A monthly collection of top 10 HOA news updates from across the U.S. and around the world.
By Deborah Goonan, Independent American Communities deborahgoonan@gmail.com
1 – Association of Certified Fraud Examiners warns owners of HOA fraud as a ‘thriving cancer’
A decade ago, when I started this blog, the HOA industry’s leading trade group claimed that HOA fraud, corruption, and theft were “isolated incidents.” The Community Associations Institute (CAI) blog posts making this ridiculous claim have since disappeared from their website.
When countless media reports cited numerous examples of HOA fraud, I began posting news roundups on this website. (See Corruption, Fraud & theft Archives • Independent American Communities) But, over the years, the media exposed that HOA management companies were responsible for many of the biggest embezzlement and fraud scams. No surprise, after that CAI stopped calling them “isolated incidents.”
These days, HOA attorneys often advise HOA board members to quietly cover up the fraud, for fear of tarnishing the reputation of their community. Therefore, the vast majority of HOA fraud cases are never reported in the news. Many HOAs won’t even report cases of fraud to local police.
But experts that investigate fraud crimes tell us that it is pervasive in HOAs.
2 – Condo owner appalled by $5M judgement against HOA (Texas)
A condo owner from Texas posted this topic on reddit (r/HOA). She’s confused and worried about what to do. You see, an owner sued the HOA for discrimination under the Fair Housing Act and that owner recently won a $5 million award from the court.
Though it’s unlikely this substantial award will be thrown out, the actual amount of the award will be challenged by the HOA. The court could reduce the award. However, it’s doubtful that HOA insurance policies will cover the cost of the judgment under these circumstances.
But owners of HOA-governed properties beware. Your HOA can be sue or be sued for various reasons. If the HOA board or its management contractors are found guilty by a court of law, and if insurance policies won’t cover the judgment, it’s property owners that will foot the bill.
Side note: even if insurance does pick up the tab for the HOA, you can be certain that the insurer will NOT renew the policy next year. And good luck finding a new insurance policy for this HOA going forward. Chances are high that any insurer willing to underwrite this HOA will charge hefty premiums and require a large deductible.
3 – Ward Lucas, former HOA advocate, author and investigative journalist dies
Ward Lucas wrote “Neighbors at War!” about his own battle with an HOA. In his case, that HOA did not even have a legal right to enforce restrictions against his home. In the book, he recounted the HOA horror stories of homeowners under HOA control.
I got my start blogging for Ward’s book website, before I started my own blog. We kept in touch after that.
Later in life, Ward Lucas wrote two other books, unrelated to HOAs. (“Get this Mother Published!” and “Sometimes Ya Gotta Ride the Elephant.”) I helped proofread preprint copies of these inspirational books.
Unfortunately, we lost touch after the death of his wife and the onset of his own illness.
Rest in peace, Ward. Thanks for caring about HOA issues. You will be missed.
Ward Lucas, longtime 9NEWS reporter and anchor, dies at 75 | 9news.com
4 – Fort Lauderdale condo evacuated due to safety concerns
Residents of a 70-year-old condominium undergoing concrete structural repairs were ordered to evacuate their building after building engineers discovered the foundation was undermined. With Hurricane Helene approaching, engineers feared high winds could lead to catastrophic failure.
The condo board of Springbrook Gardens Condominium Association is seeking a second opinion on their building’s safety status. Owners have already been assessed tens of thousands of dollars to pay for ongoing repairs. The process of concrete restoration is taking longer than expected. At this time, it’s unclear when residents will be allowed to return to their homes.
Check out the video coverage to get a glimpse of the damage to the foundation.
Residents forced to leave unsafe condo building in Fort Lauderdale – CBS Miami (cbsnews.com)
5 – California homeowners face emergency assessments for utility line repairs from their HOAs, condo associations
I’ve been notified by the Center for California Homeowner Association Law (CCHAL) that a controversial bill now sits on the Governor’s desk, awaiting his signature or veto.
The bill, HB900, amends state law to make HOAs physically and financially responsible for maintenance and repair of all utility lines entering each community. It gives HOA board members the authority to enact Emergency Assessments to pay for repairs in order to avert health and safety hazards.
The problem with this bill is that, up until now, many communities have utility easements that allow utility companies to make — and pay for — necessary repairs. In other words, SB900 passes the buck from utility companies directly to homeowners in HOA communities.
While it’s true that utility companies generally pass on the cost of repairs to their customers, the overall cost is shared among all ratepayers, not dumped onto a few customers in a specific neighborhood or condo community.
