“I bet you have never heard this one, Shu. Let me tell you what my HOA is doing to me. ”
Welcome to housing American style because as shocked as they are when they reach out to me, their story is not as uncommon as they think.
Even though I thought I had heard it all, a few years ago one listener from Florida managed to educate me on just how bad things really are. She was a single mother of an infant who was being forced out of the condo she owned. Yes she would get paid less than market value for it and what she would get was nowhere near enough to help her find another home. In essence, she and her baby were on their way to being homeless. She introduced me to the practice of condo terminations and bulk buyers to explain how this was being done.
John Cowherd joins me On The Commons . John, a frequent guest On The Commons, is an attorney in Northern Virginia who represents the homeowners in litigation and disputes against their residential and commercial associations. He also maintains a blog called Words of Conveyance I am always grateful to John for keeping me in the loop of what is going on in the courts as well as the legislature in Virginia and for coming on to inform our listeners about it all. We talk to John about HB 1548, a Virginia bill introduced and sponsored by Delegate Marcus R. Simon. This bill appears to be flying through all the committees and chambers in Richmond, on its way to becoming law much too quickly. What this law would do is strip the owners of rights and protections they have as condo owners making it so much easier for developers and investors to profit financially, leaving them much poorer than they were before getting involved in a condo. So much for protecting property values. As my mother always said, “If it sounds too good to be true, it probably is.”
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@ 21:45 The original approach to termination that was understood to apply was that: if you have property such as common areas in a condominium that are owned as tenants-in-common by all the unit owners, then how do you terminate that setup?
@ 22:10 For hundreds of years, the common law has had, and has been replaced by statutes in many places, the remedy of partition. Partition is like, if you have a 10 acre tract of undeveloped land, owned by a brother-and-sister who inherited it from their mother, and they can’t agree on what to do with it, one of them can apply to the court for partition. At the end of the case, the judge will divide up the property equally, and that will be the end of it.
@ 26:00 You also have these bulk buyers and investors who saw applying the partition rules to condominium termination as an inhibitor to the redevelopment of real estate. So they pressed state legislatures to adopt new provisions that make it easier to conduct these termination and sales. For example, in Virginia in 1993 they adopted provisions that allow termination and sale to go through outside of the ordinary partition lawsuit context.
While the remedy of partition may work for other forms of real estate for hundreds of years, condominiums were not legal in the United States until the 1960s, about 60 years ago.
“These new forms of medium- and high-density housing involving common interest forms of ownership were largely made possible by the broad enactment in the 1960s of statutes authorizing, for the first time, the condominium form of ownership, a form of ownership that was unknown at common law. 23”
“23. Before 1960, the condominium form of ownership was unknown in the United States. Beginning in the early 1960s, the states began enacting statues authorizing the condominium form of ownership, principally in response to the enactment of the National Housing Act of 1961, which extended Federal Housing Administration mortgage insurance to the condominium form of ownership. See McKenzie , supra note 2, at 95. By 1967, all fifty states had enacted condominium statutes. Id. at 95–96.”
Steven Siegel. “The Public Role in Establishing Private Residential Communities: Towards a New Formulation of Local Government Land Use Policies That Eliminates the Legal Requirements to Privatize New Communities in the United States”. The Urban Lawyer. Vol. 38, No. 4 (Fall 2006). pp. 868-869
Mr. Siegel was on your program on 04/28/2007
https://onthecommons.net/2007/04/on-the-commons-with-steve-siegel/
The article can be found at
http://onthecommons.us/images/stories/Views/Siegel,The%20Public%20Role….pdf
along with a table of contents at
http://onthecommons.us/images/stories/Views/Article%20table%20of%20contents.pdf