Friday, May 25, 2012

HUD Proposes Rule to Prohibit Housing Discrimination Based on Sexual Orientation or Gender Identity

24 CFR Parts 5, 200, 203, et al., Equal Access to Housing in HUD Programs—Regardless of Sexual Orientation or Gender Identity; Proposed Rule.

Associations, community leaders and managers are often the target of housing discrimination claims.  It is against Colorado law to discriminate against anyone with respect to sale, rental or terms and conditions of housing based upon race, color, national origin, sex, handicap, familial status, sexual orientation, gender identity, or religion.

New HUD rules would expand the categories of persons entitled to protection on a federal and sometimes state level, depending on the program.  HUD seeks to clarify that housing cannot be denied based on marital status, sexual orientation, or gender identity and, further, specify that all eligible families will have the opportunity to participate in HUD programs.

This blog is not intended to be specific legal advice. It only provides general legal information. You should consult a licensed attorney if you have a legal issue.

HOA Syndrome

Ten years I suffered from HOA Syndrome. My self-respect, emotional regulation, and distress tolerance was tested. Not with each notice I received, but by also from witnessing the faces of families, my neighbors, as they suffered silently too. I witnessed neighbors taking care of their front lawns out of fear, not out of pride in living there. I heard reports of Vietnamese families being bullied out of all the equity in their home in HOA liens, fees, and legal costs over trivial matters. I was discriminated against using the by-laws against me. I was discriminated against based on my gender identity. My son, whom is co-owner of our properties was discriminated against based on him being a homosexual. We all have a right to live anywhere. We are legal citizens in our country. Our country is based on freedoms, except in an HOA. I noticed no one played on our block. No one talked to one another. It was the most dysfunctional system I have ever experienced in my lifetime. The stress I felt in having to have a perfect home made me emotionally and physically sick. Living happily was my goal and my objective when I contracted to have a home there, never to be abused by the by-laws and HOA system. I was not happy in my expensive home. In fact, I'd venture to guess, no one in my neighborhood was happy, except those in charge of our HOA. Getting back my own power was my long-term objective. Being happy and healthy is my objective now. Sadly, HOA's in most covenant controlled communities have quite the power -- a quasi-government that has more power and control than our own Constitutional Rights! The only options I felt to live a happy and healthy life was to leave, so I did. I realize many of you are stuck, you feel you have no where else to go. Be strong, look up your legal rights, and fight for them; no matter how small or trivial. Do not allow the HOA bullies to take away your power using by-laws as the vehicle to control or abuse you. Speak up and fight back. HOA's should be outlawed. Law makers, States, and the Federal government that continue to allow this abuse should be responsible for these abuses. HOA's are criminal! Extortion is criminal.The issue here isn't the "notice" or just the "fine." The issue is the abuse of power and non-judicial foreclosures. That is extortion, which is criminal. I will not rest until I see all HOA criminals in jail for white collar crime. After all, our HOA is a "Limited Liability Corporation."

“History bequeaths a demonstrative message: Some who gain a position of power will inevitably strike down the rights of others, animals and humans, in the name of greed, grandiosity, and evil sadistic gratification.  Brief time passes, societies crumble under the weight of rise to power, and without learning prior lessons, the disgorging cycle once again begins.”
Professor Gary Solomon

This blog is not intended to be specific legal advice. It only provides general legal information. You should consult a licensed attorney if you have a legal issue.

Anshel Bomberger

Wednesday, May 23, 2012

History of HOA Abuses (HOA Reno Stonefield Brief)

Tina Pettie
P.O. Box 18143
Reno, NV 89511
Cellular (775) 303-3461


Tina Pettie, Claimant        Claim No. 12-45


Stonefield Homeowners Association, Respondent


Stonefield Homeowners Association, Counter-Claimant     


Tina and Helen Pettie, Counter-Respondents


Respondent's Attorney Gayle Kern believes that the Super Priority Lien statute in NRS Chapter 116 does not mean what it says.  More specifically, she believes there is not a nine month limitation to the amount of the lien.  To support her position, Attorney Kern quotes from a 1986, Nevada Supreme Court Decision, McKay v. Board of Supervisors, which stated that the words in a statute, “should be given their plain meaning unless this violates the spirit of the act.”

The case was not about the Super Priority Lien statute or any other homeowner association issue.  The case had absolutely nothing to do with the priority of liens or the extent of liens, but Attorney Kern believes the quote is applicable because she understands “the spirit of the act” better than the Judges that have examined “the spirit of the act,” as it relates to the priority and extent of association liens, and she has concluded that the statute violates the spirit of the act.

All parties agree that a super priority lien is that portion of a homeowners' association lien that survives a foreclosure by the mortgage holder.  All parties agree that some portion of the association's lien is extinguished by the foreclosure sale.  The parties disagree about whether the statute should be interpreted literally, word by word.  Attorney Gayle Kern believes a word by word interpretation leads to a conclusion that violates the spirit of NRS Chapter 116.   

Four Nevada Judges have recently considered whether the words in the super priority lien statute violate “the spirit of the act.” Judge Elizabeth Gonzalez, Judge Mark Denton, Judge Steven McMorris and Judge Persi Mishel all disagree with Attorney Kern.  They have all decided that a nine month limitation is consistent with the legislative intent of the statute and the other provisions in NRS Chapter 116.

All four Judges have determined that a specific phrase in the super priority lien statute, “to the extent of,” provides a clear and unambiguous limitation to an Association's Super Priority Lien.  Further, all four Judges have ruled that the limitation is numerical and not temporal in nature.

Attorney Kern does have allies that agree with her and believe the four aforementioned Judges have made an error in reaching their conclusions.  Some of Attorney Kern's allies are licensed attorneys in Nevada and Arbitrators for Nevada's Real Estate Division, however, most of Attorney Kern's allies are members of a lobbyist organization named Community Associations Institute (CAI).  Like many lobbyist organizations, CAI maintains its headquarters in a suburb of Washington, D.C. The location provides the lobbyists of CAI with close access to Congressmen and Senators from all 50 States.  There are local chapters of CAI throughout the country and they lobby state and local government officials for stronger laws to enable the governing bodies of homeowner associations to enforce their restrictions and assessments.

For example, a powerful enforcement action the CAI lobbyists have consistently lobbied for during the last three decades is the ability for homeowner associations to perform non-judicial foreclosures.  Only a handful of states allow non-judicial foreclosures by associations.  Nevada is one of the states that agreed with the CAI lobbyists and made non-judicial foreclosures permissible.  Nevada's legislature has been very accommodating to the lobbyists from CAI, but the legislature has also considered the recommendation of stakeholders with different interests to protect, such as the lobbyists from the Mortgage Bankers Association.   The exact words of the statutes in NRS Chapter 116 were often selected in the spirit of compromise.  

Many other states carefully weighed the recommendations of the CAI lobbyists and decided against granting the boards of homeowner associations the power of non-judicial foreclosure.  State legislators were examining the “spirit of the act” when they decided not to grant such powers.  They believed that having a judge review a process as serious as a foreclosure was the only way to ensure a fair and prudent process.

During the same period that state legislators were considering non-judicial foreclosure statutes, the legislators were considering another important piece of legislation being promoted by the CAI lobbyists.  It was a type of lien referred to as a super priority lien.  It would be the portion of an association's lien that would not be extinguished by a foreclosure conducted by the mortgage holder.  The lien would survive the mortgagee's foreclosure and would be attached to the property.  When considering super priority liens, state and local leaders had to carefully examine the “spirit” of their common-interest community laws.  There were many stakeholders involved, such as the defaulting homeowner, other members of the association, the mortgage lender, and the state's judicial system.   Some states wished to lessen the burden and costs on their courts.  

