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Twin Lakes HOA: Killing for Skittles

HOA Retreat at Twin Lakes, Florida, is about to be owned. And by owned, I mean sued and found responsible for the killing of 17 year old Trayvon Martin. Every owner in the Retreat at Twin Lakes HOA should get ready to open their pocketbook.

Briefly, for those not familiar with the case – HOA Block Watch captain George Zimmerman shot to death Trayvon while the boy was returning to his residence after purchasing Skittles and an ice tea. George Zimmerman claims self defense, even though he chased the boy after the police told him not to, and the deadliest thing Trayvon had on him was 2.17oz of tasty rainbow.

Here’s why the HOA is about to pay out a whole lot of cash:

  1. Mr. Zimmerman was performing an activity authorized and backed by the HOA– performing the duties of Block Watch within the neighbourhood. An HOA newsletter confirms this role in the community.
  2. The HOA, in backing Mr. Zimmerman as a Captain, authenticates a person who had been charged in 2005 for battery of a police offer, and had previously a restraining order filed against him.
  3. Mr. Zimmerman failed to conform to any of the neighbourhood watch mandated training. Block watch clearly indicates that watch members are there to observe only, and never confront suspicious persons. They are “eyes and ears only”.
  4. Mr. Zimmerman was recorded actively chasing Trayvon while on the phone with 911 (audio of call). The 911 operator also indicated that this action was unnecessary. This was definitely an act to confront Trayvon.
  5. While carrying a gun is not illegal in this situation, neighbourhood watch members are not permitted to carry firearms.
  6. Mr. Zimmerman made 46 calls to 911 since the beginning of 2011 to report disturbances, break-ins, windows left open and other incidents. Not only is it reported that he was out on his rounds for the watch, it is reasonable to assume as this encounter also started with a 911 to report a suspicious person, he was operating as a neighbourhood watch member as he was the 46 other times.

It’s a pretty simple line to draw the HOA as responsible for failing to maintain the required screening and standards required of their volunteers. Unlike a criminal prosecution, a civil case needs significantly less burden of proof or certainty. It is well documented that a person found innocent of a crime may still face significant monetary loss in a civil court. In this case it won’t be a person found liable in civil court, but the HOA.

I have said before that the Block Watch program is a phenomenal program, and every condominium and HOA that faces a crime issue should operate one. The Block Watch program has operated for over 50 years with astounding success. I still stand by the success.

The issue is an HOA must take the steps required. A formal relationship must be made between the community and local law enforcement. All members of the neighborhood watch must attend training – both at the beginning and ongoing. The HOA needs to create, back, and act on the mission statement: “eyes and ears only” – and repeat that message to the volunteers and the community constantly.

Importantly, the HOA needs to have a firm, written, commitment from each volunteer that they will abide by all the recommendations and requirements of both the national neighborhood watch program and local police authority.

And seriously, if this event makes you afraid to have a neighborhood watch – don’t be. Just stick to the program and enforce a role of observation only. That approach works most awesomely. A neighborhood watch that observes only, and doesn’t carry weapons, is both safe to themselves, safe to the community, and safe to 17 year olds coming home with a bit of ice tea and candy.

District Energy Advantages and Risks for Condominiums: Research Paper

Phenomenal full envelope failures in the last few years of new development – including Leduc, Fort McMurray, and Calgary all indicate that the industry needs to evolve both the development process, and likely the costs and processes involved in creating multi-unit housing.

For existing buildings, under-funded reserve funds and higher than expected maintenance costs are forcing corporations to find innovative methods (including borrowing against future use) to avoid fiscal hardship or bankruptcy on current owners.

District Energy (the supply of heating or cooling from a central source usually though piped water or steam, also known as District Heating or Teleheating), where available, may be a powerful and sustainable solution for condominiums – both at the development phase and at the maintenance level. Based on experience from existing implementations in Canada, the US and Europe, District Energy may lower development costs, maintenance costs, and reserve fund contributions.

247Condo has released a research paper (with additional focus on the ENMAX implementation in Calgary, Alberta, Canada) that outlines the advantages and risks of tying your condominium to a District Energy solution.

