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.

Patchogue Village Board Completely Wrong in Believing Rental Units Reduce Property Values

On Monday, the Patchogue Village Board unanimously under ignorance, denied an owner the right to rent their unit. The trustee that tabled the motion – Gerard Crean believed it would help protect property values.

First off, the whole “gotta protect property values” is a bunk argument. The role of the board is not to “protect property values”. I’ve not seen a single bill of legislation that has indicated the role of a HOA or condominium corporation is “protecting property values”. They often indicate a mandate to maintain the physical infrastructure and to ensure services. Arguing property values is just a weak excuse a board uses to falsely justify their often ill and often mean decisions. You ever hear “we did this for property values” know that there is likely some sad decision that the board has made.

But let us also evaluate this argument that allowing rental property reduces property values. The neat thing is, the argument is completely false.

An in-depth study by Tsur Somerville – Director University of British Columbia Centre for Urban Economics and Real Estate, Sauder School of Business, Chris Kay – Head of Acquisitions, Fairmont Pacific Development Ltd, and Seang Dong – PhD Student, Sauder School of Business found:

Rental Restrictions in general Decreases property values by 3.3% to 5.4%.

Wow. That is substantial.

Tangential to this, we can also look at the effect of affordable rental housing on neighbouring property values. “Affordable rental housing” often causes shivers in local owners, as they imagine hordes of smelly dirty people with chipped teeth and pan handling tins at the ready invading their neighbourhood. What really happens to property values as found by the Real Estate Board of Greater Vancouver relying on American publications:

There is increasing evidence that affordable rental units are not a threat to local property values and are instead a net plus.

Yup – those huddling masses of poor (our imagination of them, not reality) are a net plus. So if we’re talking about private owners renting their own asset, who aren’t seeking tenants who are the huddled poor, the positive value should be even better.

And an article by Smart Money indicates that no-rental policies are more likely to force foreclosure or empty units, as depriving an owner of rental income to pay their condominium fees places greater units into fiscal failure. With multiple units in foreclosure, values of the other units are significantly reduced. For single family houses – each one within a block will decrease the surrounding buildings by almost 1%. Especially in today’s market boards should do everything they can to stop foreclosures.

The Iowa Property Owners Alliance indicates:

An outright ban on rentals may not make sense, particularly in an economy where there are many properties on the market. An HOA should consider if it would rather have vacant properties or occupied properties with renters. Additionally, some buyers may be reluctant to purchase a home in a community that does not allow rentals, so an outright ban could also lower property values by creating less demand for properties in the community.

All arguments point to the justification (which is a stupid justification all on its own) that “rental reduces property values” is completely bunk, wrong, stupid, and dim witted.

Remember how I said above that if you hear someone use the property value excuse to justify a sad board decision, it applies is spades to Gerard Crean and the Patchogue Village Board. They denied Lori Patton the right to rent her unit to help cover the costs of treatment for her two-year-old daughter’s rare blood disorder. It is a disorder that requires costly transfusions and, at some time, a wonderfully expensive bone marrow transplant.

Way to go Gerard Crean and the Patchogue Village Board! You win the current award for “stupid decisions that show you have no humanity, using arguments that are completely contrary to facts”. You. Are. Awesome.

More links indicating rental effects of property values:

How Do Rental Properties Affect the Neighborhood?
There Goes the neighborhood: The Effect of Single-Family Mortgage Foreclosures on Poperty Values
Field Guide to Effects of Low-Income Housing On Property Values

Dog Poo Bad, Flipping the Bird Totally Cool

I’m a big fan of ensuring that residents can communicate with each other, even if what they want to communicate is that they hate the board. Condominium Boards tend to be very sensitive, baby-soft-skin sensitive. I’m not sure what it is, but the moment they get on the board they won’t stand for any negative comments. Part of what drives this SOS (Sudden Onset Sensitivity) comes from board members access both to money (condo fees) and a lawyer (most corporations have a lawyer on call for foreclosures, advice, and general council).

So when Steven Preu was found by a judge to be well within his First Amendment Rights to flip the bird to the board, security cameras and the condominium manager; it seems reasonable to me. Flipping the bird is an expression of aggravation and completely impolite, and while society works better when everyone is polite, I myself have flipped the bird at times (to drivers mostly, not yet in a condo related space myself).

The judge also confirmed his right to write “insulting messages” within the memo section of his checks to the corporation, and his upheld Mr. Preu’s right to post messages in the trash room, and on a neighbour’s door.

