Are you in Nevada?

Ruling spells out limits on HOA superpriority liens

The Nevada Real Estate Division issued an opinion this week that a home-owners association’s superpriority lien is limited to no more than nine months of assessments.

The association’s lien does not include “costs of collecting” as defined by Nevada law, so the superpriority portion of the lien may not include such costs, the Real Estate Division said in the decision released Thursday.

“So basically what they are saying is HOA management and collection companies have been misleading their HOAs the last several years,” said Rutt Premsrirut, who represents investors. “They have been overcharging banks and investors hundreds of millions dollars on superpriority liens for their own benefit.”

Controversy over HOAs pursuing delinquent assessments centered around the practice of turning over debts to collection agencies and including those costs – which in some cases ran into thousands of dollars – in the lien placed against the property.

The advisory opinion clarifies what constitutes a “superpriority lien” and what is not part of the superpriority lien. It provides homeowners associations with a better understanding of the law in order to act in the best interest of members, Real Estate Division spokesman Teri Williams said.

Nevada law makes special provision for recovery of past-due assessments through establishment of a superpriority lien, which is superior to a residential unit’s first security lien.

By giving priority lien status, the law provides extraordinary protection of the HOA’s interest in collection of up to nine months of unpaid assessments. After evaluating each situation, a determination should be made concerning the best course of action, officials said.

“It may not be in the association’s best interest to routinely turn over unpaid assessment accounts to a collection agency since the association may ultimately be responsible for the costs of collecting,” said Gail Anderson, administrator for the Real Estate Division.

HOA management companies sued the state’s Financial Institutions Division after it came out with a declaratory order two years ago. The Nevada Supreme Court ruled FID didn’t have jurisdiction over laws in NRS Chapter 116, which govern homeowners associations. Now that the Real Estate Division has issued a decision, the FID should be able to enforce it, Premsrirut said.

“Bottom line is HOAs are really exposed by millions (of dollars), and it’s the collection companies’ fault for misleading them,” he said.

In the News

California – Chris Barna, 33, a former employee of Stockton-based M & C Association Management Services, was arrested last month for embezzling more than $950,000 from his employer, Diablo Grande’s homeowners association.  Barna embezzled 342 checks from April 2008 to May 2011, according to the federal indictment. Those included checks to M & C or its parent company, Dallas-based Associa, and from M & C to third parties, prosecutors said. He forged endorsements on certain checks and endorsed them as “deposit only,” prosecutors said. If convicted, Barna faces up to 30 years in federal prison and a $1 million fine for each count. Read the full story here.

Pennsylvania – Sinkholes continue to give the residents of one Ephrata Township development a sinking feeling because it remains unclear who is responsible to deal with them as they arise.  Connell O’Brien, representing the Charity Gardens Homeowners Association at the most recent meeting of the Ephrata Township Supervisors, raised questions about what, if anything, the township might do to compel the developer to take financial responsibility for the problem. In the process, however, they found the township may be somewhat limited in what solutions it can offer. Read more about their sinkhole dilemma here.

California – Moreno Valley City Manager Henry Garcia’s most recent city update states that code enforcement and police officers are addressing residents’ concerns about squatting. The report comes about two months after Robin Gilbert, president of the Celebrations Homeowners Association, urged the City Council to take action to stop squatters. Gilbert said that within the past few years, about 60 squatters, including some identified by police as gang members and prostitutes, moved in his east side neighborhood. They took over foreclosures as well as vacant and occupied houses, he said. Do you have squatters?  Read the full story here.

Nevada – One homeowner writes, “Our HOA streets are city streets, and for years we have been following the governing documents regarding street parking.  Now, we have some people who want to bust the HOA and are insisting that since the streets are city streets we cannot enforce our rules of no-street parking. We have for years enforced these policies.  Our CC&Rs direct homeowners not to park on the street. There are exceptions for visitors of 14 days or less, and owners who are cleaning a recreational vehicle or boat. Our architectural standards states that each residence must have three parking spaces and two must be in a two-car garage. For 18 years we have enforced this. What is your view of this problem? See the answer to the question here.

NBC-CAM News

Beginning January 1, 2013, the CMCA computer-based examination will be delivered in partnership with Pearson VUE, a leading provider of computer-based licensure, certification and assessment examinations around the world.  The transition of CMCA test delivery to Pearson VUE offers CMCA candidates:

  • A robust domestic network of state of the art testing centers
  • An extensive network of international testing facilities
  • An enhanced level of test security
  • An excellent level of candidate service

The move to test delivery through Bloomington, MN-based Pearson VUE will be accompanied by a shift to a fully “on demand” test delivery model.  In place of the current CMCA model which requires candidates to select and test during a fixed three-month testing window, after January 1 candidates will have one year from the date their application is approved to sit for the CMCA examination and may test at any time within that one year period.  The CMCA examination will be offered on an on-going basis at Pearson VUE testing facilities.

