Fannie Mae Makes It Harder to Buy Condos

It's about that condo you're thinking of buying—or refinancing: The price is going up. I'm not talking about the sale price, but the latest fee that will nick you unless you're making a sizable down payment. With many lenders already casting a wary eye on condo loans because of their default rate, Fannie Mae has upped the ante by adding a fee of .75 percent of the loan amount of a 30-year fixed mortgage, for borrowers who put down 25 percent of the purchase price or less, effective April 1.   Read more

Failure to Communicate; Finding Good Telecom Deals Can Be Hard-Selling Them to Owners Can Be Even Harder

Jared McNabb, CMCA, AMS, knew some residents of the community he managed would object to the board’s proposal to substitute a bundled package of telecommunications services for the individual services owners had in place. But he didn’t anticipate just how strong the resistance would be. “You would have thought we were trying to take their first-born,” he says of the angry outcry that ultimately blocked the plan at this 196-unit community – one of several that McNabb, a manager at the property management company, Crowninshield Management Corp., AMO®, oversees. On its face, the proposal looked like an easy sell. It combined telephone, cable and wireless Internet in a single package at a combined monthly fee much lower than owners were paying for the a la carte services they had arranged individually. Although the up-front installation cost was steep ($75,000 to $80,000), the pay-back period, at around four years, was relatively short — one of the points that board members and the prospective vendor emphasized in multiple presentations and informational material provided to owners.    Read more

HOA Rules Enforcement Policy

All homeowner association should have a rules enforcement policy that includes any rules and regulations found in the governing documents and any additional ones enacted by the board. This policy provides a process for notifying violators, informing of the penalties and the process for appeal.  The following sample policy resolution can be modified to conform with state statute and governing documents. Before implementing any policy, it should be reviewed by an attorney specializing in homeowner association law in your state.   Read more

Common Moisture Intrusion Problems in Commercial Construction

Ninety percent of leaks occur in one percent of a building.  In fact, there are several specific points where leaks are most likely to occur.  Below are some of the common points in the building envelope that are most susceptible to water intrusion,  The roof is the most common place that leaks occur.  Exterior walls propels water into recessed windows.  Common window areas vulnerable to water intrusion are metal to metal miters and mullions, glass to metal transitions, glass to glass transitions, stucco to metal transitions, and cracks and deteriorated stucco returns.  More often than not, it is necessary to recaulk all components of a window system to avoid reoccurrence of leaks.   Read more   (PDF)

Why An Association Needs Workers' Compensation Insurance

In cases where associations do not have employees but utilize services from contractors, it is still recommended that such associations obtain a workers' compensation policy.    The reason for this recommendation is that liability for injuries travels "up the chain" from the injured person to the subcontractor to the association.   Read more

Facing the Financial Crisis: 10 Smart Things Your Board Can Do Now

It's undeniable, and the reality of that hits anew every morning. All we have to do is get out of bed and turn on the morning talk shows, retrieve the newspaper, or glance at the faces of passersby as we head to work. All tell us loud and clear that our economy is in turmoil. It's tempting to crawl back in bed, pull the covers over our heads, and pretend all is well. As board members, we're not immune to these feelings. But in these very troubled financial times, our organizations are looking to us for leadership. How we react to the economic crisis can go a long way toward calming fears and ensuring that our nonprofits remain solvent in this difficult environment and are even better prepared to enact our organizational missions in the future.   Read more

Fraud:  It Can't Happen In My Company!