Some states were more concerned with the potential for the abuse of power by associations, than with the potential cost savings produced by lessening the burden on their courts.  In the State of Washington, legislators decided that Condominium Associations could perform non-judicial foreclosures, however, if the associations pursued this fast track path, they would have to waive their rights to a super priority lien.  If associations wished to preserve their super priority liens, then they would have to pursue the more costly judicial foreclosure process (RCW 64.34.364).  It is clear that the legislators carefully considered the spirit of the law and decided it was not prudent to grant associations with both a non-judicial foreclosure process and a super priority lien.

The words in the Washington statute do not violate the spirit of their Condominium Act.  The legislators weighed the advice of the CAI lobbyists and incorporated some of the lobbyists' recommendations, but also included limitations and protections for troubled homeowners, lenders and investors.  

In Connecticut, the legislators have considered the spirit of the law and decided that associations should never have the power to perform non-judicial foreclosures.  Associations must perform the significantly more expensive process of performing foreclosures only with judicial review.  This makes Connecticut Law regarding foreclosure actions and the extent of association liens completely different than Nevada Law.  Connecticut's laws are simply not in any way applicable to the “spirit” of the law in Nevada which is a state where the CAI lobbyists have succeeded in providing associations with a non-judicial foreclosure process.  Attorney Kern's references to Connecticut in her pleadings regarding this dispute are completely misapplied. 

In NRED Arbitration Claim #10-87, Arbitrator Persi Mishel examined the spirit of the act by reviewing case law in states that have both, a non-judicial foreclosure process and super priority liens.  The Order states (page 10, line 13):

There are several states such as Colorado, Minnesota, New Jersey, Vermont, Alaska, and Delaware, whose super priority lien statute are substantially similar to Nevada's super priority lien statute (i.e. NRS 116.3116).  None of the courts of these states have interpreted their statute to mean that costs and fees related to unpaid assessments may be added to super priority lien amount even though such addition would increase super priority lien amount above the cap provided under their statute.

Attorney Kern must believe that in addition to the four previously mentioned Judges in Nevada, the Judges in six other states also do not understand the “spirit of the act.” 

Attorney Kern has been a member of the Nevada Chapter of CAI lobbyists for many years.  She is friends with one of the founding members of the Nevada Chapter of the CAI.  He is the former CIC Commission Chairman, Michael Buckley.  Mr. Buckley has lobbied Nevada's legislators to support the governing bodies of homeowner associations for many years.  Of course, as a lobbyist it was not his duty to consider the interest of all stakeholders and the laws he supported often created additional hardships for the individual homeowners who had become involved in disputes with the governing bodies of their associations.

This arbitration proceeding is an example of Mr. Buckley's lobbying efforts.  Claims such as those presented in this Brief must be arbitrated or mediated within the Nevada Real Estate Division's Alternative Dispute Resolution (ADR) program prior to receiving judicial review.  This legal requirement often causes hardship on the Claimant.  It is not unusual for an arbitration proceeding to take a year and cost the Claimant over $10,000 in attorney's fees.  It is unlikely that a low income Claimant could afford to complete an arbitration proceeding and then file an appeal in District Court.  In 1993, this ADR requirement was lobbied for by Mr. Buckley.

In Nevada's latest legislative session, Mr. Buckley lobbied for SB 254 which would have placed more roadblocks in front of an individual homeowner who felt aggrieved by their association and desired to have their day in court.  In a recent article for Nevada Lawyer, Mr. Buckley wrote, “In 2011, a bill providing for mediation and fast tracking the CC&R arbitration process (SB 254) passed the legislature but was vetoed by the Governor, primarily because of concerns about the cost of mediation to homeowners.  While these concerns are not unfounded, I can't help but think that the time has come for a better process.”

Clearly the Governor was carefully considering the spirit of the legislation when he vetoed SB 254.  Elected leaders, such as the Nevada Legislature and the Governor of Nevada have been carefully considering the spirit of common-interest community statutes for many years.  The words in the statutes mean what they say.  Mr. Buckley has been very successful in getting Nevada's leaders to consider the interest of association boards, collection agencies and property managers, but the State's leaders have also considered the interest of other stakeholders.

In the same article previously mentioned, Mr. Buckley states that, “Over the years NRS 116 has been criticized by both lawyers and lay people as being overly complex - a lawyers full employment act.  I don't think there is any question; that is true.”     

While Mr. Buckley's criticisms of the very statutes that he personally lobbied for, may have much merit for some provisions, the limitation of a super priority lien is not overly complex.  The intent was a simple numerical nine month limitation.  The limitation was six months for many years.  In 2009, Nevada was deep in a foreclosure crisis and Nevada's legislators increased the limitation to nine months.  This was done after much debate.

Mr. Buckley has many friends at the Nevada Chapter of the CAI lobbyist organization that are unhappy with the nine month limitation.  They would like to have the limitation increased to 24 months or better yet, to have no limitation at all.  Employees of three of the corporations involved in this dispute have been members of the CAI lobbyist organization: RMI Management, Truckee Meadows Properties, and Kern & Associates.

In 2009, when the legislature was considering different limitations to the Super Priority Lien statute, Mr. Buckley lobbied the legislature to include the following words to the Super Priority Lien statute, “and reasonable attorney's fees and cost incurred by the association incurred in foreclosing the association's lien.”

The Nevada legislature declined to include those words.  They increased the limitation for a super priority lien from six months of assessments to nine months of assessments.  The legislature carefully considered many options.  It was already a difficult period for associations.  News about the recession and housing crisis was everywhere.  Many lenders and other financial institutions were already in bankruptcy.  The legislature was completely aware of these problems.  The legislature selected the new words in the super priority lien statute after weighing the interests of many different stakeholders.  Mr. Buckley's request for attorney's fees was not written into the statute.

In 2010, Mr. Buckley, acting as CIC Commission Chairman, wrote an Advisory Opinion about the Super Priority Lien statute.   He constructed a complex Opinion about super priority liens in other states and how the liens should be applied in Nevada.  The Opinion never explicitly states that super priority liens can exceed the nine month limitation, but Attorney Kern and others believe the Opinion implies the nine month limitation may be exceeded.  The Opinion states that late fees, interest and attorney fees may be part of the lien, but does not provide a clear statement regarding maximum limitations.  Contrary to supporting Attorney Kern's position, the Opinion references case law from Colorado that strongly supports the Claimant's position that there is a nine month numerical limitation. Further, the Opinion references a Wake Forest Law Review article that also supports the Claimant's numerical limitation position.  Regardless of Mr. Buckley's intentions, the Opinion brought little clarity and much confusion to the question of a numerical nine month limitation.

It is simply not accurate for any Party to make the claim that the Advisory Opinion is strong support for the position that a strict interpretation of the words in NRS 116.3116(2) violates the spirit of the act.  Unfortunately, the ambiguous Advisory Opinion has contributed to a regulatory environment which is, to borrow a phrase from Mr. Buckley, “a lawyers full employment act.”

When the Nevada Supreme Court wrote about the “spirit of the act” in 1986 they did not wish to create confusion and endless litigation that would increase the employment of lawyers.  In McKay v. Board of Supervisors, the Supreme Court was writing about a situation where the clear intent of the Open Meeting Law had been violated.  That is not the situation in this dispute.  The Super Priority Lien statute is legislation that considers the interest of various stakeholders, not just the interests of association boards and collection lawyers.  The words placed into the Super Priority Lien statute in 2009 accurately reflect the intent of the legislation.  They were not placed into the statute by accident or oversight.  They do not violate the spirit of the act.