Condominium Board Fines Resident $4500+ for Flowers

I don’t know if Kimberly Bois, of the Portsmouth’s Atlantic Pointe condominiums, New Hampshire, is the nefarious evil doer her condominium board makes her out to be. I mean, if the board doesn’t stop her green thumb, perennial planting, capers – who knows what seeds of chaos and tendrils of civil unrest she may cause to root in her neighbourhood.

Seriously though, the specific perennials that she’s planted (daisies, irises, lavender, hydrangeas and tulips) may be counter to the by-laws and she may very well have to dig them up. I indicate specific perennials, because this sales video shows numerous colourful swaths of flowers when tooling through the condominium complex. There definitely are flowers there.

What I very much object to, and I think Kimberly has a leg to stand on, is the overbearing and unreasonable process of fining that is going on. On 24 October 2011 the board started fining $25/day, and has since increased it to $50/day.

That is completely unreasonable, and a great example of a condominium board – being judge, jury and executioner – attempting to financially bludgeon an owner into cowed submission. I very much think that Ms. Bois should be legally refuting all demands from the board, and use that in front of every judge as a means to be excluded from any judgement against her.

Boards have a duty and a responsibility to act reasonable, especially given the fact they act as the sole body to enforce and punish for condominium by-law infractions. A board failing to respect the powers they have been granted (and that’s not the power to cudgel owners) needs to be rapped on the wrist, turned around, and sent on their merry way.

It’s especially important, as many boards are filled with “regular joes” who, though have the best intentions, fail to act outside of personal emotion and vendetta. There are significantly too many complaints about the mismanagement of board power. Colorado Division of Real Estate recently found:

What we discovered was that the complaints we received primarily involved the board of director’s failure to follow corporate governance rules and procedures of the HOA; the transparency of the board of directors, particularly as it related to the finances of the HOA; and harassment and bullying of homeowners by the board of directors and management company by arbitrary fining, preclusion from providing input into the associations’ affairs, and verbal harassment.

Ahh, that last point is specifically applicable to this situation. The inordinate and unreasonableness of the fine Ms. Bios has received shows it.

The board needs to get their feelings and their actions pruned.

Crime Not Related To Living In Condominiums

When doing research for this blog, and on condominium in general, I often come across news stories linking violence and condominiums:  Inside a condominium unit they found a dead man, breaking into a unit at Arbor Woods Condominium Homes … He fatally shot his father-in-law, and The victim … was found in the charred remains of his condominium.

Almost daily, news feeds I subscribe to have at least one (the above three were taken from a single day’s feed) violent condominium story. Over time it makes me wonder if there is a higher or significant level of crime related to multi-unit housing compared to detached or low density.

Statistics on crime rates in/related to condominiums are next to non-existent. Instead I’ve relied upon some studies that look at crime and population density, along with other factors. Indeed, it’s hard to isolate the concept of crime in condominium because high-density can be, and exists, in almost every strata of society, and every location.

Starting with a Texas study by Jianling Li and Jack Rainwater – using land mapping tools they were able to demonstrate that:

areas dominated with single-family housing are not all associated with lower crime rates … Multifamily buildings are concentrated in the west and north of the city, but crime rates in those areas are relatively lower

the reason for these findings were

highest crime rates were those with the highest percentage of households in poverty and the highest percentage of population who did not have a high school diploma. The two neighborhoods also had the highest percentage of large-size households. In addition, male unemployment rates in the two neighborhoods were greater than 6.6% — topping the index in other beats. In comparison, the areas with lower poverty and unemployment rates, such as those areas in the north, generally have lower crime rates.

The recognition that crime isn’t based on housing density (but on demographic and socio-economic traits) is reinforced by research from Statistics Canada. Their findings indicate:

The population of high-crime neighborhoods has a larger proportion of single people, people living alone, young males aged 15 to 24, Aboriginals, people who moved in the year preceding the census and lone-parent families.

