Archive for January, 2013

Residents of Idaho’s “Pro-Gun” Citadel To Be Tenants, Not Owners/Members Of An HOA

January 31, 2013

So, the recent news stories speculating about pro-gun groups creating a gun-loving safe-haven in Northern Idaho are hard to miss if you happen to live here in Idaho.  It’s one of those regional things.  Due to not-so distant history, Idahoans are sensitive to words like “compound” and “extremist”  when used in conjunction with their state.  Imagine, for instance, if you were a resident of Waco and wanted to open a new church.  You’d just be sensitive about the words you use.

To show that this isn’t purely nativist paranoia, one of the speculative out-of-state pieces is illustrated with stock photos of SWAT teams …

Anyway, this story was interesting to me because I wondered if the Citadel was planning to use restrictive covenants to create this particular compound in Idaho.    HOAs and covenants could be used to create all kinds of political, environmental, or age-related communities, I suppose.  Another out-of-state paper indicates that this is not the approach the Citadel is taking.  Instead, it looks like a lease is going to be used.  While this would allow for maximum flexibility and eviction power, somehow perpetual tenancy doesn’t seem consistent with the life, liberty, and pursuit of happiness ideals the Citadel proposes.  Aren’t homeownership and private property rights just as fundamental?

Sources:

http://www.oregonlive.com/mapes/index.ssf/2013/01/proposal_for_idaho_survivalist.html

http://www.digitaljournal.com/article/341291

http://www.imperfectparent.com/topics/2013/01/15/idaho-commune-will-only-allow-families-of-gun-toting-patriots/

http://www.business2.com.au/2013/01/the-effect-of-homeowners-associations-on-sustainability/

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Rocky Mountain Rumble

January 30, 2013

A law blog post from Colorado highlights some interesting HOA declaration policy.  First some background.

When a developer wants to build a condominium, he (and they are almost always he’s) starts by recording a declaration of covenants, conditions, and restrictions on the property.  In Idaho and most states, this declaration puts the property under the Condominium Act, and, as implied in the title, binds future owners to the covenants, conditions and restrictions stated.   The Colorado case highlights two common clauses.

One is an arbitration clause that demands that all disputes be resolved by arbitration rather than in the courts.  Arbitration is very much preferred by developers and builders as it is seen as much more friendly than the courts.  Conversely, associations prefer to use courts.

The second clause at issue is an amendment clause.  These allow condominium owners to amend their declarations, usually with a super-majority vote.  Developers almost always retain veto power, in one way or another, over the amendment provisions, so that owners cannot take control of  the declaration amendment process before developers are finished building and selling units, etc.  Otherwise, the developer-friendly terms in the declaration might be amended out to the detriment of the developer.  Owners are presumed to have read, understood, and agreed to all the terms included by their decision to purchase.

With that background in place, it is easier to see why the arguments made in Colorado are interesting.  Per Messrs. Berg and Mill:

Residents began reporting the alleged defects, and the Residential Association (the “Association”) retained construction defect counsel. Shortly thereafter, the Association voted to amend the declarations to remove the arbitration clause without seeking the developer’s or GC’s consent. The Association then filed a construction defect suit against the developer and general contractor.

From this association-side lawyer’s point of view, the developers’ position is nearly comical.  The developers unilaterally drafted a document with total control of the language it contains.  Then they retain absolute control of the association while they build the condominiums and sell them.  Finally they turn over the condominium to the owners’ control and exit stage left.  When the owners discover defects, they amend the declaration in their favor.  Now the developers challenge the legality of the amendment, saying their interests were not fairly represented in the amendment process.  Remember, these are the folks that drafted the entire original document with absolutely no give-and-take with the future owners.

I’ll have to try to get a copy of the opinion and briefing, but it sounds like the Colorado judge got it right, finding that there was no language in the Declaration requiring developer consent to amendments, so the owners were free to amend the Declaration under its explicit language.  Good luck to those condo plaintiffs in Colorado fighting the good fight.

http://www.lexology.com/library/detail.aspx?g=b768d3c2-c021-4701-83eb-59bdc1998b87

 

HOAs For Democracy

January 29, 2013

So, I was listening to an interesting piece on Talk of the Nation on the way in to work in the car.  The participants bemoaned the lack of democratic experience in Egypt.  It is a barrier to establishing and running a peaceful constitutional republic in that and any country.  It reminded me that, among other things, HOAs are a great training ground for democratic practices as well as a chance to practice corporate governance.  Most of us never get to sit on a corporate board or run for public office, but we can learn how to do so through neighborhood HOA experiences.

