HOA, condo & co-op news brief: the bitter battle for Property Rights

By Deborah Goonan, Independent American Communities

Whose property rights matter most: the rights of HOAs, lake associations, corporate investors, or individual homeowners and residents of deed-restricted communities?


Indiana

Class action lawsuit filed HOA attorney fees, alleging ‘fraud’ and ‘deception’

Nicole Ashburn is the lead plaintiff in a class action lawsuit filed by attorney Pete Kovacs. According to a report at RTV6, Ashburn says she and several of her neighbors were victims of an HOA collection scam, and that the collection law firm charged owners fees they did not owe.

Those attorney fees have entrapped owners in a perpetual debt collection cycle, triggering liens and threats of foreclosure by their HOA. Homeowners could lose their homes, and all their equity, if Heron Lake moves forward with foreclosures.

In the class acton lawsuit, homeowners allege that the law firm for Heron Lake Condominium Owners Association, Thrasher Buschmann & Voelkel, billed owners thousands of dollars in pre-litigation attorney fees, in violation of the association’s bylaw.

Specifically, attorney Steven Earnhart mailed Ashburn a foreclosure notice on September 11, 2019, in the amount of $1,893.87. A whopping 77% of the lien against her condo consists of attorney fees.

The details

Earnhart’s invoice includes $1,467 in attorney fees, for charges posted between July 2018 and January 2019. The attorney fees were added to Ashburn’s collection account at least eight months before the law firm filed for foreclosure on behalf of the Heron Lake Condo Association.

Kovacs believes that dozens of other condo owners were also overcharged by the Thrasher Buschmann & Voelkel law firm. The lawsuit seeks a refund of unwarranted and illegal attorney fees to homeowners. It also asks for a court order to stop the HOA from collecting pre-litigation attorney fees in the future.

 

Source:

Indy woman files class action lawsuit alleging condo association wrongly charged attorney’s fees
Posted: 3:56 PM, Feb 06, 2020
Updated: 8:28 PM, Feb 06, 2020
By: Kara Kenney RTV6

 


Maryland

HOA bullies in Ocean City

Lisa Gundling is so dissatisfied with her condo association at Ocean Place that she has filed several complaints with the Maryland Attorney General.

Condo board members Scott Banker, Mac Balckom, Eric Crist, Vivian Feen, Joan Hoops, Robert Tornblom and Dennis Wieber, insist they’ve done nothing wrong. The board accuses Gundling of wasting the association’s money on legal fees.

Gundling says the condo board is now bullying her in retaliation for filing complaints with the Maryland AG, by urging condo owners to hold her responsible for wasting the association’s time and money.

Ocean Place Condo Association is represented by attorney Chad Toms of Whitford Taylor Preston law firm. According to his professional profile, Toms “serves on the Advisory Council to the Delaware Common Interest Community Ombudsman.”

The complaints

IAC readers may recall that Ocean Place Condominium has been the site of controversy before.

In December 2018, three unit owners of an Ocean City condo building filed a complaint with Maryland’s Attorney General, shortly after they were hit with $18,000 – $40,000 special assessments per unit, slated for a $2.6 million exterior renovation project.

That surprise special assessment prompted a call for more transparency and a change in board leadership. To that end, unit owners organized a slate of three candidates to run in the 2019 annual election.

But Gundling explains that the condo board rigged the October 2019 election, by omitting names of competing candidates on the proxies mailed to unit owners in September.

Condo owners decided to protect their rights by distributing their own proxies. Gundling requested a list of email addresses for all members of Ocean Place association. But the condo association dragged its feet in responding to the request. It later provided an incomplete list that does not identify the names and unit numbers which correspond to the email addresses.

 

Candidates must be nominated by committee

The board insists that condo documents require candidates to be nominated by a committee, in order to be included on the election ballot or proxy form. Since three candidates challenging the incumbent board were not nominated, their names were excluded from the ballot.

Gundling and other owners object to this arrangement, because it allows the board to decide who will be elected. That denies unit owners the right to choose board candidates that might better serve the community.

Not surprisingly, the board also refuses to allow Gundling or other owners to examine election ballots and proxies, so they are unable to verify the results of last fall’s election.

It certainly appears that Ocean Place Condo Association has created multiple barriers to prevent or discourage unit owners from running for election, while also preventing communication among co-owners.

Don’t all unit owners deserve the right to protect their property interests in the condo association?

Source:

Ocean Place Condominium battle goes to personal level
Josh Kim | Jan 23, 2020



New Jersey

Legislation could impact homeowners in private lake communities

Last year, New Jersey lawmakers considered a bill that would prevent voluntary membership lake associations from collecting mandatory maintenance fees from property owners who never chose to join the lake association.

The bill was prompted by several lake community disputes in the Garden State, in particular, Ramapo Mountain Lakes. The situation in RML is notable, because the association is demanding maintenance fees from thousands of property owners that live in the general vicinity of the lake.

At least 800 of those homeowners have refused to pay the fees. The fact is, these homeowners never use the lake. Their homes are so far away from the water that they cannot even enjoy a lake view from their properties.

The homeowners say that, at the time of purchase, they were never told that their property deed included lake rights or easement, let alone an obligation to pay fees to the Ramapo Mountain Lakes association.

Several years ago, the homeowners sued RML, hoping to stop the lake association from collecting fees and placing liens ton their properties for nonpayment. But last year, a judge ruled in favor of RML’s right to bill homeowners for lake maintenance, ruling that the lake association is equivalent to a mandatory homeowners’ association under NJ statute.

