Cooperator News New York

The stability and value of a shared interest community hinges on a lot of things; financial solvency, good governance, and proactive physical maintenance, to name a few. But another key component, and one that may be less obvious to the eye, is social cohesion and mutual respect among residents, administrators, and staff. Unresolved conflict and the acrimonious environment it produces are anathema to the peace and sense of community residents of condominiums, co-ops, and HOAs seek. 

The responsibility for cultivating and supporting that social cohesion ultimately rests with the board, and often depends on how the board handles conflicts between itself and the community, individual members, and between residents.  

Sources of Conflict

There are many sources of conflict in a shared interest community.  They can range from spats between neighbors to conflict between a resident and the board, or between the board and management, or resident(s) and management. All are serious, and all require proper attention. Much like a virus, conflict can worsen quickly and spread beyond its origin point to poison the whole community.

“There are too many common sources of conflicts to list them all,” says William McCracken, a partner with NYC-based law firm Moritt Hock Hamroff.  “When you deal with multifamily buildings, you learn that neighbors and management can get into fights about almost anything. Disputes about water leaks are very common, as are so-called ‘quality of life’ disputes—things like noise and odors.”

Jen Barnett, a partner with the Braintree, Massachusetts-based law firm Marcus, Errico, Emmer & Brooks expands on this.  “Generally,” she says, “community association disputes will fall into one of four main categories: unit owner versus unit owner, unit owner versus board, board member versus board member, and factional disputes (unit owners versus tenants, residential owners versus commercial unit owners, etc.). 

“Sources of conflict will vary among different associations,” Barnett continues, “but often concern the use of the common areas and facilities. In essence, parking, use of limited common areas, landscaping, shared amenities, such as pool, clubhouse, gym, etc. Other causes are rule violations (often related to noise, odors, pets, or the unauthorized use of a unit for business or short-term rentals), financial issues like assessments, fines, budget increases, capital improvements, etc., architectural and structural modifications, and maintenance responsibilities.”

Nip it in the Bud 

No matter the cause, the best way to minimize the effects of conflict on a community is to deal with it early. In other words, nip it in the bud. Don’t let it fester and turn into an even bigger problem. Quick attention and response is the best route to de-escalation.

“The first step is early intervention,” says Michael Shifrin, principal of Shifrin Legal, a law firm located in Chicago. “Boards and managers should address complaints promptly and professionally, while encouraging direct, respectful communication between neighbors when appropriate. Maintaining neutrality, focusing on facts instead of personalities, and reminding parties of the community’s governing documents and their shared objective of preserving and protecting their investment often help lower tensions. Sometimes, simply acknowledging a person’s concerns goes a long way toward de-escalation.”

From a procedural point of view, explains McCracken, “It helps when everyone understands each other’s rights and limitations. For example, when there’s a water leak, you hope that everyone has insurance—the main reason being that it helps ensure that everyone involved is made whole, but also because insurance professionals are better at understanding the parties’ respective rights and obligations, and there are fewer unnecessary disputes about who should pay for what. 

“That’s why it is sometimes a good thing when residents hire attorneys, at least as long as those attorneys are interested in resolving disputes and not just making a mess,” he continues. “Attorneys should be able to explain to their clients when what they want is not really reasonable or supportable under the building’s governing documents. If they do that, then it’s easier to work towards a reasonable compromise.”

 McCracken also stresses that “it’s really important for all interested parties to understand that in most cases, after the dispute is over, they have to continue living together. Ideally, you want to get the parties to a situation where they are not uncomfortable riding the elevator together—and to do that, everyone needs to feel like they were treated fairly.”

 Barnett concurs, but cautions that “as a general rule, boards should avoid becoming involved in interpersonal disputes between residents, though a board may have a duty under the FHA to help mediate disputes when they arise. In those cases, in response to any reported rule violation, the board should conduct its own unbiased and objective investigations; it shouldn’t rely solely on uncorroborated statements made by individual residents when determining how to proceed, if at all, against the person or persons alleged to be responsible.”

Mediation Station

One possible option for resolving disputes without resorting to costly, acrimonious lawsuits is mediation. In general terms, mediation—and its more structured cousin, arbitration—is defined as a mindful intervention in a dispute in order to resolve it. Professionally facilitated mediation and arbitration are remarkably effective in reaching mutually acceptable conclusions in all kinds of disagreements, usually in a fraction of the time and at far less cost than litigation. 

“Mediation generally involves bringing in a neutral third party, sometimes a professional mediator or  a trusted manager or attorney, to facilitate a structured conversation between the parties,” explains Shifrin. “The mediator sets ground rules, ensures each side is heard, and helps identify common ground or creative compromises. Mediation is non-binding but can be very effective at preserving neighborly relationships compared to litigation.”

