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 State Farm will offer alternative coverage options to those affected, citing outdated insurance regulations, inflation, natural disasters, and reinsurance rates as the reasons for this decision.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.
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.
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 condominium and cooperative buildings to be restored to habitable conditions after various natural disasters.
Pickleball Noise Is Fueling Neighborhood Drama from Coast to Coast
The rapid rise of pickleball, a sport that has experienced a surge in popularity during the pandemic, is causing a nationwide issue of noise complaints, petitions, and lawsuits from homeowners against municipalities and HOAs. The distinctive and incessant popping noise generated during pickleball games has become a point of conflict. USA Pickleball reported a significant increase in players, with about 4.8 million Americans engaging in the sport in 2020, marking a nearly 40% rise in just two years. The sport's accessibility and low entry barrier have contributed to its democratization, as it requires minimal investment and time to learn the rules and basic strokes. However, researchers have found that the noise produced when a solid pickleball paddle strikes the hard plastic wiffleball-like balls can exceed 25 decibels louder than the sound of a tennis ball being hit by a Wilson racket. Various solutions have been proposed to mitigate the noise impact, including windscreen and wooden fencing installations, free monthly pickleball workshops, and reduced usage fees. However, implementing soundproof barriers and introducing new paddles and balls designed to reduce noise may prove costly, unpopular, or impractical. As the sport continues to grow in popularity, finding a balance between accommodating players' enthusiasm and addressing noise-related concerns remains a challenge for communities across the country.
For Co-op and Condo Boards, Many Paths to Electrification
New York City's impending carbon emissions law has co-op and condo boards exploring different approaches to electrification, utilizing clean electricity to meet the 2024 caps requirement. The substantial cost of electrification, which can range from $10,000 to $40,000 per apartment when accounting for boiler replacements and other expenses, has led experts to advocate for a more gradual and cost-effective approach. Rather than immediately adopting heating electrification, industry leaders emphasize starting with energy-efficient measures like roof insulation. Beyond the cost concerns, co-op and condo boards have another compelling reason to embrace gradual electrification. As heat pumps and other electrification technologies become more widely adopted, economies of scale are expected to kick in, resulting in reduced costs over time. The consensus among experts is that energy efficiency should be the primary focus, enabling co-op and condo buildings to lay the groundwork for a more sustainable future. Electrification is seen as a longer-term strategy, with multifamily buildings potentially starting by electrifying their hot water systems before addressing heating, as the technology involved is more manageable and adaptable. With carbon regulations approaching, co-op and condo boards are carefully weighing their options to strike a balance between environmental responsibility and financial practicality.
Scottsdale Homeowners Association Tests Out Not Overseeding and Saw Major Benefits
Scottsdale, Arizona, is taking significant strides towards water conservation with a new initiative encouraging residents and businesses to skip overseeding this fall. As part of this effort, one proactive HOA took the lead last season and achieved remarkable success. In the past, homeowners and HOAs traditionally overseeded their lawns in September and October. However, last year, a Scottsdale HOA made a bold decision to deviate from the norm and abstain from overseeding. The outcomes were astounding, as the community successfully saved an impressive 1.5 million gallons of water. Beyond the financial benefits reaped by the HOA, the decision to skip overseeding also made a substantial contribution to environmental conservation. Scottsdale Water highlights that approximately 70% of residential water usage is dedicated to outdoor activities, making timely water-saving strategies critical. The HOA intends to continue to forego overseeding in subsequent seasons, championing water conservation in their community. In alignment with this proactive stance, Scottsdale Parks and Recreation is leading by example and committing to reduce overseeding in the city's parks. Their aim is to inspire other HOAs to follow suit and collectively contribute to the city's water conservation efforts. By adopting these sustainable practices, Scottsdale residents and organizations are playing an active role in preserving the region's precious water resources. With water conservation becoming increasingly critical, the community's united efforts serve as a significant step towards a more sustainable future.
State Farm is Outta There: Insurance Company Will Stop Accepting Applications for New Properties in California
In a recent development, State Farm has made an announcement stating that they are no longer accepting applications for any insurance policies in California. Simultaneously, Allstate has taken a cautious approach by "pausing" new homeowners’ insurance and HOA insurance policies to safeguard the interests of existing customers. The decision comes amid the backdrop of soaring property insurance rates in California, prompting HOAs to explore alternative options like the "bare walls" approach. With the "bare walls" approach gaining traction, HOAs are contemplating a shift towards obtaining insurance that restores damaged homes to a shell condition, leaving the responsibility for interior buildouts to homeowners. However, experts advise that before making such a significant change, HOAs should gather bare walls quotes, seek legal counsel, and take other beneficial steps to ensure a smooth transition. Typically, most condominiums insure the entire building and its contents as stipulated by the CC&Rs. Additionally, attached, planned development HOAs, where homeowners own both the structures and the land underneath, but the homes are interconnected in a townhome or patio homestyle, also follow a similar practice of insuring the entire building and interiors. As the California insurance landscape evolves, HOAs are proactively assessing their options to best protect their communities and navigate the complexities of the current insurance market. The decisions made by State Farm and Allstate are sending ripples through the industry, prompting a careful evaluation of insurance plans to ensure the continued well-being of homeowners and their properties.
