Top Condo/HOA News Stories of 2015
Wrapping up the year I thought I would pick out some news items that I thought were representative of issues associations are facing. There were a lot of important stories in 2015 and narrowing them down to these is completely arbitrary on my part – well, I am the owner/editor.
One of the more disappointing news items this year was the continuing stories of fraud and embezzlement in associations. There have been enough stories from prior years that there are no longer any excuses for associations to be taken for an expensive ride. Rather than post the stories here, Check out the Fraud & Embezzlement Archive pages……….
There were many stories where an association may be in the right legally, but got blasted when the individuals took to the airwaves. Sometimes government agencies then piled on. This is the first one this year:
U.S. Department of Justice sues Andover Forest neighborhood association (KY) in playhouse dispute
The U.S. Department of Justice has sued a Lexington neighborhood association, alleging it discriminated and retaliated against a family who built a therapeutic playhouse for their son who has cerebral palsy. Read more…………
The Nevada Supreme Court upheld an associations right to foreclose, and in doing so, squashed the mortgagor’s first lien. Fannie Mae and Freddie Mac freaked out and the Federal Housing Finance Agency jumped to their support:
FHFA issues warning on “super priority” liens
The Federal Housing Finance Agency has issued a warning to homeowners, financial institutions and state authorities, citing its concern with super-priority liens created by either energy retrofit programs or homeowner association priority status. Read more………..
This year saw a significant increase in condominium associations seeing their buildings being condemned for safety violations, resulting from failures to collect assessments and maintain the property. This was one of the first ones:
Residents face eviction as Blossom Park (FL) condo buildings deemed unsafe
Residents of a crime-plagued condo complex near Florida Mall are facing eviction after their homes were condemned by Orange County. Read more……….
Failing infrastructure is a continuing story in state and local governments, but this year it really began to hit home for community associations, especially property and homeowner associations. This was just the first of many stories throughout the year culminating in the disaster in South Carolina:
Dangerous Dams: Troubleshooters reveal critical Connecticut infrastructure not inspected in decades
The most detailed, multi-layered inspections can cost up to $15,000 per dam. With Bristol sweating to pay for a few of them, imagine the concern it raises with the homeowners’ association that took over a set of dams in Ledyard 40 years ago. The dams sit on Long and Bush ponds, a pair of water bodies with a state boat launch. Read more………
While Colorado took the lead in finding ways to make it easier for developers to build crappy structures and get away with it, other states took the cue as the builder/real estate/mortgage banking/developer attorney lobby was extremely active. When it didn’t pass a the state level in Colorado, local municipalities began passing it:
Builders vs. homeowners: Construction defects bill promises controversy (CO)
Condominium owner Jon Harris can’t walk in his own kitchen without fear of tiles cracking beneath his feet. “The tiles are coming loose because they were not installed properly,” He said. Read more………
Banning smoking, even inside the unit, became the thing to do. Surprisingly, it hasn’t cut down the number of condo fires:
Condo buildings are banning smoking, even in residents’ own units (PA)
Where there’s smoke, there’s ire. High-rise condo buildings such as the Dorchester and Society Hill Towers and luxury buildings such as the St. James are starting to ban resident smoking – even in residents’ own units. Read more………
The largest community association fraud trial ever, started up in Nevada:
HOA fraud trial kicks off this week (NV)
In the wake of a high-profile investigation that began more than seven years ago, the suicides of three key targets and the guilty pleas of 37 co-conspirators, the long-awaited trial in the unlawful scheme to take over valley homeowners associations is set to get underway this week. Read more……..
As the number of golf courses increased and the number of golfers declined, courses built inside associations began to be closed, sold to the association or for other development, or abandoned, and homeowners, whose home value was due in part to proximity to the course, began fear a decline in that value:
Rolling Hills: Once regal country club, golf course decay into dirt track, trash bin (FL)
For decades, it stood as the centerpiece of the high-end Rolling Hills community, with acres of lush fairways and an elegant clubhouse. Read more……….