In practical terms, McCracken notes, “There isn’t a standard mediation process.  I would say that it helps tremendously to have someone on the board or management side who has gravitas and credibility to instill a sense of fairness and trust.” This is especially true in shared-interest communities, as opposed to, say, labor disputes in commercial ventures. “That role was traditionally often filled by someone senior at the management company, but it could also be the board president, the board’s attorney, or some combination,” McCracken says. 

According to Barnett, “Alternative dispute resolution may be required under an association’s governing documents. And it may be a good alternative, as litigation is often unpredictable and costly. Mediation services may be available through court sponsored mediation/conciliation services, or private alternative dispute resolution providers, and even harassment prevention orders in cases of unit-to-unit owner conflict.”

Improving Communication Strategies

A key aspect to avoiding conflict and improving communication strategies for boards and management is simply being proactive. 

Shifrin suggests communities consider the following options to improve communications:  “When confronting noise and/or nuisance complaints, acknowledge receipt of the complaint, investigate it fairly, and communicate outcomes, even if the board cannot act. Silence breeds frustration. Defining board boundaries is also a good policy.  Boards must clarify their role as enforcers of the governing documents, not as referees of every personal dispute. Publishing policies, FAQs, or flowcharts for handling common complaints such as noise, pets, and parking, sets reasonable expectations. Finally, transparency is always a good policy.  Regular newsletters, meeting summaries, and accessible channels for questions reduce rumors and mistrust.”

In dense urban environments, noise can be a particularly vexing issue.  “Some level of ‘noise’ is in fact, a fact of life in a multifamily residence,” says McCracken. “Fairly, it’s not the job of management to ensure that no one ever stomps their feet or plays loud music.  To take a noise issue from an annoying fact of life to a serious legal issue usually involves hiring experts, and performing studies that residents are usually reluctant to do, and they get frustrated when management won’t do it for them.  That can be a delicate communication issue.  Communication is always important, but when it comes to dealing with a dispute over a health and safety issue, in particular, the main thing is to protect the building and residents, regardless of how well the board’s position is communicated.”

Barnett encourages her clients to “establish clear channels of communication.  Encourage all parties involved to meet to express their concerns and listen to each other’s perspective. Also, be careful of what words you choose. Be respectful and begin statements with, ‘I’, rather than ‘you.’  Engage in active listening.”

Board training is also a good and appropriate tool for conflict issues and their resolution. “Many conflicts can be prevented if board members receive training on governance, communication, and conflict resolution,” says Shifrin. “A well-informed board is more confident, consistent, and less likely to make decisions that invite unnecessary conflict.”

Avoiding Lawsuits

As with so many things, clarity and transparency are among the best options for avoiding major conflicts that may spill over blurry, poorly-defined boundaries and impact residents who weren’t even involved. Adopt clear, consistent rules for your community, and enforce them uniformly.  Document all board actions. Legal disputes often stem not just from a given decision or action itself, but from how it was handled. If a lawsuit does arise, the board should immediately notify its legal counsel and insurance carrier, avoid discussing the case with residents, and continue operating as normal while relying on professional advice to guide their response.

Some sage advice from McCracken:  “When you realize that ninety-nine percent of lawsuits settle, and lawsuits that don’t settle are extremely expensive for all involved, you would think that everyone would be incentivized to avoid escalating to court. It is often in a board’s interest to compromise on an issue, even if they have the better legal position, just to avoid the expense and uncertainty of litigation.  

“And again,” he says, “unlike in the typical commercial context, when you go to court with a neighbor, you still have to see them in the building during the lawsuit and after it is over. It’s worth going the extra mile to avoid those sorts of awkward situations. Having said all that, if you’ve done everything you can to avoid the lawsuit and are in court regardless, the only thing to do is give everything to win.  Being in a lawsuit is bad; losing a lawsuit is much worse.”

A.J. Sidransky is a staff writer/reporter for CooperatorNews, and a published novelist. He may be reached at alan@yrinc.com. 

Story by Ryan Poliakoff for The Palm Beach Post

Live in a home governed by a condominium, co-op or homeowner’s association? Have questions about what they can and cannot do? Ryan Poliakoff, an attorney and author based in Boca Raton, has answers. L

Question: I live in a single-family home community. Currently the board is collecting votes for an amendment to the declaration of covenants that would regulate leasing. The amendments would impose a lot of restrictions on homeowners who choose to lease their homes. 

For example, they are proposing that the association should have the right to terminate a lease. They also want to require owners to get leasing approval, and they would have 21 days to decide (that’s a long time to wait if you have an eager tenant who needs to move in and know whether they’re accepted right away.) The amendment will also give them the right to deny renewal or extension of leases.

