Resale Certificates and Significant Assets

Posted on June 15, 2011 by Brian P. McLean

Significant Assets and Resale Certificates, by Brian McLean

Perfect legislation is aspirational but impossible. The meaning of words change over time. Social customs and values change. These are not novel concepts.

In the newly revised Washington State reserve study legislation 2011 Wash. Laws 189, the duty to obtain a reserve study is triggered by “significant assets”. The 2011 law affects condominiums and, for the first time, non-condominium associations. It is not perfect legislation, but it aspires to do good things for owners and associations.

Continue reading →

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Resale Certificates and the Price of Disclosure

Posted on May 12, 2011 by Brian P. McLean

Resale Certificates and the Price of Disclosure

The State Legislature has updated RCW 64.34.425(2). As of July 22, 2011, a reasonable charge for the preparation of a resale certificate may not exceed $275. The former cap, established in 1990, was $150.

2011 Wash. Laws 48

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Reserve Accounts and Studies — New Law, Old Problem

Posted on May 12, 2011 by Brian P. McLean

Reserve Accounts and Studies — New Law, Old Problem

You can pay now or someone else will pay later. That used to be the law in Washington State. No longer.

Washington State Governor Christine Gregoire signed into law new legislation concerning owner associations and reserve studies. The law becomes effective January 1, 2012. A copy of the bill can be found here: 2011 Wash. Laws 189.

Continue reading →

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FHA Condominium Project Approval – Status

Posted on December 9, 2010 by Brian P. McLean

Thank you Andrew Fortin, CAI (quoted in full):

Today, FHA announced a revised schedule for condominium project approval expirations and urged all condominium communities wishing to retain FHA approval to complete the recertification process. CAI strongly encourages all condominium communities with FHA approval to be mindful of the new expiration deadlines and to begin the recertification process in a timely fashion to avoid disruption in the sale of units.

The new schedule for project approval expirations is below:

Initial Project Approval Dates Current Expiration Date New Expiration Date
1972 – 1980 December 7, 2010 December 31, 2010
1981 – 1985 December 7, 2010 December 31, 2010
1986 – 1990 December 7, 2010 May 31, 2011
1991 – 1995 December 7, 2010 July 31, 2011
1996 – 2000 December 7, 2010 August 31, 2011
2001 – 2005 December 7, 2010 September 30, 2011
2006 – 2008 (Sept) December 7, 2010 March 31, 2011

According to FHA’s announcement, “The extensions were granted to reduce the impact of processing and reviewing the number of project approvals expiring at the same time while recognizing current housing market conditions…interested parties are encouraged to begin the re-approval or recertification process as early as possible as it is not anticipated that any further extensions of project approvals will be issued.”

In August, FHA announced a streamlined process for condominiums currently on the FHA-approved list to recertify to program requirements. To view CAI’s summary of the streamlined recertification procedures, click here. Under FHA’s condominium project approval guidelines, FHA-approval for all condominiums certified prior to October 1, 2008, was set to expire on December 7, 2010.

On Thursday, December 9, 2010, FHA will host a conference call for all interested parties to explain the new recertification deadlines and answer questions from industry partners. To participate in the conference call, use the information below:

Date:   Thursday, December 9, 2010 from

Time:   3:15 pm – 4:30 pm (EST).

Participants Teleconference Dial-In Number: (800) 683-4564

Participants Access Code: 623108

Confirmation Number: 184260

Posted in Finance, General | Leave a comment

Businesses and Daycares

Posted on November 16, 2010 by Brian P. McLean

I am often asked whether the operation of a daycare in an HOA breaches a restrictive covenant that forbids the operation of a business in a residential home. The answer is, it depends.

Quote of the Day: “Operate more like a business and less like a daycare.”

Now what?

Posted in Restrictions and Rules | Leave a comment

Administrative Posting

Posted on November 6, 2010 by Brian P. McLean

A number of users have subscribed to this blog, and I appreciate the support and comments. Because of an increasing number of spambot registrations, I’ve increased security on the registration page and deleted dozens of what appear to be spam subscribers. This appears to be a better solution than forbidding registrations altogether.

If I’ve accidently deleted your subscription, I apologize. You can still access this blog without a subscription, but cannot comment without one. If you want to re-register, please do so.

