By Deborah Goonan, Independent American Communities deborahgoonan@gmail.com
This month’s brief highlights the ongoing struggle for HOA consumer rights as well as another controversial land use bill. Also in the news: unsafe condo evacuations; homeowners who complain get slapped with excessive HOA attorney fees; owners cope with construction defects, and more.
HOAs in the news
Residents ordered to evacuate unsafe condo building
Florida Condo owners were notified that all 55 residents must evacuate the 36-unit Majestic Isle Condominiums. The building is on Harbor Island, North Bay Village. A city engineer deemed the building unsafe.
According to a report on Local 10 News from Miami-Dade County, a malfunctioning roof drain caused a partial collapse of the ceiling. The resulting water damage forced residents of 5 units to evacuate. But the building inspector later ordered the evacuation of all remaining residents by Tuesday April 25.
Source: North Bay Village condo building deemed unsafe, residents ordered to evacuate (local10.com) April 20, 2023
No consumer rights? Homeowners who complain get slapped with excessive HOA attorney fees
Hawaii Rhonda Campbell-Sutton, the owner of a condo unit at Dowsett Point, was billed $4,900 by her condo association’s attorney. The bill arrived after she contacted the construction company and local fire department, attempting to get a contractor to remove junk from the hallway of her building.
According to a report in Civil Beat, Campbell-Sutton is a former condo board member. She is one of nine apartment owners who have received cease and desist letters from the Porter McGuire Kiakona. The law firm represents the condo association.
Margaret Knight, a fellow neighbor who actually serves on the condo board, was also billed $1,300 for a cease-and-desist letter. She had complained after contractors refinished the floors, which was discovered when her dog accidentally stepped in wet epoxy. Knight says residents were not notified in advance of the project.
Hawaii state law allows HOAs to shift fees for such attorney letters to unit owners.
Source: Have A Complaint About Your Condo? You May Get Slapped With Paying For The Lawyers Who Fight You – Honolulu Civil Beat April 19,2023
County sues HOA and its developer for not fixing large potholes
Florida Owners of homes in the Clearwater Estancia Townhomes community have been dealing with large potholes in an access road for more than 7 years. The original developer of the community went out of business years ago. And part of the road is officially owned by Pinellas County. However, no one is taking responsibility for the portion of the road that is currently in a sad state of disrepair. Pinellas County recently filed a lawsuit against Estancia Townes HOA and Sunfield Homes Inc., asking the courts to force one or both defendants to make and pay for repairs.
The current developer claims it’s a private road. The HOA attorney says the HOA doesn’t own the road. Stalemate!
Source: Pinellas County sues HOA for failure to maintain road, fix dangerous holes | WFLA (April 10, 2023)
Neighborhood Association vs. Homeowners Association
Mississippi The Grove Subdivision has applied to the city of Tupelo to form a Neighborhood Association. But don’t confuse this with the typical homeowners’ or property owners’ association (HOA), which requires membership and mandatory dues payments from all owners in a community. The proposed Neighborhood Association will be strictly social and civic in nature. Owners made the request to the city following three years of organizing social events.
Sometimes media coverage and HOA-industry promotions give consumers the false idea that all HOAs are benign social clubs. They are not. See my previous article, which explains the differences between a Neighborhood Association and an HOA.
Sources: HOA vs. Neighborhood Association – Apples vs. Oranges • Independent American Communities
The Grove subdivision in Tupelo applies for neighborhood association status | Local News | djournal.com (April 7, 2023)
City wants inspection of all high-rise curtain wall windows
California NBC Bay Area reports that 1400 Mission Street condominium is one of 15 high rise buildings in San Francisco that experienced damages to its curtain wall windows due to recent high winds. A 5th floor window panel shattered and fell to the sidewalk below. Thankfully, no one was injured, but owners and city building officials remain concerned about the safety of windows in high rise buildings.
The city’s Board of Supervisors wants to require window inspections for all high rises as soon as possible. Current laws don’t require window inspections until a building reaches 30 years of age.
The HOA previously sued its window supplier in 2019 after the failure of several of the tower’s windows. The building was opened in 2015, and the condo association settled with the window supplier in 2020. Regardless of that settlement, the danger persists.
Source: ‘Defective and Dangerous’: Window Failed at SF High-Rise Where Residents Had Sued – NBC Bay Area (April 7, 2023)
Kitchen fire damage displaces 40 residents from condominium
Massachusetts A kitchen fire caused in severe damage to a brick and concrete condo building in Randolph, displacing 40 residents. WBZ-TV reports that HOA officials expect repairs and reconstruction will take up to 6 months. In the meantime, owner-occupants and tenants will have to find another place to live.
Unit owners will still be obligated to pay condo fees and other expenses related to their properties. Owners who do not carry insurance will have to pay all expenses out-of-pocket.
Source: Randolph condo fire victims could be displaced for six months – CBS Boston (cbsnews.com)
New HOA statistics report
For statistics wonks, this is an interesting report worth checking out.
HOA Statistics [2023]: Average HOA Fees + Number of HOAs (ipropertymanagement.com)
HOA Consumer Rights Legislative updates
The right to sue? New law makes it harder for homeowners to file legal claim for construction defects
Florida NEW LAW Senate Bill 360 (2023) – The Florida Senate (flsenate.gov)
The enacted version of this bill makes it more difficult for homeowners to file a construction defect lawsuit against a developer, builder, contractor, architect or engineer. Effective July 1, 2023, the statute of repose for a latent or hidden defect (the time within which an owner must file a claim) is reduced from 10 years to 7 years.