It seems to me that empowering local Egyptians as presidents, vice-presidents and secretaries of neighborhood associations might provide some training there as well.  I also wonder if local governance couldn’t address a few more difficult problems, like sectarianism.  If an Egyptian HOA were working outside of the 1st Amendment-type restraints you see here in the US, could, for instance, different sects find the freedom to practice their versions of Islam or Coptic Christianity by institutionalizing their religious norms in land-based covenants?  Could recognizing and enshrining extremely local rule in a limited and defined sphere help create a solid base of peaceful government for the country?

I realize that there are some serious fundamental differences in Egypt.  For instance, the whole idea of building new subdivisions seems alien to a country as ancient as that one.  At least here in the US, property turnover, and new building is a necessary part of imposing covenants on later owners.  There also may be much less private property ownership in Egypt.  I have no idea.  However, I imagine there is slightly less diversity on a street-by-street basis in Egyptian neighborhoods.  Perhaps land covenants could be established voluntarily at first?

Just something to think about on the drive home.

VF-Law Winter Newsletter 2013

January 15, 2013

My firm’s HOA winter newsletter is out.  You can sign up to get it emailed to you.  

I really like this development:

 

Announcing Vial Fotheringham’s ‘HOA Hall of Fame’ Award 

Our attorneys would like the opportunity to reward our local, hardworking homeowner and condominium associations!

We want to recognize boards that are doing a great job supporting the health and well-being of their communities. To do so, boards may send in completed applications during 2013, and those that are outstanding in their governance will win gift cards and a training at their association on a topic of their choice, as well as recognition in our website, blog, and newsletter.

More details to come, so stay posted!

There are many problems reported about HOAs out there, but even so it is only a small minority of all the great boards that get attention.  Typical problem,  I suppose.

See, e.g. top google news posts for contrast:

Columbia County News Times  – ‎1 hour ago‎
WHAS 11.com (subscription)  – ‎Jan 14, 2013‎

Lien Powers = Big Brother?

January 11, 2013

It is not news that some folks really don’t like homeowner associations.  They equate enforcing the written covenants and assessments with “small government oppression” and “Big Brother” tactics.

So I only mention this soft-news opinion piece from “Realty Biz News”  because I like the Orwell cartoon it used, below.    Ironically enough the cartoon was borrowed, perhaps from a health care law critique, without much attention to the details.  If this cartoon really were of an HOA, one would hope the windows and exteriors in the building pictured would be better maintained.

Image courtesy of Fugue

 

While the article’s analysis is accurate, beware of the comments section, which is a bit misleading.

 

Sun Sets On Omaha Doctor’s Solar Panels

January 10, 2013

I suspect we will see more and more of this type of conflict as environmentally-friendly technologies get cheaper and smart grids and other factors encourage home power use reduction and/or power generation.  As far as I know, Nebraska is no hotbed of environmentalist activism, and yet, it was the setting for a heated dispute between one homeowner and his HOA over some extensive solar panels.

article photo

The local coverage indicates that a settlement was reached, in which the HOA chipped in some money towards the cost of removing the panels.

 

I suspect this was a tough call for that HOA board, who were attacked by the owner in billboards and other fora.  They no doubt did some math and realized that it was going to cost more to get a result in court.

However, the enforceability of CC&Rs in situations like this is not really in question.  Covenants are not trumped by environmental concerns, no matter how deeply felt.   Until a state or federal law explicitly overrules property covenants  (see, e.g. OTARD) , homeowners should be wary of preemptively installing solar, wind, or any other power-generating devices without consulting their CC&Rs.  This owner apparently is out $75,000 plus court costs.

Fire Escape Does Not Escape HOA Scrutiny

January 2, 2013

Stowecroft staircase

Wow, that’s some staircase.  The owner of the house nearly dwarfed by this neolithic structure doesn’t think the HOA should pay any mind.  She already received town permits, after all.  It is unclear from the local news coverage why she decided to spend thousands of dollars on this monstrosity without complying with her covenants.  We’ll have to watch developments to see if the HOA backs down or… escalates the conflict.