I have seen fraud at every level - from the management company receptionist to the general manager who reports to the CEO of the management company; from the Association's volunteer treasurer to the onsite employee.  There are opportunities for fraud with absolutely every position within your organization and within the Association's sphere of influence.   Read more   (PDF)

Beware of Inexperienced Service Companies

With Palm Beach County experiencing a larger than normal  downturn in the economy, climbing unemployment rates and a  growing crisis in all areas of real estate and  construction, most associations are going through a  extremely difficult time maintaining their associations,  keeping their maintenance costs low as well and trying to  match assessment income with assessment costs.     Because of the recent economic and mortgage related  problems, we have seen a growing trend with Associations  hiring low cost and low fee service companies and we  believe that this trend will cause additional problems to  an association if ignored. These low cost vendors and  service companies that are coming into the marketplace are  new, inexperienced and under staffed. These new companies  have no real experience in their chosen fields or new  professions.             Read more

WHEN HOMEOWNERS ATTACK! Enforcement Against The Demented Homeowner

Unfortunately, all of these examples are taken from actual incidents. (Names have been changed to protect the innocent.) You've seen it before. A homeowner is abusive to a board member, committee member, property manager, security guard, other vendor employees, or association employees. When does rude conduct cross the line from being an annoyance to harassment or a dangerous situation which may require legal action? What tools and remedies does a board of directors have to deal with such misconduct by a member?   Read more

The challenge of enforced idleness

It's not just big manufacturing firms that are taking this step, either. In fact, according to the U.S. Bureau of Labor Statistics, the number of employees who normally work full-time but were now doing fewer than 35 hours a week because of the tough business climate climbed by nearly three quarters in the year to November, from 1.49 million to 2.57 million.    Read more

A Dangerous Gap in Pool Safety

The bulk of the country's public swimming pools are in violation of a new federal safety rule aimed at keeping people from becoming trapped in underwater drains, and some pools have begun closing down temporarily while they scramble to comply with the law. About 80% of the country's roughly 300,000 public pools and spas, located in communities, hotels and fitness centers, still need to retrofit their facilities to meet the new requirements, which took effect last month, according to the National Swimming Pool Foundation, a nonprofit group that promotes aquatic education. Pool operators complain that the new, safer drain covers required by the law didn't hit the market until the fall and continue to be in short supply. For most facilities, the new equipment costs between $1,000 and $10,000 to purchase and install, depending on the type of pool and the size of the drain.   Read more

HOAs & Bankruptcy, Foreclosure, and Workouts

Sometimes, real property owners fall on hard times and they default on some type of a payment that's owed on their property. Usually, the creditor can either take action to enforce and collect the debt, such as foreclosing on a lien, or the property owner and the creditor can make a deal to settle the matter, which is called a "workout." Sometimes, a property owner has to declare bankruptcy. All of these things can happen when the property is part of a homeowners' association (HOA). And, anyone who's a member of an HOA, should know how their HOA will react in such circumstances. Often, a HOA will be aggressive in collection actions when assessments and dues go unpaid, because it's simply not fair to other owners to shoulder the financial responsibility of a non-paying HOA member.    Read more

When Late Fees and Interest on Unpaid Assessments Go Too Far:

In August 2006, the Court of Appeals in Indiana Harbours Condominium Association, Inc. v. Hudson, 852 N.E.2d 985 (Ind.App 2006), decided an appeal from a condominium association who sought to recover over fourteen months of late fees and interest against a unit owner. The amount of the unpaid condominium fees was $799.12. The condominium association’s documents allowed for a monthly $25.00 late fee, plus an additional $5.00 fee for every day that the assessments remained unpaid. The condominium charged interest at the rate of 18% compounded. The condominium was therefore assessing $4,733.46 per month in late fees.   Read more

TX: Dominion HOA plans talks after destructive fire  In the wake of a fire that left a million-dollar home in ruins, Brigitte Saidi, chair of the Dominion Homeowners Association board of directors, said safety of residents and their families is the primary concern....

FL: Lawmakers dream up a condo and homeowner law wish list   Lawmakers have a lot of homework ahead when it comes to condominium and homeowner association laws...

FL: Woman Suing HOA Over Marriage Rule
An unmarried mother of four said she is filing a lawsuit against her former homeowners' association whose rules of only allowing married couples to own or rent homes in an east Orange County subdivision forced her out of her dream home....

VA: Man barely avoids jail over refusal to fix wall
A Spotsylvania County man avoided jail yesterday for violating a third court order to fix a crumbling retaining wall on the left side of his Lee's Hill home....