Articles Posted in Current Affairs

Blog post by David Swedelson, Partner, SwedelsonGottlieb

As we all know, the Great Recession has changed the way we live and do business. Getting a home loan is not easy these days, and the federal government is instituting some pretty major changes to the mortgage finance system. This is complicated by the fact that regulators and legislators do not really understand community associations.

Because the decisions that Congress and federal agencies make now will impact how or if owners will be able to get loans, CAI has developed Mortgage Matters, “a comprehensive response to mortgage challenges at the federal level.” CAI states that “[t]he common thread for Mortgage Matters is to ensure that potential homebuyers have access to affordable mortgage products and that the criteria used to determine eligibility for loans in community associations are realistic measures of an association’s financial health.”

Posted by David Swedelson, Partner, SwedelsonGottlieb

Community Associations Institute (CAI) is petitioning Congress to host oversight hearings examining the Federal Housing Administration (FHA) and its management of the FHA condominium insurance program. If your condominium association has applied for FHA approval, CAI would like you to take a short survey. The survey will help CAI collect data on issues with the FHA’s administration of the program. CAI will share the summary results of the survey with members of Congress in their effort to highlight many of the problems we are hearing from condominium associations across the country. The survey will close on April 6, 2011.

CLICK HERE TO TAKE THE SURVEY

Blog Post by Sandra Gottlieb and David Swedelson from a CAI Alert

When it comes to the FHA and its lending guidelines, describing their guidelines as a moving target would not be an exaggeration. If you asked us two days ago regarding the FHA’s stance on rental percentages language in association governing documents,we would have told you that they were restrictive. FHA got the word and again revised their guidelines. The following comes from a Community Associations Institute report:

Attached are the new FHA guidelines which allow for a Waiver on Leasing Restriction provisions found in association CC&Rs. Although the new requirements do not give associations’ automatic guarantees to obtain FHA approval if your governing documents allow for rental restrictions for most associations, compliance has just become easier.”Leasing restrictions have been one area of the FHA condominium guidelines that has caused problems for associations seeking to get FHA approvals. Community Associations Institute (CAI) has brought this issue to FHA’s attention and has petitioned FHA to review these criteria. On March 18, 2011, FHA issued a waiver that will provide greater flexibility on leasing restrictions under the FHA condominium insurance program. This means that many condominium associations whose FHA approval was rejected due to rental restrictions may now qualify under the FHA waiver.
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Some California community associations charge transfer fees. The Federal Housing Finance Agency was proposing a ban on such fees, and they have now backed off this proposal. Community Associations Institute (CAI) was very much involved in addressing the proposed ban. Now the Federal Housing Finance Agency says they will exempt the fee if it is imposed to benefit the property or community. Follow this link to a LA Times article that addresses this issue in more detail.

Here at SwedelsonGottlieb, we’ve dealt with or heard a lot of interesting situations. Sometimes, we think we must have seen just about everything there is to see. But a recent article about squatters at an a home in a Newport Beach HOA made us laugh out loud. The squatters had taken over a $2.6 million home in a gated planned development community, and amazingly, they complained of not being able to access the security gate to the association. They claimed they were “prisoners in their own home”, but now it looks like they may have to make prison their home for awhile.

This story does have more serious implications. Associations should keep an eye out for squatters and then alert the owner, as the association should not get directly involved except perhaps to call the police. And, there could be some implications for not allowing access, assuming that the squatter is now a tenant (technically and depending on how they got possession of the home/unit). We have heard about owners putting people into their home or unit as the foreclosure was taking place. At some condominium associations we represent, we have been told that squatters have taken up residence. How did anyone know? The first clue was an extension cord out the door and plugged into the association’s common area electrical socket. A clue for another association was a transient using the spa and clubhouse. A sign of the times?

The Orange County Chapter of the Community Associations Institute (CAI) will be holding a luncheon on January 11, 2011 at the Irvine Mariott, entitled “Professional Behavior Affects Everyone”. CAI encourages you to “come hear the leading professionals in our industry discuss ethical and professional issues relevant to our industry. Our panel will address ethics and professionalism beyond the office and into social settings. In addition, the speakers will present the current trends in ethics complaints as well as the legal issues that arise with ethical violations, and provide insight on dealing with difficult ethical situations.” SwedelsonGottlieb senior partner Sandra Gottlieb, Esq. will be a speaker at this important program. Follow this link to download the registration flyer.

Mark your calendars, because just around the corner from the holidays is the California Association of Community Managers’ (CACM) Southern California Law Seminar on January 21, 2011, from 8 am to 5 pm at the Disneyland Hotel in Anaheim. CACM’s annual event is tailored to “community management professionals to have an in-depth understanding of case law and other applicable legal issues, as best practices are driven by the extensive laws associations face.” Follow this link for more information and to register for the Southern California Law Seminar. Be sure to say hello to our attorneys, including our senior partner, Sandra Gottlieb, Esq., who will be presenting. Our senior partner, David C. Swedelson, Esq., is also presenting on the top 10 cases impacting community associations.

CACM will also hold a law seminar and trade show in Northern California at the Oakland Marriott City Center from February 3-4, 2011. Follow this link for more information and to register for the Northern California Law Seminar, at which Sandra Gottlieb will also be a panelist.

By Mark Petrie, Legal Assistant at SwedelsonGottlieb

Shakespeare’s Hamlet complains about the “law’s delay” as part of the reason he considers suicide. If he had lived today and tried to revive a California corporation’s suspended status with the Secretary of State, his decision would have been easy. Extended delays are placing California corporations (including homeowner associations) at serious risk of litigation exposure and may make them ineligible for disaster relief such as SBA funds, as well as causing them to suffer the extended suspension of other benefits of incorporation. Arguably, the greatest risk of suspended status is exposure to litigation, as the association may not prosecute nor defend a legal action without active status.
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SwedelsonGottlieb Senior Partner Sandra Gottlieb and Karen Conlon, President and CEO of the California Association of Community Managers (CACM) have written an article providing community association boards of directors with practical tools designed to identify and implement ethical value systems for their association board members. These tools will enable board members to navigate through the complex ethical issues that can occur in the everyday administration, management and governance of a condominium project, planned development, stock cooperative or other community association. To download a copy of this important article, please follow this link.

“Most successful businesses have embraced the concept of strategic planning, and the results attained drive the direction, resources, and decisions made in the daily course of doing business. It guides the leadership and unites the employees and partners through common goals and objectives.”

This is the introduction to an article on strategic planning by hoalawblog friend Debra Warren, PCAM, CCAM, CMCA, of Cinnabar Consulting. As a Community Association Manager, Management Firm CEO and Consultant, Debra should know a thing or two about this subject. She has had the opportunity to work with hundreds of communities and literally thousands of Board Members. She has had a seat at the table with some of the most successful communities and, conversely, at some of the most challenged communities.

Debra raises a good question: Since the benefits of developing a strategic plan are generally positive, why don’t community associations enthusiastically proceed along the same path? Debra’s article suggests that there are several answers to this question. One answer is simply the perception that creating a plan is complicated and requires a lot of time and money. Another answer is that many community association volunteers believe that the 30-Year Reserve Study is their plan. While this financial tool is an important part of a comprehensive plan, it does not include many factors that contribute to the overall health of the community. Some of these factors are changing demographics, local economic conditions, and aging landscaping and design elements. A complete plan will also consider the needs and wants of the individual community members.