Florida high-rise condo owners feel financial pinch with rising HOA fees and insurance costs
High-rise condominiums in Florida are having financial hardships as new structural mandates and soaring insurance costs take a toll on their budgets. Recently, individual condo homeowners with Citizens Property Insurance received a jolt when they were mandated to obtain flood coverage for their units, regardless of being as high as 10 stories above ground. The requirement for Citizens’ condo flood insurance was passed during last year's second legislative special session on property insurance. A spokesperson for Citizens explained that the separate flood insurance measure aims to mitigate potential litigation disputes between wind and flood damage in future storms. The state-backed insurer now oversees just under 1.2 million policies. For condo homeowners, this new mandate means added expenses, further burdening their finances. The increase in flood coverage costs has been noticeable, with one high-rise HOA board member stating that their building's flood insurance premium surged by 14%, rising from $97,000 to $110,000 between 2021 and 2022. Additionally, their property insurance premiums skyrocketed by a staggering 77%, surging from $106,000 to $187,000 during the same period. The Surfside Condo Collapse tragedy in 2021, which claimed nearly 100 lives, triggered Florida lawmakers to pass Senate Bill 4D. This bill now requires milestone inspections for condominiums, ensuring safety measures are in place. Furthermore, it mandates that each association maintains sufficient reserves to cover any necessary repairs identified during the inspections. Amid these challenges, high-rise condo communities in Florida are navigating a precarious financial landscape while prioritizing the safety and well-being of their residents. The ongoing efforts to comply with new mandates and manage escalating insurance costs underscore the urgency to address the complexities of high-rise living in the state's dynamic environment.
Yukon HOA at Odds with Construction Company
A neighborhood in Yukon, Oklahoma is grappling with a rough road situation after a construction crew repeatedly disregarded their community rules. The gated neighborhood, located off Route 66 near Sara Road and comprising nearly 200 homes, has been dealing with the aftermath of large construction trucks driving through its streets. The construction company allegedly used a fire hydrant near the entrance to access water for their worksite. To reach the site, the company's trucks repeatedly passed through the neighborhood, despite the presence of a prominent sign at the entrance clearly stating, "No large trucks allowed." The community's residents have long struggled with this issue, as the construction vehicles breach the neighborhood's peace and damage the roads. In response to the ongoing problem, homeowners have taken action by getting the approval of their HOA for a specific fee targeting the drivers of these large trucks. According to the newly established policy, each time a construction truck enters the neighborhood against the rules, the offending party is liable to pay a fine of up to $500. Seeking accountability and compensation for the damage caused, homeowners are urging the construction company to bear the responsibility for each trip they made through the community. As the construction trucks continue to traverse the neighborhood when the gate is opened, the financial burden on the construction company could significantly escalate. The situation has ignited tension between the community and the construction company, sparking discussions about respecting neighborhood guidelines and safeguarding the well-being of residents. As the conflict unfolds, residents are keen to find a resolution that upholds the neighborhood's integrity while encouraging responsible practices from businesses operating in the vicinity.
ICYMI: Live in an HOA? The Idaho legislature quietly created a new HOA act: here’s what’s included
In a significant development, the Idaho Legislature discreetly revamped homeowner's association laws introducing a comprehensive Homeowner's Association Act that consolidates various provisions into one coherent framework. The bill received overwhelming support, with the House voting 63-3 and the Senate 34-1, ultimately earning Governor Brad Little's signature. The newly enacted Homeowner's Association Act includes critical additions to enhance transparency and financial disclosure within HOAs. Members of HOAs are now entitled to receive a detailed rundown of fees annually before January 1. Furthermore, the HOA must provide each member with a copy of the association's financial statement yearly. Moreover, HOA members possess the right to request an "up-to-date financial disclosure" at any time, which the association must furnish within ten days. This consolidation of Idaho code pertaining to HOAs streamlines information, making it easier for board members, administrators, and residents to comprehend and navigate the laws that govern their communities. The updated code also establishes that Idaho state law supersedes any HOA rules or CC&Rs. Notably, homeowners cannot be prohibited from installing solar panels, although some reasonable design and location restrictions may apply. Political signs are also safeguarded, except when they pose public health and safety threats, violate other laws, or come with accompanying sound or music. Additionally, HOAs are barred from prohibiting flags of the state, the United States, branches of the military, or POW/MIA flags. With these updates in place, Idaho seeks to strike a balance between safeguarding property rights and fostering a transparent and harmonious environment within homeowner's associations throughout the state.