And, when they decide whether to approve a lease, they will have the right to do background checks, including an evaluation of the monthly gross income of the tenant in relation to the rent.

In addition to these things, they want guests to be prohibited from staying on the property more than 30 days in a calendar year when the owner is not present. We have two homes, and we may wish to make our home available to a friend while we’re away, especially if we want them to stay with our pet.

By William McCracken in Legal/Financial HABITAT Magazine

This is a slightly edited version of an article that appears in the October newsletter of the law firm Moritt Hock & Hamroff. The author is a partner at the firm.

Savvy co-op and condo boards and their management companies are aware of the need to protect themselves from cyberfraud. But few have the misfortune of experiencing cyberfraud on steroids.

It happened recently in Battery Park City in Lower Manhattan. Last summer Milford Management Corp., a subsidiary of prominent real estate firm Milstein Properties, notified its portfolio of managed condominium associations in Battery Park City that it had been the victim of a cyberfraud scheme. The loss was staggering: more than $18 million belonging to its client properties.

On Sept. 12, the board at one of those properties, Liberty Terrace Condominium, sued Milford in state Supreme Court, seeking the return of $1.3 million, the building’s share of the overall loss.

The stunning scale of the fraud was made possible in part because of the way these properties in Battery Park City are organized. The land, which was created by landfill dumped into the Hudson River in the 1970s, is owned by a governmental agency, the Battery Park City Authority (BPCA), which developed the buildings and then leased them out to condominium associations on long-term ground leases. These ground-lease condominiums must make periodic rent and PILOT (tax equivalent) payments to the BPCA, which can exceed seven figures. Rent and PILOT payments processed by Milford were stolen from multiple properties all in one go.

According to the complaint, Milford was the victim of a classic phishing scheme. An employee in charge of processing wire transfers received an e-mail purporting to be from a BPCA employee (but in reality a fraudster), providing new wire instructions for the BPCA’s June 2025 invoice. The Milford employee not only failed to recognize the signs of fraud evident on the e-mail itself (among other things, the e-mail was sent from a “.com” rather than a “.gov” e-mail address) but also allegedly failed to verbally confirm the new wiring instructions before releasing the funds.

One obvious lesson here is that it is important to always follow best practices for making payments by wire transfer, such as verbally confirming wire instructions. Milford undoubtedly already had those official protocols in place, but this time, for whatever reason, those procedures were not followed.

One might think that these sorts of events should be covered by insurance, but there may be difficulties. First, a generic cyber insurance policy probably will not cover the type of loss suffered here. Cyber policies typically cover only classic hacking schemes, whereby a criminal breaks into a company’s computer files. In contrast, the loss here was the result of a phishing scheme, whereby a human employee was fooled into facilitating the theft. These types of losses are covered, if at all, by “social engineering” coverage that may or may not be specifically added to the underlying cyber or crime policy. Thus, the first takeaway for boards is to find out whether their buildings and management companies have social engineering coverage under their existing policies.

However, even when boards have social engineering coverage written into their policies, the coverage limits tend to be low. Perhaps only a few buildings are ever likely to need to wire out seven-figure payments like the ground-lease condominiums discussed above, but in any event it would be a good idea for boards to contact a reputable insurance consultant to confirm whether they and their management companies have sufficient social engineering coverage to protect themselves from these increasingly common phishing schemes.

by Brittney Maxfield

Dear Crucial Skills,

I have taken your course, but I’ve hit a wall. A coworker comes into my office, closes the door and starts talking about her husband, cat, children, etc. How do I tell her I don’t want to discuss this with her?

Signed,
Friend of a Chatty Cathy

Dear Friend,

It can be tricky to find the right balance between sharing and oversharing at work. I have a few thoughts regarding how to move forward in this situation.

The reason you’re hesitating to simply set a boundary with your coworker around how much she shares with you is because you know it has potential to hurt her feelings. But the promise of Crucial Conversations is that you can deliver tough news in a respectful way.

Here are a few skills that can help in the Crucial Conversation.

Start with Heart

When beginning a Crucial Conversation, get your intention right before opening your mouth. Clearly examine your reasons for not wanting to hear about your coworker’s personal life. Starting with heart ensures you understand your intent. And when you understand your intent, you can better communicate your intent. Starting with heart also pushes you to find a respectful intention beyond desires to rid yourself of irritation.

Perhaps your intent is to express that her interruptions disrupt your focus, your workload is demanding, or you simply don’t have the emotional bandwidth. Whatever the reason, consider how you can share it honestly and kindly so your coworker can better hear your request.