Interesting, Statistics Canada indicates that the statistics don’t indicate that these types of people are more prone to perform crime, but:

The analyses presented here do not establish causal links between these residents and the crime level in their neighbourhood. However, many studies have found links between these demographic characteristics and higher rates of victimization

This says that crime exists where people who tend to be more easily victimized reside. Significantly, they also indicate that levels of neighbourhood wealth are a primary indicators of crime:

A larger proportion of the population of high-crime neighbourhoods spend more than 30% of their income on shelter, and a smaller number of owners occupy their dwelling, regardless of whether these neighbourhoods are located near city centres or are on the periphery of the municipality

Finally, backing up the idea that crime isn’t related to density, the Metropolitan Policy Program at Brookings released a paper that indicates the gap between city (where I assume higher housing density) and suburban violent crime rates declined in nearly 2/3 of metro areas, and that city and suburban crime rates rose or fell together.

All this leads me to realize that it’s not the nature of condominium or high-density housing to promote or encourage crime. It’s the characteristics of the citizens – education, wealth, and ease of victimization – that births higher crime rates.

Indeed, if there was a single rule of thumb about condominiums and crime, the more expensive the housing in comparison to other homes in the municipality, the safer you will generally be. Single detached housing or condominium.

More Fallout to Toronto’s Falling Glass: $20 Million Lawsuit

In 2010 and 2011 two recently built condominium – the Murano Towers (731 units) and Festival Tower (378 units) literally rained down glass on the ground below. 13 panes of glass balcony railing released and fell.

Since then the glass from all those balcony units (somewhere short of 1000 units) has been removed and the owners forbidden from utilizing the space.

Yesterday the owners launched a $20 million dollar class action lawsuit. That’s about $18,000 per unit – to cover loss of use and to have the issue fixed in a timely manner.

Developer Accepts Full and Utter Responsibility for Catastrophic Failure

I have written many times that the final and full responsibility for critical failures of a condominium are the sole responsibility of the developer. End of story.

So I found it surprizing refreshing that Kevyn Frederick, developer for the failed Leduc, Alberta, condominium development Bellavera Green, has stated:

As CEO of Bellavera Green, I take full and utter responsibility. I felt that to speak to anything involving anybody else’s responsibility would be to minimize the impact that I’ve caused upon the people of Bellavera Green. So I had no other choice but to do the right thing and speak to only my failures.

The failure of the Bellavera Green has most likely forced significant and likely in some cases complete, fiscal ruin for the 150 people forced out of the development. That doesn’t include unpaid bills to subcontractors and other stakeholders.

People are still going to be madly angry at Mr. Frederick – and rightfully so. There is significant pain and hardship now, and lasting well into the future, from such an absolute failure of the development.

But there is an upside.

A developer that takes no responsibility acts as a roadblock to an investigation. We’ve seen bad developers destroy documents, launch counter suits, attack people’s reputations and lives, in all – do everything in their power to cloud the issue and slow down an investigative review. All at the cost of hurting even more innocent people.

Having accepted responsibility (which I am still stunned, and think is an amazing step forward), it may open up Mr. Frederick to cooperate with an investigation.

Specifically, with the developer on side, an investigation can get a direct understanding on how the “development dream” changed into a “development disaster.” A personal reconstruction makes it significantly easier for an investigation to isolate key failures or holes in current legislation and best practices that could be rectified.

With Mr. Frederick, given his willingness (the acceptance of guilt is a positive sign), we may have a very unique opportunity to improve the process of condominium development and protect future buyers a little better.

For I’m sure – and as he has indicated under questioning – he and his company are broke. So if there is no fiscal compensation, some time and assistance would be a start. Call it a form of truth and reconciliation.

HOA vs. Kangaroo – HOA Avoids Bad Press and Possible Suit

The Estates of Legends Ranch, Texas, HOA has jumped back from their decision to oust a kangaroo from the association. The six month old kangaroo named Mike resides with Jeni and Nick Dreis, and their daughter Kayla.

When the HOA found out the kangaroo resided with the family, they issued a demand letter for the animal’s removal. Kangaroos, it seems, are not deemed household animals. As such, they’re not allowed in the HOA.

The HOA relented though, and has allowed the animal to exist at the Dreis residence till the Texas Downs, a special needs education and enrichment facility utilizing a wildlife park and organic farm, is completed (estimated mid 2012).