 

Conditional veto in 2019

In response to the court’s decision, the NJ Legislature voted overwhelmingly in favor of a bill (S3661) to uphold property rights of homeowners who never expected to pay lake maintenance fees.

But that property rights victory was short-lived.

Governor Phil Murphy disrupted the legal process with a “conditional veto” of the S3661.

New Jersey law allows its Governor to strike parts of a bill and suggest changes, then send a revised version back to the Legislature for their consideration.

As explained in a previous IAC post, the conditional veto appears to create windows of opportunity for lake associations to charge mandatory fees to all owners within the boundaries of its community.

In the following screen shot, areas highlighted in yellow are additions to the conditional veto, and areas highlighted in red are deletions.

 

NJ S3661 2019 Third Reprint
NJ S3661 2019 Third Reprint

The good news: the conditional veto upholds the rights of homeowners guaranteed in the title to their properties.

The bad news: the veto adds a standard legal exception catch-all phrase, “unless otherwise provided by law.”

Last session, the Senate voted to accept the Governor’s conditional veto, without changes. In the 2020 session, the House will reconsider S3661. And, according to one local report, the bill seems likely to pass with the Governor’s suggested amendments.

The property rights of RML Association might still trump the rights of individual homeowners who never expected to support a private lake association.

Source:

Debate on mandatory private lake fees will resume in new legislative session
William Westhoven, Morristown Daily RecordPublished 2:48 p.m. ET Jan. 23, 2020 | Updated 2:24 p.m. ET Jan. 24, 2020

 


Virginia

Reston isn’t a suburban utopia after all

Some of the oldest and largest planned communities in the nation are now engaged in bitter neighborhood disputes about their future.

Take, for example, the town of Reston, Virginia. Built more than 5 decades ago, surrounding 2 golf courses, Reston was envisioned as one of the first racially-inclusive communities in the nation.

Today, more than 60,000 residents call Reston home. And, according to a recent article in the Washingtonian, the “liberal enclave is whiter, older, and richer than its founder ever intended.”

Residents disagree about many issues in Reston, including how to redevelop the public golf course, and increase the supply of affordable housing near its Metro station.

 

Reston’s growing pains

Reston is one of the oldest planned communities in the nation, a home base for many people who work in the Washington, D.C. area. The city-sized planned community has a suburban feel, consisting of mainly single family homes, in a setting with ample green space.

Reston Association’s annual HOA dues for 2020 are $708.

That pays for a plethora of open spaces and recreational amenities, including four lakes.

In 2012, Fairfax County decided to extend the Metro to Reston, and, with that, came lots of new residential development. The area continues to grow. For the past decade or so, County officials have been eyeing up the Reston National public golf course as the future site of 1,000 multifamily housing units.

Urban planners and County leaders are also clamoring to increase housing density in Reston by building apartments and condos near the Metro Station.

However, hundreds of homeowner activists have organized against these plans. They say residents do not want more new development. They’re sick of heavy traffic and inadequate parking. Some long-time homeowner don’t want to give up their golf course views — even if they don’t golf. Others want to preserve open space for wildlife. In general, the most vocal town dwellers say that enough is enough — Reston is full.

 

Battle for individual vs. corporate property rights

As the reference article in The Washtingtonian explains, Reston is deeply divided by local politics, as hundreds of homeowners stress over new development and population density, claiming it might ruin their property values.

Residents in favor of growing Reston’s population, and providing more affordable housing, accuse the “cranky old, white people” of discriminating against people with lower incomes, mostly people of color.

But Benjamin Wofford’s article doesn’t directly address the underlying problem in Reston, and hundreds of other cities and towns across the U.S.

At heart, the battle in Reston is one that pits individual rights against corporate property rights.

 

Wall Street landlords vs. Reston Association

As Wall Street corporations continue to scoop up single family homes with cash sales, to convert them to rental properties, they compete with buyers who intend to occupy their homes.

That kind of competition drives up prices for entry-level Reston home buyers. If the rental conversion trend continues unchecked, will it limit the future supply of homes for sale?

And what happens when a single corporate landlord dominates an entire neighborhood, as the primary supplier of rental housing? With little competition between landlords, consumer will pay a premium for rental housing, even if the quality of the home and its maintenance service is mediocre, at best.

It’s obvious that, if renters want to live in Reston, they must also contend with Reston Association. The HOA and its core supporters seem downright hostile to renters, opposing local zoning and state legislation to override the HOA’s onerous covenants that restrict homes to “single family” use.

Those restrictions prevent owner-occupants from creating in-law suites, separate living quarters in their homes for adult children, or independent living spaces for older family members.

HOA restrictions also prevent homeowners from renting or leasing part of their home to long-term tenants. Such home-sharing arrangements are a win-win situation for homeowners and their roommates. It’s one time-proven way to make housing more affordable for all residents. The savings can also help a renter set aside money for a future home purchase.

Unfortunately, in places like Reston, the property rights of individual homeowners and housing consumers are mostly ignored.

Meanwhile, Reston’s HOA and Wall Street real estate investors continue to engage in a bitter battle for their respective corporate property rights.

The HOA’s right to lock out non-owners vs. a Wall Street investor’s right to transform a single family neighborhood to rental revenue center.

That’s why current residents, as well as people who would like to live in Reston, have limited housing choices and minimal individual control over their own homes.

Source:

The Very Uncivil War Going Down in America’s Most Civil Suburb
WRITTEN BY BENJAMIN WOFFORD (The Washingtonian)| PUBLISHED ON DECEMBER 15, 2019

Virginia won’t legalize duplexes statewide this year, but the urgency remains
ZONINGOPINIONBy Alex Baca (Housing Program Organizer) January 24, 2020 ♦♦