Several months after the CIC commission adopted Mr. Buckley's Advisory Opinion, the commission adopted Regulation R199-09 which describes the fees collection agencies and attorneys may charge in their efforts to collect unpaid assessments.  At least one portion of the regulation clearly violates the spirit of NRS Chapter 116.  NRS 116.3116(4) explicitly states that the recordation of the Declaration perfects the association's lien and there is no need to record any other lien to complete a non-judicial foreclosure.  Recording a Delinquent Assessment Lien is an antiquated tradition that has survived from the days of NRS Chapter 117, Nevada's old Condominium Laws.  NRS Chapter 117 is no longer applicable to any common interest communities.  NRS Chapter 117 was never intended to govern single family housing units such as the units at the Stonefield Homeowners' Association.  More importantly, back when NRS Chapter 117 was applicable, a Delinquent Assessment Lien was completely subordinate to the lender's mortgage.

Unfortunately, Regulation R199-09 states that collection agencies and attorneys may charge homeowners $325.00 for recording a redundant and unnecessary lien.  It is obviously a regulation written by a commission that has not carefully considered the procedures for non-judicial foreclosure in NRS Chapter 116.

A regulation that encourages collection agencies to generate fees by filing unnecessary liens against homeowners is anti-homeowner.  It is anti-consumer.  The regulation is a violation of the spirit of the Common-Interest Community Act.  The regulation is a violation when viewed in the context of Nevada's Supreme Court Decision in McKay v. Board of Supervisors.

Commission member Gary Lein supported Regulation R199-09.  He is also the Registered Agent for the lobbyists at the Nevada Chapter of CAI.  Giving great deference to R199-09 is not consistent with giving consideration to all the stakeholders in common-interest communities.

If an Arbitrator decides to give deference to R199-09, he should recognize that at least one of the charges Attorney Kern has claimed in this dispute exceeded the limits in R199-09.  According to an Affidavit from Attorney Kern, the Claimant was charged $837.39 for the Notice of Default.  The limit in R199-09 is $400.00.

The total charges paid by the Claimant were extremely large in comparison to the $20 per month regular assessment.  After paying over $2,700.00, the Claimant received another demand from Attorney Kern for an additional $294.00 in attorney's fees.  The total of the payments made to Attorney Kern was equal to about 150 months of regular monthly assessments.  An additional $245.00 was demanded by RMI Management, the property manager.  

If a super priority lien can equal 150 months of assessments, then why would 1,500 months of assessments be inappropriate?  Placing limitations on super priority liens is not a violation of the spirit of the law.  It is sound governing that recognizes protecting lenders and investors are important elements of solving the difficult issues that occur when a financially troubled homeowner defaults on their obligations.

Attorney Kern has two pillars of argument to support her position that the super priority lien provision does not mean what it says, the case law in Connecticut and Mr. Buckley's Advisory Opinion.  A careful examination of those arguments reveals Attorney Kern's position simply does not have rational or objective support.

Attorney Kern's pleadings repeatedly urge the Arbitrator to consider that the Claimant made an unjust profit from her investment in the Stonefield community.  Upon close examination, the facts do not support Attorney Kern's allegation.  The Claimant did not make a profit of over $30,000.00.  The profit was not even close to that amount.  The closing statements show that closing costs charged to the Claimant were $12,398.29.  The closing costs do not include the nearly $3,000.00 paid to the Association.  The closing costs do not include the cost of fixing broken windows, replacing missing appliances, installing new carpets, painting the house or the county transfer taxes paid when recording the Trustee's Deed.

The Claimant's real profit on the investment was approximately 10%.  That is an attractive return, but it is certainly not unjust enrichment, when the amount of risk is considered.  On the other hand, of the nearly $3,000.00 paid by the Claimant to the Association, over 90% went to corporations such as Kern & Associates and Phil Frink & Associates.  Documents show less than 10% of the payments went directly to the benefit of the other homeowners in the Stonefield community.   That is an unjust distribution of the Claimant's payments.

Currently, Nevada is in the middle of the worst housing recession since the great depression.  All of the communities in the Reno area have struggled with abandoned houses, dead lawns and stripped out kitchens.  The capital to fix these houses is in scarce supply.  Investors have to make difficult choices.  Should they spend their capital painting the house or laying new sod in the front yard?  Some people believe that the highest priority for investor's capital should be to pay lawyers $290/hour for recording unnecessary documents at the County Recorder's Office.  Wasting scarce capital on the recording of unnecessary liens is not part of an efficient solution to Nevada's severe housing problems.

Investors should be spending their time and money on broken windows and missing appliances. Forcing investors to spend their time and money disputing association liens that exceed 100 months of regular assessments makes Nevada appear to be a lawless land with endless litigation, where keeping lawyers fully employed is the highest priority.  Validating hostile opinions such as Attorney Kern's opinion about unjust profits will discourage investment in Nevada's common-interest communities, and that will not help Nevada's crashing real estate values. 

Making a 10% return on an investment is an attractive return, but foreclosure investors cannot rely on succeeding on every investment.  During 2010, the Claimant purchased an Evergreen Condominium through a foreclosure sale.  The investment in the condominium lost a significant amount of the original principal invested.  The losses occurred primarily because the Claimant poorly estimated the price at which the condominium could be resold.  The Claimant made a mistake. Investing is often a risky and sometimes humbling activity.  However, one task that was not unpleasant was working with the condominium attorney.  Attorney John Rogers represented the Association.  He carefully read the words in Nevada's Super Priority Lien statute.  He concluded there was a nine month numerical limitation and he could not include late fees, interest or collection costs in addition to the nine months of assessments.  Nine months of assessments were paid without any dispute.

Attorney Kern is the only attorney headquartered in Northern Nevada that demands payments with claims that a super priority lien equals over 100 times the regular monthly assessment.

Attorney Kern clings to her belief that the words in the statute do not have a plain meaning and thus, in this particular dispute, she is entitled to charge the Claimant payments equivalent to almost 150 months of regular monthly assessments. The most important word in the statute that Attorney Kern claims is ambiguous is “extent,” but the meaning of other words are also in dispute.  Attorney Kern claims “institution” does not have a plain meaning.  If a Court accepts that a super priority lien has a numerical limitation, then the meaning of “institution” is of minor significance; however, if a Court holds that a super priority lien may be the sum of nine months of assessments and the collection costs incurred during the nine months, then the dispute regarding the definition of “institution” becomes significant. 

The word “institution” has several definitions in Black's Law Dictionary.  The first definition is, “The commencement of something, such as a civil or criminal action.”  The word's meaning is clear when used in the legislative phrase, “immediately preceding institution of an action to enforce the association's lien.”   Institution means beginning.  Institution means the first step in enforcing the association's lien.

Is the first step of enforcing the association's lien described in Chapter 116?  Yes. The steps are clearly described in Chapter 116.  Section 116.3116 is followed by section 116.31162.  The section's title is: 

Foreclosure of liens: Mailing of notice of delinquent assessment; recording of notice of default and election to sell; period during which unit's owner may pay lien to avoid foreclosure; limitations on type of lien that may be foreclosed.

The last phrase in the title of section 116.31162 is, “limitations on type of lien that may be foreclosed.”  The words show that the “spirit of the act,” includes protecting financially troubled homeowners, not just the association's board of directors.  The spirit of the law was to provide “limitations” that protect many different stakeholders.  It was consistent with the spirit of the act for the legislature to place numerical limitations on the Super Priority Lien statute to protect lenders and investors.

For the person that carefully considers the words in the title of section 116.31162, the conclusions are inescapable. The words in the sub-sections are also crystal clear.  The action for the association to institute is a non-judicial foreclosure. The words are plain, “Foreclosure of the lien.”  Foreclosure is the “action.”

The “institution” is the “Mailing of the notice of delinquent assessment.”  The institution is a very easy step for the association.  They simply have to go to the post office and fill out a certified mail card developed by the United States Postal Service for a certified mailing.  This institution of an action takes a few minutes and costs about five dollars.

