Thursday, September 28, 2006

Condo and townhouse boards must enforce bylaws and rules or change them

One of the hardest things boards of directors of home owners associations have to do is enforce their condo and townhouse home owners associations' bylaws and rules.

It is just uncomfortable to enforce some rules. Others are pretty easy to enforce.

This brings up the question, what does a board do about rules that its members don't feel like enforcing?

Bite the bullet and enforce the rules, sue people and make people mad, regardless.

Or change the rules?

Why change the rules? If a board member feels a rule is unenforceable or shouldn't be enforced, the board should consider eliminating the rule.

Why not change a rule? Two reasons come to mind.

You enforce a rule because the rule involves safety and you enforce the rule that is essential to maintaining the appearance and the value of the community.

Wednesday, September 27, 2006

Condo and real estate appraisers under fire in Colorado

Condo and townhouse HOA board members will be interested in the controversy involving alleged inflationary appraisals that are putting over appraised homes at even more risk if home prices begin to decline.

The Rocky Mountain News' John Reebock reports on the plans of Erin Toll, director of the Division of Real Estate for Colorado, to go after appraisers who inflate homes. His key graphs:

"The best way to stop mortgage fraud and our abysmal foreclosure rate is to crack down on appraisers who inflate property values," Toll said this week.

"And lenders, who trust the appraisals, are often victims, too," Toll said. "They may not know there is a scam going on."

Others, however, say that lenders often pressure appraisers to artificially inflate properties so they can justify making loans and collecting fees.

National studies indicate that predatory lending practices, which frequently involve appraisal fraud, are especially prevalent in poor minority neighborhoods.

Toll said she can yank the license of an appraiser who is found to be inflating values. There are about 5,500 licensed appraisers in Colorado.

In her first case, Toll said she knows the appraiser has inflated more than a dozen appraisals, but she's trying to figure out why.

"I don't think he is doing it for the $350 appraisal fee," Toll said.

Asked if she thought some appraisers were taking kickbacks, Toll said: "I would not be surprised. Why else would they do this?"

Tuesday, September 26, 2006

Condo prices down, single families up

Economists and Realtors™ offer their spins on the latest housing sales figures, which show some price declines for condominiums and townhouses. (click head for free roundup of economists's reactions.)

In Denver, Realtors™ are seeing very weak demand for condos and townhouses.

Monday, September 25, 2006

Huge Florida condominium HOA airs new web site

In an effort to improve communications with its some 9,000 residents, a Floridal condominim and townhouse HOA board has introduced a sophisticated web site.

Lede graphs from a story in The Observer News:

Kings Point Community Communications Go Global
By Melody Jameson
Sep 21, 2006, 16:13

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KINGS POINT – The long-standing grapevine here has been updated.

With launch of its own colorful, comprehensive and highly navigable website last week, KP’s 9,000 or so retirees have joined the global village - and enhanced their community communications with interactive 21st century electronics.

They now have access to a trio of communications tools unprecedented in their 35-year history. The website joins a new internal television channel – 95 - and a recently-initiated computer e-mail network dubbed KP Info, to create free-flowing, two-way means of staying in touch.

KPSCC.COM is the latest in a series of innovations undertaken by the KP Federation’s board of directors in the last half year aimed at assuring transparency in governance and clear communications across the community. Meeting the objective fulfills a pledge made when a coalition of five reform candidates for board seats campaigned successfully early in 2006.

The new communications system still includes Channel 20, another televised internal information vehicle providing a schedule of activities slated within the community in a scrolling power point format, according to Ruth Flinn, vice chairman of the federation’s communications committee. There are no plans to alter Channel 20 which is maintained by clubhouse personnel and transmitted to residents via cable, Flinn indicated.

The multi-paged website, in development for several months, is the result of concerted efforts by both volunteers and a commercial firm, Flinn said. It was designed by E Solutions Corporation, a company specializing in such creations, and will be hosted by the company, meaning KP information is stored in E Solutions computers, she added. But funds to get it up and running, for example, were contributed by the KP Condominium Owners Association (COA). And a team of volunteers are to be trained to keep the website current, Flinn said.

Sunday, September 24, 2006

Shortage of condo and townhouse HOA managers feared

There may not be enough professional property managers available to managed the home owners associations for residents in condominium and townhouse associations and coops.

