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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Home buyers and owners seeking to refinance will find a lump of coal in their Christmas stockings thanks to President-elect Donald Trump.

Economists say mortgage rates in early December skyrocketed to a high for 2016 in anticipation of higher inflation under President-elect Trump’s administration and a long-forecasted Federal Reserve Board (Fed) interest hike this week that are expected to push the cost of borrowing higher.

Eyeing the prospect of a more vibrant economy in 2017 and more rapidly rising prices, lenders are hiking interest rates, experts say. Economists are predicting home-loan rates of 4.5 percent by the end of 2017.

Freddie Mac’s latest mortgage-rate survey posted an average of 4.13 percent for benchmark 30-year fixed rate home loans—the largest interest rate for that loan in 2016.

According to Freddie Mac’s Primary Mortgage Market Survey, the 30-year loan jumped to 4.13 percent on December 8th from an average of 4.08 percent a week earlier. It was the sixth week in a row that rates moved higher. A year ago, 30-year loans averaged 3.95 percent.

The 4.13 percent rate hike boosts the typical the monthly payment on a $200,000 mortgage about $6 a month.

Fifteen-year fixed rate loans averaged 3.36 percent, up 3.34 percent a week earlier. A year ago at this time, the 15-year fixed-rate loans averaged 3.19 percent.

“The 10-year Treasury yield dipped this week following the release of the Job Openings and Labor Turnover Survey,” said Sean Becketti, chief economist, Freddie Mac. The average 30-year mortgage rate started the month 18 basis points higher than this time last year, he said.

Long-term home-loan rates are not set by the Fed. They are tied to the yield on 10-year U.S. Treasury bonds. Ten-year Treasury bond yields have risen sharply to 2.35 percent from 1.6 percent in the third quarter of 2016, pushing loan rates higher.

“As rates continue to climb and the year comes to a close, the December 13th-14th Fed meeting will be the talk of the town with the markets 94-percent certain of a quarter of 1 percent rate hike,” Becketti said.

Higher interest rates have caused refinancing activity to plummet 28 percent in November. However, home loan applications for home buyers are still marching along at a strong pace because many “fence sitters” are purchasing now to avoid higher rates later.

If you are planning to buy a home or condo before higher rates price you out of the market, there are a few facts you should know:

• History is on your side. On the positive side, home-loan rates still are historically low. The annual average rate from 1972 through 2011 was higher than current rates. In 1999, benchmark 30-year mortgage rates were 8.15 percent.

• Lower down payments available. New programs at Freddie Mac and Fannie Mae allow the secondary mortgage market gurus to purchase loans from lenders with lower 3-percent to 5-percent down payments, opening the homeownership door to more young, first-time buyers.

• More lenient credit scores. The average FICO score for home buyers obtaining mortgages backed by Freddie Mac currently is 750, a relatively high score. However, if a borrower is approved for a Federal Housing Administration-insured (FHA) loan, the score averages only 700.

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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Last week we covered: the kickback, overbilling, expense padding, volunteer compensation and underreporting income. In the final installment of this two-part series, we continue highlighting common examples of how HOA’s can unwittingly be stripped of their monies:

• Overreporting expenses. Owners should beware when financial statements show an exaggerated amount for recurring regular monthly expenses. For example, the reported electricity budget is 40 percent higher than the actual electric usage, or the maintenance is reported as double the actual cost. One-time expenses may also be overreported. The goal of overreporting expenses is to create a “slush fund” that can then be siphoned off by whoever is in charge of the bank account.
• False bottoms. This financial chasm is created when income is underreported or expenses have been overreported. False bottoms are created by making false entries in books. By creating a “false bottom,” would-be thieves can extract monies without being easily spotted.
• Photoshopping bank statements. In the age of computers, this illegal act is not at all uncommon. If you go online and Google “How to Photoshop a bank statement,” you’ll get an amazing 508,000 results. The first query: “How do I edit a bank statement after scanning?” Prior to taking off with more than $2 million in assets, one management company sent fake bank statements to more than 40 condo associations it managed.
• Creative accounting. This is any accounting that fails to follow generally accepted accounting principles (GAAP.) For example, GAAP would include preparing a statement of assets and liabilities, a profit and loss statement, and an income and expense report. By failing to follow basic accounting principles and setting arbitrary and misleading matrixes, owners are overwhelmed and often do not admit when they cannot understand the “creative accounting procedures.”
• Insider trading. Invested on Wall Street, this highly illegal act occurs when board members use their power, position, and inside knowledge to acquire property for personal wealth and gain. In associations whose bylaws or covenants, conditions, and restrictions (CC&Rs) contain a right of first refusal, board members have been known to avoid presenting the sale to the board in an open meeting and signing their own waiver in order to purchase a pristine unit at below-market value. High-end cooperative associations are equally vulnerable to this type of abuse, wherein board directors deny purchase applications and subsequently purchase the unit for their own personal pleasure and financial profit. Under the “buddy rule,” fellow board members simply look the other way. Note that association insider trading is not regulated in any way. “Insider trading” is typically the illegal act of trading stocks to one’s own advantage through the use of confidential information. If only Martha Stewart could have been so lucky!
• Debit cards. They simply are an embezzler’s dream come true. Association debit cards have been routinely used for traveling, gambling, medical bills, gas, groceries, cell phone bills and even lingerie purchases at Victoria’s Secret. Some associations are lulled into a false sense of security when two signatures are required on checks. Debit cards require only one signature.
• Forgery. Perhaps one of the oldest scams around, forgery is still running rampant in homeowner associations across the nation. In several cases, signatures of deceased or mentally impaired owners were used to cash checks. Additional means of embezzlement include double billing, false billing, data falsification, inflated management fees, phantom labor, bundling, and unapproved billing.

Best practice would mandate association finances to be transparent to the owners at all times. The monies belong to the owners as a whole – not the board officers or members. Next week, we’ll discuss some clues to help you discover if your HOA is the victim of embezzlement.

The post The Many Names For Theft Inside Your HOA: Part TWO appeared first on Association Evaluation LLC..

The HOA, Association of Poinciana Villages (FL), wants to become a city. In fact, a group of residents have been attempting to become a municipal corporation for several years. Poinciana Incorporate Now Citizens Home Organization (PINCHOS) has completed a

It seems as though the large subdivision of Poinciana is tired of being underfunded and getting no services from Osceola and Polk Counties, despite the fact that 47,000 residents pay taxes to both Counties and the state of Florida. Their mature HOA cannot provide the same level of service to its residents that is typical of nearby cities of similar size. Apparently the residents pay assessments, while the developer does not. PINCHOS feasibility study concludes that incorporation would give Poinciana access to millions of dollars in revenues from County, utility, gas, and sales taxes.

PINCHOS residents are tired of Developer Avatar retaining majority control since 1971 and want each resident to have voting rights, instead of a 9 member Board of Directors voting on behalf of each of Poinciana’s Villages.

Why would a large group of HOAs want to become its own municipality?

Compare PUBLIC local government (municipal or county level) to PRIVATE governance in HOAs.

More sources of revenue and financing

• A municipality has access to property and sales tax revenues, low interest loans, issuance of municipal bonds, state and federal grants.
• The HOA is limited to collection of assessments that are not necessarily based on assessed property values. (often the $50K home pays the same assessment as the $500K home and even commercial property owners) The HOA has very limited access to financing through loans.

Ability to collaborate to obtain needed services

• A municipality can take advantage of economies of scale, and can cooperate with nearby towns and cities, or enter into local agreements to provide needed services.
• The HOA has few options to collaborate with neighboring communities or public entities to provide needed services. In fact, its governing documents (the so-called CC&Rs contract) often state that the local governing entity willnot provide such services, because the Developer has given away owner rights to these services as part of the development agreement at the time permits were issued.

