By Deborah Goonan, Independent American Communities
It’s bad enough that COVID-19 is spreading across the U.S., with confirmed cases exceeding 200,000 and 4,300 deaths as I write today’s post.
Americans also face devastating economic and social fallout of the global pandemic — 10 million suddenly unemployed; schools, colleges, and universities closed and unlikely to reopen for the remained of the academic year; many states enforcing various levels of “stay at home” orders and strict guidance on social distancing.
Inevitably, in government’s attempt to control a worldwide health crisis, hundreds of millions of Americans are asked to give up their basic rights and liberties.
Nationwide, people are growing especially uneasy about governance at the state and local level, including millions of Americans who reside or own property in HOA-governed communities.
Nearly 70 million residents of “community associations” must also cope with poor or abusive governance as enabled by the largely unregulated HOA industy.
Several recently publicized example follow.
How HOAs hurt people at a time when they are most isolated, weak, and vulnerable
HOA objects to child’s sidewalk chalk art
Let’s start with Florida, the state with the most HOA-governed communities in the U.S.
Earlier this week, the management agent for Enclave at Naples Condominium gave a “do not chalk” warning to the parents of a 6-year-old girl. Ashleigh Martin, the girl’s mother, captured the incident on her cell phone camera.
You see, with schools shut down for the foreseeable future, children are naturally looking for ways to keep busy close to home. Ashleigh’s daughter, Iris, decided to take advantage of some nice weather by sharing her artistic creativity with a little sidewalk chalk.
Who could object to a child writing positive messages and drawing colorful images of hearts and flowers on the walkways outside her home?
The condo manager, that’s who! Instead of getting compliments for her efforts, Iris was told to stop “defacing private property” in the community.
Really?!? Someone let this Naples condo manager know that sidewalk chalk art is not graffiti. One good Florida rainstorm will wash the slate clean.
HOA tells six-year-old girl she can’t play with chalk outside of her home
According to HOA manager who confronted the six year old girl, chalking is defacing property.
Tuesday, March 31st 2020, 7:20 PM EDT by Rachel Anderson
Updated: Tuesday, March 31st 2020, 8:21 PM EDT
HOA threatens to foreclose if owner won’t stop working from home
Here’s a doozy of a nasty, threatening letter received by an unknown resident from an unnamed Tennessee HOA-governed community.
This Association’s draconian “30 day notice to vacate” warns the homeowner and tenant that covenants and restrictions do not allow any type of work-from-home activities.
Apparently, the HOA thinks that “Section 8” of their governing document includes an absolute prohibition on work-from-home, even when that work is a direct result of federal guidelines or state-imposed economic shut down.
In order to stop the spread of the coronavirus, millions of companies have been forced to close their offices. Therefore, if an employee wants to keep earning a living, they must work remotely or not at all.
The HOA letter says it intends to evict any tenant does not stop working from home by the end of the month. Likewise, the HOA cites its “bylaws” that give its board the power to foreclose on the property.
That would leave the owner unemployed AND homeless.
But, hey. The rules are the rules.
NOTE: The threatening HOA letter was first posted on reddit, then picked up by Stephen Green of PJ Media. Redditors claim that they’ve verified the HOA letter is legit — it’s not a hoax.
And it’s rather obvious that the HOA board behind this threat is unprofessional, totally unfamiliar with the concept of due process, and probably in direct violation of state law.
It’s a predictable power grab under these unfortunate circumstances.
HOA Threatens to Foreclose on Residents Conducting Business at Home During Lockdown
BY STEPHEN GREEN (PJ Media) MARCH 31, 2020
Do HIPAA laws apply to HOAs? Not if you ask the HOA-industry trade group
According to the most recent HOA expose article from Judy Thomas of Kansas City Star, one homeowners association in Missouri thinks it has the right to order its residents to report their health status to the community.
A resident of Forest View HOA in Olathe, Jennifer Robinson, was outraged when she received what she calls an inappropriate letter from FirstService Residential (FSR), the HOA’s management agent.
The letter reportedly asks any resident testing positive for COVID-19 to report their illness to the HOA manager, who would then ‘warn’ all residents. A similar letter was sent to hundreds of other properties managed by FSR in the Kansas City area and elsewhere in the country.
All across the U.S., homeowners and residents are loudly objecting to this violation of their privacy. A federal HIPAA law enacted in 1996 “requires the protection and confidential handling of protected health information.”
(*HIPAA stands for Health Insurance Portability & Accountability Act.)
But, unbelievably, a leading attorney of the national trade group, Community Associations Institute (CAI), insists that HIPAA does not apply to HOAs.
According to David Graf, partner of Moeller Graf, P.C. in Englewood, Colorado, and a fellow in CAI’s College of Community Association Lawyers (CCAL):
HIPPA (sic) laws do not apply to community associations. However, associations should try not [to] reveal names of quarantined if possible but can still let residents know if there is a case is in their building.
(Source: https://www.caionline.org/Pages/Coronavirus-FAQ.aspx )
CAI does not explain why the organization believes HIPAA laws don’t apply to HOA-governed community associations.
HOA letter asking KC area homeowners to report if they have COVID-19 sparks outrage
BY JUDY L. THOMAS, Kansas City Star
APRIL 01, 2020 05:56 PM, UPDATED 3 HOURS 25 MINUTES AGO
RV offers perfect refuge for quarantine, but FL HOA won’t allow owners to park it on their own property
A few HOAs allow residents to park their recreational vehicles on their property. But most HOA governing documents don’t allow them, deeming RVs “eyesores” that could bring down property values.
Sarah Lynch is a nurse coordinator that works for a local hospital group. She resides in the Magnolia Point Golf and Country Club in Green Cove Springs, with her husband and their special needs child.