Seems pretty good so far, but Mr. Preu’s actions at free speech weren’t completely ok, and even I knew – when reading the case – when he went too far.

He additionally blocked open fire doors that are required to be closed, and closed and obstructed fire doors required to be open. That is just plain dangerous. Fire doors must always be treated with respect.

Finally, he twice decorated common areas of the condominium with bags of dog poo, labeling the condo president’s name on the bags. Placing the name of the president is a non-issue to me (but likely does a fine job piercing the president’s skin), it’s the act of littering that become enforceable.

I’m just glad that the bags of poo weren’t flaming bags of dog poo – a fatal mixture with fire doors that were interfered with.

Stephen Cassady Elected To The Canadian Condominium Institute’s National Executive Board

On Friday, Stephen Cassady was elected to the Canadian Condominium Institute’s (CCI) National Executive Board. The board, consisting of 7 elected members and a Secretary Treasure, oversee the day-to-day operations of this organization, operating though 16 chapters in 8 provinces.

The CCI is a national, independent, non-profit organization dealing exclusively with condominium issues. Formed in 1982, CCI represents all participants in the condominium community. Interested groups are encouraged to work together toward one common goal – creating a successful and viable condominium community.

Stephen Cassady previously served on the National Council for CCI since 2008, and is currently serving for the 3rd year as President of the CCI South Alberta Chapter.

Don’t Fear Volunteering To Be On Your Board

The one piece of advice I have for all condominium owners – spend the time to participate on your board for at least one term. For most people, their house will be the largest part of their financial holdings in their life. Most people will never have more cash and securities than the value of their house. For condo owners, that house equity is directly impacted by how well your condominium, strata, or HOA is managed. Poorly managed condominiums could cost you a lot of extra money.

By being on the board you will get a special look, and insight, on where your fees and contributions go to. It also presents you the “other side of the story” for complaints brought against the corporation, or between condo neighbours. There’s nothing like the experience of dealing with all the different complaints and trying to resolve as many as possible of them gracefully.

Finally, you’ll likely realize that the condominium isn’t evil. It raises money against a budget, and most boards try to make sure each and every penny is used properly. By working with the budget you can see if your fees are well managed (they normally are – the majority of fees go to electric, water, natural gas, and insurance).

You don’t need to spend your life on the board – but you have chosen a living arrangement where you share some building costs and responsibilities with your neighbours. A year or two helping out with the condominium will be beneficial not only to you, but your financial understanding – and hopefully financial health – as well.

Banning People with Criminal Records from Condominium Residence

I recently wrote that US Home Owner Associations wield an inordinate and improper amount of ability to pry into the private life of purchasers. Potential purchasers providing inch think stacks of documents to boards, just for the right to purchase a property, seems to becoming (sadly) the norm.

There is a wedge issue would that, if supported, allow Canadian condominium boards the same sort of access to purchaser (and ongoing access to owners) personal information – that condominiums can ban residency and board participation based on a criminal record. Being able to ban on a criminal record would allow boards to start intruding on personal privacy in order to enforce the ban.

Denise Lash of Heenan Blaikie closes in a recent article that –

It is time for condominium corporations to look at taking more extreme measures to ensure that the safety and security of residents is not compromised and put into place restrictions in condominium documentation.  Of course, the documentation will have to be carefully drafted to avoid any potential argument as to its enforceability.

This is a direct call to bring rights of intrusion to privacy into the hands of a board. We all have stories of our boards  with the  powers they currently have abusing privacy, position and status already. Adding additional fodder – and more significantly – responsibilities that are more prone to court challenges and civil suits is a recipe for disaster.

Most importantly, Ms. Lash takes singles out condominiums to go after because they offer an additional level of legislation and rules – the corporation bylaws – as a wedge to invade privacy. At a condominium’s heart is that it is housing. We wouldn’t be able to argue that a community association (single detached housing) could deny the right to residence in their community based on a criminal record – but we do for condominium only because there are additional levels of rules around the management of the shared or common property.

That’s what “extreme” and “carefully drafted to avoid any potential argument as to its enforceability” is all about – it’s the caution that what she suggests is a strong warping of the intention and scope of condominium legislation. I would say she suggests a perversion of condominium legislation and pushes in into a realm of social engineering.

HOA (U.S. Home Owner Associations) Seem To Have Excessive Authority and Privacy Invasion Rights

As I do research for posts, I am finding a lot of stories that refer to HOAs denying the purchase of a unit, as well as demanding all sorts of information from interested purchasers in order to determine if it should deny such purchase.