Thank you.

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Hot Roofs, Cool Roofs, and a New Moon

Posted on October 28, 2010 by Brian P. McLean

Hot Roofs, Cool Roofs, and a New Moon

By Brian P. McLean, Leahy McLean Fjelstad

People’s tastes and technologies change. Restrictive covenants don’t, at least not without the consent of a significant number of affected owners in the hamlets we call neighborhoods and community associations. Sometimes the consent of 100%  of affected owners is required before the covenants change, no matter how much they heat the tar and ruffle the feathers of a mob.

In Washington State, the battle between cedar shingles, because the covenants require them, and composite shingles, because they may offer better value, functionality, and looks, is one example of the type of high-level “meta” disputes that fuel community dysfunction. That dysfunction waxes and wanes along with the different phases of the moon, until a full moon draws out the lawyers. And once in a blue moon the lawmakers may set public policy that changes everything again.

In Maryland, there’s a battle raging between cool roofs and hot roofs. Dark (hot) roofs retain heat. White (cool) roofs reflect heat. In the summer, the cool class rules. In winter, the dark class rules. An epic insoluble feud like that between the houses of Gryffindor and Slytherin.

Buried beneath the ruins is the long-standing assumption drafted into many governing documents that uniformity satisfies the primal urge of suburban dwellers. But we know there’s no way you can make everyone happy. It’s much easier to make everyone equally unhappy.

Which leaves us with several questions. Shingle roofs or composite roofs? Cool roofs or hot roofs? Gryffindor or Slytherin? To be or not to be?

No wonder Hamlet was named after a small town.

For an interesting article in Gazette.net on cool roofs by Danielle E. Gaines, click here.

Posted in Legislation, Restrictions and Rules | 1 Comment

What is a Reserve Study?

Posted on July 8, 2010 by Brian P. McLean

By Brian P. McLean, Leahy.ps

I respect Jim Talaga of Association Reserves in Washington State, and have had the pleasure of meeting the founder of Association Reserves, Robert Nordlund, and watching both of them testify at a legislative hearing in Olympia, Washington. Jim and Robert are articulate proponents of long-term financial planning.

For a succinct and easily understood primer on reserve studies, check out Robert’s recent article entitled Reserve Study Results – What to Expect. Robert articulates what you should expect from a reserve study. Although setting aside money for long-term goals remains anathematic to many Americans, we are discovering, particularly in twenty year-old or older commonly owned properties, that sound long-term financial planning can make the difference between thriving or becoming a neighborhood paperweight.

Let’s be careful out there.

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Greedy HOAs Foreclose for Profit? Come On

Posted on July 1, 2010 by Brian P. McLean

Greedy HOAs Foreclose for Profit? Come On

By Brian P. McLean, Leahy.ps

For a superficial and one-sided take on homeowner associations, check out the following article at:

http://consumerist.com/2010/06/homeowners-association-can-foreclose-on-your-house-over-500-in-dues.html

and the link to NPR:

http://www.npr.org/templates/story/story.php?storyId=128078864&ft=1&f=1001

The major theme of both is simple: homeowner associations are abusing their right to force the sale of homes for nonpayment of association assessments. The emphasis could easily have been turned around: owners not paying their assessments are causing associations to take drastic and desperate measures to pay their bills, harming the owners who remain, and leading to the destruction of entire neighborhoods. Continue reading →

Posted in Finance | 4 Comments

Videorecording Meetings

Posted on May 26, 2010 by Brian P. McLean

Videorecording Meetings, by Brian P. McLean, Leahy.ps

In Washington State, owner associations are still private organizations. As such, they are not subject to public open meeting laws of the State.

There are two kinds of association meetings, board meetings, and owner meetings over which the board presides. Obviously owner meetings are open to the owners. Board meetings for non-condo associations are generally required to be open to the owners (there are some exceptions).

Washington State makes it a crime to record a private conversation without the consent of all participants (with some exceptions not relevant here). Consent can be obtained through notification and the absence of protest.

Owners and associations, acting in an abundance of caution, would probably rightfully prohibit the recording of a meeting without the consent of all those attending.

Posted in General | 1 Comment