Following the Florida condo collapse, the universal cure seems to be to fund the reserves. Making sure there are adequate funds for the necessary repairs is a no-brainer. I had long advocated funding the reserves but have always been surprised when homeowners quickly informed me that I was wrong. Some even claimed they would prefer a special assessment to take care of any problems. That approach never appealed to me. However, it is important to hear all the concerns.
Bill Davis joins us today. Bill, a Texas attorney and a frequent guest on On The Commons, sees the big picture and can explain what we are missing. While making sure we fund the reserves, that is only part of the solution. Please tune and take a look at the big picture. It is not always quite as simple as it sounds. Be sure to tune in.
If people knew what they were getting into, would they still buy in an HOA? I was convinced that they wouldn’t, but I was wrong. Thirty years ago when I first became aware of HOAs and started to understand what we were dealing with, HOA mandates were already in place in Fairfax County and probably across the country as well. However, there were still pockets of older neighborhoods so some choices still existed. Now, even most of those older neighborhoods have been razed to the ground only to be replaced by some new faddish fantasy that will no doubt sound positively utopian but in practice be unworkable.
Shelly Marshall and Michael Marshall, PhD join me On The Commons. Shelly is an HOA Warrior. She is a prolific writer of self help books including a book on HOAs, what to look for and how to understand what you are getting into. Dr. Marshall, Shelly’s brother, is a Psychology Professor and practitioner. This dynamic duo have combined forces to answer the question; “Why can’t people hear us?”. Shelly warned Mike about the risks involved in buying a condo and told him to keep looking but that didn’t stop him. For awhile everything went well until one day when his utopian dream came crashing down. So why didn’t he listen? Why don’t people learn from other people’s stories? Mike and Shelly, along with Deborah Goonan, are working on a case study, doing some research with the intent of publishing a paper answering this question. In an easy to understand and simple way, Mike explains the psychology behind human nature. He and Shelly fill in with facts, stories and typical situations that take place every single day. This is a very exciting piece of research and a fascinating interview. For all those people who believe that “HOAs are here to stay,” are you listening?
Ever since the Surfside condo collapsed in Florida there has been much speculation as to what caused it and what needs to be done to prevent this from happening again. And predictably, the homeowners themselves were blamed for it. I have been involved with the policies and politics of HOAs and condos for well over 20 years, but this has always baffled me. Condos in particular have been sold as “care free living” so why blame the owners who were sold on the idea they didn’t have to do anything? And they are negligent for not having filled in cracks. What’s the rationale behind it or were they first in line without a lobby behind them to deflect the accusatory finger pointing at them? None of the reasons given for the tragedy made any sense to me at all. I thought we at least needed to know what caused the collapse before we could come up with a way to prevent it from happening again. Blaming the homeowners because they were not keen on funding repairs on something they no longer owned made no sense to me. As far as I am concerned it was just more evidence that the HOA and Condo concepts are flawed. That is a discussion for another time but one we definitely need to have.
In my experience we never had a vote as to whether we would fund the reserves. Silly me, I thought all HOAs and condos had to fund the reserves. Apparently that is not the case. Whoever dreamed this concept up should have ensured that the funds needed to maintain this terrific experiment were always available. Julio Robaina joins me On The Commons. Julio is a former Florida legislator who promised he would always work for the HOA and condo homeowners and he has kept his promise. Even though he is not currently a legislator he is very much involved with drafting legislation to protect the owners from another similar disaster. I am really excited and impressed with some of the legislation he talked about. Finally some sensible ideas. I would love to tell you about them but I suggest you tune in and hear Julio explain them.
The truth is that none of us has a crystal ball and can’t predict exactly what will happen, but life has taught us that certain pitfalls and dangers lurk around the corner and could cause a lot of problems. One of those problems is not having enough money set aside if the walls come tumbling down around us. In a condominium, it is mandatory that the board ensures that they fully fund the reserves unless they want to impose special assessments to make the necessary repairs to ensure that the buildings are safe and sound. It is inconceivable that the entire building will fail, right? Well, we have just witnessed one of the most horrific disasters that resulted from a condo that shrugged off their responsibility to fund the reserves and also to make the necessary repairs and replacements as they came due. Entire families lost everything they owned. If there is a lesson to be learned here, it is to make sure the condo collects the needed reserves and that we, the members, pay them when they are due. A special assessment will be a lot less convenient at a later date.
They built a condominium where a shared building is owned by a business, managed by a board of directors, and funded by the members. What can go wrong? This arrangement complicates things considerably. The owners are required to comply with decisions made by others whether they like it or not. Unlike a traditional form of ownership, where the buyer buys and owns the building and is solely responsible for the maintenance, the members of the condominium are stuck with the responsibility of paying for any problems. And those problems can be disastrous, as we saw when the Surfside condo collapsed, killing entire families.