If the Stonefield Association had instituted an action to enforce their lien and then simply waited for the lender to foreclose, they would have preserved their super priority lien.  The long wait may have forced them to write off about 15 months of assessments.  The write off would have been about $300.00.  It is unfortunate that the Association would have been forced to write off any amount, but many other stakeholders also suffered during this period.  The lender lost about two thirds of their loan on the Stonefield property.  The defaulting homeowner filed for bankruptcy protection and lost ownership of their home.

It is also important to consider that the Claimant paid Association transfer fees when she purchased the Stonefield property and again when she sold the property.  The transfer fee payments totaled about $500.00 which is more than the $300.00 of unpaid monthly assessments that the association could not recover through a nine month super priority lien.    

The Stonefield Association did not simply wait for the lender to foreclose.  Attorney Kern actually completed the step of mailing a Notice of Delinquent Assessment twice.  First on or about April 29, 2010, a certified mailing containing a notice of delinquent assessment instituted an action to enforce the association's lien.  Then, a virtually identical Notice of Delinquent Assessment was produced and the certified mailing step was repeated on or about September 8, 2010.  In addition to being sent to the defaulting homeowner, both notices were recorded at the Washoe County Recorder's Office, which is certainly not required by NRS Chapter 116.  The redundant and unnecessary activities all generated costs that Attorney Kern believes should be paid by the Claimant.

Regardless of the unnecessary extra steps, the association clearly instituted an action to enforce their lien in April of 2010.  In the Order for NRED Control # 10-87, Arbitrator Persi Mishel wrote, “An HOA may enforce its lien by instituting a non-judicial foreclosure pursuant to NRS 116.31162 to 116.31168…” (Page 22, Line 11.)

Community associations have lobbied for and received this simple “institution of an action.”  The Nevada Legislature has provided associations with an extremely powerful action, non-judicial foreclosures, and provided for such a simple step to complete the institution of an action.   It is absurd that association lawyers, such as Attorney Kern, are arguing that the words in the statutes do not mean what they say. 

Attorney Kern proposes that the institution of an action to enforce the association's lien is the completion of a Trustee's Sale conducted in August of 2011.  The sale was conducted at the request of the lender, following a lengthy foreclosure process.  The super priority lien period may very well be defined this way in the statutes of states such as Connecticut, but it is not the definition in Nevada's Super Priority Lien statute.  Nevada law clearly states that the super priority lien period precedes the association's institution of an action.  Attorney Kern wants all parties to ignore the fact that the lender's Trustee's Sale was not the beginning of an action.  The Trustee had already recorded a Notice of Default and a Notice of Sale.  The Trustee's Sale was not the institution of anything.  It was the completion of a non-judicial foreclosure by the lender.

The institution of an action was the certified mailing by Attorney Kern on April 29, 2010.  The nine months immediately preceding the institution of an action were approximately August of 2009 through April of 2010.  Therefore, the costs incurred by the corporation known as Phil Frink & Associates, LLC, cannot possibly have occurred during the super priority lien period.  The statements of charges from Phil Frink, LLC, claim the corporation to be a “Foreclosure Services” corporation.  Phil Frink, LLC's work occurred in November of 2010, approximately six months after the institution of an action.

The Association's Collection of Assessments Policy repeatedly references the “Collection Agency.”  Phil Frink, LLC, is not a licensed collection agency.  More importantly, circumstances demonstrate that Attorney Kern and Phil Frink, LLC, never had any actual intentions of foreclosing on the property prior to the lender's foreclosure sale.  Over eight months transpired between the time Phil Frink, LLC, recorded the Notice of Default and the foreclosure sale was completed by the lender; however, during the eight months, Phil Frink, LLC, never completed the next step of a non-judicial foreclosure which would have been to record a Notice of Sale.  Phil Frink, LLC's work was simply a method to generate more fees and then claim the fees as part of a super priority lien.

The Respondent has never produced a written contract between the Association and Phil Frink, LLC.  There were no memorandums of understanding, letters or e-mails between the two parties that might be construed as a binding contract.  The Association never made any payments directly to Phil Frink, LLC; however, Phil Frink, LLC, must have believed it would be paid for performing collection activities.  Phil Frink, LLC, recorded a Notice of Default and Election to Sell which contained a warning to the homeowner that they may lose their home in a foreclosure sale if they do not pay their unpaid assessments.  The Notice of Default was recorded at the County Recorder's Office and it claimed that the Phil Frink, LLC, was a Trustee and an Agent for the Association.  The claims were brazen when considering that the Phil Frink, LLC, had no written authorization of any kind from the Board of Directors for the Association.  Phil Frink's foreclosure services corporation must have been confident that there were virtually no State Regulators concerned about who was performing foreclosure services.

There is no support anywhere in NRS Chapter 116 for hiring a corporation who is not licensed to practice law or to perform collection services, and then charging the homeowner for the corporation's collection services.  Phil Frink, LLC, was unlicensed by the State of Nevada as a collection agency and unauthorized by the Board of Directors to conduct a Trustee's Sale.  Further, their actions were not part of a good faith effort to foreclose on the property.  They never had any intention of completing a Trustee's Sale.  

If an Arbitrator entirely accepted that Phil Frink, LLC, was a valid Trustee and performed legitimate collection activities, and further, accepted Attorney Kern's position that the limitations of a super priority lien are temporal, and further, accepted that the appropriate super lien priority period was the nine months from November 2, 2010 until the lender's foreclosure sale on August 2, 2011, then Attorney Kern still overbilled the Claimant.  Attorney Kern's position is that she is entitled to include her fees from April of 2010 as part of the Super Priority Lien.  The April, 2010, attorney's fees for the first Notice of Delinquent Assessment occurred five months prior to the nine month period that Attorney Kern believes is the correct period, and her work performed in September of 2010 was also prior to the nine month period proposed by Attorney Kern.

No matter which Party's interpretation of the nine month period is utilized, the Claimant was over charged. 

The most disputed word in the super priority lien statute is “extent.” The Synonyms listed in Burton's Legal Thesaurus for extent include “amount, area, dimensions, distance, length, limit, limitation, magnitude, measure, quantity, size, span and width.”

The word “extent” was clearly intended to have a mathematical or numerical meaning when used in NRS 116.3116(2).  The word is not ambiguous.   In McKay v. Board of Supervisors, both the Appellant and the Respondent argued that the plain meaning of the words in a statute, NRS 241.030(1), supported their position.  The definition of “consider” was debated.  Both Parties presented plausible, but different definitions of the word “consider.”  Attorney Kern has not presented any plausible definition of “extent” to support her position that the word has only a temporal meaning. 

In the Order for the Wingbrook Capital vs. Peppertree Homeowners case, Judge Elizabeth Gonzalez made the correct interpretation.  She explained the wording of the law in her crystal clear Order, “The words 'to the extent of' contained in NRS 116.3116(2) mean 'no more than,'” (Page 4, Line 3.)

An association's super priority lien can be “no more than” nine months of assessments.

For the readers who needed further clarification Judge Gonzalez wrote, “ … in no event can the Assessment Cap Figure exceed an amount equaling 9 times the homeowners' association's monthly assessment amount…” (Page 4, Line 14.)

Clark County District Judge Mark Denton reached the same conclusion in the Ikon Holdings v. Horizon at Seven Hills HOA Case (Page 4, Line 13.):

The base assessment figure used in the calculation of the Super Priority Lien is the unit's un-accelerated monthly assessment figure for association common expenses which is wholly determined by the homeowners association's “periodic budget,” as adopted by the association, and not determined by any other document or statute.  Thus, the phrase contained in NRS116.3116(2) which states, “to the extent of the assessments for common expenses based on the periodic budget adopted by the association pursuant to NRS 116.3115 which would have become due in the absence of acceleration during the 9 months immediately preceding institution of an action to enforce the lien..” means a maximum figure equaling 9 times the association's regular monthly (not annual) assessments.  If assessments are paid quarterly, then 3 quarters of assessments (i.e. 9 months) would equal the Super Priority Lien…”

If a Court accepts Judge Denton's numerical limitation, then the debate about the definition of “institution” becomes a minor issue. Judge Denton understands the spirit of the law. He has concluded that the words in the Super Priority Lien statute are plain words that create a numerical nine month limitation which is consistent with the spirit of the law.