Grandfathering of Rental Restrictions in Condos and HOA’s
Florida's Chapter 718 Statutes have introduced significant changes to rental restrictions in both Condominiums and Homeowners Associations, impacting property owners who wish to lease their units for short-term periods. Under the existing Chapter 718, condominiums had provisions stipulating that any new rental restrictions approved by the membership through amendments to governing documents would only apply to those who voted in favor of the changes or to those who acquired property after the amendment's approval and recording in the County Public Records. Similarly, Section 718.110(14) of Florida Statutes for Condominiums specified that amendments restricting unit owners from renting their units or altering rental durations would only apply to consenting unit owners and those who acquired ownership after the amendment's effective date. Now, HOAs have adopted new short-term rental restrictions under these revised statutes. These restrictions are applicable to all property owners and limit rentals to a maximum of three times a year, with each lease period being less than six months. For property owners under HOAs who voted in favor of these amendments or acquired ownership after their effective date, further restrictions come into play. These include rental restrictions of six months or longer or limits of three, two, or one lease per year. As these rental restrictions come into effect, the affected property owners must adapt to the changes while the real estate market and communities adjust to the new regulations.
A Legal Showdown Over Section 8 Discrimination Is Brewing in Dallas Suburb
A planned community's HOA in Dallas, Texas, has ignited a high-stakes civil rights battle by enacting a ban on renters who receive federal housing aid. This contentious decision raises serious concerns about fair housing and potential racial discrimination. A recent incident involving a single Black mother of two brought the issue to the forefront. Reliant on housing aid, she rented a spacious over-2,000-square-foot home in a new master-planned community within Denton County. However, her hopes were dashed when she received a notice from the HOA, prompting her to seek alternative housing immediately. Texas is no stranger to such practices, as state law does not explicitly prohibit property owners from denying tenancy to individuals participating in the rental assistance program known as Section 8. Compounding the matter, federal anti-discrimination law does not afford voucher users the same protected status as categories like race or sex. While over 100 cities and counties, along with 16 states, have passed local laws to protect voucher holders from discrimination, just over half of Section 8-supported tenants live in areas where the source of income discrimination is prohibited. The situation in Texas is exacerbated by a 2015 state law that prevents local city and county governments from enacting their own safeguards against source of income discrimination. Despite this, federal protections still exist against policies that disproportionately harm specific racial groups, under the legal doctrine known as "disparate impact." The ongoing dispute now stands as a test of civil rights and fair housing principles, and it remains to be seen how the legal landscape will unfold in this complex battle between the HOA's decision, federal protections, and the fight against housing discrimination.
Bill might require training for volunteers who serve on condo boards
A condo association board in Hawaii holds the responsibility of making decisions on behalf of the condo owners, regardless of whether the community consists of a small building with four units or a large complex with hundreds of units. Their fiduciary duty encompasses various tasks, including setting maintenance fees and allocating funds for significant repairs that can amount to millions of dollars. A proposal currently under consideration in Hawaii's State Legislature aims to mandate leadership training for condo board members. The curriculum for this training would be developed by the Real Estate Commission. However, critics argue that organizations like the Hawaii Chapter of CAI already provide free training sessions, both in-person and online, for directors and owners. They believe that imposing this additional requirement would only hinder the recruitment of owners willing to serve on condo boards. Hawaii has approximately 2,000 condominium buildings and complexes throughout the state. Hawaii lawmakers introduced a bill that would require board members to successfully complete a board leadership course within 90 days of being elected. SB729, after undergoing several amendments by Senate and House lawmakers, currently awaits its fate in the conference committee before the Legislature adjourns. The bill also stipulates that budgeting for sprinkler installation will be mandatory for buildings deemed necessary by the Honolulu Fire Department. As per the amended bill's current language, the state auditor would be tasked with evaluating a proposal within the legislation. This proposal would require condo board members to review an association's articles of incorporation, bylaws, rules, and regulations within 90 days and complete a board leadership course within their first year. Let us know your thoughts on mandated board training by leaving a comment at HOACommunityLeaders.com.