Study: Homeowners Associations Are Booming
A recent study highlights a significant growth in homeowners associations across the U.S., emphasizing their increasing role in residential real estate. These associations are now managing a vast portion of new housing developments, impacting housing trends and community management practices. The study indicates that this surge is not just in traditional suburban areas but also in urban and semi-urban regions, reflecting a broader shift towards organized community living that prioritizes managed services and amenities.
4 Changes Fannie and Freddie Have Made on Condo Building Policy
The number of condominium and homeowner associations (COAs) is expected to rise from 365,000 in 2023 to as many as 370,000 in 2024, comprising nearly one-third of the U.S. home inventory, according to a recent study and forecast by the Foundation for Community Association Research. Community associations account for about 30% of the overall housing stock, which includes many new construction homes and a significant number of buildings over 40 years old, stated CAI Chief Strategy Officer Dawn Bauman. In the wake of the tragic Surfside, Florida condominium collapse that killed 98 people three years ago, policies regarding condo building safety have undergone significant changes. Fannie Mae and Freddie Mac have introduced stricter condo safety policies, such as broader use of attorney title opinion letters and improved transparency through an online tool for COAs to check project ineligibility information. While one-third of title claims involve issues not found in routine searches, the cost of insurance coverage has decreased by almost 8% since 2004. "Seller-pay" regimes in many states help minimize buyer costs for insurance. However, according to the American Land Title Association (ALTA), condos remain particularly vulnerable to risks.
Who Will Adopt North Carolina’s Abandoned Roads?
North Carolina’s orphan roads issue has long been brewing under the radar, but the state's rapid population growth is shedding light on this problem. Orphan roads, lacking clear owners and not maintained by municipalities, exist in subdivisions with homeowners' associations or road maintenance agreements, causing confusion and financial burdens for homeowners. The lack of road turnover to cities or counties results in roads not meeting required standards, making them ineligible for state takeover. Many potential homebuyers are now aware of this situation, as the North Carolina Real Estate Commission's disclosure forms do not include this information. The North Carolina Department of Transportation imposes density requirements and specific conditions for road maintenance, disqualifying many orphan roads from meeting these criteria. Consequently, hundreds of miles of rural roads and streets across the state are left unattended and unclaimed, earning the moniker "orphan roads." Notably, North Carolina is one of five states where most non-city local governments do not have their own road departments, worsening the challenges of addressing the orphan roads issue. As the state's population continues to grow, the urgency to find solutions to this problem escalates.
HOA becomes First Firewise USA site in Green Valley
In a groundbreaking development, an HOA in Green Valley, AZ, has secured its place in history by becoming the very first local homeowners association to achieve certification as a Firewise USA site. The momentous feat was initiated by a dedicated group of residents who were already familiar with the Firewise program through their volunteer work with the GVFD (Green Valley Fire Department). Becoming a Firewise USA site is no small task; it requires immense dedication, meticulous planning, and relentless effort from a committed team of volunteers within the community. Becoming a Firewise USA site requires significant effort and strategic planning by a committed group of volunteers within each community. An HOA must first complete a comprehensive wildfire risk assessment of their community with the guidance of a local wildfire expert. The community must then formulate a meticulous three-year action plan that prioritizes crucial steps to reduce the risk of ignition to homes. After becoming certified, each neighbor is expected to annually dedicate at least one volunteer hour per dwelling unit to wildfire risk reduction and is required to complete educational and risk reduction actions outlined in the three-year plan. With this commendable achievement, the Green Valley HOA joins a select group of approximately 125 Firewise communities in Arizona, with about 20 of them located in Southern Arizona. With more communities and homeowners’ associations showing interest in the Firewise program, the state's landscape is witnessing a remarkable transformation in wildfire preparedness and prevention. Green Valley's pioneering achievement sets a shining example, instilling hope for a safer and more resilient Arizona in the face of future wildfire challenges.