More qualified, accountable representation

• Local government elected officials are compensated, are publicly vetted, and they generally possess experience relevant to their respective roles. They often have term limits. Should these officials fail in their work, they are usually voted out of office in the next election. If they engage in unethical or illegal conduct, they will eventually be investigated, and held personally liable, without constituents having to bring legal suit.
• The HOA Board is comprised of volunteers who are practically immune from personal liability and oversight. They and the managers they hire often lack necessary personal and professional skills to do the job. The burden is placed upon owners and residents to investigate wrong-doing or spend personal funds in filing civil suit.

Democratic elections with equitable voting rights

• Voting and elections in a city – one vote per registered adult voter vs. one vote per unit (dwelling) owned. That means tenants vote, and each adult in the household gets to vote. No one in the community gets more than one vote.
• The HOA Developer is granted weighted voting rights and appoints the Board as long as he controls most of the votes. After turnover, Boards are often elected by representative voting members, proxies, and other dubious means. Of course, allocation of voting rights is inequitable: the more property one owns, the more votes one has.

Limitations on legal liability

• The city has sovereign immunity, limiting its legal liability.
• The HOA is a corporation that must insure itself against potentially high legal liability.

This is one evolving story to monitor closely.

***

Reposted with permission

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Once you wade through the alphabet-soup the federal government uses to describe the nation’s newly revised mortgage-application process, understanding what you are signing will be a breeze.

First, some background. The U.S. Congress enacted the Dodd-Frank Wall Street Reform Act to help control the banking industry’s predatory lending practices, which sparked the mortgage foreclosure crisis and the Great Recession of 2008.   

Experts say the nation’s banking crisis happened because there were too many gaps in regulation and no one was looking out for the system as a whole. The Dodd-Frank Act created the Consumer Financial Protection Bureau (CFPB) to prevent mortgage abuse in the future.

The CFPB was given the task of revising and simplifying the rules regarding home loan disclosures as they apply to mortgage lending under the Real Estate Settlement Procedures Act (RESPA) and the Truth in Lending Act (TILA).

Starting on October 3, 2015, lenders must implement the new integrated disclosure rule—called TRID—on all mortgage applications set forth by the bureau. TRID stands for TILA-RESPA Integrated Disclosure.

While the new TRID rule is designed to simplify the home loan process, it also will take longer—up to 45 days on average—to close a loan. However, under TRID, home-loan borrowers now will receive two key simplified and consolidated mortgage documents, instead of four:

• The Loan Estimate. This new mortgage document, given to a borrower when his or her loan application is approved, replaces the old Good Faith Estimate and initial Truth-in-Lending statement.
• The Closing Disclosure. This new document replaces the old HUD-1 Settlement Statement and the final Truth-in-Lending statement.

Borrowers must receive the Closing Disclosure document in writing three days prior to the closing. Any last minute changes in rates or terms trigger another three-day delay. So the borrower has time to read and understand all the terms and costs.

Now, you won’t have to be a math major to clearly see and understand exactly what you’ll be paying. The Loan Estimate will show the total loan amount, interest rate and charge, monthly loan payment, and other loan closing costs—all individually broken out.

A glance at the Closing Disclosure will tell borrowers exactly how much money they’ll be paying at the closing table, including costs for the appraisal and title search. The form also clearly shows the amount of the monthly loan payment, money escrowed each month for property taxes, homeowner’s insurance, and mortgage insurance.

So, theoretically, under TRID there should be no last minute surprises. The numbers should match the costs the borrower was originally quoted, and lenders will not be tempted to add on any hidden extra fees during the closing.  

“TRID is about full disclosure to the consumer—and it’s long overdue in association-governed communities where excessive transaction fees, document charges, and upcoming special assessments are often hidden from buyers,” said Sara Benson, president of Association Evaluation, a Chicago-based condominium-rating service agency.