Marjorie Murray of CCHAL explains SB900 in her latest alert:
TAKE ACTION! Sacramento Votes to Burden Owners with Emergency Assessments
Try and hang onto your checkbook.Sacramento lawmakers have voted YES to giving a SINGLE board director the power to levy emergency assessments based on unspecified “health and safety hazards.”
The chief architect of the bill is the Community Association Institute (CAI).
Monday’s vote was 74 “yes” and 5 abstentions by Cervantes, Essayli, Muratsuchi, Ortega, Soria,
So did YOUR Assembly Member vote YES to burden you with emergency assessments (or did your representative abstain)? Look here to find out: https://leginfo.legislature.ca.gov/faces/billVotesClient.xhtml?bill_id=202320240SB900
If YOUR Assembly Member voted YES, then phone him/her to say how deeply disappointed you are that you gave board directors the power to get into your wallet without your say-so.
Can’t remember who your Assembly Member is? Go here to find out: https://findyourrep.legislature.ca.gov/
SB900 is the legislation requiring homeowners to MAINTAIN AND REPAIR ALL UTILITY LINES coming into the subdivision.
Financing can be done through EMERGENCY ASSESSMENTS, which
Have no dollar cap
Don’t require a vote by homeowners
Yes, the HOA can foreclose on the owner who doesn‘t — or can’t afford to — pay
The bill was just amended on the Assembly floor to let ONE board “start the process” of
Declaring an emergency for the entire association
Levying an emergency assessment on owners
Taking out a loan and using the assessments as collateral
Homeowners are already reporting “emergency assessments” of $4800 to $49,000. [See “Homeowners Balk at Emergency Assessments” on the CCHAL Facebook page.]SB900 goes next to the Governor’s desk. Are there any homeowners who want to stop SB900? mail info@calhomelaw.org
NOTE the new amendment saying that SB900 prevails no matter WHAT an association’s CC&Rs say about whose job it is to fix utility lines.
Do forward this NewsBrief to your Facebook, Twitter, and other social media platformsQuestions/comments? Email us at info@calhomelaw.org
Help support the work of the Center for HOA Law (CCHAL) by making a donation here: https://calhomelaw.org/
Copyright © 2024 Center for California Homeowner Association Law, All rights reserved. 28/08/24
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6 – Georgia lawmakers to study HOA problems after local media highlights decline and crime in Atlanta condominiums
Peyton Place Condominium, located in southwest Atlanta, has gained notoriety lately, but not in a good way. The condo community has been the site of shootings as well as fights among residents and the HOA president.
The condition of the buildings is deplorable. There are holes in the walls, worn out roof shingles, sagging and missing rain gutters, and general blight throughout. And that’s just what we can see on the outside.
Living conditions are so bad that the local housing authority won’t refer low-income individuals seeking rent subsidies (Section 8) to Peyton Place.
Twelve out of the 47 apartments are owned by the condo board’s president, and many other units are owned by non-residents, who rent them to tenants. Either the condo association has neglected to collect sufficient fees, or they’ve wasted or misappropriated the money. Is fraud or embezzlement a possibility? Who knows?
One thing is for certain. Condominium and HOA decline is actually quite common, especially among lower-tier housing communities as they deteriorate with age and years of neglect.
Georgia lawmakers say they’ll study the situation next year. But what’s really needed is bold action to force HOAs to live up to their responsibilities — or face forced dissolution and condemnation when they don’t.
The current status quo allows HOAs to kick the can down the road for many years, allowing irresponsible landlord owners and HOA board members to milk the community dry, until the assets are completely worthless.
Lawmakers agree to study Georgia HOA woes | 11alive.com
Section 8 won’t let tenants live in this HOA’s Atlanta complex | 11alive.com
7 – City says HOA must pay for broken culvert, erosion damages (Missouri)
The biggest ball and chain that burdens homeowners with HOAs is stormwater management within their communities. That includes maintenance and repair of culvert pipes, retention ponds and basins, drainage swales, and dams for private lakes.
It doesn’t matter how large or small the community is. If your local government required the developer to form an HOA to maintain stormwater management, then you’re on the hook if you own a home in the community. This is true even if you don’t own a condo — even if you have a detached single-family home.
For at least 4 or 5 decades, local governments have been offloading the duty to manage stormwater to private landowners or groups of homeowners who are members of HOAs. In fact, nearly every HOA in the U.S. has at least one stormwater management structure.
