Archive for September, 2012

The Pink Playhouse Returns

September 25, 2012


A covenant fight in Georgia is getting press coverage all over the South.  It appears that the homeowner, Ms. Peck, really, really, wants to keep a pink playhouse she built in her backyard for her granddaughter.  Unfortunately, the board of her homeowner association has decided that it violates the restrictions.

So, now the neighborhood association is taking Ms. Peck to court.  They really have no other choice if they want to keep pink playhouses from proliferating.  They also have to prove they aren’t just whistling Dixie. As the cost of removing a pink playhouse is minimal, these lawsuits quickly become a fight over legal fees.




Covenants usually provide that the owner has to pay all legal fees for the association.  While this may seem harsh, it would not be fair to make the neighbors foot the bill for Ms. Peck’s hijinks.  Ms. Peck, on the other hand, is not above inflaming local prejudices in her favor.  “This is the United States, last time I checked. I’m a little redneck Georgia girl. They aren’t going to tell me what to do,” she said.





Turnover Does Not Have To Lead To Fumbles

September 20, 2012

I’m focusing on HOA turnovers in my training seminars this week and next.  Turnover is when a development comes under the control of an elected board instead of the original Declarant.  Turnover rules are a good thing, but there are few rules in place here in Idaho.  The turnover process is mostly governed by good faith and common sense.  Unfortunately, both of those things are sometimes in short supply.

So, here is a helpful checklist of documents or information to ask for from your Idaho developer at turnover:

  • Corporate Documents
    • Articles of Incorporation
    • Bylaws
    • Meeting Minutes
  • Association Information
    • Original Declaration of CC&Rs
    • Adopted Rules & Regulations
    • Current List of Owners & Mailing Addresses
    • Inventory of Personal Property
  • Construction Information
    • As-built plans
    • Contractors who worked on common areas
    • Warranties
    • Approvals/compliance with development agreements
    • Assignment of Water Rights
  • Financials
    • Bank Account Control or Balance
    • Budget
    • Tax Returns
    • Accounts Receivable/Payable
  • Legal Documents
    • Contracts
    • Insurance Policies
    • HUD certification (if applicable)
    • Ongoing enforcement/collection/other litigation
    • Transfer/ownership of all common area & easements

Some of these are merely intended to be helpful, but Idaho law requires non-profit corporations like HOAs to maintain certain corporate documents on file.  Turnover of those should not be negotiable.

-Jeremy O. Evans

PS, I compiled this list from experience, but I also checked the web for ideas from other jurisdictions.  A few sources that I found helpful were:

Aspen Shake-down

September 18, 2012

 There is no great way to ask your HOA treasurer if she has a criminal record.  It is hard enough to get volunteers for many board positions without subjecting candidates to public scrutiny or background checks.

However, if you are hiring a professional bookkeeper, like this Aspen association, there is no reason not to.  The Mountain View Board, if they had checked, might have noticed that Ms. Dobbs, their treasurer, had a checkered history of fraud, forgery, and embezzlement.

You may wonder if your typical HOA checks and balances are robust enough to handle convicted felons, but Ms. Dobbs apparently did not use any sophisticated methods.  She just withdrew cash from the HOA account for personal use.  Her haul totaled over $27,000.  From the local paper:

An HOA representative told Aspen police that Dobbs was hired as treasurer. An Aspen police detective said it is easy to mistake Dobbs for a sweet older woman who has bookkeeping skills.

Upon getting the HOA job, she asked for a debit card to cover a few expenses. She then repeatedly went to a bank and drained all but $1,000 from a $28,000 account, according to her arrest warrant.

In court on Monday, Judge Gail Nichols of the 9th Judicial District asked her how she pleaded to the felony count of theft in a series of more than $20,000.

“Guilty, your honor,” Dobbs said quietly.

“Did you get money from the Mountain View Homeowner’s Association?” Nichols asked.

“I did, your honor,” she said.

“And you had to take it bit by bit, is that correct?”