Navigating changing laws and regulations: How HOAs and COAs can work with banking partners to plan and prepare
A new Florida law, effective July 1, will increase accountability for condominium associations (COAs) in buildings three stories or taller. The law addresses key areas such as reserves, recordkeeping, maintenance, and repairs. COAs can prepare for compliance by collaborating with their banking partners to prioritize capital projects, select appropriate contractors, and explore loan options. Examples of necessary projects include roof replacement, concrete restoration, painting to prevent leakage and elevator maintenance. By working together, project managers and bankers can ensure these tasks are appropriately prioritized. This legislation affects Florida’s approximately 49,000 HOAs and 27,000 COAs, impacting a significant number of homeowners across the state.
Proposed Bill Would Extend FEMA Aid to Condos, Co-ops, & HOAs
Congress is currently reviewing the proposed Disaster Assistance Fairness Act, which seeks to address disparities in Federal Emergency Management Agency (FEMA) recovery assistance provided after natural disasters. The bill aims to extend FEMA aid to HOAs, co-ops, and condos, offering essential support like roof repairs and debris removal, similar to what single-family homeowners currently receive. Presently, shared interest communities often do not qualify for federal disaster aid, hindering their ability to rebuild homes and communities. The bill, known as H.R. 3777, proposes amending the Robert T. Stafford Disaster Relief Act to include critical common elements of community associations under FEMA's Federal Assistance to Individuals and Households Program. Additionally, H.R. 3777 would make HOAs and cooperatives eligible for FEMA's assistance in debris removal after major disasters. The bill has garnered support from national organizations advocating for multifamily homeowners and boards. According to Thomas M. Skiba, CEO of the Community Associations Institute, this act will provide crucial access to FEMA's recovery resources, enabling condominiums and cooperative buildings to be restored to habitable conditions after various natural disasters.
HOA Homefront: What Happens at an HOA Disciplinary Hearing?
Many homeowners often overlook covenants and rules until an issue arises. Disciplinary hearings are intended to encourage owners to be good neighbors, not to target them. Boards typically do not publicize their enforcement activities, so don't assume you're the only one. Making the issue personal can reduce credibility and alienate the board from the start. Homeowners should take proactive steps to prepare for hearings, advises Kelly Richardson, a Fellow of the College of Community Association Lawyers. Key actions include reading about the policy violation in the governing documents and determining if the violation can be quickly corrected. Confirm attendance with the community manager, and plan your presentation, including both arguments and documentation, in advance. If the violation is a first-time issue, show proof that it has been corrected and request a fine waiver. Address the issue rather than arguing about the policy. HOA disciplinary hearings are not court proceedings but meetings between neighbors. Emphasizing the value of neighborliness can lead to a positive outcome for all parties involved.
Condo Seeking to Evict Dogs Gets Gobsmacking Legal Estimate to Make Their Case
In recent developments, residents who refuse to provide the necessary paperwork for accommodating emotional support animals (ESAs) may face fines or suspensions from their Condo Owners' Associations (COAs) for violating no-pet provisions. If residents remain non-compliant, COAs could seek legal intervention, which could cost up to $20,000, as experienced by a 30-unit COA in Palm Beach, FL. Alternatively, COAs might file for mediation to resolve the issue in court. Despite the ease of obtaining ESA certificates online, the government has deemed these insufficient proof for accommodation needs. Under the Fair Housing Act, no-pet buildings must adjust their rules to accommodate disabled persons, including allowing animals that assist with their disabilities. However, COAs are permitted to conduct meaningful inquiries into the disability and its connection to the need for an ESA, especially if the disability is not visibly apparent. Let us know your thoughts by leaving a comment at HOACommunityLeaders.com.
HOAs must file BOI reports with the Financial Crimes Enforcement Network
Despite pending Congressional actions to limit the Corporate Transparency Act, HOAs and board members are currently required to comply with beneficial ownership information (BOI) reporting requirements. Accurate and timely reporting is crucial to avoid severe penalties, including fines of $500 per day for ongoing violations and criminal penalties such as imprisonment for up to two years and fines up to $10,000. CAI is advocating for efforts to relieve HOAs from the BOI mandate, arguing that HOAs were likely not the intended focus of federal financial crime prevention efforts. Additionally, individuals may face civil and criminal penalties for willfully failing to file required BOI reports or for submitting incomplete or false ownership information to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FINCEN).
