Water One Casualty of High Foreclosure Rates

Water One Casualty of High Foreclosure Rates

by Brian P. McLean, Leahy.ps

Imagine you live in a condominium, you pay your assessments like clockwork, and you arrive home to find your water turned off because of non-payment. That’s what happened to one Florida Condominium:

“The Miami-Dade Water and Sewer Department turned the water off Wednesday after the condo association failed to pay tens of thousands of dollars in previous water bills.” © MMIX, CBS Television Stations Inc. (http://cbs4.com/local/Mirassou.Condominiums.miami.2.986212.html)

We read a lot in the paper about high rates of unemployment and decreasing property prices. What we don’t read about is how nonpayment of dues by some are affecting people who have worked carefully to save money, live within their means, and don’t take unreasonable financial risks. At many properties they’re paying a higher price because of the misfortune of others. There’s plenty of fault to go around, and it will take months if not years to sort this out.

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What Makes Homeowner Association Meetings Work

What Makes Homeowner Association Meetings Work

By Brian P. McLean, Leahy.ps

Making association meetings work requires strict obedience to two shining principles:

1.    Get along with your neighbors.
2.    Run meetings efficiently.

Getting along with your neighbors is a self-explanatory precept to those who understand one should pick one’s battles carefully. It doesn’t mean anything to the rest of us. It is the foundation of successful community living. In fact, it describes successful community living. If a homeowner doesn’t understand, doesn’t care, or disagrees with the first principle, then rural Yellow Knife in the Northwest Territories has some lovely view properties this time of year. Continue reading

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Failing Mortgages and the Domino Effect

Failing Mortgages and the Domino Effect

By Brian P. McLean, Leahy.ps

The Puget Sound Business Journal discusses the continuing deterioration of the mortgage market:

Subprime mortgages, which were issued to people with checkered payment histories, have the highest level of delinquency, but the delinquency rate among prime borrowers is growing fastest. From March 31, 2008 to Dec. 31, 2008, the percentage of prime borrowers who were at least 90 days late on their mortgages more than doubled, to 2.4 percent.

There are now more than 550,000 prime mortgages more than 90 days overdue, and for the first time, that number surpassed the subprime tally. The subprime loans are failing at much higher rates, however — more than 16 percent are seriously delinquent.

Puget Sound Business Journal, April 3, 2009.

Mortgage failures typically follow defaulting payments on homeowner assessments. The continuing decay of housing prices, personal income, and wealth (real and imagined) , is straining association budgets and the finances (and largesse) of the remaining owners who budgeted for themselves but not to pay their neighbors’ debt, too.

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Small Condos to be Exempt from Reserve Studies?

The State Legislature has proposed an amendment (HB 5461) to the reserve study bill that passed in 2008. The amendment would exempt associations that have fewer than 11 units.

There are four obvious flaws with the amendment. One, any association that faces an unreasonable hardship in obtaining or updating a reserve study can opt out. Two, it’s not the number of units but the scope of the capital infrastructure that should determine whether an exemption is advisable. Three, it erroneously uses the adverb “less” rather than “fewer”. And four, the reference to limited common elements makes no sense.

Here’s the relevant language of the bill:

7 A condominium association that has ten or less units and limited
8 common areas is not required to follow the requirements under RCW
9 64.34.380 through 64.34.390.

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WA State Legislature Proposes Construction Warranty Bills . . . Again

The Washington State Legislature has proposed two new residential construction warranty bills — HB 1045 and HB 1393. Neither bill affects condominium developments. It’s too early in the legislative session to determine whether the bills have sufficient legs to get to the full legislature for a vote.

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California: Court Goes Too Far on Smoking Ban?

In Birke v. Oakwood Worldwide, 2009 Cal. App. LEXIS 19 (January 12, 2009), the California Court of Appeals ruled that a cause of action for nuisance was adequately pleaded by a five year-old child against a company that managed an apartment complex, where smoking was banned in most of the common areas but there was still limited exposure to second-hand smoke in the common area set aside for smokers.

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Foreclosures on the Rise in Puget Sound

The Seattle Times published an article today that documents the rising number of foreclosures in Puget Sound. Continue reading

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Solar Energy and Homeowner Associations

Solar Panels and Homeowner Associations

By Brian P. McLean, Leahy.ps

On January 13 and 14, 2009, the State Legislature introduced two bills that would impose limitations on a homeowner association’s ability to regulate the installation of solar energy systems in Washington State. House Bill (HB) 1112 and Senate Bill (SB) 5136 are intended to further the State’s policy favoring greater use of renewable energy. HB 1112 applies to all associations, including condominiums. SB 5136 applies only to non-condominium associations. Continue reading

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Renting in Non-Condo Homeowner Associations

Renting in Non-Condo Homeowner Associations

By Brian P. McLean, Leahy.ps

In Washington State, there is no blanket restriction in RCW 64.38 (HOA Act) on either the rental of single-family homes or the authority of the homeowner association to restrict rentals. The obvert authority to enforce such restraints would arise in the association’s Declaration of Covenants, Conditions, and Restrictions (the “contract” between the owners regarding governance, enforcement, and behavior). Continue reading

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Yurt Association Law: Developer v. Association Attorneys

Yurt Association Law: Developer v. Association Attorneys

Brian P. McLean, Leahy.ps

In Washington State, there’s a palpable and sometimes hostile split between attorneys who represent developers and attorneys who represent owner associations (particular construction defect attorneys). (As for attorneys who represent owner associations in construction defect claims only, their interests are singular in nature.) The purported polarization between developer attorneys and association attorneys is an old debate dressed and propped up in a new fact pattern. Continue reading

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