Master Your Emotions

The primary reason we do badly in Crucial Conversations is that by the time we open our mouths we’re irritated, angry, or disgusted with the other person’s actions. Then, no matter how much we try to fake it, our negative feelings creep into the conversation. So, before opening your mouth, open your mind. Try to separate people from the problem. Try to see your coworker as reasonable, rational, and decent—even if her actions frustrate you. It’s likely she is desperately looking for connection and not intentionally trying to disrupt your workflow. When you hold a generous thought about the other person, you will come across entirely differently. You will be able to calmly communicate your good intent rather than speak out of frustration and annoyance.

Help Others Feel Safe

Unskilled people believe that certain topics are destined to make other people defensive. Those who are skilled at Crucial Conversations realize people don’t become defensive until they feel unsafe. They become defensive less because of what you’re saying than because of why they think you’re saying it. But when others feel respected and trust your motives, they let their guard down and begin to listen—even if the topic is unpleasant.

Communicate Your Good Intent

Start the conversation by assuring her of your positive intentions and your respect for her. And finish by kindly drawing the boundary. Let me also pose a question for you to consider. Is there a happy medium? Is there a way to both hold a boundary as well as be more available to your coworker? Can you tell her that you enjoy talking with her but are not available for uninvited drive-by conversations in the middle of the day? Maybe you can spare 10 minutes every now and then when things are slow, or over a coffee break. Perhaps your colleague is seeking friendship and connection, and you could find a way to offer some, assuming it’s in a way that is more respectful of your time and attention.

I started by sharing the promise of Crucial Conversations—that tough news can be delivered in a respectful way. I’ll end with a caveat. Just consider that even though tough news is delivered respectfully, it doesn’t mean it isn’t hard to hear. It’s possible there will be no way to say something without your coworker taking some offense. But if you do your part to get your heart right, master your emotions, make her feel safe, and communicate your good intent, how she reacts is up to her. Her response is not your responsibility. Your responsibility is to be both candid and respectful, always.

Best of luck,
Brittney

By Kelly G. Richardson, Esq. CCAL, HOA Homefront Column

Dear Mr. Richardson: I have a blue disabled person parking tag. What rules govern street parking in HOAs where no signs are posted prohibiting overnight parking, etc.?  The security company which patrols these streets is tagging cars with warning notes saying they are in violation of parking at any time unless a guest! Thanks, A.H., Valencia

Dear A.H.: DMV license plate tags or placards do not automatically qualify residents to park where they choose in the HOA. Normally, persons with mobility disabilities would be expected to use their driveways or garages and not park on the street. If you need parking accommodations, you would need to provide the HOA with written verification of your disability and explain why you need to park on the street (instead of in your driveway or garage). As to violations claimed by the security patrol, there would need to be a written rule or CC&R provision before there can be a violation. So, ask the security patrol company and/or the HOA’s management to point out the rule or CC&R provision they believe you are violating. Best, Kelly

Dear Kelly: Our community is in violation of Americans with Disability Act. California law says where there are 500 parking spaces 2% need to be designated as handicapped spaces. Our community has only 3 instead of the 11 required by law. Who do I contact to get enforcement of this law? I am severely disabled and need help. T.J., San Diego

Dear T.J.: Normally the ADA applies to “public accommodations,” which are not normally HOAs, so I am not sure if that law and its parking requirements would apply to your association. The law more likely to be applicable to parking for disabled persons in your HOA would be the state and federal Fair Housing laws, which require reasonable accommodations for documented or obvious disabilities. However, if a resident is disabled and needs relocation of their parking space to be nearer their home or the elevator, they should submit a written request to the HOA. The HOA might be able to relocate their parking space to help them with their mobility limitations. Best regards, Kelly

Dear Kelly: Does the definition of a “protected class” also include a person who has disabilities that is continually being aggravated by loud door slamming on the part of a new neighbor who is mentally ill? This problem has been continuing and ongoing, since the parents bought a neighboring unit for their mentally ill son to live alone in. The son has committed criminal acts on the property. I have repeatedly contacted his parents, our HOA president, and the property management firm, but there has been no resolution to my dilemma to date. I am a senior citizen; have a DMV disability placard for a neck injury that results in severe headaches; and am recovering from cancer. D.A., Newport Beach

Dear D.A.: Mental illness could qualify as a disability under Fair Housing laws, but the behavior you describe could be deemed to be a nuisance. If a person’s disability is disturbing or harming other residents, allowing that disturbance to continue could be an unreasonable accommodation and therefore not protected by Fair Housing laws. Residents, disabled or not, should not have to be afraid in their homes. Sincerely, Kelly

How hidden biases and inner voices shape the choices leaders make every day.