Leaders In HOAs Discuss How to Improve Sustainability Practices
Residents from over a dozen Montana HOAs recently attended a sustainability workshop addressing education, financial challenges, and practical solutions for HOAs. The workshop covered topics such as achieving sustainability certification, combating wildfire threats, forming action committees, and fostering collaboration between community managers and renters. The workshop director highlighted the excellent collaboration between HOAs and property managers but noted differences between vacation rentals and second homeowners, emphasizing the need for tailored approaches based on varying priorities and resources. Key focus areas included landscaping, waste and consumption, finance and governance, and energy efficiency. Organizers plan to gather feedback from attendees to create a resource guide for homeowners based on these categories.
‘It Will Get Better,’ Insurance, Fees for Hawaii Condo Owners Continue to Rise
Condo owners in Hawaii are grappling with significantly higher insurance premiums, with some facing increases of more than double the previous rates. This spike in costs has been exacerbated by recent natural disasters nationwide, including the devastating Lahaina fires. In addition to insurance hikes, owners are dealing with rising maintenance fees. To tackle these issues, the Hawaii Economic Association convened on Thursday to discuss potential solutions. The consensus was that while risks need to be mitigated, improvements will take time. Experts also cautioned that due to climate change, insurance premiums are unlikely to revert to the levels seen three or four years ago.
Co-op and Condo Boards Must Accommodate Hearing-Impaired Residents
Recently, an issue arose in a Manhattan co-op where a shareholder with "profound deafness" struggled to understand voices on the intercom. The resident questioned the legal requirements for an intercom system accommodating disabilities. Federal, state, and local laws mandate that co-op and condo boards are legally obligated to accommodate hearing-impaired residents who request intercom systems suited to their needs, such as visual interface devices. Non-compliance can lead to discrimination lawsuits for not engaging in "cooperative dialogue" with the resident and even award monetary damages to compensate for things such things as emotional distress.
New Laws Can Prove Financially Challenging for HOA’s
HOAs are grappling with significant financial burdens due to new regulations. Earlier this year, New Jersey became the second state, following Florida, to enact legislation aimed at protecting the structural integrity of condominiums and cooperative buildings. This move was in response to the tragic collapse of the Champlain Towers South condominium in Surfside, Florida, in June 2021. New York City's stricter environmental laws and New Jersey's updated structural safety standards are prime examples of city and state mandates that can have serious financial impacts on associations, whether they comply or not. Concurrently, the federal Corporate Transparency Act's stringent reporting requirements and hefty financial penalties have led the Community Associations Institute (CAI) to advocate for exemptions for community associations.
Camas HOA Rule Dispute Heads to Washington Supreme Court
A conflict over trees blocking some HOA members' views is set to be heard by the Washington Supreme Court. This follows a state appellate court's decision to uphold the HOA's revision of an old rule that previously did not restrict trees from obstructing views. A couple who has refused to trim, top, or remove their trees is hoping the higher court will rule in their favor, arguing they should not have to comply with what they consider a new rule. In 2018, the homeowner’s association revised its rules to state that trees and vegetation in a "view and/or view corridor area" must not exceed 15 feet or the height of the first-story gutter in the front or backyard of any home.
State Farm to Exit Homeowner Renewal Policies in California
Starting in July, State Farm will begin a phased non-renewal of 72,000 California policies, impacting community associations, homeowners, commercial apartments, and businesses. This move follows similar actions by Farmers, Kemper, and other insurers. State Farm will offer alternative coverage options to those affected, citing outdated insurance regulations, inflation, natural disasters, and reinsurance rates as the reasons for this decision. The withdrawal of commercial apartment policies will commence on August 20. State Farm will continue to assess the need for further business actions based on evolving market conditions. These policies account for just over 2% of State Farm General’s policy count in California.