“If you are purchasing a condominium, your lender will need a lot of additional information about the association in order to assess your financial ability to repay the loan,” Benson warned.

“Know Before You Owe,” the government’s new TRID website explains the new disclosure forms to real estate professionals—Realtors and lenders. It also includes “Your Home Loan Tool Kit,” a 26-page, step-by-step, home-loan application guide for consumers.

For more information, visit: http://www.consumerfinance.gov/know-before-you-owe/real-estate-professionals/.

***

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.

###

Article reposted with permission from Don DeBat

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By Deborah Goonan, Independent American Communities blog http://independentamericancommunities.com/

In a recent discussion forum on rules regarding display of flags in Common Interest Communities (aka Homeowners Associations), there was some vigorous back and forth about the fact that Association-controlled communities are controlled primarily by the CC&Rs (or Declaration of Condominium) contract, rather than Constitutional law.

The classic Association Governance industry argument is that the governing documents are contractual agreements to which property owners “agree,” and that the Constitution forbids interference with, or “impairment,” of HOA contracts.

One Community Association Manager’s comment on the thread reads as follows:

“To call this a patriotic issue is fatuous at best. The number of ‘patriotic’ issues can bury an HOA or Condo with beliefs of how to showcase them. The ‘freedom’ is to make the changes in an organized fashion. If your neighbors agree, then change the docs. If not, agree to conform or sell and move on. No one is forcing you to live where you, and only you chose to live…”

Let’s unravel several untrue premises and faulty assumptions.

First of all, a buyer, or someone otherwise acquiring title to an Association-controlled property, has absolutely no control over the contents of this “contract” to which one supposedly agrees without full disclosure. It’s not as though a home buyer is instructed to sit down with an attorney prior to closing, reading and initialing each cumbersome page of Declarations of  Covenants, Conditions, and Restrictions or Declaration of Condominium, with an opportunity to ask for clarification and to negotiate the terms of the agreement with the Developer or Owner-Controlled Association.

Even if full disclosure were provided in plain language, those Declarations are subject to change significantly after purchase or transfer of title. On the day you move in, the pool is open all weekend, you can park your Ford F-150 in the driveway, and your 55 pound dog is acceptable. Next month or next year, the Board could change the rules, sometimes without a direct vote of members, depending upon the latitude spelled out in the governing documents. Or there might be a membership vote at the next annual meeting. All of a sudden, the pool is closed on Sundays, you are expected to park your truck in the cramped garage, and you must get rid of your pet unless he loses 15 pounds.

…a buyer, or someone otherwise acquiring title to an Association-controlled property, has absolutely no control over the contents of this “contract” to which one supposedly agrees without full disclosure.

Furthermore, the entire process of amending the governing documents “contract” is most often undemocratic.

The only title holders that have meaningful power to amend its terms are the majority shareholders, usually represented by the Developer, affiliated investors, or perhaps a voting bloc represented by a handful of persons who either own multiple units or hold most of the proxies. These same individuals often have the power to unilaterally amend By-Laws without a vote of membership. The truth is, a physical majority of people (homeowners) might not hold a majority of corporate voting interests, resulting in Minority Rule.

Even if that’s not the case – in the rare instance that each member owns an equal proportion of property – the homeowner must be prepared to conform to Majority Rule, subject to change at any time in the future, regardless of the resulting inconvenience or hardship.

Who, in their right mind, would agree to these terms, if given the choice?

If a buyer were writing a contract to purchase a home in a homeowners or condominium association, what would it look like?

• If HOA governing documents were valid, consumer-friendly contractual agreements, then title holders would be required to agree to any change in the terms of the agreement.
• Likewise, property owners would demand the right to withhold payment of assessments for non-delivery of services or non-performance of HOA duties.
• The HOA would not be permitted to use title holder funds to settle disputes with unit-owners in court.
• The HOA would not have the unilateral power to fine, where the homeowner is presumed guilty with the burden of proving innocence.
• Nor would title holders agree to the HOA’s right to foreclose upon private property to collect its lien on relatively small debts – often inflated by hefty legal and collection costs.