Dobbs said yes.

If your board is hiring a bookkeeper, it would be fair to look into her criminal record.  And watch out for the nice little lady who wants a debit card for personal expenses.

PS.  The court is considering letting Ms. Dobbs avoid jail, based on the hope that she will repay the debt incurred.  However: 

Nichols and prosecutor Andrea Bryan both expressed concern that Dobbs — a four-time convicted felon — would steal from others to pay back the victims in this case.




DNA is not for the Dogs

September 14, 2012

I’m not one to shy away from new technology.  Along with the many other advances popping up these days, I think the dawn of cheap, reliable DNA testing is great and will lead to all kinds of advantages in family history, medicine, sports and the like… Sci Fi predictions to the contrary.

However, I understand that this is not everyone’s view.  So, when HOAs decide to try to use DNA technology to address the old “whose doggie did it?” conundrum, it is no surprise that there is a public reaction.

Could DNA prove that Fifi is responsible for the mess instead of Kojo?  Sure.  Several new businesses think so.  Should an HOA demand DNA samples from every pet in the subdivision?  Maybe not. Let’s be honest.  This sounds creepy, is invasive, and is a pig of an issue, in the George Bernard Shaw sense.  ( “I learned long ago, never to wrestle with a pig. You get dirty, and besides, the pig likes it.”)

Whether our canine friends have any right to DNA privacy or not, I can’t help but imagine they would appreciate the humor of the situation if they understood it.  In this day of cell phone cameras, it is hard to think that a little neighborhood diligence couldn’t clean up the situation better than a regime of DNA testing.  Leave the DNA to CSI.

Grand Theft HOA: Developer Board President Charged

September 12, 2012

Wow, Florida’s getting an unfair share of  juicy HOA news this week.

This story comes from Central Florida, where apparently people live in nice subdivisions on the everglade swamps between Tampa and Orlando.     

This guy, no Mickey Mouse fraud, was the developer of a homeowners’ association that was not finished before the bust in 2008.  Left an unfinished association and a bunch of empty lots, it appears Mr. Meadows decided to make the most of the situation by “financially exploiting” (per the State Attorney) the homeowners that had already bought in.

Mr. Meadows allegedly set up a rigorous and illegal fine schedule, charging as much as $100 per day for minor infractions.  The association’s funds went to contracted companies that Mr. Meadows owned, and occasionally  to pay unrelated bills like his personal mortgage.  He is charged with misappropriating over $500,000.

Fortunately, the State Attorney’s office got wind of it, and, after four years, has thrown the book at Mr. Meadows.

When a developer controls an Association, either here in Idaho or in Florida, many of the democratic processes and checks-and-balances that normally protect Association Members do not function.  However, owners need to be aware that they still have rights, and that the Association must be run according to state law.  Board members, whether they are elected or not, still owe fiduciary duties to their Association.  They must follow conflict of interest rules, make disclosures, and, at the end of the day, might get dragged off to Court.

Without awareness of homeowner association issues, and with no common interest ownership laws, it would be hard for homeowners to get the attention of prosecuting attorneys here in Idaho.  It would be difficult to find someone like Polk County’s Investigator Stephen R. Menge to dig into the nitty gritty.

Florida Bar To Shine Sunlight On Unlicensed Practice Of Law

September 11, 2012

Lawyers have a monopoly, just like doctors and dentists do.  We go to law school, pass a bar exam, learn and follow professional rules, and get regular training.  In exchange, each state lets lawyers control a monopoly over the practice of law in that state.  But, since we’re lawyers, there’s always argument about what “the practice of law” means, exactly.

In Florida, attorneys are trying to decide where the boundary  is in the field of homeowner association management.  What does “the practice of law” include in this industry?