Any claims the Respondent makes that most lenders and financial institutions have generally rejected the conclusion that the super priority lien has numerical limitations are inaccurate.  Any claims that lenders have generally accepted the opinion that a super priority lien has no limitations for attorney's fees are inaccurate.  In 2009, Wells Fargo filed a claim against a Washoe County Association claiming there was a numerical limitation to the Association's super priority liens.  The Claim was ADR Control No. 10-49.  Wells Fargo prevailed.  In 2011, a division of Bank of America filed a well-publicized complaint against dozens of associations in Clark County claiming there were numerical limitations to the association's super priority liens that were being violated.  The proceeding is ongoing.  In 2012, the United States Government filed a complaint in Federal Court under the False Claims Act claiming there were numerical limits to many association super priority liens that were being violated.  Over 500 Nevada homeowners' associations were named as defendants. The Government is claiming millions of dollars in damages to the agencies commonly known as Fannie Mae and Freddie Mac.  

The Claimant respectfully requests that the Arbitrator provide an Order instructing the Respondent to revise the billing of the Claimant, limiting the demand for a super priority lien to nine months of assessments at twenty dollars per month, refunding the overcharges to the Claimant, and providing relief to the Claimant for arbitration costs, filing fees and other costs.

Tuesday, May 22, 2012

City of Aurora Offers Xeriscape Landscaping Programs To HOA Homeowners

Have you been looking at your newly-turned-on sprinklers and seeing dollar bills spraying out of them? Did you get a notice from the HOA for a dry lawn, during a drought? We’ve got some good news for you! The City of Aurora is sponsoring a program that offers financial incentives to Aurora residents who commit to Xeriscape landscaping. The program – aimed at incentivizing its residents to conserve water – will provide rebates of up to $1.00 per square foot for turf grass that is replaced with low-water-use plant material. Aurora has $250,000 per year allocated to the program and about 25 percent of this year’s budget has already been doled out. Aurora’s water-conservation department also offers 20 classes each year, designed to help inform residents about Xeriscaping in Colorado.
Xeriscape Rebate Programs Provide a Great Opportunity for HOA’s and other Property Owners
by Matt Corrion
This $400,000 project entailed correcting some serious drainage problems and replacing outdated high water-use landscaping with new low water-use landscaping as part of Aurora’s Xeriscape Rebate Program.  Outdoor Design Group worked with the HOA to design the improvements, submit plans to the City for approval, and apply for the Xeriscape rebate.  We then worked with the general contractor in the field on the re-grading of large areas, piping of downspouts, and the creation of drainage swales.  Finally, we provided bid procurement services for installation of the approved landscape and irrigation design, and worked closely in the field with the selected landscape contractor to complete the project. Through careful planning, design, and coordination, we were able to obtain the maximum possible Xeriscape rebate for the HOA while reducing the water-use and associated costs by over 60%.  The maintenance costs for the landscaping are expected to be reduced by 20-40% with the new low-maintenance approach.

Upcoming Classes 

Learn about water conservation, Xeriscape and how registered Aurora Homeowners Associations can apply for up to $5,000 in matching Xeriscape grants at the Neighbor-to-Neighbor Roundtable Jan. 24 from 6 to 8 p.m. at the Aurora Municipal Center. Funded through the Aurora Water Department, the Xericape HOA grant program is offering a total of $20,000, with a maximun of $5,000 each, to registered neighborhood groups to help promote the use of waterwise landscaping. Homeowners associations must be registered with the City of Aurora and are required to attend the Neighbor-to-Neighbor Roundtable to apply for a grant. Following the Introductory roundtable meeting, interested applicants must attend a two-session class on Xeriscape planning and design. 

The state has taken some lead with landscaping requirements – specifically not prohibiting xeriscape options. The state has established guidelines for public project landscaping to promote water efficiency and conservation through C.R.S. 37-96-101 et. seq.  Covenants for homeowners associations that restrict or prohibit xeriscape options are also not enforceable per C.R.S. 37-60-126. And model ordinances for landscaping, like those provided by DOLA (Water Efficient Landscape Design Model Ordinance; WaterWise Landscaping Best Practices Manual: A Companion to the Landscape Design Ordinance), can assist local governments in adopting local regulations promoting water conserving landscapes.   

This article is not intended to be specific legal advice. It only provides general legal information. You should consult a licensed attorney if you have a legal issue.

Monday, May 21, 2012

HOA Laws - Your Legal Rights

This blog is not intended to be specific legal advice. It only provides general legal information. You should consult a licensed attorney if you have a legal issue.

Notice of Complaint


Anshel Bomberger and Kennedy Smith-Fliesher, Homeowners, Co-Complainants
Regarding Residental Single-Family Home Address: 15437 East 7th Circle, Aurora, CO 80011


c/o Western States Property Services, Inc.,
Ina Meyer, Property Manager:
Sue Johnston, President, Highline Court HOA Board of Directors
9145 East Kenyon Avenue, Suite 100, Denver, Colorado 80237
Office: 303-745-2220 Fax: 303-745-3335

DATE: 04-27-2012

This correspondence is to serve as notice of complaint against the Highline Court HOA, Inc., Board of Directors, ("HOA"), through and in care of the property management agent, Western States Property Services, Inc., (“WSPS”), pursuant to CRS SECTION 1. 37-60-126 (11), Colorado Revised Statutes, which was amended to read: "37-60-126.

Specifically, (11)(a); along with the Fair Housing Act and Civil Rights Act of 1968; based on alleged harassment and alleged discriminatory practices by the Highline Court HOA, Inc., (“HOA”). and property management agent, WSPS, under any and all State and Federal laws in the proper jurisdiction of this matter.

1. Complainant is a disabled veteran (disability status is protected by law and will not be disclosed). Complainant is a "Female to Male" transsexual (“transgender man”) living full time as a male and was formerly known publicly and privately in the Denver metropolitan community as a lesbian. Complainant’s son, is also a homosexual and is co-complainant in this matter as his homosexual status includes him in a protected class for Civil Rights Act laws, Fair Housing Act laws and Anti-Discrimination laws.

2. This issue will not be resolved when the Board of Directors abuse their powers to act on behalf of HOA and each and every homeowner affected by abuse of powers. Especially when such abuse in powers are outrageous and capricious in nature and are alleged harassment and discriminatory for all the above and below stated reasons within this notice of complaint.

3. The Board HOA, through the management company, WSPS, imposed an alleged violation notice, dated 04-24-2012, giving 20-days to remedy the said alleged violation or they would further file a violation lien proceeding on our property. Liens can and do lead to foreclosure of properties, getting people out of the community when they are not wanted.

4. The property in this action is located at: 15437 East 7th Circle, Aurora, CO 80011. The co-owners of said property are: Anshel Bomberger and Kennedy Smith-Fliesher, et al, homeowners.

5. During the date of this issue in this matter, the State of Colorado has undergone a State-1 drought and water restrictions have been imposed by local authorities.

6. On or around April 16, 2012, Complainant put fertilizer on their lawn and the lawn died in spots, noting that not the entire lawn died. The Complainant made a good-faith effort to abide my HOA covenants and resurfaced the soil, by putting grass-seed, appropriate mulch on the affected areas, and hand watered in accordance to the local authorities water conservation recommendation.

7. An alleged violation notice was served on Complainant by the HOA Board, and through the HOA's agent, Property Manager, Ina Meyers, of the Western States Property Services, Inc., via U.S. Mail, dated: 04-24-2012 and is on record with the WSPS office.