$95M Deconversion Condo Deal in Chicago Falls Apart
Following two years of delays due to the buyer's financing challenges, an agreement to sell a 467-unit property in River North has fallen through. The collapse of the deal comes after the condo board's decision in July to terminate the $190 million sale. A board member described the process of working with the developer as "hell for the past three years." The failure of the deconversion deal has put an end to the conflict among owners, with some initially eager to sell to capitalize on favorable interest rates, while others preferred to wait until nearby office space for Google workers opened.
These Cities Are Most Profitable for Airbnb Hosts. Why Are So Many Arizona Cities on the List?
According to finance experts at Wealth of Geeks, Arizona cities have been ranked among the Top 10 most profitable locations for short-term rental owners. These cities offer opportunities related to golfing, events, and colleges. Notably, seven of these cities are in the Valley of the Sun. Since a 2016 law that prevents local governments from regulating short-term rentals was passed, both the number of rentals and related issues have surged in the Valley. Complaints about disruptive "party houses" that residents say lower their quality of life have increased. Formerly quiet communities have experienced significant disturbances, according to residents and officials, with some house parties at short-term rentals even resulting in gunfire. Property owners must adhere to various state and city regulations, including notifying their HOAs, neighboring properties, and neighborhood associations about operating rentals.
Va. Condo Project Advances Despite Affordability Issue
Despite concerns over the absence of on-site affordable housing, a 23-story, 240-unit condo development project in Fairfax County, Va., has been given the green light with an 8-1-1 vote. However, some supervisors conceded that county staff were justified in recommending the denial of the application, primarily due to the prospective developer's proposal to offer cash or off-site workforce housing in place of on-site affordable units. In a bid to address the issue, the developer has agreed to contribute approximately $4.8 million to the county, arguing that significant increases in condo fees could render affordable housing unattainable for owners, potentially forcing them to sell. This move has ignited discussions about the best approach to balancing upscale development with affordable housing in the area.
The FCC Wants to Ban Apartments from Forcing People to Pay for Cable TV Internet
A new proposal by the Federal Communications Commission aims to prohibit apartment complexes and possibly HOAs from bundling internet service into fees or rent, thereby supporting consumers' right to choose their own providers. Current bundling contracts tend to favor cable TV providers, and when an HOA breaks such a contract, the provider can sue.
These partnerships often include not just internet but also TV and phone services. According to iProperty Management, there are 355,000 HOAs in the United States, representing about 40 million housing units. If even a quarter of these HOAs partner with a cable TV company, that equates to 10 million cable TV internet customers. Considering there are only about 50 million cable TV subscribers left, the impact of these 15 million HOA and apartment complex customers is significant for the struggling cable TV business model.
HOA becomes first Firewise USA site in Green Valley
In a groundbreaking development, an HOA in Green Valley, AZ, has secured its place in history by becoming the very first local homeowners association to achieve certification as a Firewise USA site. The momentous feat was initiated by a dedicated group of residents who were already familiar with the Firewise program through their volunteer work with the GVFD (Green Valley Fire Department). Becoming a Firewise USA site is no small task; it requires immense dedication, meticulous planning, and relentless effort from a committed team of volunteers within the community. Becoming a Firewise USA site requires significant effort and strategic planning by a committed group of volunteers within each community. An HOA must first complete a comprehensive wildfire risk assessment of their community with the guidance of a local wildfire expert. The community must then formulate a meticulous three-year action plan that prioritizes crucial steps to reduce the risk of ignition to homes. After becoming certified, each neighbor is expected to annually dedicate at least one volunteer hour per dwelling unit to wildfire risk reduction and is required to complete educational and risk reduction actions outlined in the three-year plan. With this commendable achievement, the Green Valley HOA joins a select group of approximately 125 Firewise communities in Arizona, with about 20 of them located in Southern Arizona. With more communities and homeowners’ associations showing interest in the Firewise program, the state's landscape is witnessing a remarkable transformation in wildfire preparedness and prevention. Green Valley's pioneering achievement sets a shining example, instilling hope for a safer and more resilient Arizona in the face of future wildfire challenges.