When the latest economic disaster hit, Florida passed a law making it easier for developers to buy up units and take over the building(s) for whatever purpose they could get away with. This was supposed to help with the numerous abandoned new developments. But then a side effect began to occur, developers started buying units in fully occupied condos, and when they had bought enough, forcing the sale of the rest of the units at prices often below what was owed on the mortgage:
Florida law could help rich investors force condo owners from their homes
In the past few years, an investment company connected to Texas billionaire John Goff has been on a buying spree that puts it close to owning at least 800 of the 1,000 units in Grande Oasis at Carrollwood, one of Tampa Bay’s largest condo complexes. Under Florida law, that would be enough to force residents like Rosselli, Gregory and the Freemans to sell their condos — probably at a big financial loss — so Grande Oasis could be converted to apartments. Read more………
FEMA didn’t help condo and homeowner associations after Hurricane Sandy – they weren’t allowed to:
Feds Prepared To Reopen All Superstorm Sandy Insurance Claims
The Federal Emergency Management Agency says it is prepared to reopen all 144,000 insurance claims that resulted from Superstorm Sandy in 2012. The move comes after months of questions over whether insurance companies contracted by the National Flood Insurance Program fraudulently altered engineering reports. Read more………
Drought hit a number of states, especially California, and all too many associations didn’t deal with it very well, oftening noticing and fining owners for lawns not being watered properly. This resulted in a lot of bad press, and legislation prohibiting them from enforcing those rules or others that were counter to water savings:
HOA Members May Face Drought-Related Dilemmas (CA)
We could all be facing a long dry summer ahead. For homeowners that can make it tough to keep landscaping green. And if by chance you live in a tightly controlled Homeowners Association, keeping that lawn green could cost you. “If we see a dry dead spot in the lawn, we notice the homeowners and if they don’t fix it they could be fined by their HOA,” says Melissa Ramsey of FirstService Residential that manages 10,000 homes in the area. Read the article……….
FHA certification became a problem for boards to be concerned with and one of the issues was the percentage of rentals within the association:
Is Your Condo Rental Cap Legal & Enforceable? (WA)
An interesting ruling regarding rental restrictions at condominiums came up in September 2014 that Washington condo owners and potential buyers should be aware of. In the case of Filmore LLLP vs. the Unit Owners Association of Centre Pointe Condominium, the Court of Appeals ruled that Centre Pointe’s rental restriction was not valid as it had not been approved by 90% of the total votes of the association. Read more………
More stories on association infrastructure issues continued to appear:
Many earthen dams on private property are behind on repairs
Two years ago, maintenance workers at the 400-home lakeside community in the Hocking Hills region saw that the dam had slipped and notified the state. After seeing what had happened, the state’s Dam Safety folks ordered them to lower the water level and fix the dam. The water has been down since then. The association is trying to reach agreement with the state on how big the dam must be for safety. It also wants to fill up the lake and enjoy it this summer while awaiting construction next spring. Read the article………..
Chicago passed an ordinance requiring certain building code compliance, then they got serious. Starting to see this type of thing in other cities:
City sues 96 buildings over Life Safety violations (Chicago, IL)
Owners of residential buildings in Chicago that have been too slow to comply with the city’s new “Life Safety” ordinance are getting not just a list of violations but a summons to appear in Cook County Circuit Court. 96 residential buildings have been sued by the city this year, each housing complaint filed in the Municipal Division of Circuit Court. Read the article………..
There were numerous fights between associations and local governments over who was responsible for what, or who should have fixed something earlier. Often it was the association asking the government to take over the maintenance and repair of something they hadn’t budgeted for. This one is typical:
Orchards residents seek nearly $900K from Belleville (IL) over flooding problems
Residents of The Orchards subdivision on the east side of Belleville are seeking nearly $900,000 in damages in a lawsuit alleging the city did not solve flooding problems in their neighborhood as promised. Mayor Mark Eckert said he could not comment on the pending litigation. City Attorney Garrett Hoerner could not be reached for comment. Read the article……….
It’s unusual for criminal charges to be filed in these matters:
FL: Criminal complaints filed in condo catastrophe
It’s one of dozens of condos at Jade Winds in North Miami Beach that have unusable sealed-off balconies for years, and it’s just the beginning. The place seems to be going to seed, with large cracks in some buildings, a general state of disrepair, and the historic office tower that has been the pride and joy of the community empty and condemned from neglect and failure to pay rent. Recently, the condo association filed for bankruptcy in federal court claiming more than $1.5 million in debt. Read the article……….
When the Confederate flag issue went national, associations were right there in the middle:
HOA attorney: Cary man’s Confederate-style flag battle not a ‘free speech’ issue (NC)
An attorney for a local homeowners’ association says a man’s Confederate battle flag is not an issue of ‘free speech’ and must be removed from outside of his Carpenter Village home. Read the article………….
One of the largest damage verdicts I have seen:
Developers ordered to pay $55 million to Mount Pleasant (SC) property owner’s association
A Charleston County jury has ordered three developers to pay tens of millions in damages for shoddy construction during a condominium conversion in Mount Pleasant, one of the largest residential real estate lawsuits in South Carolina history. Read the article…………
Courts getting involved in elections:
Judge orders community association to seat new leadership (MD)
A judge has ruled on a community dispute over two leadership positions, ordering the Russett Community Association to count votes from a June election and seat new members of the Board of Directors. Read the article………
Sometimes you just shake your head:
HOA dealt defeat in judgement, purple playground gets to stay
A judge has ruled in favor of a family who wanted to keep a purple playground in their Lee’s Summit backyard. The Stout family says they were told by their attorney on Friday afternoon that a judge found in their favor, and that the HOA that wanted the purple playground removed did not prove their case. Read the article……….
