Loan Modifications in HOA Communities

Coming Soon! I am going to post a new article about Loan Modifications and their impact within HOA communities.

Election Ballots..Are They Revocable?

I have received the following question several times lately and thought that I would post the question and the answer; " When does a secret ballot become irrevocable?" I have received this question from both HOA Board members and community owners presumably because they have voted and have later changed their mind.

The answer is contained in Civil Code Section 1363.03 (f), which states "Once a secret ballot is received by the inspector of elections, it shall be irrevocable."

Homeowners Association (HOA) Attorney
Note: The information contained is not legal advice and does not establish an attorney-client relationship. Contact us via email Ryan.McClure.Esq@gmail.com, website: http://www.rpmcclurelaw.com/, or call us at 951.818.0687

HOA Rentals

Many HOA communities have detailed rental restrictions contained within their governing documents. A community can restrict the number or units or the percentage of units rented at any given time.

The basis for this restriction lies in the preservation of the community. It is thought that by limiting the number of units that were rented at any given time would preserve the aesthetic features of the community and therefore promote and preserve the value of the community.

Whether this holds true or not more than likely depends on the community.

Rental issues within a HOA come up in two very distinct ways. First, I receive numerous phone calls from both Board members and community members asking whether they are enforcing the rental restrictions in accordance with the governing documents correctly. Of course, I get the same number of calls from absent owners that wish to rent out their unoccupied condo and are receiving resistance from the HOA Board. Generally, a reasonable restriction on the number or percentage of units that can be rented at any given time will be enforceable. However, out right bans against "any" renting would more than likely be a unreasonable restriction and probably would not be upheld by a court hearing the matter.

The second area where rentals comes up is with the lending industry. Most lenders ask what number of units or what percentage of units are rentals before making any lending commitments within a specific community. This kind of scrutiny can be detrimental to resident owners and absent owners alike.

Careful consideration should be taken when enforcing rental restrictions within HOA communities and absent owners and renters alike should understand that reasonable restrictions will more than likely be enforceable and not subject to challenge.

Homeowners Association (HOA) Attorney
Note: The information contained is not legal advice and does not establish an attorney-client relationship. Contact us via email Ryan.McClure.Esq@gmail.com, website: http://www.rpmcclurelaw.com/, or call us at 951.818.0687

Coming Soon

I will be posting a short article on the following topics based on popular demand. Readers of my Blog! have asked very specific questions around the following area's;

• Condo Insurance-Separate Interest Insurance Policies vs. Master Policy Coverage.
• Flooding Damage
• Mold Issues including Toxic Mold

These articles and others will be coming soon!

Choices... Choices

Even before a resident owner in a HOA community goes into default or foreclosure they may be faced with the choice of whether to pay or not pay their HOA dues. I have heard from both HOA Boards and community members that they are often faced with whether to pay the HOA dues or take that specific sum of money and apply it to their now-adjusting mortgage payment.

Of course, the Board and the community feel the impact of these decisions in delinquent assessments, and on-going collection efforts, which many times are fruitless where the homeowner is so upside down they couldn't even contemplate paying the dues without first considering the impact on their current adjusting mortgage.

There is really no easy solution to this problem and each community is faced with a responsibility to collect the assessments to ensure a proper functioning community. However, if Boards take a hard line with the residents over unpaid assessments they may find that they eventually have another foreclosure in their community.

Note: The information contained is not legal advice and does not establish an attorney-client relationship. Contact us via email Ryan.McClure.Esq@gmail.com, website: http://www.rpmcclurelaw.com/, or call us at 951.818.0687

The Condo Glut & The Rental Market

I have received many phone calls and emails over the last year and more importantly after the real estate bubble popped concerning renting in a condo community. As developers try to finish their final phases of the condo communities they are faced with a surplus of units that either will not move because of lack of buyers or buyers that cannot finance the condo due to the credit crunch. However, there is a large contingent of vulture investors or value investors that usually circle every market collapse who are happy to purchase condo's at discounted prices.

These so-called vulture investors or value investors purchase condo's not as their own personal residence but as an investment. They are more than happy to turn the condo into a rental unit and capitalize on the falling prices of these units.

The problem becomes one where the condo community in which they just purchased has rental restrictions in their community. Many communities have some type of rental restriction in their governing documents, which either limit the percentage of units that can be rented at any given time or list fees or requirements that the renter must comply with while living in the community.

The dilemma for the communities and the board's facing the proposition of enforcing the governing documents and restricting rentals is that the community may already face massive foreclosures in the condo community and there may be large percentages of units already sitting idle starting to create an eye sore in the community with their multiple listing signs, overgrown lawns, and overloaded mailboxes.

I talked to a board member the other day in San Diego county that was facing with and trying to deal with a 35% foreclosure rate in their community. They offered assessment payment plans for their community and have tried working with everyone that they could but unfortunately the loss continues.

To compound the problem the community had a very restrictive rental requirements in their governing documents. So restrictive that many investors that were willing to purchase the idle property only to rent it out balked at purchasing the property because they knew that they would have difficulty with the property management company and the board.

So many communities must make the decision to either allow more rentals within their community or learn to deal with the mounting foreclosures and empty units.

Homeowners Association (HOA) Attorney
Note: The information contained is not legal advice and does not establish an attorney-client relationship. Contact us via email Ryan.McClure.Esq@gmail.com, website: http://www.rpmcclurelaw.com/, or call us at 951.818.0687

The Recent Wave of Foreclosures!

You would have to be living under a rock to not know that the U.S. is experiencing one of the worst real estate down cycles in history. The real estate market seems to affect everyone that I have come into contact with recently. It is either the HOA board looking for advice on how to handle foreclosures in their neighborhood or the community member calling for advice on how to avoid or slow down the foreclosure of their condominium.

There really isn’t a one size fits all answer to these types of problems. Every homeowner and every community is unique and each faces their own unique challenges. However, there has been one running theme that seems to be present in all of these desperate calls. Many times the homeowner has waited until the bank is actually posting the foreclosure notice to the door.

Many lenders, in fact most, now have programs for the down and out homeowner. My best advice is to contact your lender as soon as you feel that you will be unable to meet your monthly mortgage payment. I cannot make any guarantees, but I can only assume that lenders today DONT want any more foreclosures on their books.

Well, what can the HOA board do in these type of situations? They could add general tips and advice to their monthly community newsletter, or HOA website. Any proactive advice and support from the Board doesn’t stop a foreclosure but it could certainly help under certain circumstances.

Good Luck!

Note: The information contained is not legal advice and does not establish an attorney-client relationship. Contact us via email Ryan.McClure.Esq@gmail.com, website: http://www.rpmcclurelaw.com/, or call us at 951.818.0687