Jan Bergemann joins us On The Commons. As many of you know, Jan is the founder and President of the Florida-based Cyber Citizens for Justice. Jan has done a fantastic job at CCFJ and is very knowledgeable about condos and HOAs. He has long advocated for fully funding association reserves. Following the catastrophe at Surfside, he took things one step further. Jan called a town hall meeting with legislators and leaders from all different Florida groups to look at ways to prevent this from happening again. Fortunately for all of us, they recorded the meeting on Youtube and for all to watch. I urge you to take the time to tune in and consider something similar in your state. Here is the link https://www.youtube.com/watch?v=0hotkUUlYqk
Sometimes it takes a tragedy to make us realize we have been ignoring the elephant sitting right in front of us in the middle of a tiny room. For years many of my guests On The Commons have warned us that we are not saving enough in our association reserve accounts. Having served on the board of directors of my HOA and having served briefly on the finance committee, I knew we had a reserve account that was healthy. I did not want to deal with a special assessment. Weren’t we like all other other residential associations across the country? I have always advocated making sure residential associations fund their reserves. Imagine my shock and surprise when my listeners let me know, in no uncertain terms, just how wrong I was. Their concern was that there was no one guarding the cookie jar. Too much money has been embezzled from HOAs. A very valid problem. Some industry members were unaware that this was going on and seemed genuinely shocked when I brought it up. How could they possibly not know?
Julio Robaina, a former Florida Legislator, joins us On The Commons. Julio had promised that he would always protect the rights of home and condo owners and he has kept his promise. When the Surfside condo collapsed, Julio’s former colleagues asked him if this is about what he was warning them? You shouldn’t have to lose so many people to prove you knew what you were talking about. Following the tragic collapse, Julio is working with the legislature, coming up with legislation that would prevent a repeat performance and allay any fears home and condo owners typically have about leaving bags of money on the table, unattended. Julio joins us and explains his new legislation. I LOVE it. I think he has covered all the bases. When Julio’s bill is enacted as written and not stripped of important points, it should serve as a model to be adopted and enacted throughout the rest of the country. Since we will not be able to clone him for every state, we, the home and condo owners, will have to do the heavy lifting. Tune in to today’s show, you will be inspired to have the same bill in your state.
The tragedy of the Champlain Tower collapse in Florida has the rest of the country, and perhaps the world, scratching their heads wondering why an otherwise seemingly well-built building would all of a sudden just collapse in the middle of the night? What happened to cause the building to crumble, burying many of the owners and residents in the rubble? How do we prevent something like this from happening again if we don’t know what caused it? There are as many thoughts and ideas as to the cause but nothing concrete yet. Was it, as some people speculate, rusted-out metal rebars? Did the saltwater have anything to do with it? Could the concrete have been too thin? Was it the proper consistency? And the all-time favorite, the owners failed to have sufficient reserves? I suppose there are loads of reasons why the building could have fallen so dramatically, but that is not helping us prevent it from ever happening again. So barring a conclusive reason for the failure of the structure, we turn our attention to the things we need to improve on to catch any flaws during the construction phase of a building. This is where the local governments need to step in and stop whining.
Jan Bergemann joins us On the Commons. Jan is the founder and president of the Florida-based Cyber Citizens for Justice. Jan is always generous with his time and in-depth knowledge of what goes on behind the scenes in Florida. Today is no exception. His insider knowledge helped explain a lot of mysteries. We still have no conclusive evidence, but the Federal government is sending money and the workforce to dig a little deeper into the tragedy. Finally, our tax dollars may be doing some good instead of being wasted. Here, we hope we get some solid answers and make sure there will never be a repeat performance.
The tragic news from Surfside Florida has the world stunned. How could such a thing happen? What caused a condo tower to collapse in the middle of the night? Mayors and local politicians are quick to go on camera and assure all that something similar could never happen in THEIR town. Why not? How can we be sure that a condominium like Champlain towers won’t just collapse in the middle of the night again? Why did the tower collapse killing so many people sleeping peacefully in their beds? What caused the building to pancake? There has been a lot of conjecture on what caused it, but so far, nothing definitive. Water intrusion, climate change, rusty rebar, and salt have been cited as possibilities. Maybe there is some truth to all of these causes, and perhaps a combination of them. But we need to know for sure, if possible. We need to know how to prevent something awful like this from happening again.
Evan McKenzie joins us On The Commons.