Through a partnership with Pearson VUE NBC-CAM is pleased to offer CMCA candidates greatly increased flexibility in scheduling the CMCA examination, access to a network of secure, world class testing facilities, within the United States and abroad, and a strong commitment to timely, responsive candidate service.

Do you use Quickbooks?

You’re likely familiar with the Apple App Store, Google Play, and the Windows Store, but what about the Intuit App Center?

Probably not on your radar. But maybe it should be. There you’ll find nearly 50 apps that work with QuickBooks, and more than 25 that work with QuickBooks Online.

Here are five of them to check out because they integrate with the popular business accounting software to offer more features and functions. Best of all, they’re free to try for 30 days.

BodeTree

BodeTree sits on top of Quickbooks and helps people who are freaked out by numbers, ratios, and formulas by giving them hard facts in a light, visual way. It gives you a current estimated valuation of your business, one-click reports, and an interactive optimization tool that lets you compare your company’s performance to the competition, test scenarios to see how various metrics impact your company’s value, and set specific targets to help you reach your goals. Cost: $49.95 a month or $495 a year.

Mavenlink

This collaboration app keeps project and accounting teams on the same page and integrates with both QuickBooks Desktop and QuickBooks Online. It lets you work on projects with others; share files; track budgets, time, and expenses; and send financial information to QuickBooks. Mavenlink also integrates with Google Apps so you can sync deadlines with Google Calendar, take care of “to-dos” in Google Tasks, and search and embed Google Docs. You can choose to receive notifications about events, messages, and comments in real-time or bundled in a once-a-day email. Cost: $39 a month.

Method CRM

This customer relationship management app lets you create Web forms to help you get leads from your site as well as create invoices, payments, and estimates, and sync them all with QuickBooks Online. You can also use Method to build self-service portals for customers–a “My Account” area on your website–where they can ask questions, see past transactions, make payments, and print existing invoices. Method also lets sales people share leads with each other and includes analytics that identify your best customers and staff, and the ones need more of your attention. Cost: Either $25 or $40 a month per user.

ProOnGo Expense

ProOnGo Expense lets you track, approve or deny employee expenses. It syncs with your QuickBooks credit card registers so that you and your employees can edit and categorize credit card transactions from mobile devices running iOS, Android, or BlackBerry. First you activate online banking in QuickBooks, which pulls credit card transactions from your bank. QuickBooks then pushes those transactions out to ProOnGo. You can use your mobile device to edit and categorize the expenses, which sync back to QuickBooks. It also records timesheet info and mileage data, and auto-extracts information from receipts snapped with a smartphone camera. Cost: Plans start at $15 a month for one user and go up to $290 a month for up to 100 users.

SOS Inventory

SOS Inventory offers serious inventory, order management, and manufacturing features and is designed specifically to integrate with QuickBooks Online, which on its own doesn’t include sales orders. SOS Inventory lets you create sales orders, shipments, and invoices. It also lets you manage inventory in multiple locations, track items by serial number and cost history, track multiple stages of work-in-progress, and create pick tickets and packing slips. Cost: Plans start at $25 a month and go up to $200 a month.

In the News…

CondoHOALaw App

A new app has been created be the law firm of Katzman Garfinkel & Berger. The App currently contains the statutes for the 14 U.S. states that have the largest populations of community association residents: Arizona, California, Connecticut, Florida, Georgia, Illinois, Nevada, New Jersey, New York, North Carolina, South Carolina, Texas, Virginia and Washington DC.  Sun Sentinel (Florida)

 

$50 million lawsuit against Loudoun board, homeowners associations

Telecommunications provider OpenBand filed a $50 million lawsuit Tuesday against more than a dozen defendants in Loudoun, alleging that county supervisors acted beyond their authority in their efforts to negotiate an agreement between the Dulles-based company and the communities it serves.  The lawsuit added to the years-long, litigious drama involving OpenBand, its customers and the Board of Supervisors. Defendants include the board, two of its members and two homeowners associations.  Washington Post (Maryland)

 

Campaign signs in CICs are a private matter, not a free-speech issue
Many common-interest communities prohibit residents from displaying campaign signs and other messages on their lawns. Residents such as Dianne Black of St. Paul, Minn., say the rules violate the right to free speech, but a spokesman from the Minnesota Secretary of State’s Office says that after residents sign papers related to a CIC’s regulations, it becomes a private matter. Such restrictions are meant to preserve property values in CICs and to help keep the peace among neighbors, a real estate lawyer says. Pioneer Press (St. Paul, Minn.)