The family owns an RV, which they have moved to their property for use as a quarantine zone for Sarah. Although she’s currently handling cases from home, Sarah anticipates floor duty in the hospital as COVID-19 spreads in the Sunshine State.
The RV offers an ideal separate living space, where the health care professional can quarantine herself, to avoid putting her family at risk of being infected with COVID-19.
But Magnolia Point HOA threatened to fine the homeowners $100 per day, up to $1,000 if they didn’t remove the RV at once.
The Lynch family home sits on a spacious lot with a long driveway, with plenty of room for their RV. It shouldn’t create any health or safety hazard. But, to avoid the fine, the owners have moved the RV back to its storage area.
Outrage After Homeowners Association Targets Florida Nurse During COVID-19 Pandemic
by Colin Kalmbacher | 12:51 pm, April 1st, 2020
Clay County nurse battles with HOA over ‘quarantine RV’
Nurse believes it’s necessary for isolation; association threatens $1,000 in fines
Vic Micolucci, I-Team reporter, anchor (News 4 JAX)
Published: March 31, 2020, 4:56 pm Updated: April 1, 2020, 9:51 am
HOA legal experts and service providers respond to coronavirus pandemic
In the past several weeks, members of the HOA-industry trade group CAI have published dozens of articles providing COVID-19 information and “guidance” to board members of homeowners, condominium, and cooperative associations.
A few examples:
To prevent residents from using the open-space common areas, Florida attorney Samuel B. Friedman, Esq. recommends imposing HOA fines or calling local police and filing criminal trespass charges.
Especially in New York, contractors have stopped working on major construction projects for condo and co-op buildings, including exterior facade rehabs and elevator replacements.
The reason for widespread work stoppage is two-fold.
First, state and local orders, as well as most condo and co-op boards, have banned all nonessential visitors and nonemergency in-unit repairs. Second, few contractors are willing to take on the high risk and personal liability of working inside condos and co-ops. Simply put, construction professionals don’t want to risk infecting themselves, their staff, or residents.
As for HOA board meetings, most have been cancelled, with the exception of “emergency” meetings. By example, in Florida, emergency powers of the board include the right to conduct meetings without advance notice, and to order evacuations in the community.
That’s a heck of a lot of power for volunteer leaders to wield. With unit owners and residents living in relative isolation, what could go wrong?
I fear we’ll soon see how these powers can be abused.
COMMUNITY ASSOCIATION EMERGENCY POWERS: ENFORCING EMERGENCY SHUTDOWN OF COMMON AREAS
April 1, 2020 by Samuel B. Friedman, Esq.
Most Co-op and Condo Capital Projects Grind to a Halt
Marianne Schaefer (Habitat magazine) in Bricks & Bucks on April 1, 2020
DBPR Emergency Order 2020-04 Suspending Damage Requirement For Condominium Association Emergency Powers
Posted by Shumaker, Loop & Kendrick, LLP
Domino effect of economic shut down
Unfortunately, the forced unemployment of workers required to control the spread of the coronavirus has created a financial crisis for millions of American households — homeowners and renters alike.
Although federal stimulus checks are on the way, many economic experts don’t believe the financial assistance will cover household budget gaps.
Many tenants aren’t able to pay rent for April. Furthermore, unless the viral infection rate is controlled, persistent unemployment will make it difficult to pay rent in May or beyond.
Tenant advocacy groups are calling for state and local “no eviction” orders, to prevent homelessness. But few states are offering rent assistance.
When tenants can’t pay their rent, landlord owners — especially small “mom and pop” landlords — can’t pay the carrying costs on their rental units. That means missed mortgage payments and, in HOA-governed communities, missed condo, co-op, or HOA fees.
Worried about paying rent on April 1? What states are doing, and not doing, to help
Alan Gomez USA TODAY (March 31, 2020)
Nearly half of the nation’s 49 million rental units are owned by individual investors, “mom and pop” landlords who, in many cases, depend on that income to survive, according to data from the Department of Housing and Urban Development. Even in cases of larger apartment buildings, landlords say they have a long list of bills they have to pay as well, including mortgages, utilities, payroll, insurance and taxes.
One thing is obvious. HOAs across the U.S. will likely see a steep drop in collection of maintenance fees and assessments.
CAI responds to coronavirus financial crisis
As of March 31, 2020, CAI is recommending “leniency” in collecting HOA fees, and a suspension of foreclosures until at least June 1.
However, CAI admits that advice is short term and “subject to change,” particularly if the economic standstill drags on more than a few months.
(Read CAI’s COVID-19 & Community Associations Statement of Foreclosure Moratorium)
To be clear, CAI’s recommendations are temporary, and there’s no way to enforce them. The truth is, your HOA isn’t legally restricted from moving ahead on foreclosures in the midst of the COVID-19 pandemic.
CAI still recommends placing liens on delinquent properties, and is not recommending to cap or waive attorney or collection fees.
Plus, there’s no trade group recommendation to avoid imposing fines for violation of covenants, restrictions, or rules.
My hunch is that CAI’s moratorium will primarily benefit its trade group members who rent their homes and units to tenants on a long- or short-term basis. An HOA foreclosure moratorium, if implemented, will give landlord owners a month or two to restructure their finances.
Due to factors beyond their control, chronically unemployed owners or tenants will probably continue to accumulate bad debt for the HOA.
And here’s the other side of the coin.
Looking long term, if HOAs are not able to collect sufficient fees, and if they cannot tap into reserves, regular maintenance and capital improvement projects will definitely be delayed, if not cancelled.
That’s not good news for property values in non-resilient HOA-governed communities.
If a coronavirus-induced economic recession takes hold and deepens, it’s doubtful that the HOA industry can succeed in its feeble attempts to save already struggling community associations. ♦
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