I lived in Reston for 6 years and loved it. Like anything it has some issues, but overall, very nice. Robert Simon had a dream…………
Reston Virginia founder Robert E. Simon, Jr. dead at 101
Robert E. Simon, Jr. died at his Lake Anne Village home in Reston, Virginia Monday, September 21, 2015 at the age of 101. Aside from his exceptional longevity, Simon’s death may not have much been noted aside from Fairfax County websites and newspapers. But Simon was, in fact, the founding father of Reston, a still growing community of some 60,000 residents not far from Washington, D.C.
Read the article………..
There were a number of associations that collapsed this year – this one was symbolic of the issues and problems some associations face:
How Failing Institutions Left an Atlanta (GA) Condo Complex Derelict and Crime-Ridden
Every day, Ismael Shahid fills five-gallon jugs of drinking water from a nearby building to haul to the burned-out shell that’s providing the roof over his family’s heads. Shahid and his teenage son Taha put the jugs in an Office Depot shopping cart and push it up the charred stairs—past their neighbors, some of whom use crack—into Brannon Hill, a condominium complex near Atlanta that by all rights should just be torn down before it collapses. Read the article………..
The infrastructure problems really hit home during the massive flooding in South Carolina, but the problem is national:
Floods, rain expose SC’s flawed dam safety program
Maintenance of dams through the years has often fallen on property owners’ associations, whose leaders have changed hands. As a result, experts say those property owners officials don’t always realize the responsibility that comes with maintaining their neighborhoods’ dams. Read the article…………….
Short-term rentals became a problem for associations this year, often in violation of governing documents:
In The News: AirBNB – Lawmakers Struggle to Legalize Airbnb
Websites like Airbnb, HomeAway and FlipKey have fostered a booming short-term rental industry that’s giving policymakers a headache. A growing number of cities are trying to formalize the rentals (defined as 30 days or fewer) and make sure hosts charge hotel and sales taxes, which are an important source of revenue for cities like San Francisco. Read the article…………..
FHA condo certification compliance was time-consuming and expensive, so groups tried to make it better:
Pressure Mounts on FHA to Relax Condo Rules
Lawmakers and housing groups are urging the Federal Housing Administration to relax its condominium regulations to help open up homeownership opportunities for first-time buyers and urban families. More than 50 House members signed a letter last week asking the FHA to make policy changes. Read the article…………..
I’m predicting code violations will become local governments newest revenue source as other revenue sources decline. Watch out!!!:
Condo owners’ fines reduced from $2.3 million to $26,000 (FL)
For more than seven years, the Hamptons at MetroWest complex worked to deal with numerous code violations that built up fines totaling more than $2.3 million. Code enforcement issues included leaky walls, rotten wood and mold, and while the problems have been remedied, the fines remained. Read the article………..
Ordering someone to stay away from a condo he owns is something you don’ t see very often:
Stay away, judge tells bad neighbor (NM)
There are bad neighbors, and there are neighbors so awful that the folks living nearby are willing to go to court to keep them far away. David Shaykin falls into the latter category. Read the article…………
What’s in your walls?????
$1 Billion Lawsuit Alleges Cover-Up In Faulty PVC Pipes
A class-action lawsuit has been filed over defective fire sprinkler systems and a national cover-up involving what’s considered significant life safety issues in condominiums around the country. Read the article………..
This one is just bad in so many ways……….
Court says Hopkins condo critic has the right to be offensive in long feud (MN)
Hennepin County District Court Referee Richard Trachy upholds free speech, even though it may be upsetting to some. Read the article……….
Let’s end on a reasonably happy note, someone trying to do something positive in an area that usually ends up in a fight (just too many holiday display stories this year):
A stand against ‘political correctness’ – Condo launches nondenominational holiday tradition (NJ)
The Holiday Inspiration Tree is in part a reaction against political correctness that Robin sees as impacting the holidays, making people tiptoe around anything that smacks of religion. She decided to come up with a symbol that included everyone, instead of avoiding symbols altogether. Read the article………..
Watching and reading of the problems winter storm Nemo caused brought back memories of my early days in condo management.
(It’s not that I’m lazy, but every year when I go to write a new post about budgets, I realize
Most states have “Sunshine” or “Open Meetings” laws, requiring that meetings of governing bodies be open and transparent. The laws