Honestly, the HOA didn’t have much of a choice. The Texas Downs is founded by the Dreis, and Kayla has Down syndrome. The kangaroo is expected to be transferred to the wildlife park when it becomes habitable for the creature, and in the meantime acts as a companion pet for Kayla.

A simple search on “HOA Kangaroo Dreis” will return 149,000 results – and you can read the massive amount of attention this issue has received. The utter cuteness overload of Kayla and the kangaroo would have been a public relations nightmare if the HOA insisted on enforcing the bylaws (stating the kangaroo isn’t a household pet). The Dreis could have also filed a civil rights suit, as the kangaroo may fit under the Americans with Disabilities Act – which defines a service animal as (and the underline is theirs):

The ADA defines a service animal as any guide dog, signal dog, or other animal individually trained to provide assistance to an individual with a disability. If they meet this definition, animals are considered service animals under the ADA regardless of whether they have been licensed or certified by a state or local government.

I’m personally ecstatic that the HOA has relented on its booting of the kangaroo, and has accepted its bouncy lifestyle until it transfers to the wildlife park. Beyond the public relations issue, it’s OK (really, more than OK) for HOAs to realize that the concept of community is important in an association. That home is more than a house people huddle in, away from their neighbours. It’s a place to form relationships, friendships, and show some decent basic humanity to your fellow neighbours.

The Estates of Legends Ranch has put a great foot forward with their support of the kangaroo. They are to be commended.

Jesus Discovered Under Condominium Patio

Does star power increase the value of a condominium – if so some lucky owners have hit the money manna jackpot!

James D. Tabor and Simcha Jacobovici have claimed that inscriptions on ossuaries (boxes containing the remains of the dead), buried in tombs under a modern condominium complex (and yes, one is under a patio) in Jerusalem indicate the remains are of Jesus.

This is definitely one way to resurrect a flailing condominium market.

Scary Centralized Power of a Board President

I have often said that mixing the role of board President and manager is a dangerous practice. This co-mingling of roles and powers has led to corrupt and illegal acts. It just becomes too easy, and seemingly too tempting, to keep one’s hands out of the cookie jars.

So reading this article, I immediately see many of the bad practices that I warn of all wrapped up in one package. While there is no indication that Sigrid Ingold has, or will ever, do anything immoral or illegal, her operation of the condominium highlights all sorts of actions which raise my “condominium spidey sense.”

Ms. Ingold has been president of her condominium association, the Thorndale Beach North of Chicago,  for 19 years, and for the past 5 as property manager as well (paid $43,000/year for a part-time job).

There are two things here which I become concerned about. First, the role of president should never remain in the hands of a single person for more than a few years. I like American Statesman Richard Henry Lee’s description that an office without term limits creates a:

most highly and dangerously oligarchic

and I particularly enjoy historian Mercy Otis Warren warning of missing US Congressional term limits:

[without] provision for rotation, nor anything to prevent the perpetuity of office in the same hands for life; which by a little well timed bribery, will probably be done….

I feel such warnings are also appropriate to consider for condominium boards.

Second, by being president, she has significant influence on the awarding of condominium contracts. In this case, the board – with her as president – awarded a well-paying part-time management job to her for the last 5 years. And much like the separation of congress, the judiciary, and the president being a great idea to reduce abuse and corruption in US politics – the separation of board and management company is something I find serves a like role in condominiums. If not in operation, then transparency, the separation of roles creates checks and balances on the use of condominium funds.

Speaking of which, even the board of this condominium is being denied the review of bank statements and invoices. Further, the condominium has had one audit in its 44 years history, and that was 15 years ago.

I would like to point out that the Illinois Condominium Property Act 18.5.d.1.ii shall maintain the following records for examination to any unit owner in the condominium:

 Detailed and accurate records in chronological order of the receipts and expenditures affecting the common areas, specifying and itemizing the maintenance and repair expenses of the common areas and any other expenses incurred, and copies of all contracts, leases, or other agreements entered into by the master association, shall be maintained.

The fact that the board is being denied review of the bank statements appears to be in direct contradiction to the state act. Given that legislation, refusal of sharing financial documents – with duly elected board members – raises significant and real concern over the operation of the condominium in a proper manner. This isn’t a concern for just the Thorndale Beach North condominium – but any condominium which refuses to share fiscal details.

