This month’s news brief reveals that homeowners and HOAs face numerous new financial challenges and regulations. Aging communities are dealing with financial pressures due to deferred maintenance and unforeseen or underinsured disasters. State legislatures focus on regulation of HOAs and creating new housing policies to address the housing shortage in the U.S.
By Deborah Goonan, Independent American Communities deborahgoonan@gmail.com
A new industry survey sheds some light on HOA homeowner dissatisfaction.
LendingTree conducted a survey of 1,037 U.S. homebuyers, and the results indicate that more than one third of homeowners think their HOA fees are too high.
In my opinion, the summary report of this survey looks like it was intended to be a PR piece for the HOA industry. The headline emphasizes that the majority of owners think their HOA is priced fairly. (63% Of Members In A Homeowner Association Say They’re Priced Fairly, But Fees Are Rising– Jacqueline DeMarco of LendingTree.com, Feb 2023)
But a closer look at the details of the report reveal that more than one third of HOA members think they pay too much and get no value from their HOA!
Survey report based on only 363 respondents
Interesting fact: this was not really an HOA satisfaction survey, but a LendingTree survey of homebuyers in general. Most of the people who answered the survey did NOT buy into an HOA. According to the author of the report, only 35% of the homeowners who answered the survey are members of an HOA. Doing the math, that means HOA-related survey results are based on responses of only 363 homeowners in the U.S.
Even if the total survey sample size were truly representative of all U.S. homeowners (that’s debatable), a group of less than 400 HOA homeowners may not accurately reflect the views of all HOA homeowners in the U.S.
Therefore, in my view, the survey probably grossly underestimates the nationwide level of opposition to, and current dissatisfaction with, HOAs.
Scope of the LendingTree survey was limited.
For example, wouldn’t it be nice to know the age of the communities with higher HOA fees and more complaints of deferred maintenance? It would also be interesting to know if the income levels of HOA members correspond to relatively higher property values.
Other important questions were not answered by the LendingTree report. For example, how many HOA members surveyed actually live in their properties and/or in the community? And how many survey respondents own more than one property purely for investment?
Read more about HOA surveys on IAC
Broken elevator forces terminal cancer patient from her home (FL)
An elevator at the International Village condominium community in Lauderhill, FL has been broken for more than 6 months. With no working elevator, a female resident with terminal cancer had to be carried up the stairs to her unit by family members.
A few weeks later, an Emergency Response team had to carry the resident downstairs to take her to the hospital. The woman was transported to hospice, for her care. She would prefer to spend her final days at home, but cannot, because she can no longer safely access her home. (See Property manager’s refusal to fix elevator hurts Broward cancer patient who wants to go home -Layron Livingston, Reporter, Published: February 27, 2023 at 7:24 PM Updated: February 27, 2023 at 7:32 PM, Local 10 News)
Fatal construction accident due to collapse of cantilever balcony (NJ)
While three construction workers were making repairs to concrete balconies at Spinnaker South, 3500 Boardwalk in Sea Isle City, NJ, an eighth floor balcony collapsed onto the seventh floor balcony below.
Two workers on the eighth floor suffered minor injuries. Tragically, a 43-year-old male worker on the seventh-floor balcony was trapped under the concrete, and died from his injuries. The entire condominium building was subsequently evacuated. (See 1 person trapped in condo balcony collapse near Jersey Shore boardwalk, NJ.com Updated: Feb. 25, 2023, 12:57 p.m.| Published: Feb. 24, 2023, 4:13 p.m.)