That, at least is the warning publishe in the Toronto Star:

Impact graphs:

Millions of dollars are at stake: Asset values in a single condo corporation can easily reach between $50 million and $70 million, yet boards are under pressure from owners not to raise fees. Boards often see only the bottom line, awarding contracts to the lowest bidder.
"Management, at the moment, is in deep trouble," says Andy Wallace, a veteran of almost 40 years in the industry which he has helped shape since its infancy.
"Anyone can hang out a shingle," says Wallace, 77, who began his property management career in 1979. The vice-president of General Property Management stayed about six years before opening Wallace McBain and Associates and has spent his career focused on the issue of good governance. He now runs his own consulting firm and teaches a course in condominium law at Humber College.
Wallace knows of crackerjack managers, too, but insists, "There's a dire shortage of good ones."
He tells of one property manager fired for taking a $1,000 payoff from a cleaning company. The property manager got a job with another company two days later.
Another quite capable manager was caught stealing and was fired, Wallace said. When another employer asked Wallace about a reference for her, Wallace said he couldn't give one. The employer hired her anyway.

You can look at this story several ways.

1. There is a shortage of trained managers.
2. There is a shortage of honest managers.
3. There is a shortage of managers over 70 years old.
4. The people quoted in the story got some good publicity.
5. Watch your check book. And that's not easy for a board to do. Need to write about theft and audits.

Friday, September 22, 2006

Condo HOA boards and directors can find lots of blogs on alternative & renewable energy

Use the search bar in this blog to search blogs that are covering renewable energy. Click the head on this post to link to one of the more active ones.

This site on alternative energy looks pretty good. Click here. It offers a bunch of links to similar sites.

Thursday, September 21, 2006

Condo & townhouse home owners association hot topics

Condominium prices, townhouse prices, home owners insurance premiums, insurance premiums for home owners associations, energy costs, renewable energy, the impact of interest rates and inflation on HOA reserves and finding good HOA management firms are the hot topics that we'll be covering here.

The housing market is growing slowly compared to recent years and is quite weak in many markets.

Interest rates are encouragingly flat to falling, which may help home sales. At the same time, however, the interest HOAs will earn on certificates of deposit and money market accounts will decline, or at best, hold steady.

Natural gas prices are tanking, and petroleum prices are correcting, but renewable energy will continue to be worth considering by HOA boards that are running large buildings.

Inflation seemed to be threatening earlier this year but seems to be less of a threat today.

In many states, the government's increasing policing of illegal immigration will put HOAs and their contractors at risk. They must be sure that their vendors are employing people who are in the country legally.

This could drive up the cost of maintaining condominium and townhouse communities. If fewer illegals are available to grounds maintenance and painting contractors, they'll have to pay more to get workers. And they will pass those costs on to home owners.

Budget for it.

Wednesday, September 20, 2006

Condo board purchases renewable energy credits

A Chicago condo is purchasing renewable energy credits from an Iowa wind farm. (Click head.)

Following in the footsteps of major corporations such as Whole Foods and Johnson & Johnson, the building's association has approved a contract to purchase renewable energy credits from an Iowa wind farm. The clean renewable energy will go into the electric grid to alleviate some of the system's demand for coal, gas and nuclear power-producing facilities.

Felix Friedman, the association's president, proposed the idea of creating a "green" building. The condo association brokered a deal to purchase "green credits" from Midwest Renewable Energy Credits in the amount that offsets the total quantity of electricity used by the building. Friedman said the decision was made to help the environment, and to attract environmentally-conscious real estate owners.

Condo and townhouse HOAs boards must help market their communities

Condominiums and townhouses are the first to feel a break in housing prices in times like these for whatever reasons.

HOA boards can use their membership meetings, newsletters and community marketing and public relations talents to let the world know why people should want to live in the community.

It's not as obvious as you might thing. Many bright new developments are offering great price discounts to potential buyers these days.

How do you do this?

1. Publish and maintain a strong web site that keeps members and their friends up on the community's news and people. An HOA blog would make sense, but who will write it? A retired PR, marketing or news person, perhaps?
2. Make the periodic newsletter mailed to members a vehicle for promoting the community and reminding home owners to visit the web site and tell their friends how much they love living here.
3. Encourage a resident Realtor™ to mail promotions for homes on the market to a wide audience.
4. Get home owners to sit down for home design and garden design interviews with the local paper.
5. Oranize annual house tours that allow neighbors to visit and bring their friends to see the great places that they might buy some day.
6. Make sure that your community is well maintained, provides outstanding customer service to residents and has a strong balance sheet with competitive maintenance fees, and promote those benefits on your web site/blog and in your newsletter.
7. Have your HOA president serve on regional HOA boards and spread the word about your great community.

These are just some quick ideas. More will come in due time.

Townhouse and condomium home owners associations may use this referral service

Here's an 11-year-old referral service with 425,000 paid members. Click on headline.