By Tony Daloisio Ph.D. for Psychology Today

Key points

• Leaders often mistake intuition or urgency for objectivity, leading to costly missteps.
• Cognitive shortcuts like recency bias and anchoring distort leadership judgment under pressure.
• Inner voices, scarcity, approval, control, and protection, quietly drive critical decisions.
• Naming internal voices, slowing choices, and inviting diverse perspectives improve outcomes.

What voices are you listening to in order to make critical decisions for your life and the organizations you lead?

A CEO client once told me about the time she pushed her company into a joint venture that looked irresistible. The pitch deck sparkled, the recent success of a similar deal was fresh in her mind, and her intuition told her to move quickly. Six months later, the partnership unraveled due to different cultures, incompatible goals, and millions in lost investment.

When I asked her what was happening in her mind at the time, she said, “I thought I was being objective, data-driven. But in hindsight, I was listening to the voice that said, Don’t miss out. Grab the opportunity before it’s gone.”

That voice, urgent, persuasive, and seemingly rational — was it the voice of data, or was it well-oiled intuition? Perhaps it was the voice of scarcity. And scarcity tendency drove a decision that cost dearly. In our coaching we uncovered that this voice of scarcity and don’t miss out was a deep rooted one with origins from her Dad that was a product of his upbringing.

The Illusion of Objectivity

Leaders often pride themselves on rationality. We like to believe that our decisions flow logically from facts, financial models, and strategic analyses. But the truth is more complex. Decisions are rarely made in a sterile, data-only space. They are filtered through two powerful forces:

1. External heuristics: mental shortcuts our brains use to make fast judgments, often at the cost of accuracy.
2. Internal voices: the narratives and reactive mindsets that live within us and shape how we perceive the world.

Together, they form a less visible operating system that drives our leadership choices.

The External World: Decision Heuristics

Psychologist Daniel Kahneman, in his Nobel Prize-winning research and his book Thinking, Fast and Slow (2011), explains that our brains run on two modes:

1. System 1: fast, intuitive, and automatic.
2. System 2: slow, deliberate, and effortful.

Leaders rely heavily on System 1 because the pace of business demands speed. These shortcuts seem to be based on experience in the marketplace, yet this approach exposes us to systematic errors, such as:

• Recency Effect: Overweighting the most recent information.
• Availability Heuristic: Giving undue importance to what comes easily to mind.
• Confirmation Bias: Seeking evidence that supports your prior beliefs, while ignoring data that contradicts them.
• Anchoring: Clinging to an initial piece of information (a price, an estimate) even when better data becomes available.

These shortcuts are not flaws in themselves, they evolved to help humans make rapid judgments. In a way, our brains want to move swiftly, but in the boardroom they can lead to costly missteps. These external biases on their own can raise the probability of faulty thinking, and when combined with the next set of factors, the inner world of misguided voices can make for a challenging landscape.

The Internal World: Voices of the Reactive Mindset

Equally powerful are the voices inside us. These are not just passing thoughts but ingrained narratives, often invisible, that whisper (or shout) as we weigh choices. In leadership development research, including The Leadership Circle Profile (Anderson & Adams, 2016), these voices are described as reactive tendencies. Four of the most common include:

• Scarcity Voice: “There isn’t enough. If I don’t act now, I’ll lose.”
• Approval-Seeking Voice: “What will others think? I need to please and be liked.”
• Control Voice: “I can’t trust others. I need to stay in charge and minimize risk.”
• Protective Voice: “Don’t take the chance. Play it safe so you won’t fail.”

These voices often present themselves as rational and prudent. Yet when unchecked, they distort judgment as much as any external bias.

When the External and Internal Interact

The real danger is when external heuristics and internal voices reinforce each other. Imagine a leader operating from scarcity. That mindset makes the availability heuristic louder; the first seemingly good option that comes to mind feels like the only option. Or consider an approval-seeking voice combining with confirmation bias, the leader only hears data that keeps their board of directors or boss happy.

This fusion of inner and outer distortion creates a powerful echo chamber, one that feels objective but is anything but.

Pathways to Better Decisions

The good news is that leaders can develop practices to interrupt these patterns. Here are three strategies that can help:

1. Pause and Name the Voice: When you feel the urge to decide quickly, ask: Which voice is speaking right now? Scarcity? Approval? Control? Naming the voice reduces its grip, and can counteract our strong affinity toward using intuition as the main guidance mechanism.
2. Slow the Process: Deliberately shift from System 1 to System 2. Use structured pauses, “pre-mortems” (imagining what could go wrong before acting), or simply sleep on a big decision.
3. Diversify Perspectives: Bring in others who see differently. Research shows that heterogeneous groups reduce bias and widen the range of considered options (Page, 2007).