On the issue of “choice:” If one wants to own a home in many US housing markets, one is forced to hold one’s nose and take the bitter HOA pill.

In reality, the only “choice” is to simply walk away from the closing table or refuse to buy into an association governance. But when 80% of new construction is burdened by Association control, then for millions of buyers in the fastest-growing real estate markets, choice is merely an illusion.

The post The Myth of the Homeowners (& Condo) Association “contract” appeared first on Association Evaluation LLC..

With more and more Millennials choosing to rent apartments, many housing advocates are asking: “Whatever happened to the American Dream of homeownership?”

Owning a home once was considered essential to the stability  and future of the United States, experts say. When President Bill Clinton left office in January of 2001, nearly 70 percent of Americans were homeowners—the highest rate of owning in our history.

However, the nation’s homeownership rate has been falling for the past decade, slumping to a current rate of 63.4 percent—the lowest it has been since 1967. And today, homeownership is not a hot topic for Presidential candidates on the campaign trail.

As a result, the nation’s young people are swimming in a sea of apartment rent receipts while paying off student loans. Nearly 11 million renter households—or 27 percent of all renters—now pay more than half their incomes for housing.

Today, Republicans blame the Great Recession of 2008 partly on the efforts of the Clinton Administration to increase homeownership. Easy to obtain, low-interest loans backed by federal mortgage giants Fannie Mae and Freddie Mac caused a housing bubble, a stock market crash and a financial crisis, they say.

The truth is that Wall Street and banking industry greed had more to do with sparking the mortgage foreclosure crisis and the Great Recession, which nearly became the second Great Depression.   

The blame for the Great Recession was focused on the eroding standards for mortgage lending and predatory lending practices often targeted at minority borrowers.

The so-called “toxic sub-prime home loans” were packaged into mortgage-backed securities and sold to investors. When the bargain introductory interest rates ended on the sub-prime home loans, borrowers couldn’t meet their higher loan payments and the loans fell into delinquency. This had devastating effects throughout the financing system.

In addition, the explosion of Wall Street trading in unregulated derivatives helped fuel the crisis and spread it to investors worldwide, creating a global meltdown. The foreclosure crisis that followed trickled down to damage local and state economies still is being litigated in the courts.

As a result, Congress passed the Troubled Asset Relief Program (TARP) a $700 billion bailout that was supposed to save the banking industry, stop the mortgage foreclosure crisis and stabilize the economy. TARP may have saved our financial system, but experts say the main beneficiaries where the same big banks who created the crisis.

While the big banks were penalized with fines, the Justice Department did not track down the managers and employees who were responsible for creating the toxic loans.

Meanwhile, Fannie Mae and Freddie Mac were put under control of the Federal Housing Finance Agency in September of 2008, and eventually received $187.5 billion in bailout money. During the nation’s slow, seven-year housing recovery, the companies have paid back a whopping $239 billion to the U.S. Treasury.

However, with Fannie and Freddie in conservatorship, critics say affordable housing largely has been forgotten in America.Experts say the nation’s banking crisis happened because there were too many gaps in regulation and no one was looking out for the system as a whole.

“It’s important for regulators to be vigilant and keep monitoring,” said former Federal Reserve Chairman Ben Bernanke, who noted that the Fed and the Financial Stability Oversight Council now are constantly surveying the entire financial system.

In addition, the Dodd-Frank Act created the Consumer Financial Protection Bureau to prevent mortgage abuse in the future and help put the American Dream back on its feet.

“The bureau’s entire mission is consumer protection,” Bernanke noted. “It represents an upgrade of regular resources directed to the issue of strong consumer protection.”