Condo and townhouse HOAs might use vendor referal services

A new service,, is creating online communities where handy men, plumbers and other services can advertise their services and members can discuss vendors and review them.

Services like this have been available in health care for years, recommending dentists, physicians, nursing homes and home health care services.

The problem with them is that all the recommended services are paid advertisers, not independently reviewed and checked out.

This particular service claims that two of the five services it will recommend to members will come up as unpaid, organic searches, and the other three will be paid sponsors. Whether the paid sponsors will be clearly identified as such remains to be seen.

Another question for the sponsors is whether home owners will turn to their site instead of or in addition to friends and neighbors? How will generate traffic for the advertisers?

Advertisers will pay something like 99 cents per lead, which says will be screened for false leads. And advertisers can buy banners on the sites to generate traffic.

Here is the news release e-mailed by

Click here.

Hewlett-Packard's board secrecy a lesson for all condo HOA boards

I've blogged on the board secrecy and corporate spying issue over at The Business Word.

If you think you have to hire a private investigator to learn about another board member or home owner, you've got a problem and should consult your lawyer and your HOA's lawyers. Hopefully, they'll keep you and your board out of trouble.

Tuesday, September 19, 2006

HOA reserves important to condo, townhouse values

Homes 101 (click on head) offers a basic article on evaluating and maintaining home owners association reserves. Consultants make nice livings doing reserve studies for HOA boards.

Trust, integrity and fairness key to condo, townhouse HOA boardmanship

The Hewlett-Packard board used pretexting to spy on a board member who was leaking information to the business press, and as the Washington Post reports (click headline), a law firm used a consulting firm to illegally obtain a partner's phone records using pretexting. Pretexting is misrepresenting a phone company's customer to get to that person's phone records.

Home owners association boards often are scenes of acrimony and distrust, and I wouldn't be surprised if a few of them have hired "consultants" to spy on fellow board members for one reason or another.

This is unethical, no matter the reason.

An HOA board member is an elected member of a board and has the right to say anything he or she wants to, subject to being sued by the board or other offended parties after committing the misdead. And that's one point. If a person on the board is misbehaving, the board should remove that person by vote or a recall election or call in the attorneys. No one should use illegal or unethical tactics to get back at someone they disagree with.

In the HP case, a board member acted unethically in leaking confidential information from the press. That board member has resigned and probably will never be asked to serve on another board.

When you join a board, you make a commitment to work for the better interest of the organization and to work through channels. You commit to keeping information confidential that the board deems confidential unless you see wrong doing. If you see wrong doing, you call the organization's attorneys and go to your constituency during the next election.

For HOA boards, not much should be kept confidential from members. If you have direct employees, you make personnel decisions in executive sessions. But you ultimately should make all contracts and salaries public so that all home owners can inspect them, if they wish. If an employee or vendor objects, they can leave. Secrecy has no place in local government, and HOAs are the ultimate in local government.

Luxury condos open in NYC's China Town

Serving on the board of a gentrified inner city Condo apartment building would be interesting.

Everyone on the board will be affluent, most will work in the city and may will be frequent travelers.

It's a good read.

Interest rates drop, housing market depressed

Housing construction was down 6% in August. Inventories of unsold homes are at record highs in many markets.

Both buyers and sellers are on strike.

At some point both will break. Buyers won't be able to resist bargains, and sellers will get tired of just sitting there. They'll take what they can get.

Our strategy when we sold our townhouse last spring was to price high when we listed. We started at $359k. After a few weeks we went to $345k. Then we dropped to $335. I was just getting ready to drop the price to $320k when we were offered $310k, up from the $297k we paid 30 months earlier. We took the offer, because in this market, if you don't close the deal, the buyer may find something better and walk. I wanted out of the deal, and I was sure the market was quickly weakening. That was in May. The market's softened considerably since them, and I'm happy to have done as well as we did.

Sellers who hold out for "their price" in this market may find themselves selling for a lot less in a few months.

Buyers with the discipline to wait for sellers to give up will find some wonderful bargains over the next 12 to 18 months, I'm thinking.

Today, the AP reported: "WASHINGTON - Housing construction plunged in August, falling to the lowest level in more than three years as the once-booming industry showed further signs of a dramatic slowdown.

The Commerce Department reported Tuesday that construction of new homes and apartments fell by 6 percent, the third consecutive decline and a much bigger setback than analysts had been forecasting."

Monday, September 18, 2006

Time to say I'll serve on another HOA board

The year has been a busy one, and it looks like I may have another busy one if I get elected to the board of our new HOA.

I'm thinking that I can make my contribution to the community while I'm still relatively young. And we like to get to know the neighbors. Serving on an HOA board introduces you to a lot of people real quick.