Closing Reflection

Think back to the CEO and her failed joint venture. If she had paused and asked, “Is this my scarcity voice talking? Am I overweighting the last success because of recency bias?,” the decision may have looked different.

Inside the mind of every leader is a chorus of voices, some wise, some misleading. The next time you face a critical decision, ask yourself: What are the voices that are present in the boardroom of my mind, and what can I do to slow this down, verify assumptions, consider a broader range of options and invite trusted advisors into the process.

A low-priced barrier to entry for FHA borrowers ignores condos’ deteriorating asset quality from an affordability standpoint

By Ryan Kingsley for Scotsman Guide

Two national advocacy groups that support community housing initiatives are urging the Trump administration to extend Federal Housing Administration (FHA) insurance coverage for mortgages on condominium units approved by Fannie Mae and Freddie Mac.

During a Labor Day breakfast interview with the Washington Examiner, U.S. Treasury Secretary Scott Bessent suggested that the Trump administration “may declare a national housing emergency” as soon as this fall to address a chronic housing affordability crisis.

Meanwhile, Democratic senators have petitioned Bill Pulte, director of the Federal Housing Finance Agency, which regulates the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac, with policy suggestions they believe could lower housing costs and expand access to affordable housing.

In collaboration with the Community Home Lenders of America (CHLA), a trade group that works on behalf of mostly small and midsize mortgage lenders, the Community Associations Institute (CAI), an advocacy body supporting condo associations, homeowners associations (HOAs) and housing cooperatives, seeks to add an agenda item to any national housing emergency declaration that may be invoked.

“For millions of Americans, especially in high-cost markets, condominiums represent the most attainable path to homeownership,” the groups wrote in a joint statement published Wednesday, citing Zillow data indicating that condos in the 25 largest U.S. metros were 54% more affordable on average than single-family homes in 2024. The CAI and CHLA request FHA loan flexibility for condos eligible under the GSEs’ revised condo guidelines.

“Since condominiums are typically more affordable than freestanding homes, a simple but effective action to add to an emergency housing list would be to allow FHA to insure condos in projects approved by Fannie and Freddie — but not by FHA,” said Scott Olson, executive director of the CHLA, in the statement.

An emergency measure

Per the Foundation of Community Association Research, the market research arm of CAI, approximately 369,000 “community associations” housed roughly 77 million people across nearly 29 million units in 2024. “Community associations” includes condominiums, cooperatives and planned communities with HOAs.

The simplicity of changing the guidelines may be overstated though, says Orest Tomaselli, a condo compliance professional who has partnered with builders, developers, lenders, community leadership and government agencies on condo inspection projects for thousands of properties around the U.S.

“It would be a wonderful idea,” Tomaselli tells Scotsman Guide. “The only caveat would be it’s a very long road if FHA were to amend their guidelines.” Many disclosures and lending requirements required of the FHA are not required of Fannie Mae and Freddie Mac as quasi-private entities.

Take, for example, fair housing considerations baked into the National Housing Act of 1934 that established the Department of Housing and Urban Development (HUD) and the Office of Housing, more commonly known as the Federal Housing Administration, within HUD. The GSEs must obey federal and state anti-discrimination laws — but not in the same way.

“Those laws render thousands of condo associations around the country ineligible because the associations have bylaws for screening prospective tenants by their credit history or to perform criminal background checks,” Tomaselli explains. Those types of covenants have been used to reject applicants on the basis of matters independent of mortgage eligibility, which can run afoul of FHA fair lending guidelines, but not those of the GSEs.

“There are several provisions for legal documents that would be necessary,” he adds, across a range of lending conditions that exist because of distinct missions at the FHA and the GSEs. “It would be very difficult.”

Olson of CHLA tells Scotsman Guide that over the last few decades, the number of FHA-insured loans has declined from an average of roughly 100,000 annually to 10,000 annually. The FHA has very limited condo risk exposure as a percentage of its overall book as a result of the declining origination volumes.

“The proposal is aimed at addressing a significant reduction in the number and percentage of condos FHA has financed,” says Olson. “We are not suggesting permanent changes but instead an emergency action, narrow at that, in this very affordable sector.”

Mounting condo costs

The CAI and CHLA suggest condos provide a clear path to affordability for FHA borrowers, and the path to homeownership for first-time homebuyers through condos is well-traveled.

An Urban Insitute study published in 2022 indicates first-time homebuyers accounted for 60% of GSE-financed condo and co-op purchases in 2021, compared to 40% of single-family homes. However, condo mortgage lending has experienced a rough-and-tumble ride for the past four years following the 2021 collapse of the Champlain Towers South complex in Surfside, Fla., which killed 98 people.

