Staying in or Selling Out?

Whose Interest Comes First?

   The needs of short-term owners can conflict with the interests of owners who are in it for the long-term and with the overall interests of the homeowners association.  Community association boards which cave in to political pressure and avoid developer claims or artificially keep assessments low--are depriving the remaining and future owners of critical leadership.(1)

We hear it all the time, especially now with home sales so hard to close. Members of a community association who have their property listed for sale or those who are seeking alternate financing, complain that their association’s board is taking actions that are contrary to their interests. What actions? Raising assessments to comply with the recommendations of a reserve study. Imposing a special assessment or applying for a bank loan to raise funds for long-deferred repairs. Initiating an investigation of the condition of the project that might lead to a claim against a developer for construction defects. 

The Privatopia Papers: Home ownership hits lowest level since 1965

 Our essay, "Getting Sober in the New Economy" suggests that we should back off of new development of owned homes and focus instead on providing high quality rental properties, especially in urban areas. Click the title link above for a story that shows statistically why this may be the new direction for housing.

Bankruptcy Won't Work

A member raises his hand at a meeting and asks the question: if the association is too broke to pay its bills, why not simply declare bankruptcy? Hold the creditors at bay until the economy picks up? No one on the board has a good answer because it almost never happens. Here are the practical and legal reasons why...

Getting Sober in the New Economy

Are Rentals a Better Solution for Affordable Housing?

"The crux of (the) analysis is that the loose lending practices seen during the housing bubble allowed 5 million renters to become homeowners and the market is in the protracted process of evicting this group."

Sometime in the early sixties, a large California developer opened its first development of condominiums for sale. They were offered at rock bottom prices. A home for a single family that could be bought for $10,000.00 was big news even then. The desire for suburban housing that could be built in high densities and thus be affordable was apparent. Condos could be sold in volume which meant higher profits for home builders. Other developers followed suit, and condominiums became a ubiquitous part of the national real estate market. Those home buyers who could not afford a single family home on its own lot could still get in on the real estate ownership bandwagon. Low interest loans backed by the government gave many low and moderate-income wage earners the opportunity to purchase a home. Most people could buy with 5% or no money down. Veterans could buy a new home for nothing down. Condominiums, and their planned development cousins, became the darlings of the real estate industry and they were constructed by the carload.

It's Your Neighbors, Stupid.

Who, not what, is a Homeowners Association?

                 The blogosphere is alive with stories about the transgressions of homeowners associations. Foreclosures. Enforcement of arcane architectural guidelines. Lawsuits by associations for minor rule violations. Owners suing their associations for failing to enforce the rules. “Nazi” boards. Libertarian owners. Just surf the web for awhile and you will see numerous all-caps diatribes against what is perceived as a corporate enemy—the homeowners association. But the truth is that the association serves the owners—not the other way around—in ways that many people do not think about.

Disaster!

No Reserves. No Insurance.  
What’s Left if a Natural Disaster Destroys a Community Association?


By 

Tyler P. Berding and Steven S. Weil

       We have recently seen horrific earthquake disasters in New Zealand and Japan. There has been widespread loss of life and destruction of infrastructure and buildings. California has a history of devastating earthquakes as well—the San Francisco, San Fernando, Northridge, and Loma Prieta earthquakes, among others. Heavy rains have created landslides, mudslides and shoreline erosion all over California, damaging homes and property, some of it in community associations. Wildfires in the past decade have destroyed hundreds of homes. Rising sea levels are threatening to flood low-lying developments, including many common interest developments. 

A Funny Thing Happened on the Way to the Meeting--Or, Why is a Homeowner's Association like Wisconsin?

By Steven S. Weil

The Wisconsin Democrats employed a clever technique (denying a quorum) to prevent their legislature from adopting an anti-labor law. The Wisconsin Republicans responded with their own smart bag of tricks; they re framed the law to eliminate the quorum requirement and got it passed without the Democrats participating. Can this sort of politicking be used in the context of homeowner association votes? You bet.