According to another report, the work being done at the building lacked the proper construction permits. Sea Isle City had issued a stop work order prior to the fatal accident. The beachside condominium was originally constructed with cantilever balconies in the 1970s. The building passed its most recent state safety inspection in April 2022. (See Work at time of fatal Sea Isle City balcony collapse lacked proper permitting – Eric Conklin, Mar 15, 2023, The Press of Atlantic City)
Condo owners file class action lawsuit after fire leaves hundreds homeless (FL)
It has been nearly two months since a massive fire at New World Condominiums in Miami Gardens. Owners and residents are still homeless, and cause of blaze is still unknown. Owners are suing the condo association, the board, and management company for negligence. (See Lawsuit filed on behalf of residents left homeless after Miami Gardens condo fire – Christian De La Rosa, Published: March 2, 2023 at 5:56 PM Updated: March 2, 2023 at 11:28 PM, Local 10 News)
The class action lawsuit could include up to 200 plaintiffs who have been displaced by the massive fire that occurred on January 28, 2023. In the lawsuit, homeowners accuse the condo association, its board and its management for failing to address fire code violations. The legal complaint also alleges the HOA has neglected to obtain adequate fire insurance. (See Class Action Lawsuit Filed After Massive Fire at Miami Gardens Condo Displaces Residents – By Laura Rodriguez, Published March 1, 2023. Updated on March 1, 2023 at 8:45 pm, NBC Miami)
Lawsuit challenges condo association’s duty to prevent harassment by one’s neighbor (HI)
A condo owner from the Yacht Club Terrace complex in Kaneohe, Hawaii is suing her condo association for its failure to stop her neighbor’s repetitive harassment. According to one report, the woman’s harassment has been caught by security cameras. The hostile neighbor has been seen destroying landscape plants, banging on front doors, and resisting arrested by local police. The lawsuit claims the HOA has fined the woman but has taken no further action to evict her from the building. (See Woman with ‘terrifying’ neighbor sues condo board, alleging they failed to stop harassment – By Rick Daysog Published: Jan. 31, 2022 at 12:49 AM EST | Updated: Jan. 31, 2022 at 1:00 AM EST, HNN)
Condo owners dodge PSEG utility shut off – for now (NJ)
Owners and tenants at Prospect Condominiums in East Orange, NJ are dissatisfied with Royal Property Management. The investor group owns many units, and manages the condo association. In recent weeks, a local news station investigated reports of trash piling up, as well as PSEG threats to turn off electricity to the building for nonpayment of utilities.
One condo owner says this is the second time in 12 years that the utility has threatened to turn off power to the building. Some owners believe that Royal Property Management intentionally neglects the building, in hopes of forcing owners to sell their units.
The recent media investigation has prompted the Mayor of East Orange to personally tour the property. That has led to a cleanup of excess trash and has convinced PSEG to keep the lights on. (See – East Orange condo residents say conditions have improved since News 12 report, but problems remain, Mar 17, 2023, 10:22pm, By: Matt Trapani and Naomi Yané, News 12 NJ)
Londoners to pay £85k for new roofs and energy efficient windows (U.K.)
It seems that huge special assessments to pay for many years of deferred maintenance are a problem for condo owners in the U.K., not just in the U.S. and Canada. The HOA council of the Golden Lane Estate recently informed owners of a sizable assessment to pay for structural repairs to their buildings. The renovation is in the planning stages, but it’s estimated that the work will take 5 years to complete.
Reader note: in the U.K., an apartment condo is referred to as a “flat” and condo board members are called “councillors. (See Barbican flat owners could be charged an eyewatering £85k each for roof and window repairs | Councillors approved a £29m refurb of the Barbican Estate, By Adrian Zorzut, MyLondon, 11:35, 15 MAR 2023)
State-by -state legislative highlights
ARIZONA – regulation of parking, political activity in HOAs, upzoning policies
In Arizona, Legislators are considering SB1117. This is a housing supply bill that would allow for construction of smaller homes and smaller lots. It would also streamline the permitting process for the adding an Accessory Dwelling Unit (ADU or “granny flat”) on a property owner’s lot.
Several HOA-related bills are also on the move, including two bills supported by the Arizona Homeowners Coalition. (AZHOC)
HB2298 would require HOA members to vote whether or not to allow their HOA to enforce parking restrictions on public streets. Presumably, most owners would vote against their HOA enforcing parking restrictions on public streets. HB2298 would be a much cleaner, simpler bill if it prohibited all HOAs from enforcing parking restrictions on public streets.
