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Opinion – HOA War in North Carolina

Neighbors at War: HOA War in North Carolina
By Ward Lucas
November 28, 2014

North Carolina is certainly a state where the HOA system has gotten way out of control. Fortunately, outspoken advocates like Ole Madsen (HEAR4NC.org) are articulating the insanity that’s disrupting the lives of so many homeowners around the country.

When you buy into an HOA, you’re essentially pledging all your personal assets to a group of partners, most of whom you’ve never met. Your assets become the de facto assets of a non-profit corporation which is potentially subject to liability lawsuits, damage from natural disasters, poor workmanship by developers, frivolous legal actions by overreaching board members, embezzlement by board officers and management companies. That’s a crazy kind of partnership, but it’s one that tens of millions of Americans have blindly accepted. And it’s one where HOA law firms are bathing in the mythical pot-of-gold.  Read more:

National: Book Review: ‘Escaping Condo Jail’

HUNTINGTONNEWS.NET:  Book Review: ‘Escaping Condo Jail': Comprehensive Book Explores Pitfalls of Condominium, Home Owner Association Real Estate with Research, Wit
Reviewed by David M. Kinchen
November 18, 2014
If you have your heart set on buying a condo, cooperative apartment or a single-family house in a planned development, you should read “Escaping Condo Jail: The Keys to Navigating Risk & Surviving Perils of the ‘Carefree’ Community Lifestyle” by Don DeBat and Sara E. Benson (Sarandon Publishing, 624 pages, $24.95, appendixes, index, illustrations by John Michael Downs) before signing on the dotted line.

Both DeBat, a former real estate editor for the Chicago Daily News and the Chicago Sun-Times, and Benson, a real estate agent, have personal experience owning condos. In fact, DeBat emailed me that some of the experiences related in the chapters on “Bully Boards” and thefts by association board members were inspired by Benson’s personal experiences with one of her condos.

In the subtitle, “carefree” is in quotes. What was billed when the  modern form of condominium ownership was born about 50 years ago as  carefree, chic and glamorous isn’t really carefree at all. Steep maintenance fees, restrictions on day-to-day living and limited personal freedoms are three very real costs prospective condominium owners might not have considered. This applies to the many community developments, often gated, that feature single-family houses or town houses. The technical name for such developments is Planned Unit Developments or PUDs. The authors provide a very useful glossary of terms at the end of the book. Read more:

Fences or flamingoes: Be sure you know your homeowner association rules (BEFORE you buy)

Posted:  September 26, 2014  By Rob M. Davies

Before you buy into a homeowners association, you should know what you are getting yourself into.

A new homeowner moves into a neighborhood governed by a private association, receives an invitation to a potluck that doubles as an annual meeting and shows up with a bottle of wine and a dish to pass.

Feeling welcomed by the new community, the new homeowner starts paying dues, volunteering to help with neighborhood improvement projects and voting on association matters. But what happens when the homeowner receives a large bill to pay “his share” of the replacement costs for a portion of a road maintained by the association that is washed out?

The homeowner goes back to the governing documents for the association, reads the rules and restrictions, and finds out he was never really a member of the association at all. A fight ensues with his new neighbors and the association, which claims the homeowner behaved like a member, performed acts like a member, paid dues and received benefits like a member, and now must pay for the road replacement — like a member.

A closer reading of the governance documents — which no one has read in years — spells out that the homeowner and a dozen or so of his neighbors were never intended to be members of the association. Further, these houses never used the section of the road being replaced and were supposed to be assessed smaller fees for only a portion of the road maintenance.   Read more




Opinion by Jan Bergemann

September 27, 2014

I have over the years seen many attempts to “bribe” CAMs, but none as blatant as this postcard:

(See article)

This postcard was mailed to a myriad of licensed CAM’s in South Florida, offering them a 10% “KICKBACK” – on the postcard politely called “referral fee.” This attempt to get business by “Old School Plumbing” is clearly aimed at licensed CAMs, tempting them not to give the business to the best offer, but giving it to the company that offers the highest “kickback.”     Look at the condition of this offer: “Must be an active LCAM with FL DBPR to participate.”    Especially since many CAMs are empowered by contract to hire vendors without prior board approval if the amount of the necessary repair (work) is below a certain dollar amount ($500 or $ 1,000 for example), it’s clearly very tempting for any CAM to call this company and quickly earn a “referral fee” – in reality a kickback.    This is just one example for the “kickback” scenario that is going on daily in Florida’s community associations.  Read more:


NEVADA – Comment by Evan McKenzie

Evan McKenzie on Las Vegas Fraud Case:

It makes no sense to put untrained, uncompensated, and often unqualified volunteers in charge of billions of dollars, based on a bogus ideology of privatism.

http://m.reviewjournal.com/news/las-vegas/new-details-revealed-hoa-fraud-caseWhat this massive fraud reveals is how vulnerable HOAs and condo associations are to being taken over or manipulated into becoming ATMs for fraudsters. Insurance companies were taken to the cleaners. I haven’t even tried to list all the embezzlement cases. I have a notebook three inches thick of press clippings reporting them. Then there were the developer and converter frauds.  Here in Chicago at least 200 fraudulent condo conversions shoveled millions of dollars from banks into the pockets of crooks, cost investors a fortune, and victimized  hundreds of tenants who were paying rent to somebody who didn’t own the building.

And all that criminality is in addition to the non-criminal practices of underfunding reserves that  exposes owners to enormous risk, and vendors charging ridiculous fees for doing nothing and locking  associations into terrible adhesion contracts.

Why is it so hard to put all this together and reach the obvious conclusion that the money side of CIDs is not working?  The media have a frame for reporting on the social control conflicts that happen in associations–flags, pets, political signs, religious symbols–but they can’t seem to see the pattern when it comes to the enormous financial problems that leave millions of Americans vulnerable to major economic loss.

It makes no sense to put untrained, uncompensated, and often unqualified volunteers in charge of billions of dollars, based on a bogus ideology of privatism.