein, a condominium attorney. “The first step is to contact the family, but in most cases family members want nothing to do with the individual. The second step is to contact the neighborhood community police officer, who, if they respond, will notify the Board of Health and may refer the individual to a care facility on a temporary or permanent basis.”

Pearlstein stated: “More often, with a younger person, we advise the owner with a cease and desist notice that they have 48 hours to clean the  unit or we send in ServiceMaster to clean the premises and restore it to a sanitary condition. If the owner resists access, we seek an emergency injunction. Management or staff will often find insect infestation, thus justifying the emergency.”

In dealing with a hoarder, David Hill, an Atlanta, Georgia, community association manager, found that “in the end, the association had to obtain a court order. By the time we were able to enter the unit, the hoarder managed to accidentally burn the building down.”

Living inside a community-governed association requires neighborly involvement. Be sure to look for warning signs of hoarding and be vigilant about any insect or vermin infestations in your building.

The post HOA Horror: Roaches, Bedbugs, And Rats Pt. 2 appeared first on Association Evaluation LLC..

. This week, we begin an examination of HOA Horrors stories about roaches, bedbugs, and rats across the nation.

A “Biblical” Explosion of Roaches

Cleanliness may be next to godliness, but when your community is invaded by roaches, bedbugs, rats, maggots, and other vermin, it’s time for quick action.

New York City’s famed Ansonia has had an illustrious and remarkable past. The 18-story Beaux-Arts style structure was originally built as a hotel around 1900. Ninety-two years later, it was converted to a 430-unit condominium building.

Over the years, the Ansonia has been home to Babe Ruth, Igor Stravinsky, and Angelina Jolie and has been featured in several movies. During the 1960s and 1970s, it house an infamous gay bathhouse in its basement. Later, the club became, Plato’s Retreat, a renowned heterosexual swing club.

One couple at the Ansonia, Alan Arkin (not the famous actor) and his wife, Suzanne Bagert, said they were hardly able to sleep at night and stopped using their kitchen for fear of crawling critters. They started seeing roaches scurry about in 2006 and had an exterminator spray their unit, but it helped only temporarily. They started sleeping with the lights on.

Ms. Bagert, who worked from home, imagined roaches crawling on her neck. “My brushes my neck and I scream,” she said in an interview with the New York Times. Her husband found a roach in his sock.

After what Mr. Arkin called “a biblical-type explosion of roaches,” the couple filed a lawsuit in New York State Supreme Court against the Ansonia’s management. “This infestation,” Mr. Arkin wrote in his court papers, “has rendered their apartment completely unfit to live in.” According to the filing, the situation was so bad that the roaches were on the floor, the walls, the ceiling, the curtains, and even the couple’s bed.

The suit further alleged that his and his wife’s complaints were met by “doublespeak and half-truths.” Management reportedly responded by sending a maintenance worker to knock cockroaches off of the hallways walls, vacuum them up, and then wash the walls with soap and water, a treatment Mr. Arkin called “grossly and negligently” insufficient.

Mr. Arkin further states that management said the infestation was caused by an elderly tenant on the same floor who would not allow exterminators into her apartment.

Even if you’re the most spic and span housekeeper in the world, if you’re sharing walls, ceilings, or floors with a hoarder, or someone who simply keeps wet cat food out all day, getting rid of roaches – and even ants- can be next to impossible. It’s the actual physical nature of community living that is the most challenging.

If infestation exists, communities would be well served to have a regular maintenance schedule for extermination with mandatory cooperation from all unit owners. If the root source of the problem is overlooked, all the spray in the world will be only temporarily effective.

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This week, we discuss what mold actually IS and how to take action against it.

There’s a Fungus among Us

Mold is a fungus.To Some degree, it is always in the air- both inside and out. Mold is an equal-opportunity organism, and it doesn’t discriminate between new construction and older buildings, geographical locations or poverty and wealth. It can attack one unit at a time or infect an entire building through improperly maintained common elements, including HVAC systems.

A consistent water supply is ideal for mold growth. Building materials such as wood, drywall, and even dust, if combined with enough high humidity and moisture, will produce sufficient food sources for mold to multiply.

Newer buildings are sealed more tightly than older ones. They don’t “breathe” as much, and if there is any kind of leak or water infiltration, mold can quickly grow. Moisture is mold’s best friend. In buildings with central heating and air-conditioning systems, under certain conditions, mold spores can quickly spread throughout all of the units. Any type of leaks in a building – from water pipes to air conditioner lines – must be immediately repaired to prevent mold growth.

Indoor mold growth can typically be seen or smelled. Looks can vary from cottony, wet slime to velvety or grassy growth in a color chart that rivals the rainbow: white, black, red, green, purple, yellow, and brown, to name a few. It smells musty and musky.

Mold can secrete chemicals called mycotoxins, which can find their way into your body, entering through your nose,  mouth, and skin, lodging perhaps in your digestive tract, your lungs, or your brain, according to the New York Times. Among these toxins, are trichothecenes, which were rumored to have been used as a biological weapon during the wars in Afghanistan and Vietnam.

Most states have enacted legislation to mandate that sellers of residential real estate disclose in writing any known presence of mold, fungus, mildew, and similar organisms. Additionally, most statutes allow buyers to obtain an inspection specifically to diagnose mold conditions. It is important to remember than in addition to mold and mycotoxins, various types of bacteria may also be problematic.

How To Take Action against Mold

Removing mold by stopping the water source is the first step. Next, all mold should be treated and removed.The good news is that mold is a fragile organism and is easily killed by exposure to disinfectants, sunlight, and heat. However, mold’s means of reproduction is through a by-product known as “spores.” Spores are produced in huge quantities and are easily airborne and inhaled. To make the situation worse, spores are exceptionally resistant to chemicals and heat.

In these tough economic times, association boards should be vigilant in inspecting and assessing vacant or abandoned units. What often starts out as a small maintenance issues can easily turn into runaway mold in a vacant unit. At a minimum, monthly inspections of the appliances and all related hoses and connections for condensation and leaks should be made.

Mechanical units should be inspected to determine if heating, ventilation, or air-conditioning ducts, vents, and intakes are covered or blocked. Water heaters, furnaces, refrigerators, dishwashers, humidifiers, dehumidifiers, freezers and icemakers, and all plumbing lines and drains should be inspected.

If a unit is vacant, the main water supply to the unit should be turned off as well as the individual water supplies to all fixtures and appliances.

In Chicago, one Wicker Park owner heard water dripping in an adjacent bank-owned and long-abandoned unit. Upon inspecting the condominium, he found mold covering the kitchen and bathroom floors and giant mushrooms sprouting from the carpet. “I only got halfway down the stairs to the basement when I had to stop,” said owner Matt Duffey. “I was blown back by the stench of mildew.”

Boards have a duty to always take a mold complaint seriously and immediately investigate using appropriate and qualified experts. The expert should deliver a written report including recommendations for remediation. If the cost of mold abatement is anticipated to be large, bids from qualified contractors should be obtained.

Associations that ignore complaints often find themselves in the most hot water regarding mold claims. That trouble can easily lead to a lawsuit against the association if it fails to protect the health of its members.

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