Evan is a law professor at the University of Illinois at Chicago. He studies urban politics, land use law and policy, and common interest housing developments, including condominiums, HOAs, and housing cooperatives. He is the author of several books and articles about common interest housing, he is the media’s go-to guy for comments on any housing issue that grabs the headlines. I am honored to have him On The Commons again. Who better to share his thoughts and ideas for the collapse of and how to prevent something like this from happening again? There are preventive steps that can and must be taken to ensure there are no repeat performances. Tune in and listen to what Evan has to say. As always, his ideas are full of common sense and easy to follow and understand. You won’t want to miss it.
Like so much of the world, Radio Fairfax is closed to protect all the employees and volunteers. We will be back in full swing as soon as the coronavirus scare is over. Please take good care of yourselves and keep healthy. Shu and the Technical Staff at On the Commons.
Coronavirus is dominating the news worldwide right now. To add to all the confusion, this strain of coronavirus is new so science and the medical community are working around the clock to learn about it, figure out how to treat the patients who have contracted it and to develop vaccines to prevent the future spread of the virus. There is much to learn about this virus and there is always fear of the unknown. However, with all the misinformation floating around, the unknown is creating a lot of confusion and increasing the fear factor manifold.
Ed Allcock joins us On The Commons. Ed, an attorney with Marcus, Errico, Emmer and Brooks, a Massachusetts law firm that represents condominiums and HOA. Ed took a step back and started looking at common sense ways to mitigate the spread of this potentially deadly virus, especially in high density buildings such as high rise condominiums where people come into contact with public facilities. With a little thought, common sense and some help from his high school daughter’s leadership he came up with a plan on how can board members and managers can reduce the risk of cross contamination in their buildings Ed wrote an article, “Coronavirus:What should Condominium Associations Do?” With common sense ideas and some very worthwhile ways of combating the spread. We’ll talk to Ed about his article, what he has learned in the process and how we call do our bit to avoid being victims but warriors fighting back.
An often cited benefit for residential associations used to be that they allowed the members greater control over their immediate surroundings. The other bonus they were promised was that collectively they would gain political clout. At least that was the sales pitch, along with the ever present promise of enhanced property values. It all sounded wonderful and in a perverse sense sounded sort of logical. But as we have learned over the years not everything works the way it is supposed to. In fact in the case of residential associations, the opposite is true. Not only don’t the members have control over their immediate surroundings but have lost sovereignty over their own private spaces. The existence of an HOA or Condo association is infinitely more intrusive and tyrannical than a neighborhood where the residents are on their own and allegedly have no control.
Jonathan Dessaules joins us On The Commons. Jon is an attorney in Phoenix, Arizona. As part of his practice he represents homeowners against their associations. He is one of a handful of attorneys nationwide who will only represent the owners and not straddle the fence hopping over to the HOA side when they feel like it. Currently his is in a class of his own in Arizona. He also has a blog where he discusses HOA issues and gives general guidance. It’s a great page to check out for quick guidance on some of the more common issues facing homeowners. We talk to Jon about all the usual HOA issues common to all American homeowners but we also talk about a long and protracted case that he recently won. His clients own a unit in an upscale condominium where the fees are in excess of $1,000/month. The condo shut the key card down, impeding access to the private unit and banned the use of the amenities until the owners forfeited a right they had. So much for having greater control of your immediate surroundings in a residential association.
For years the bulk of information about this relatively new experiment in housing has come from the industry that has created it and gains from it. The sales pitch generally describes the concept of condominiums, homeowner associations and cooperatives in glowing terms, promising the owners an easy life where all their problems will be taken care of for them. Housing consumers are assured they will have greater control over their immediate environment, that this is “democracy up close and personal”, it is carefree living at its best, owners will have access to amenities that are beyond the financial reach of most Americans and of course the promise of protected and enhanced property values. We’ve all heard these promises and all know that nothing can be further from the truth.
But finally the tables are starting to turn. Academics, attorneys, psychologists, advocates and medical professionals are speaking out. And finally the truth about the effects of HOAs is being uncovered.
We’ll talk to Mike and Shelly about their case study, a crisis in a condo association on the gulf coast. In this case the condo owners were faced with massive renovations. The condo owners were facing having to get a loan in excess of 10 million dollars to make the repairs. Naturally the owners would be required to repay the loan. We’ll learn how the association communicated the problem to the owners and how the owners reacted. While we have seen many similar cases, they have all focused on the structural issues, and often when discussed by the HOA industry the blame has been put squarely on the shoulders of the owners. What is refreshingly enlightening about this paper is that the authors study the situation more from an interpersonal and normal communication perspective. Really happy to note that this dynamic trio are busy working on their next paper. It is high time to get the real story out.