 

New lending rules will affect condo buyers, HOAs
Fannie Mae this week will change the lending rules for home buyers looking for a condo or a property that falls under a homeowners association. The mortgage financier’s director of media and external relations says condo buyers will have to fill out a questionnaire about the homeowners association’s financials and reserves when putting less than 20% down; previously such questionnaires were required when putting less than 10% down. The new rules also will require the lender to review HOAs’ budgets. Chicago Tribune (free registration)

National Statistics

CAI just released the updated community association industry statistics:

National Statistics

Estimated number of U.S. association-governed communities and individual housing units and residents within those communities:

Year

Communities

Housing Units

Residents

1970

10,000

701,000

2.1 million

1980

36,000

3.6 million

9.6 million

1990

130,000

11.6 million

29.6 million

2000

222,500

17.8 million

45.2 million

2002

240,000

19.2 million

48.0 million

2004

260,000

20.8 million

51.8 million

2006

286,000

23.1 million

57.0 million

2008

305,800

23.8 million

59.5 million

2010

311,600

24.8 million

62.0 million

2011

317.200

25.4 million

62.7 million

2012

323,600

25.9 million

63.4 million

Association-governed communities include homeowners associations, condominiums, cooperatives and other planned communities. Homeowners associations and other planned communities account for 50-52 percent of the totals above, condominiums for 45-48 percent and cooperatives for 2-3 percent. These are estimates based on U.S. Census publications, American Housing Survey (AHS), IRS Statistics of Income Reports, California and Florida state-specific information, related association industry trade groups and collaboration with industry professionals.

  • Estimated number of community association managers: 60,000
  • Estimated number of community association management companies: 10,000
  • CAI estimates that 15-25 percent of common-interest communities are self-managed, meaning they do not employ an onsite manager or use the services of a association management company. The percentage of self-managed associations is highest in older urban areas where many apartment buildings have been converted to condominiums or cooperatives.

In 2012, association boards supervised the collection of close to $40 billion in annual assessments and maintained investment accounts of more than $35 billion for the long-term maintenance and replacement of commonly held property.

NBC-CAM Board of Commissioners meeting

NBC-CAM is currently having our annual in-person October Board of Commissioners meeting in Alexandria, VA.  Twice a year our nine person board gathers to discuss issues facing NBC-CAM and the industry of community association management.  Do you have questions, comments or concerns?  Leave your inquiries in the comments and we will pass them along to our Board.

Talking Politics at Work: What Not to Do

By Rachel Elson

Speech isn’t actually free in the workplace–and the wrong words can be costly indeed. Follow these rules to keep your company out of trouble.

By the time late October rolls around, you may find that wherever you go–the elevator, the local gym, a café, the kitchen in your office–you’re surrounded by deep discussions around the finer points of Electoral College math, candidate caught-on-video gotchas, federal budget strategies, and any number of other 2012 presidential campaign minutiae.

That’s great for civic engagement–but if you’re the boss, it might be terrible for you.

Political conversations can be delicate wherever they take place (say, Thanksgiving dinner with the in-laws). But in your office, such discussions can be both toxic to the culture and financially damaging to you as an employer.

“No good comes from it,” says Alec Beck, a labor and employment attorney at Ford Harrison in Minneapolis. “All it does is make people mad.”

Situations in which one worker offends another with a political message tend to create the biggest HR headaches, Beck says. But it’s employers’ political actions–whether they come in the form of workplace prohibitions or campaign-related requirements–that are most likely to generate costly legal battles, he explains.

Rule No. 1: There’s No Free Speech at Work

Part of the problem comes when employees assume that they have a right to free speech at work.

They are wrong. The truth is that, outside the public sector, the First Amendment doesn’t really protect employees’ speech in the workplace, attorneys say. “Federal law is straightforward: If you’re a private-sector employer, there are not a lot of restrictions on what you can and can’t do” to restrict speech, Beck says.

But telling employees just what not to say can be problematic as well.

Rule No. 2: Be Careful What You Ban

So can you just tell your workers not to talk politics at all? It’s not quite that simple.

The trouble is that political conversations (especially in their most personal and most inflammatory incarnations) can easily veer into issues of race, gender, age, or religion–the so-called protected classes, spelled out in the federal Civil Rights Act’s Title VII. And you don’t want your well-intentioned policy to appear to be trampling on the rights of members of any of those classes.

For instance, a Memphis lawsuit emerged recently when a worker thought her boss’s anti-Obama remarks were racially motivated.

Rule No. 3: Know Your Local Law

Moreover, political speech and behavior are covered by an uneven, overlapping patchwork of rules.

In addition to the groups protected by Title VII, you may need to worry about labor rules. Is a “Teamsters for Obama” T-shirt a political statement, for instance, or a pro-union statement? The answer probably depends on who’s reading it. But if you try to ban it, you could find yourself going toe-to-toe with the pro-union National Labor Relations Board.