HB2301 reinforces the legal right of HOA members to engage in political activity within their communities, even in gated communities. Apparently, HOAs of gated communities in Colorado had been arguing that they don’t have to follow current state laws that provide these rights to its residents.
CALIFORNIA-HOA trade groups try to reverse regulation of HOA elections and meetings
The permanent virtual HOA meeting bill
HOA industry lobbyists have convinced state Legislators to consider AB648. This bill permits all types of HOAs and community associations to hold all its meetings by teleconference or videoconference. Current law only permits HOAs to avoid in-person meetings during a declared emergency. (As occurred during the COVID pandemic.)
There are a few conditions. Owners must be notified in advance of the meeting, and all members must be provided full access to technology and instructions that allow them to hear and/or view the meeting.
AB648 would even allow counting of election ballots at a videotaped (not merely audio recorded) annual meeting. The only condition is that video cameras must provide a full view of the person(s) counting and tabulating the ballots.
Throw out quorum requirements HOA bill
Another HOA-industry backed bill, AB1458, would essentially allow each HOA to throw out its quorum requirements for membership meetings. (A quorom is the minimum attendance required for a business meeting.) The bill states that, if an annual membership meeting fails to reach a quorum, the board can adjourn the meeting. A new meeting is then rescheduled within in 5 to 30 days.
But the bill is controversial. Whoever attends the resceduled HOA meeting is declared to meet quorum, even if the only members in attendance are the board members. The HOA can conduct its business, and homeowners cannot challenge board’s decisions on the basis of not meeting quorum!
The Center for California Homeowner Association (CCHAL) opposes both bills. CCHAL believes these bills discourage full transparency and in-person participation of homeowners in HOA meetings. In the past two years, CCHAL helped to pass several laws which promote transparency, trust and integrity in the annual meeting and HOA election process. Both AB1548 and AB648 would make it easy for HOA boards to undermine the intent of current law.
COLORADO – HOA, Metro District regulation task forces
HB23-1105 seeks to establish two homeowners’ rights task forces, one regarding HOAs, the other with respect to Metro Districts. The task forces would study the impact of HOA and Metro District powers on housing consumers. This bill is timely, as it comes one year after Colorado Legislature enacted a law to limit HOA foreclosures. According to one analysis by ProPublica, last year’s regulations appear to be successful. The number of HOA foreclosures has declined dramatically.
CONNECTICUT – more help for home and condo owners with crumbling foundations
Thousands of Eastern Connecticut home and condo owners face expensive foundation repairs, due to the presence of pyrrhotite in the poured concrete mixture at the time of construction. Legislators will review several bills that continue the state’s efforts to combat an epidemic of concrete foundation failures. The bill proposals are summarized on this Facebook post on CT Crumbling Foundations group.
The bills aim to increase funding for foundation repairs for homeowners of both single family homes and condominium properties. Additionally, supporters seek grant money for condo associations with limited financial resources. There are also proposals to increase the quality of concrete mixtures, to require insurers to pay claims for failing foundations. One bill also provides for better disclosure of potential faulty foundations to home buyers.
FLORIDA – proposed regulations would impose criminal penalties for HOA fraud
HB919 would impose criminal penalties upon HOA board members and management agents that engage in HOA election fraud, embezzlement, or kickbacks. The proposal follows the arrest of the HOA board of Hammocks community association in south Florida. The board allegedly stole millions of dollars in homeowner association fees over the course of several years. Investigators are looking into accusations that the board covered up their actions by tampering with HOA election ballots and denying access to association records.
Another bill, SJR 122, concerns all owner-occupant homeowners in Florida. Legislators may consider a state Constitutional Amendment that would change the maximum increase of property taxes for homestead properties. (From 3% to 2% annually).