On another positive note, as the job market improved and the number of mortgage foreclosures declined, the nation’s average FICO score rose to 695 in September of 2015, the highest it has been since 2005. The average FICO score for those approved for mortgages now is 723.

However, in the aftermath of the financial crisis, lending requirements now are far more stringent. Many young first-time home buyers are scratching to save down payment cash while paying off student loans. So for many, the American Dream still is on the distant horizon.

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National Community Housing Survey: ‘EASY’ CONDOMINIUM AND HOA LIVING IS NOT WITHOUT ITS DRAWBACKS

First of two reports on community-association living.

CHICAGO—Seventy-million Americans may reside in condominiums and homeowners associations (HOAs), but it is not a perfect lifestyle. One of the biggest attractions of shared-community ownership is the so-called “carefree living” aspect. Often, 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. However, the condo lifestyle often isn’t always pretty. In 2010, a survey by the Community Association Institute found that more than half of the nation’s HOAs were facing “serious financial problems.”

In 2013, Association Reserves, a California company that helps associations with budget and operational issues, noted that 72 percent of association-governed communities were underfunded, up from 59.5 percent a decade ago. Now, a new national survey by the Coalition for Community Housing Policy in the Public Interest (CHPPI) found that 95 percent of community association residents feel that “lack of transparency” and “poor communication” was at least a moderate problem, while a shocking 84 percent felt that it was a “very serious problem.”

CHPPI’s mission is to unite Americans to establish consumer-friendly community housing policy that restores, upholds, and preserves the constitutional and civil rights of all residents living in association-governed communities. And, CHPPI seeks to educate housing consumers about their rights and responsibilities, should they choose to live in an association- governed residential community. “Our survey, which rated the level of concern on 26 commonly reported 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 housing advocate Sara Benson, a CHPPI board member.

“An overwhelming 93 percent of survey respondents felt there is at least a moderate problem within their condo or HOA’s power of the board to issue fines,” noted housing advocate Deborah Cassano Goonan, a CHPPI board member based in Florida. 

More than 300 owners residing in condominium and HOA communities in Florida, California, Nevada, Illinois, Texas and Arizona, and a host of other states responded to the survey. Click here to read the rest of the press release. 

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Denver unveils construction-defects reform proposal to spur condo building
10/15/2015
By Vic Vela
THE COLORADO STATESMAN

Denver Mayor Michael Hancock this week unveiled a proposal aimed at reining in costs associated with construction defects lawsuits, an issue he believes has hampered the city’s ability to provide housing options for a booming city population.

The proposed ordinance is the latest effort by a municipality to deal with a polarizing issue that has yet to yield results at the state level.

“Cities are looking for leadership, and we’re looking for balance because ultimately we pay the price at this level when we don’t have the proper laws to allow us to implement a balance within our communities,” the mayor told reporters Tuesday.

Developers argue that a rise in lawsuits brought by condominium homeowners associations over construction defects has created a chilling effect on new condo development.

And reform supporters argue that high costs due to increased litigation have hurt cities like Denver, which is experiencing an affordable housing crisis. READ MORE: http://www.coloradostatesman.com/content/996243-denver-unveils-construction-defects-reform-proposal-spur-condo-building

Given that condo development is an integral part of a city’s economic growth, do you think this type of legislation is the right move?  Should homeowner associations be provided more legal protection when combating negligent developers? 

What is your opinion? Let us know!  Email us at info@associationevaluation.com.

The post DISPATCHES FROM THE FRONT: DENVER PROPOSES ORDINANCE TO CURB LAWSUITS BROUGHT BY CONDO HOMEOWNER ASSOCIATIONS FOR CONSTRUCTION DEFECTS appeared first on Association Evaluation LLC..

Bluffton Today:  S.C may empower gated-community dwellers against HOAs, managers

What type of legislation would you like to see come out of this panel? Is lack of transparency a problem in your HOA? Let us know! Email us at info@associationevalution.com. We would love to hear from you!

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