Some state laws also create additional protected groups, or additional restrictions on politics-related behavior. In some states, notes Beck, employers can’t call mandatory meetings or rallies to support a candidate. He says: “In many states, I [as an employer] can’t discriminate against employees who support a candidate I don’t like.”

California, meanwhile, prohibits employers from limiting an employee’s off-duty political activity–even a run for office, says Chas Rampenthal, an Inc. contributor and general counsel at LegalZoom. Bottom line: If you’re thinking of mixing politics and the workplace, you need to have a lawyer on speed dial.

Rule No. 4: Be Consistent

Legal experts suggest that companies offer clear policies–and then enforce them evenhandedly.

An electronic-communications policy could bar employees from using company equipment for personal use. That might be enough to restrict them from following a candidate’s Facebook page, for instance.

Rampenthal also suggests that employers have a broadly enforced nonsolicitation policy, barring workers from collecting money for any cause–whether a political campaign or a charity walkathon.

Beck suggests something different. “What I recommend is that employers have a policy that’s very clear: Any political discussions in the workplace cannot interfere with an employee’s job duties, co-workers’ job duties, or the employer’s business,” he says.

“Then actually enforce it, which is often the hard part.”

Rachel Elson is managing editor at Inc.com. Her work has appeared in Newsweek.com, Dance and Pointe magazines, The Washington Post, Salon.com, People.com, The New York Post and other publications. @rachel_elson

Are You A Bit Of A Loser?

Are You A Bit Of A Loser? Don’t Worry, You’re Probably Really Creative

A new study explores the connection between rejection and creativity and could provide perspective for companies looking to hire creative people.

Are you a recovering high school geek who still can’t get the girl? Are you always the last person picked for your company’s softball team? When you watched Office Space, did you feel a special kinship to the stapler-obsessed Milton Waddams? If you answered yes to any of these questions, do not despair. Researchers at Johns Hopkins and Cornell have recently found that the socially rejected might also be society’s most creatively powerful people.

The study, which is forthcoming in the Journal of Experimental Psychology, is called “Outside Advantage: Can Social Rejection Fuel Creative Thought?” It found that people who already have a strong “self-concept”–i.e. are independently minded–become creatively fecund in the face of rejection. “We were inspired by the stories of highly creative individuals like Steve Jobs and Lady Gaga,” says the study’s lead author, Hopkins professor Sharon Kim. “And we wanted to find a silver lining in all the popular press about bullying. There are benefits to being different.”

The study consisted of 200 Cornell students and set out to identify the relationship between the strength of an individual’s self-concept and their level of creativity.  Continue reading this article to assess your “need for uniqueness.”

It’s no secret that community association managers are creative problem solvers.  This article will illustrate how to create a professional environment that facilitates independent and creative thought.  How does your management company foster a creative environment?  Let us know in the comments section.

In the News

Subdivisions amp up leasing restrictions
Subdivisions in Madison, Miss., are making it harder for homes to become rental properties with new restrictions that limit the length of a lease and who homeowners can rent to. “That’s the way an association can protect its members and what covenants are all about,” says lawyer Mike MacInnis. “You have new homeowners coming in who don’t want to buy a $250,000 house in a neighborhood that doesn’t have restrictions.” The Clarion-Ledger (Mississippi)

 

Crackdown on septic leaks that feed algae

Kathy Bozony, a natural resource specialist, has been sampling algae this summer around Diamond Point Beach and a nearby stream, and some samples have indicated the algae growth there is being caused by organic pollution from septic system outflows or leaks. Bozony has spoken to owners who don’t know what type of septic system they have or where it’s located on their property. Bozony has been partnering with the Dunham’s Bay Homeowners Association to identify homes in the Dunham’s Bay area with faulty systems. Her hope is the association will put pressure on homeowners to make improvements and prevent further pollution. PostStar (New York)

Bankruptcy protection for HOA

Four years after buying Ocean Breeze Park, homeowners are seeking bankruptcy protection to preserve the 45-acre, riverfront, mobile-home park that’s served retirees for more than seven decades. The historic park was founded in 1938 by Harry Hoke and incorporated in 1960. Hoke and his heirs owned the park until 2008, when they put it up for sale. Residents united to buy the property. But poor timing and a series of bad breaks sent their co-op association into a tailspin. “The board is working hard to make all of this work out,” said Harry Bartlett, president of the Ocean Breeze Park Homeowners’ Association. “I’m very positive things will work out in the end.” TCPalm (Florida)

 

HOA accused of violating Fair Housing Act

A Gibsonton homeowners association and its former property manager are charged with violating the federal Fair Housing Act after they threatened to evict a family of eight because there were too many people living in the house, according to the U.S. Department of Housing and Urban Development.  Tampa Bay Times (Florida)