KENTUCKY – Regulation of planned community HOAs
Earlier this month, state legislators passed, and the Governor signed into law, entitled the Planned Community Act. (SB 120) The 15-page bill creates new statutory requirements pertaining to Declarant (Developer) recording of governing documents, HOA board responsibilities, HOA elections, HOA bylaws, and homeowner rights to display political signs.
However, most of these new provisions will only apply to newly created planned communities or existing HOAs whose current governing documents do not contradict amended state law. Whether that’s a good thing or a bad thing depends entirely on the language of a community’s current governing documents!
For example, the law requires 80% majority of lot owners to amend the governing documents. But, with rare exception, this requirement will not apply to existing HOAs. (You can read the entire text of the bill here.)
LOUISIANA – Regulation of HOAs by prohibiting enforcement of unconstitutional covenants
Rep. Paul Hollis has filed HB9, a simple but bold declaration. The bill prohibits HOAs from violating the Constitutional rights of owners and residents in HOA-governed communities. Specifically, the original draft of this bill states: “Any provision of a community document which restricts a constitutional right of a lot owner or a person residing in a residential planned community shall be null and void.”
Predictably, HOA-industry attorneys oppose HB9. They want HOAs to retain the right to deceive owners into giving up some of their Constitutional rights when they purchase an HOA home. HOA-industry attorneys insist that buyers “agree” to do so by way of the Covenants and Restrictions that apply to each home, lot, or condo.
NORTH CAROLINA – Seeking AG regulation of HOAs
Creating significant pushback against HOA corruption and illegal activity, HB311 seeks to establish a Community Associations Oversight Division under the state’s Attorney General. The CAOD would have the authority to investigate and remedy housing consumer complaints against HOAs and condo associations. That could result in the AG bringing lawsuits against errant HOAs that violate state laws. Supporters of this bill say this could put an end to HOAs routinely denying homeowners access to financial records. They also believe it would prevent fraudulent HOA elections, among other things.
WASHINGTON – Consumer protection regulations, upzoning policies
Establishing consumer protections for HOA homeowners
In 2018, Washington enacted the Uniform Common Interest Ownership Act (WUCIOA). The law created new, more strict record keeping requirements for all types of HOA-governed properties. (This includes condominiums, cooperatives, and planned communities.) WUCIOA also requires that HOAs provide access to records for all homeowner members. However, these more comprehensive statutory requirements only apply to HOAs created after WUCIOA was enacted in 2018.
HB1569 proposes to expand recordkeeping provisions of WUCIOA to all existing HOAs. It also provides that any violation of state laws pertaining to common interest communities (pre- or post-WUCIOA) are subject to the Consumer Protection Act. Finally, the bill would make home and unit owners third-party beneficiaries of Management contracts. This would allow owners to enforce the terms of those contracts.
The bill is supported by RiseUp Washington, a homeowner advocacy group. The Washington Chapter of Community Associations Institute opposes the bill. AS usual, the trade group does not see the need for regulation of the HOA-industry it represents.
Bills address housing supply
The Legislature is considering the following three bills: Middle Housing Bill HB1110, Lot splitting bill HB1245, Transit oriented development SB5466.
All three bills are progressing rapidly in the Legislature, with ample debate and proposed amendments.
The general intent of these housing bills is to increase the number of housing units available for low to moderate income residents of Washington. All three bills attempt to reach this goal in several ways. First, the proposals would make it easier and less costly to build smaller homes on smaller lots. Second, these bills would essentially force approval of zoning changes. The goal is to build more 2- to 4-unit multifamily properties in predominantly single-family home neighborhoods. Third, the goals is to build additional multifamily properties with minimal parking requirements near public transportation lines.
All of these housing bills are supported by some (but not all) affordable housing advocates. However local governments tend to oppose these bills. The Washington Board of Realtors favors this legislation, because it will increase the number of rental apartments in cities with severe housing shortages.
Email legislative updates and news tips to deborahgoonan@gmail.com
You must be logged in to post a comment.