Fannie Mae and Freddie Mac intensified scrutiny of individual complexes, eventually amending their guidelines to stop buying loans for condos in complexes where major repairs have been deferred or where condo associations have been ordered by local authorities to remedy unsafe conditions. A so-called “condo blacklist” was established for properties ineligible to receive conventional GSE mortgage financing.

These shifts pushed condo associations and HOAs to significantly increase monthly fees for existing owners and prospective buyers to satisfy new post-Surfside maintenance requirements, build reserves and cover spiking insurance costs. New regulations in Florida aimed at preventing a repeat of the Surfside collapse have introduced steep costs to cover additional inspections as well as new condo-owner association reserve fund requirements.

“Interestingly, GSE requirements on critical repairs and deferred maintenance are more rigid now than the FHA regulations for the same things,” Tomaselli notes.

In major condo markets in Florida and Texas, jacked-up fees have loaded downward pressure on condo prices, especially in contrast to single-family home prices near all-time highs. National condo prices declined annually in April 2025 for the first time in a decade, sliding 0.26%, according to Intercontinental Exchange data.

“CAI strongly supports reciprocity between the U.S. Department of Housing and Urban Development’s Federal Housing Administration condominium certification process and the government-sponsored enterprises, Fannie Mae and Freddie Mac,” said Dawn M. Bauman, chief executive officer at CAI, in Wednesday’s joint statement.

Sustaining affordable homeownership

“This proposal is more narrowly focused on more flexibility in the approvals and eligibility of individual condo projects for FHA loans in those projects,” says Olson. However, extending FHA lending guidelines for GSE-eligible condos as a path to affordable homeownership for FHA borrowers may be more nuanced, as aligning condo certification guidelines does not necessarily address a mismatch in FHA and GSE borrowers’ credit profiles.

FHA borrowers generally present as less creditworthy as a function of their credit score, less liquid as a function of lower downpayments, or both. Single-family home-price gains that have rendered condos “demonstrably more affordable,” according to Olson, belie the rising costs of ongoing condo homeownership and deteriorating asset quality in key condo markets.

Florida, California and Texas have some of the highest concentrations of condos in the U.S. and have experienced some of the largest increases in homeowners insurance costs in recent years. The cost of homeowners insurance — required for mortgage borrowers with federally backed home loans — rose to nearly 10% of average monthly mortgage payments in July.

Rising flexible costs of homeownership disproportionately impact less-liquid borrowers with lower downpayments. Affordability pressures have doubled for condo owners due to the surge of condo and HOA assessment fees. The asset quality of condos has thus deteriorated, as has owners’ ability to sustain condo homeownership.

Deteriorating asset quality has put downward pressure on prices at the same time condos have become more difficult to sell because of associated homeownership costs and stricter government lending guidelines. After rapid price acceleration during the pandemic, the supply of condos nationwide has far outpaced demand, rising to a four-year high in July and softening prices further, according to a recent report by Realtor.com.

“Denying FHA type borrowers the option of buying a much more affordable condo loan pushes them into more expensive site built homes financed with FHA,” Olson adds, highlighting the up-front cost savings of lower list prices. “It is hard to see how this is good from an FHA risk perspective.”

The CMCA Study Pathway Plan is a suggested eight-week roadmap to help candidates prepare for the CMCA exam with structure and confidence. It begins with a two-week Pre-Study Phase for orientation and self-assessment, followed by a six-week Active Study Phase focused on targeted review, practice, and reinforcement across all exam domains. Designed for candidates at all experience levels, the plan provides study strategies, resources, and tools to build knowledge and address gaps—requiring about 5–10 hours per week, with flexibility to adjust based on individual needs. The CMCA Study Pathway Plan can be found beginning on Page 20 of the updated CMCA Study Guide under: Section 3: Exam Preparation and Study Pathway.

USLI claims Liberty wrongly denied coverage for a California HOA

By Tez Romero For Insurance Business

A fight between two insurers over who should cover a California HOA in a dog bite lawsuit is now playing out in federal court, raising questions that could ripple across the insurance industry.

On Aug. 29, United States Liability Insurance Company (USLI) filed a complaint against Liberty Insurance Corporation in the Central District of California. At the heart of the case is whether Liberty must defend and reimburse the Palisades Homeowners Association #3 (HOA) after Ludovica “Lulu” Pietroiacovo was allegedly bitten by a pit bull owned by Adam and Amanda Gruen, residents in the HOA community. 