Additionally, the time begins to toll when the local authority issues a temporary certificate of occupancy OR a certificate of completion, whichever occurs first. The amended statute removes all reference to the date when an owner takes possession of the property. This new stricter standard applies to both the 4-year statute of limitations and the 7-year statute of repose.
Finally, an owner will only be able to file a lawsuit for “material” defects. Combined, these amendments reduce the likelihood that a homeowner discovers a “material” defect in time to file a legal claim.
Your right to rent – Housing Bill bans HOA rental restrictions based on source of rent payments
Texas HB 1193 is making its way through the state House committees. The bill would prohibit HOAs from banning leases with tenants who pay rent with housing vouchers (known as Section 8) or other government or private non-governmental sources that provide financial assistance to households. The bill was prompted by one Texas HOA’s restriction of rentals paid by Section 8 housing vouchers. Fair Housing advocates argue that such a restriction discriminates against lower income households, and that most low-income renters happen to be racial or ethnic minorities, or immigrants. Read the most current version of the bill here.
State vs. Local control: Controversial land use bill aims to eliminate single family only zoning, even for HOAs
Colorado Introduced in the Senate, SB 23-213 Land Use | Colorado General Assembly is a 105-page statewide housing bill that would allow “by right” construction of multifamily housing in Colorado’s cities, towns, and rural areas that currently restrict zoning to single family detached housing. For example, this bill, if enacted, would allow any property owner to divide a single-family home into 2 or 3 units, or add an accessory dwelling unit (guest cottage) in the back yard. Owners could use vacant lots to construct townhomes, duplexes, cottage courts or apartment buildings with up to six units. The bill requires allowance for low to mid-rise apartment buildings in transit-oriented areas close to bus, train, or subway stations.
Notably, covenants and restrictions in planned unit developments (PUDs) and HOA-governed communities would also be unable to enforce single-family only provisions. The bill would outlaw any existing or new restriction that could prevent the addition of ADUs. It would also force HOAs to allow the conversion of homes and lots to multifamily dwellings.
**National Housing Policy Trend Note:
CO HB23-213 follows boilerplate language of similar middle housing and ADU bills that have been considered and enacted (in some form, with amendments) in state legislatures in Washington, California, Oregon, and Minneapolis, Minnesota. Similar 2023 legislation (SB 1141) made it through the Senate but failed to advance through the House in Virginia.
Supporters of these housing, land use planning, and anti-single-family-zoning bills claim they will create a diversity of more affordable housing options. Opponents say these policies create a top-down state government. It also eliminates local control and threatens scarce natural and economic resources of counties and cities.
Consumer Rights – Lawmakers mull HOA oversight by AG and restrictions on foreclosure
North Carolina, two bills to watch are S312 and H311.
S312 would essentially eliminate HOA foreclosures. The bill also requires homeowners and condominium associations to provide a property owner with written notice of a claim of lien by certified mail. H311 proposes the creation of a Community Associations Oversight Division under the Attorney General. The purpose of the CAOD would be to investigate consumer complaints against HOA that are not following state laws. The division would also have the authority to “remedy” law violations on behalf of homeowners. Both bills are in the early stages of consideration.
Bold bill would prevent cities from restricting STRs
Arkansas SB 197 is a bill that would prohibit local government ordinances that have the effect of restricting or preventing short term rentals. The bill is broad, and applies to any single-family dwelling, condominium, co-op or timeshare. SB 197 sailed through the Senate and is progressing in the House.
Sneaky condo termination bill would tax all condo owners to pay for relocation fund
Arizona SB 1198 started out as a totally unrelated bill pertaining to restored salvage vehicle inspections. But it is now one bill to watch, due to its strike-all amendment pertaining to condominium terminations.
Dennis Legere of AZHOC, a property owners’ right advocacy organization, recently posted an alert regarding this outrageous bill. This is an apparent attempt to get taxpayers to subsidize investor and developer group buyout deals. In a condo termination, some owners are forced to sell their units against their will.
The current version of the bill proposes to create a “Condominium Relocation Fund.” The money for the fund would be collected as an additional property tax assessment on each condo unit in the state. The fund would pay relocation costs and expenses of a homestead property owner who is forced to sell the condo unit in termination. The developer or investor that is initiating the termination should adequately compensate condo owners, not Arizona taxpayers.
The bill contains other provisions to more fairly compensate condo owners selling due to a termination. Hopefully, this sneaky bill will not progress unless the Relocation Fund and additional tax are eliminated.
HOA-industry lobbyists try to undo existing consumer protection of voting rights
California AB-1458 proposes reducing the quorum requirements for holding an election for homeowners, condo, or co-op associations. When an HOA fails to meet the quorum required by its governing documents, the board must adjourn the annual meeting and postpone the election. A second meeting must be scheduled for at least 5 days but not more than 30 days later. But the quorum for the second meeting can then reduced to 20% of membership. The lower quorum applies regardless of higher requirements written in HOA governing documents.
Another bill to keep an eye on is AB-648. This bill amends current law that allows HOA meetings by teleconference. The most recent amendment to this bill reversed an attempt by HOA-industry lobbyists to continue to allow videoconferences for annual election meetings, where ballots are tabulated and counted, even though pandemic emergency restrictions have expired. The current draft now states that there must be a physical location where owners can witness the counting of ballots. In other words, when counting ballots, a video camera cannot be substituted for a live audience.
A third bill to watch is AB572. It proposes reducing the maximum increase in annual HOA fees from 20% to 5% — but only for owners of units that qualify as affordable housing set aside for lower income households. If you live in a mixed income community, middle- and higher-income households can still see their HOA fees increase by up to 20% per year, without a vote of members.
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