Combined, the length of Ms. Ingold’s presidency, her role as manager, and the lack of fiscal disclosure, makes for significant concern over the financial operation and wellbeing of the condominium. It appears that all knowledge of the finances is held, and has been held for a long time, by one single person, with no public audit or disclosure on the funds.

As indicated by Robin Morgan:

Knowledge is power. Information is power. The secreting or hoarding of knowledge or information may be an act of tyranny camouflaged as humility.

I personally would never buy into the Thorndale Beach North condominium corporation because of the significant concern I have over such centralization of power in a single person.

I highly encourage reading the original article. There is also a dissident owner blog site with tasty details here. Combined, there are lots of other concerns that I haven’t touched on here, and the article and blog makes great, if not scary, reading about a condominium ruled by a single individual.

Catastrophic Condo Failure Is Not Caveat Emptor – Buyer Beware

The Bellavera Green Condo, Leduc Alberta, has suffered a massive, catastrophic, failure requiring all 150 of the residents (85 units) to vacate the premises. The reasons: code-failing fire alarm system, missing or damaged firewalls, condemned exterior staircase, non-sustained heat and electric, a second phase abandoned – unsafe and unsecured, and inability for emergency vehicles to access the building.

It is unclear who has title to the units (it’s not clear if the developer handed over title to occupied units), who to go after for costs, and the developer – Kevyn Frederick – has conveniently disappeared. As with catastrophic failures of this type, residents who have mortgages will remain responsible for their payments even if they can never return to their units, or have other costs until such time they could reside again at the Bellavera Green.

In all, 150 people (and those that rely upon them) have suffered grievous fiscal harm due to the mismanagement and greed of yet another developer. And I lay the blame clearly and solely at the foot of the developer and none others. Developers have full and final control over the building and plans. It is their choice to follow legislation, or to cut corners and ignore building codes. The rest of the infrastructure – including building inspectors – is just there to try to catch errors. But these errors are not there because they haven’t been caught; they are there at the failure of the developer. Trying to pass responsibility off on inspectors is a lot like saying “you didn’t catch me, so I’m innocent.”

That’s why fools who imply that the Bellavera Green owners who put down money and purchased mortgages have a responsibility to the failure of the condominium because of “Caveat Emptor” – or “if you were stupid enough to buy into this building then too bad for you” are pathetic and dim-witted.

The whole issue of Caveat Emptor, for a situation like this, was thrown out with Supreme Court of Canada judgement of Winnipeg Condominium Corporation No. 36 v. Bird Construction Co [1995] 1 S.V.R. 85, January 26 1995 (further discussion here):

First, it is reasonably foreseeable to contractors that, if they design or construct a building negligently and if that building contains latent defects as a result of that negligence, [purchasers] of the building may suffer personal injury or damage to other property when those defects manifest themselves.

In this case, the act of negligence: that it fails to meet code, and there is a real and true concern over devastating fire; so that personal injury or damage: the effects of such fire, that –

The reasonable likelihood that a defect in a building will cause injury to its inhabitants is also sufficient to ground a contractor’s duty in tort to subsequent purchasers of the building for the cost of repairing the defect if that defect is discovered prior to any injury and if it poses a real and substantial danger to the inhabitants of the building.

And the ruling seems to support my thought that the sole responsibility for catastrophic failures like this lay solely in the hands of the developer:

Apart from the logical force of holding contractors liable for the cost of repair of dangerous defects, a strong underlying policy justification also exists for imposing liability in these cases.  Maintaining a bar against recoverability for the cost of repair of dangerous defects provides no incentive for plaintiffs to mitigate potential losses and tends to encourage economically inefficient behaviour.  Allowing recovery against contractors in tort for the cost of repair of dangerous defects thus serves an important preventative function by encouraging socially responsible behaviour.

In the end, the owners are in for a long term amount of lost monies and (more importantly) time that will be required in moving forward with their lives. It’s a sad thing, and the province needs to put better protection in place to help stave off this type of abuse by developers in the future.