The story starts in July 2021, when Poppy Webster, on her own behalf and as guardian ad litem for Lulu Pietroiacovo and Valentina Pietroiacovo, along with Michael Pietroiacovo, filed a lawsuit in Los Angeles County Superior Court. The suit, titled Poppy Webster et al. v. Adam Gruen et al., names both the Gruens and the HOA as defendants. The underlying action alleges strict liability against the Gruens and negligence, negligent infliction of emotional distress, premises liability, and public/private nuisance against both the Gruens and the HOA. The trial is set for Sept. 2. 

USLI says it provided commercial liability coverage to the HOA, while Liberty issued a homeowners policy to the Gruens. The big question: Should Liberty step in and defend the HOA, or does that job fall to USLI? USLI argues that Liberty’s policy language covers “any person or organization legally responsible for animals owned by” the insureds – in this case, the HOA, since the incident involved a resident’s pet. 

The HOA’s rules, known as CC&Rs, also come into play. These rules state that owners, mortgagees, occupants, and all other persons acquiring any interest in the property are subject to the rights, easements, covenants, conditions, restrictions, and obligations set forth in the CC&Rs. Article VIII, Section 10 of the CC&Rs provides that no animals may be kept which result in an annoyance or are obnoxious to residents in the vicinity, and that any owner shall be absolutely liable to each and all remaining owners, their families, guests, and invitees, and to the association, for any and all damage to person or property caused by any pets brought upon or kept upon the units. 

But Liberty has pushed back. The company denied the HOA’s request for defense and indemnity, stating that the HOA was being sued not due to the dog bite incident itself, but because the HOA did not take appropriate action against the Gruens in response to prior incidents involving their dog. Liberty also claims the HOA does not meet the policy’s definition of an “insured,” so it’s off the hook. 

The back-and-forth didn’t stop there. The HOA kept trying to get Liberty to take responsibility, but Liberty stuck to its position. The most recent denial came in a letter dated Aug. 6, just weeks before the trial. 

Now, USLI is asking the court to declare that the HOA is covered under Liberty’s policy, that Liberty must defend and indemnify the HOA, and that USLI’s own policy only kicks in after Liberty’s is exhausted. USLI also wants Liberty to reimburse any amounts USLI has already paid or may pay in connection with the underlying action. 

For insurance professionals, this case is a real-world example of how policy language and HOA rules can collide, especially when multiple insurers are involved. It’s a reminder to check the fine print and understand how different policies interact – because when a claim hits, the answer isn’t always clear.

As of now, the court hasn’t made any findings on the merits of USLI’s claims or Liberty’s defenses. But with trial dates looming and both insurers holding their ground, the outcome could shape how similar disputes are handled in the future.

The rights of shareholders to transfer their shares vary from building to building. The answer lies in the co-op’s governing documents.

By Jill Terreri Ramos The New York Times Real Estate

Q: I live in a Housing Development Fund Corporation, or HDFC, co-op in New York City. Recently, an original shareholder added her adult daughter as a shareholder, and the daughter is a chronic nonpayer. The board doesn’t think she can afford the apartment, and would like the chance to financially vet her. After the daughter moved in, the original shareholder moved to a different HDFC co-op, but the shares were never transferred. Can we require that the shareholder certificate be revised to reflect the daughter’s sole ownership? And can the board financially vet her as a sole shareholder?

A: If the daughter has already been added to the lease, then the board cannot go back and vet her after the fact, unless there was some conditional agreement when she was added. What’s done is done.

Peter Massa, a partner at Fox Rothschild in New York who works with condominium and co-op boards, suggested checking the co-op’s governing documents, regulatory agreements and records for this unit. Was the daughter actually added to the lease? Look to see if there are transfer fees, and read the assignment provisions to see what the board’s review rights are.

If the daughter was never added to the lease, then she may be there illegally. It’s possible that shareholders in your building have a right to transfer their shares to a family member without board consent, but the board can likely prevent any transfer until the maintenance is paid.

Like other co-ops, the board in a Housing Development Fund Corporation co-op has a duty to manage the co-op’s finances in the interest of all shareholders. (There are more than 1,100 HDFC co-ops in New York City, and they have income and resale restrictions.) Almost all HDFC co-ops require owner occupancy, so the original shareholder could be in violation of this rule. But, generally, it’s not in the co-op’s interest to enforce this, since the daughter is a shareholder.

“You want to be able to have her on the hook,” said Darryl M. Vernon, a partner at Vernon & Ginsburg in New York. “She might be able to get her daughter to pay.”

If the daughter isn’t paying the maintenance, you can take action against her — either a nonpayment case or a chronic nonpayment case, depending on how many times she’s failed to pay. In a nonpayment case, the daughter can pay and stay in the apartment, but a chronic nonpayment case could lead to an eviction.

“It’s rare, but it can happen if it’s extreme,” Mr. Vernon said.