Monday, September 19, 2011

Killer Weed in the Common Area?

How do Boards of Directors deal with the use of Medical Marijuana in Community Associations?

By Paul Windust
    Community Associations increasingly face issues with medical marijuana.  It is a confusing area because federal and state laws conflict and social mores are in constant flux—especially when it comes to marijuana.  Long gone are the days when the high school health teacher could show “Reefer Madness” and his students would accept that marijuana use leads straight to jail, depravity, or worse!  Today, attitudes toward many substances, including marijuana, are more relaxed—at least at the state level. But regardless of current social opinions on the use of marijuana, the question that board members and managers ask us is whether the use of marijuana, medical or otherwise, is a violation of their CC&Rs, and if so what can or should be done about it?

Sunday, September 4, 2011

First Thing We Do, Let's Ban All the Bloggers!

   All speech is not necessarily objective or persuasive--merely posting something on the Internet does not make it right, or even important.
  
      Anyone who surfs the web for useful stuff about community associations has seen three kinds of information posted there--the good, the bad, and the ugly. “Good” information provides accurate facts and useful advice related to those facts. “Bad” information, while often inadvertent, provides neither accurate facts nor useful advice and is usually the result of carelessness or lack of experience. “Ugly” information, on the other hand, is accurate facts used as a cover for bias that either intentionally misleads or is simply invective—or both. The facts used, true as far as they go, are nevertheless intended to disguise or “beard” a political or social agenda. To illustrate “ugly” information, assume that the following is a blog post.  It is reproduced here in the blue font below, in its entirety as it appears in the blog—all of the emphasis is in the original. You tell me into which category this “information” falls: 

“HOA boards can be sued and not covered by insurance
Much of the abuse by boards, the management firms, and attorneys are tortious acts that are illegal and also constitute a fraud upon the members. You will not hear this at pro-HOA seminars sponsored by local governments and/or taught by CAI attorneys.
“D and O” means “directors and officers.”

“Most, if not all, D and O policies contain a provision that excludes intentional criminal and fraudulent acts committed by board members,” says Collins. “However, [our policy] will continue to defend the directors and/or officers until such time that a criminal action can be proven. The policy will then cease to provide any further protection once it is determined that a board member knowingly committed a criminal or fraudulent act.”
 
D and O coverage also doesn’t indemnify a board or board member against decisions made “in bad faith,” or with illegal intent. If a board is found to have acted in an illegal manner—deliberately discriminating against a prospective buyer, for example—and are hit with punitive damages, members are on their own when it comes to paying them.

The reason for pursuing these actions acts of bad faith is to force the homeowner into court, where the attorney gets his fees and the HOA gets a free ride, most of the time.  Directors and officers are legally bound to act in good faith toward their members.”
     
Yes it’s ugly, but let’s analyze why.

Sunday, August 21, 2011

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. 

Friday, August 5, 2011

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.

Sunday, July 17, 2011

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...

Monday, July 11, 2011

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.

Saturday, May 21, 2011

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.