8. This NOTICE is to serve as Complainant's intent to wave a request for a hearing with the HOA Board of Directors (per the letter dated 04-24-2012) with the Highline Court HOA, Inc., and WSPS.

9. Further this NOTICE is to serve as Complainant's LEGAL NOTICE of our intent to sue for harassment, discrimination, and abuse of powers and fiduciary authority as it pertains to each Board member of the Highline Court HOA, its officers, designees, management firm handling such notices, its officers, and any other third party that arises or results from filing this complaint in the proper State and Federal agency, as well as any court of law, within proper jurisdictions of the HOA and WSPS, naming each as Respondents/Defendants in this legal matter.

10. The conduct of the Highline Court HOA, Inc., the HOA Board, to include the Property Manager, employed with WSPS, handing such alleged violations and notices, is OUTRAGEOUS, CAPRICIOUS, and a clear violation of the laws in place pursuant to SECTION 1. 37-60-126 (11), Colorado Revised Statutes, which was amended to read:


11. Further, the Department of Regulatory Agencies, Colorado Civil Rights Division, has laws into place that protect gay, lesbian, and transgender persons that reside in the State of Colorado. “Sexual Orientation” means heterosexuality (“straight”), homosexuality (lesbian or gay), bisexuality (“bi”), transgender status, or the perception thereof. “Transgender Status” means having a gender identity or gender expression that differs, or does not differ, from societal expectations based on gender assigned at birth. “Gender Identity” means an innate sense of one’s own gender. “Gender Expression” means external appearance, characteristics or behaviors typically associated with a specific gender.  Effective May 29, 2008, the Colorado Anti-Discrimination Act was expanded to include sexual orientation, inclusive of transgender status, to the list of protected classes for public accommodations. Effective May 29, 2008, the Colorado Anti-Discrimination Act was expanded to include sexual orientation, inclusive of transgender status, to the list of protected classes for public accommodations. Title 24, Article 34, Part 6, Colorado Revised Statutes, protects my son and I from discrimination in public accommodation which the HOA may fall.

12. It is outrageous, capricious, discrimination, and harassment in nature to send a notice of alleged violation dated 04-24-2012, when there is a period of water restriction declared by the City of Aurora beginning May 1, 2012 and extending as late as Oct 1, 2012. The homeowner is required to comply with the water restrictions imposed by the water provider, which has powers above and beyond any alleged lot violation (imposed by and through HOA) for not being able to water and bring the lot back to life in the areas where the lawn has been affected.

13. The HOA Board and management company, is not allowing a reasonable and practical opportunity, with consideration of applicable local growing season, practical limitations to reseed, which the homeowner in this case has done before the date of the said notice by the Highline Court HOA, and management company (dated 04-24-2012).

14. This NOTICE does not preclude the opportunity for any other homeowners affected by abuse of powers by and through the HOA and WSPS, to file as co-complainant/plaintiffs, thus exercising our rights to also file a Class Action Complaint against each HOA Board member, agent, designee, and any and all other third parties involved with this action; resulting out of their outrageous, capricious, harassment, and discrimination throughout the years this HOA has been incorporated and violating our Constitutional Rights.

15. As a matter of law, the HOA, HOA Board, and through their Property Management agents, are dismissing the laws that protect any homeowner when a watering issue is at issue for a alleged "Dry Lawn and Weeds" violation.

16. There is no other reason for this homeowner to have to endure such alleged violation notices. The HOA, HOA Board, and WSPS, is misinterpreting the laws and abuses powers in favor of the HOA and not the homeowner.

17. The complainants allege than this homeowner and son belong to certain classes that bring up the matter of being harassment and discrimination based on our disability, gender status, sexual orientation, and religion; which violates Federal Statutes under the Fair Housing Act; as the homeowner is a Jewish, transgender, disabled veteran.

18. On several occasions, Sue Johnston, President of the HOA Board made disparaging remarks about Complainants transgender status, stating, "I can see why Kathy left you, if my husband did what you are doing, I'd leave him too and we have been married for over thirty years." This comment left Complainant to believe there is an attitude of bias and discrimination on the part of this so-called “neighbor” that is the President of the HOA Board, against those that are of a protected class.

19. The Civil Rights Act of 1968, commonly called the Fair Housing Act, which outlawed discrimination in the sale, rental, financing and advertising of housing (to include HOA abuses in CID's) base on the violation of such laws due to race, color, religion, sex (1974), national origin, disability (1988) or family configuration (1988). These are examples of discriminatory impact when harassing, threatening, intimidating, and coercing homeowners to comply with alleged violations when the homeowner is abiding by water restrictions above and beyond the HOA covenants. The water restrictions imposed by the city have more powers than the HOA in these matters. Harassment includes actions that are suspicious and discriminatory in nature, regardless of the intent of the HOA Board member, HOA, and management company action on behalf of HOA Board and HOA. Harassment is based on how the homeowner interprets it, not the perpetrator. As a HOA Board, HOA, and management company handling such issues, the HOA Board, HOA, and management company has the role of setting a climate of civility and respect in our community, not harassment or discrimination. Fair housing laws generally require agents handling sensitive issues to be consistent in all of the HOA policies, procedures, and rules, and certainly not violate any State and Federal laws in the process.

20. This homeowner (Complainants’), as well as other homeowners of this Highline Court HOA are not taking these matters lightly. Other homeowners have reported that the HOA Board is out of control and abusing their powers based on certain neighbor's and HOA members national origin, as a matter to force homeowners out that are not White, Heterosexual, Christian, and American Born. It is our intent to make abuses in power, harassment, and discrimination in this HOA and its Board Members accountable for such illegal practices, which may be construed as criminal in nature in accordance with State and Federal laws.

21. We reserve the right in the future to file a Class Action should the need arise.

22. In closing, when I swore into the Armed Forces of the United States of America, the greatest country on this planet, I stated the following:

"I, do solemnly swear (or affirm) that I will support and defend the Constitution of the United States against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same; and that I will obey the orders of the President of the United States and the orders of the officers appointed over me, according to regulations and the Uniform Code of Military Justice. So help me God."

(Title 10, US Code; Act of 5 May 1960 replacing the wording first adopted in 1789, with amendment effective 5 October 1962)."

23. Nowhere in this oath did I swear to bear true faith and allegiance to an HOA at any time in my lifetime. Signing the closing documents of the said property does not give the HOA a right to violate any of my rights as a citizen of this great nation. I was willing to give my life to protect our nation. I will not allow myself to put up with any HOA's abuses (to include psychological forms of coercion) of my Constitutional Rights for one moment longer. I refuse to live in a community where I am forced to put up with this sort of abuse of power and a violation of my Constitutional rights that I was willing to give up my life for.

24. President of the HOA Board, Sue Johnston's words (as reflected in paragraph 18 above) is biased, discriminatory in nature, and shows that she is not looking out for all of the members of the HOA, let alone “neighborly.” She has a hidden agenda. She and the HOA Board, to include the Property Manager of WSPS, is not any homeowners master and no homeowner is their slave. As a Jewish transgender human being, I have a right to liberties, just as other Americans are afforded rights. It is not up to the HOA Board, it’s fiduciaries, and WSPS to force people out of neighborhood based on misinterpretation of State and Federal laws. The HOA laws do not abolish any and all other State and Federal laws. Being ignorant of the laws is no excuse. Psychologically coercing people to do things their way or else is illegal and criminal in nature.

25. Homeowners' associations (HOAs) are legal entities created to maintain common areas in various types of real estate developments, such as condominiums and subdivisions. Depending on the type of development, membership in the HOA usually is automatic upon becoming a property owner in the development. HOAs have the authority to enforce the restrictions found in the homeowners' property deeds. An HOA gets its power and authority from a variety of legal documents, including the HOA's governing documents and federal and state laws. The HOA governing documents consist of the declaration of covenants, conditions and restrictions (CC&Rs), the articles of incorporation, the bylaws, and the rules and regulations adopted by the HOA's board.