The line is not always clear.  The Florida Bar has already had a meeting on this question, and is expected to issue an advisory opinion in September addressing  the following actions:

1. Preparation of a Certificate of assessments due once the delinquent account is turned over to the association’s lawyer,

2. Preparation of a Certificate of assessments due once a foreclosure against the unit has commenced,

3. Preparation of Certificate of assessments due once a member disputes in writing to the association the amount alleged as owed,

4. Drafting of amendments (and certificates of amendment that are recorded in the official records) to declaration of covenants, bylaws, and articles of incorporation when such documents are to be voted upon by the members,

5. Determination of number of days to be provided for statutory notice,

6. Modification of limited proxy forms promulgated by the State,

7. Preparation of documents concerning the right of the association to approve new prospective owners,

8. Determination of affirmative votes needed to pass a proposition or amendment to recorded documents,

9. Determination of owners’ votes needed to establish a quorum,

10. Drafting of pre-arbitration demand letters required by 718.1255, Fla. Stat.,

11. Preparation of construction lien documents (e.g. notice of commencement, and lien waivers, etc.),

12. Preparation, review, drafting and/or substantial involvement in the preparation/execution of contracts, including construction contracts, management contracts, cable television contracts, etc.,

13. Identifying, through review of title instruments, the owners to receive pre-lien letters, and

14. Any activity that requires statutory or case law analysis to reach a legal conclusion.

Some of these activities also occur here in Idaho, but many are unique to Florida’s regulatory scheme.   I believe the definition of the practice of law has traditionally been narrower in Idaho.  According to the American Bar Association‘s list of state definitions:

Idaho State Bar v. Villegas, 879 P.2d 1124 (Idaho 1994)
This Court has defined the practice of law as: ‘The doing or performing services in a court of justice, in any matter depending [sic] therein, throughout its various stages, and in conformity with adopted rules of procedure. But in a larger sense, it includes legal advice and counsel, and the preparation of instruments and contracts by which legal rights are secured, although such matter may or may not be depending [sic] in a court.’
Idaho State Bar v. Meservy, 80 Idaho 504, 508, 335 P.2d 62, 65 (1959) (emphasis in original) (quoting In re Matthews, 57 Idaho 75, 83, 62 P.2d 578, 584 (1936)).

Any thoughts out there?

Kentucky’s Blue Over Devilish Homeowner Shooting

September 7, 2012

I may have made the occasional snide remark about how often guns are involved in neighbor disputes in Idaho.  Admittedly, I almost titled one of my articles “Shootout at the OK Corral Clubhouse.”    However, when tragedies like this occur, it is not time for jokes or even politics (cough, gun control lobby, cough). Obviously, HOAs as a whole are intended to provide a forum for dispute resolution and governance of neighborhoods.  They can also become involved where, as here, neighbors have simmering legal conflicts.

An apparently deranged homeowner in Louisville pulled a gun in an HOA meeting and shot his neighbor over a driveway and fence dispute.  Our thoughts prayers are with the victim’s family.  Originally reported by the AP.

Update: HUD was 1,972 days late?

September 6, 2012

Just a quick update on the HUD duh.  Never an agency to miss a chance at a slam dunk, it appears HUD may have waited 2,072 days–that’s over five and a half years–to file a complaint in the case.  HUD are apparently supposed to act within 100 days.  Thanks  to Tampa Bay Online for the follow-up investigation and video.



September 5, 2012

OK, OK, I know.  Sometimes those fair housing issues are complicated.  Maybe there’s a close call.  Sometimes the HUD case inspectors  seem to have it out for you and the HOA.  But once in a while you just have to wonder what is going on with the American educational system.  Today Tampa area’s Townhomes of Kings Lake  gets the wag of the finger.

Tampa Bay Times

As reported by the Tampa Bay Times, who, as far as I know, has no reason to make a Gibsonton HOA look any dumber than the facts require, this association tried to enforce an occupancy limit and policy on a tenant family of eight, saying they “had too many kids.”  It sounds like the family has other issues going on, but from an HOA best practices point of view, this is not good.   Not good at all.

This is not a hot-button cultural question balancing on the definition of a family.  This is just plain, old, well-settled, illegal discrimination.  Don’t do it.