I’m aware of many HOAs that have no amenities at all — no pool, no green space, no clubhouse, no lake, NOTHING. All the community has is a drainage swale or a culvert pipe or a low-lying basin to collect stormwater. That alone is enough to require an HOA. This makes owners financially responsible for any flooding or erosion or sinkhole or landslides that may occur when stormwater management fails.
Dispute over who is responsible
The homeowners of this HOA neighborhood have appealed to the city of Arnold to help them repair (and pay for) their broken culvert pipe that feeds into an easement. The city says the HOA owns the property that surrounds the culvert pipe.
However, homeowners say that a nearby creek on city property has eroded the drainage easement, leading to the culvert failure.
The city Administrator disagrees. He says the culvert pipe is on HOA property. It’s a game of finger pointing, where neither the city nor the HOA wants to assume responsibility for the damages.
That said, the city of Arnold has offered to do the repair work, but only if owners agree to pay for those repairs through their HOA or through property taxes subject to property lien for non-payment.
For now, the matter remains unresolved.
8 – California condo association gets $8.5 million from city for repair of huge sinkhole
Nearly 6 years ago, in 2019, a 100-foot-wide sinkhole opened up between two rows of buildings at Coyote Village Condominiums in La Habra. The sinkhole was caused by the failure of an underground flood channel that was on HOA property. However, due to the age of the community, current owners on the HOA board had no idea that the drainage tunnel existed. Therefore, it was never maintained.
For more than five years, the city and county both refused to pay for repair of the sinkhole. Then State Senator Josh Newman secured an $8.5 million grant to make permanent repairs to the stormwater conduit for the Coyote Creek Storm Drain, which he calls an ‘integral part’ of Orange County’s flood control system. Construction began in August 2024.
Side note: for many years I’ve been making the point that, sooner or later, local and state governments will have to assume responsibility for HOA infrastructure. Why? Because, as this example shows, it was never a good idea to expect volunteer homeowner boards to competently manage its own community infrastructure.
La Habra Sinkhole Follow-Up – Fullerton Observer
Groundbreaking for La Habra Storm Channel Sinkhole Repair Project – Fullerton Observer
9 – Condominiums (Strata) have big problems in Australia, too
This 44-minute documentary was forwarded to me by a reader. Anyone who thinks that condominium problems are exclusive to the U.S. is mistaken.
Wherever condos and HOAs exist in the world, you’ll find the very same risks and disadvantages.
The following documentary sheds a light on the near total lack of accountability of strata (condo) management companies and board members. There are zero consumer protections for owners of apartments, known as strata (rather than condos) in Australia.
If you own a condo in the U.S., this will ring true to you, too.
10 – After new state law is enacted, HOA prepares to vote over street parking (Arizona)
Ahwatukee Foothills community association is preparing to vote on whether or not to allow the HOA to maintain control over parking restrictions and other regulations pertaining to its public streets.
The call for an October 23 community vote follows the passage of a new state law that prohibits HOAs from regulating activity on public streets, unless a majority of HOA members votes to allow the HOA to enforce parking restrictions.
Specifically, Arizona’s new state (HB 2298) law prohibits HOA regulation of public roads for any community established as of January 1, 2015, or later. For communities established earlier, the HOA must vote on whether or not to retain its authority to regulate public roads no later than June 30, 2025. If the vote isn’t taken, or if the vote fails, the HOA can no longer enforce restrictions and regulations pertaining to public roads. You can read the full details here.
The Foothills community falls under the category of communities that can vote on whether or not to allow their HOA to retain control over public roads.
Pros and cons of extending HOA regulation of public roads
Some residents welcome the idea of being able to park oversized vehicles and guest vehicles on the street, avoiding the hassle of being fined or towed by the HOA for parking violations.
Another advantage, according to one outspoken resident, Jim St. Leger, is that allowing curbside parking will force traffic to slow down and prevent speeding hazards within the neighborhood.
And there’s another very important reason to allow street parking. It helps disabled residents. St. Leger’s daughter is blind and must use a cane to walk. However, oversized vehicles parked in short driveways hang over the sidewalk, creating a hazard for people with disabilities who must navigate around bumpers.
But the current HOA board isn’t so willing to give up control. It has launched a fear-based campaign, warning residents that, if the city becomes responsible for regulating parking, the whole neighborhood will suffer, along with property values.
I happen to agree with St. Leger: this is nothing more than a scare tactic designed to hold onto control over homeowners and residents of the Foothills.
Nevertheless, the voting has begun. Time will tell how this all plays out.
Resident opposes Ahwatukee Foothills street regs extension | News | ahwatukee.com
New law eliminates some parking rules in HOA communities in Arizona (azfamily.com)
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