26. Homeowners' associations often reserve the right to approve or reject new residents, whether expressed in writing, orally, or implied through verbal remarks to the contrary affecting a homeowner that is a member of the HOA and a member of a protected class. Such approval or rejection can't be based on race, color, religion, sex, handicap, familial status or national origin because this would violate the Fair Housing Act and other State and Federal laws as applicable in this matter.

27. Constitutional Laws Violated:

a. Seventh Amendment – Civil trial by jury. In suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise re-examined in any court of the United States, than according to the rules of the common law. Thus, HOA "Laws" do not abolish Constitutional Laws.

b. Ninth Amendment – Protection of rights not specifically enumerated in the Constitution. This amendment declares that the listing of individual rights in the Constitution and Bill of Rights is not meant to be comprehensive; and that the other rights not specifically mentioned are retained by the people. The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people. Thus, HOA "Laws" do not abolish Constitutional Laws.

c. Tenth Amendment – Powers of States and people. The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people. This amendment reserves to the states respectively, or to the people, any powers the Constitution did not delegate to the United States, nor prohibit the states  or people from exercising. Thus, HOA "Laws" do not abolish Constitutional Laws.

d. The Four Freedoms were goals articulated by US President Franklin D. Roosevelt on January 6, 1941. In an address known as the Four Freedoms speech (technically the 1941 State of the Union address), he proposed four fundamental freedoms that people "everywhere in the world" ought to enjoy:

1.Freedom of speech and expression

2.Freedom of worship

3.Freedom from want

4.Freedom from fear

e. Living within an HOA does not afford homeowners the freedom of expression, freedom of worship, freedom from want, and freedom from fear. We all fear HOA liens on our property and the cost of losing money involved defending the right to not have a lien placed on our title of our properties when the HOA Board abuses powers by threatening to place lien;  when they decide a violation has occurred, they indeed place liens on properties, taking away our liberties to own our properties outright. We are not afforded a fair trial. Thus, the homeowners do not own the land, the HOA owns the homeowner. It is a master-slave relationship.

f. Thirteenth Amendment to the United States Constitution, which abolished slavery. The Thirteenth Amendment to the United States Constitution officially outlaws slavery and involuntary servitude, except as punishment for a crime. HOA homeowners should not be subjected to a "Master-Slave" relationship by the HOA Board and WSPS acting as the "master" in this regard. Psychological coercion had been the primary means of forcing involuntary servitude in United States v. Ingalls, 73 F. Supp. 76, 77 (S.D. Cal. 1947). However, in United States v. Kozminski, 487 U.S. 931 (1988), the Supreme Court ruled that the Thirteenth Amendment did not prohibit compulsion of servitude through psychological coercion. Kozminski limited involuntary servitude to those situations when the master subjects the servant to: 1. threatened or actual force, 2.threatened or actual state-imposed legal coercion.

g. The Trafficking Victims Protection Act of 2000, P.L. 106-386, updated the federal anti-slavery statutes to include victims who are enslaved through psychological coercion, even if there was no physical coercion. The HOA Board abuses their powers through psychological coercion, through the threatening of liens as their remedy for homeowners not complying exactly as the HOA Board believes they can require through their abuse in powers. The HOA Board and WSPS abuses their powers through implied psychological coercion of:  "Do what we say or we will eventually take your property from you. " That is a clear type of psychological coercion. Thus, violating the provision of master-slavery psychological provisions as provided under the Trafficking Victims Protection Act of 2000, which pertains to anti-slavery.

28. As of the date of this NOTICE, I will be placing my property located at: 15437 East 7th Circle, Aurora, CO 80011, for sale. Please address all future correspondences to my following permanent residential address:

Anshel Bomberger and Kennedy Smith-Fliesher
P.O. Box 1126
Georgetown, CO 80444-1126;

Respectfully Submitted,
Anshel Bomberger


United States Department of Housing and Urban Development (HUD)
Office of General Counsel, Headquarters Managers OGC
Helen R. Kanovsky, Esq., GC
451 7th Street S.W., Room 10110,
Washington, DC 20410

United States Department of State
Under Secretary for Civilian Security, Democracy, and Human Rights
Office to Monitor and Combat Trafficking in Persons
Hillary Rodham Clinton
Secretary of State
2201 C Street NW,
Washington, DC 20520

Colorado Department of Regulatory Agencies (DORA)
Division of Civil Rights
Steven Chavez, Division Director
1560 Broadway, Suite 1050,
Denver, CO 80202-5143

Anti-Defamation League (ADL)
1120 Lincoln St Ste 1301,
Denver, CO 80203

HOA Specializing Law Firms


Lynch Legal Firm



Douglas Turner Law Firm

Hindman Sanchez Law Firm

Winzenburg Leff Purvis & Payne Firm



Buckingham, Doolittle, and Burroughs

Levin Tannenbaum Law Firm


New Jersey

Tom Martin Law Firm



Buckingham, Doolittle, and Burroughs



Barker Martin Law Firm



These links and/or referrals provided are not intended to be specific legal advice. It only provides general legal information. You should consult a licensed attorney in your area and expertise needed if you have a specific legal issue. This list is not a complete list. It is a work in progress. If you know of a law form that handles HOA abuse in any State, please contact me and let me know their web site. Do not just give me their name. Send your information to:

10 Things An HOA Won't Tell You...

1. "We Can't Wait to Get Our Hands on Your Money -- Or Even Your Home."

A gardening violation. That's what landed Jeffrey DeMarco in hot water with his Rancho Santa Fe, Calif., homeowners association a few years ago: He planted too many roses on his four-acre property. Peeved, the association fined him monthly and sat back as the bills mounted. Then it placed a lien on his property and threatened to foreclose, according to DeMarco.

He took the board to court, but lost on the grounds that he had violated the association's architectural design rules. (In addition to planting roses, he also had regraded the site.) In the end, he got stuck with the association's $70,000 legal bill and lost his home to the bank. "Mr. DeMarco came into the community and wanted to step outside the rules," says Walt Ekard, the association manager. "That's a detriment to everyone."

Think it couldn't happen to you? Think again. Many people who belong to homeowners associations do not understand just how much power these groups have over them -- until they miss a payment or otherwise run afoul of the board. Fall a single day behind in paying your monthly dues, for instance, and the association may slap you with a fine. Fall 90 days behind and it may place a lien on your home and threaten to foreclose unless you pay up immediately. And because you often hand over the right of property trustee to the association when you agree to the by-laws, in some cases "you don't even get to go to court," says Evan McKenzie, a lawyer turned political science professor in Chicago and the author of Privatopia: Homeowner Associations and the Rise of Residential Private Government.

Your best defense, if you can afford it: paying what the association says you owe, then arguing. Most associations work on a "balance forward" accounting system, in which your payments go toward the outstanding balance. By delaying, you'll just accumulate more late fees.

2. "We're More Secretive Than the CIA."

Like corporate boards, which have a fiduciary responsibility to make disclosures to shareholders, a homeowners association board is supposed to be upfront with its members. But all too often, boards play things close to the vest. "The board will say everything is confidential and they can't tell you anything," says Willowdean Vance, president of the American Homeowner Association, a consumer group based in Lake Forest, Calif. "They're just on a power trip and it's absolutely deceitful."

Some boards can be impossibly stubborn about disclosure. When a few members of the Columbia Foundation, a Maryland homeowners association, tried to gather some information, another faction of the board was so miffed at not being consulted first, that they went so far as to try and impose a rule that would have required members to get permission from the entire board before asking an outside agency for information. Larry Holzman, an attorney with Ochs, Holzman and Rosen, a firm specializing in homeowners litigation, says the rule was voted down only after a major publicity campaign put forth by the Maryland Homeowners Association.