NYT ran a real estate article about Steve Siddell’s attempt to find a great home in the city. There is one section of the article that caught my attention:

He submitted his application, which included an inch-thick stack of paper, in a neat binder. The co-op board requested 11 more copies …Weeks passed; his frustration grew. After about two months, he was interviewed … A few weeks later, the rejection letter arrived.

This seems both intrusive and abusive. The amount of information required and the type of information, the lack of timeliness in initiating the interview, and lack of timeliness in rejection, and even the right to review the purchaser at all seems, simply, wrong.

As each state has different legislation, there is a multitude of “but that’s not allowed in this state” arguments available but a quick search of the web seems to indicate that board intrusion into private sales seems rampant country wide.

Some states do allow HOA right of first refusal, meaning they can deny a purchaser (without reason) completion of the sale if the HOA itself buys the unit, or can find a replacement buyer at the same price.

While I disagree that such a right should even exist, in states which allow it there is ample opportunity to abuse the system and pry into people’s lives. It opens up all sorts of questions about information that can be requested – and all sorts of strange requests can be built that avoid human rights violations (race, gender, disability, sexual orientation). Many now ask for resumes, job history, references, past addresses, driver licences, social security numbers, credit reports, travel history (in the guise of how much of the year the owner will be onsite), education, marriage status, fiscal equity levels, and tax records (which might show charitable donations reflecting political or religious leanings).

As a kicker – the HOA doesn’t need to generate an explanation why they deny a sale. While racism and sexual preference bias isn’t an allowable right to say no, we know (for example after the 9/11 tragedy, the anti-Muslim expression) that people do act on those feelings. And while they might not be in the position to act on first refusal and buy the unit, they can significantly slow down the review process (say, for months) and the decision (say for weeks) in order to force the purchaser to withdraw their request because of timeliness issues.

In Canada, we have pretty strong privacy laws that would block condominiums – which are set up as not-for-profit corporations – from prying into a purchaser’s life like that.

The sale of a unit is a private transaction between two parties that the condominium has should have no right of access to, and there is no justifiable reason to review the sale and purchaser of a condominium unit.

For those that fear non-payment of monthly condominium contributions – they happen (some buildings have more than 60% delinquency) and have been happening even with new purchaser review. There’s no belief the board is better suited than a bank to determine fiscal ability to pay in the future.

There is no reason for HOAs to pry into the private life of a purchaser.

Strata Fines Resident $25 for Smoking Creating “activities causing nuisance or hazard to others”

The only organization that should be fined for “causing nuisance … to others” should be the board of the Chelsea Gardens Strata Corporation for such a cowardly use of the by-laws.

The Chelsea Gardens Strata Corporation has been dealing with a series of complaints from a unit owner against their neighbour for smoking. It’s implied that the complaints arise mostly when the smoker is on their own patio, and the second-hand smoke drifts into the complainant’s unit. The complaints have been expressed to the corporation in 2009 and 2010, and recently they have been filed with the BC Human Rights Tribunal. It is scheduled for mediation in November 2011.

What I find interesting is the board’s response, at one point, to attempt to address the situation by fining the smoker $25 for breaking the by-laws though “activities causing nuisance or hazard to others.” The role of the board is in part to help the community live together in harmony and mediate the interaction of residents.

I can see how the board may have felt constrained – smoking is not an illegal activity, but they have a serious of complaints from an owner indicating that their health is being impaired by another resident. A $25 fine though seems ineffectual, token, and something that would cause more harm. It’s an action that seems to say to the complainant that the board is sympathetic to the complaint, but the amount of the fine indicates the response is toothless and meaningless. $25 will not pose a fiscal threat that encourages change in behaviour.

I would think that the board actually puts themselves in a more vulnerable role, especially given that smoking isn’t illegal, and they are regulating that activity. It’s a similar situation to those fatty carcinogenic plumes of bbq beef carcass smoke that fill my unit, issuing from several neighbours balconies and patios this summer.

When I buy into a condominium that allows pets, I assume that at least some of my neighbours will have pets and I will bump into them, sometimes on a daily basis. If I buy into a condominium that doesn’t outline in the by-laws a non-smoking policy on exclusive use common property (including balconies and patios), then I assume that some of my neighbours have the right to smoke there – and will take that right up.

For those that think that this comes from a smoker, I am a dedicated non-smoker. Euuugh – smoker breath.