Homeowners who feel shut out should first write a letter to the board formally requesting access to the records, suggests Debra Bass, a spokeswoman for the Community Associations Institute. If the board is still mum, "ask for a letter from the association attorney that explains why you can't see the records," she adds. And if you still aren't satisfied with the board's response, move somewhere else, or hire a lawyer and sue. "The entire budget should be open and available to every homeowner," says Bass. "It should not be kept a secret."

3. "When In Doubt, We Sue."

Board members will tell you that the last thing they want is to go to court. But it happens all the time. Experts estimate that in California, 75% of the homeowners associations are embroiled in a legal tangle of some kind. Chicago attorney Mark Pearlstein, who represents associations, figures that 60% of all condo boards and homeowners associations in Illinois are involved in some kind of legal suit.

It's partly a reflection of our increasingly litigious society. But that's not the only reason. "The association lawyers tell the board to enforce every rule," says author Evan McKenzie. "They say, 'If you make one exception, the whole neighborhood falls into chaos.' But who gets paid every time you take an owner to court?"

The lawyers, of course. But the litigation option can be hard for board members to resist. For instance, Margurette Nicholson was board president in 1991 when her association in Portola Hills, Calif., took a neighbor to court for installing a satellite dish in his backyard. "Nobody wanted to take this thing to court," says Nicholson. "But one of the homeowners was a lawyer and she was friends with the association's lawyer. They both campaigned for it. They both said we would win. I knew we wouldn't." Indeed, the owner's lawyer argued that the rule infringed on his client's First Amendment rights and he won. The board's legal fees: more than $40,000.

4. "You Won't Be Able To Sell When You Want."

Besides being expensive, lawsuits often mean that you won't be able to sell your home when the time comes to move. "Would you want to go out and buy a property that was in the middle of a lawsuit?" asks Oliver Burford, executive director of the Executive Council of Homeowners, a trade group for California associations. "I wouldn't."

Naturally, banks don't like lending money for homes on which lawsuits are pending, either. But there are exceptions. "There will always be some lenders who are willing to lend you the money," says Larry Holzman, a Maryland attorney. "The problem is you will not be able to get the same rates set up because banks have very strict lending criteria." If you find out a condo you're interested in is embroiled in litigation, use that information to negotiate a lower price, Holzman advises. If you're the seller of such a property, you'd better not hold out for top dollar.

5. "We're Poorer Than We Look."

Every association has a reserve fund. It's like a savings account, and it's meant to be tapped when things go wrong or the property falls into disrepair. But often these funds are in terrible shape themselves.

Ron Williams, an engineer with R.J. Moore, a consulting company that specializes in reserve accounting, once worked with a Northern Virginia condominium that had a paltry $100,000 set aside. "Closer to $1.25 million would have been considered healthy," says Williams. When power-plant equipment gave out in early 1994, the association didn't have the $400,000 needed to replace it. The solution: A $2,400 special assessment to each of the 170 unit owners and a 22% increase in monthly dues.

When it comes to checking up on a reserve fund, there are two good rules of thumb. First, about 20% to 25% of your dues should go toward the reserve fund, says Robert Nordlund, president of Association Reserves, a California company that specializes in reserve accounting. Second, there should be a long-term schedule for the reserve fund in the annual budget, including a projection of upcoming expenses for each common-area item: elevator repairs, painting, pool maintenance and so on. Reserve accountants suggest that the account should contain no less than 70% of the projected reserve budget. If the account is 30% funded or less, you can expect to be hit with some big assessments down the road.

6. "We Can Make Up the Rules As We Go Along."

By law, a majority of the homeowners in an association have to approve any change in the bylaws. But many boards sidestep this by simply changing their house rules, which are as binding as bylaws but can usually be rewritten without asking all the homeowners. "Even if you were to be given the rules today, they're probably already out of date because [boards are] constantly making changes to the rules at whim," says Elizabeth McMahon, a co-founder of the American Homeowners' Resource Center, a San Juan Capistrano, Calif., consumer group. "And they couldn't care less if you don't like them."

At the Reston (Va.) Homeowners Association, for instance, only residents who used the swimming pools and tennis courts had to pay for their upkeep. But then in 1990, the board decided everyone ought to chip in, and it polled members. More than 70% of those who voted opposed the new rule, but it didn't matter. In the end, the board pushed it through anyway, and fees climbed 26%. "They disregarded the will of the people," says Thierry Gaudin, a Reston homeowner, "and that was wrong."

It may be wrong, but it's the board's right. Period. "Bottom line, the board has to have the right to run the show," says attorney Benny Kass, who represents associations. About all you can do is keep up to speed on any changes the board makes in the rules, and if you don't like them, complain. The sooner you raise a fuss, the better: Rules that have been around for a while tend to be the hardest to change.

7. "We Don't Want You At Our Meetings."

Monthly meetings are open to all homeowners. At least in theory. "A lot of times, however, meetings are moved at the last minute to limit the questions from homeowners or to keep information from them," says Willowdean Vance, president of the American Homeowner Association, a consumer group based in Lake Forest, Calif., which has fielded a number of complaints from homeowners who were shut out of meetings.

Even when you can attend, the board may not acknowledge you. "Board members won't come out and say that they don't want you at their meetings," says Vicki Satern, co-founder of Common Ownership Alliance, a Washington, D.C., consumer group. "But basically, that's what their goal is."

She knows from firsthand experience. The board at her Virginia vacation home once decided to hire a new management company. The problem: "They cost double the money," says Satern. "They wanted 6% of refurbishing contracts, 10% on engineering contracts, plus we had to buy their copyrighted software and the equipment to use it."

Outraged, Satern raised her hand at a board meeting. "They ignored me," she says. "Finally, I just spoke up. They yelled at me and said I was not allowed to speak." The new management company was hired.

"When you come to a board meeting," says B. William Smink, the association's attorney, "you can sit, you can observe, but you cannot speak because the board is there to exercise its business judgment. And that's in compliance with national and state community-association laws." Satern would have done better, according to Smink, if she had contacted the board members individually before or after the meeting.

Other options for homeowners who feel ignored: "Put your complaint in writing," says attorney Michael Nagle, who represents associations. "That's hard to ignore." If that gets you nowhere, petition other homeowners and call a special meeting to discuss the issue or to remove some of the board members. "And if it's really bad, take the board to court," suggests Nagle.

8. "We're In Over Our Heads."

Most board members are volunteers, and they generally get their training on the job. Sometimes their inexperience means they bungle the bookkeeping, resulting in higher fees or assessments. Sometimes they fail to do their homework on outside contractors, meaning that you get shoddy workmanship in your common areas. And sometimes, as Mary Lindsey knows all too well, they can cause much bigger problems.

While involved in a divorce in 1992, the Pomona, Calif., family therapist fell behind in her monthly dues. Back dues, late fees and interest quickly mushroomed, so Lindsey tried to work out a payment plan with the board and a credit-counseling service. But they couldn't agree on exactly how much was owed. "I thought I owed them less than $800," says Lindsey. "They said it was over $1,000." The dispute wound up in court as the association threatened to foreclose on her home.

In the end, it turned out that Lindsey was right about the money she owed. The board had goofed. But the association won its lawsuit anyway. The judge ruled that she was wrong not to make back payments while the matter was in dispute. To her dismay, Lindsey was left with a $22,000 bill for the association's legal costs, late fees and interest.

9. "We Work For Nothing But Get Compensated In Other Ways." 

Being on the board is a thankless job, board members will tell you. That's probably true much of the time. But strictly speaking, it's not always so. The thanks they often get may surprise you.

Special favors and perks for board members are fairly common, not to mention being a "control Freak, fulfilling the need of "Pathological Narcissist Supply." The potential for abuse is inherent in the way these things are organized. The board members give themselves and their friends privileges and they never get hassled. The worst-case scenario: The board retains a contractor and board members get kickbacks.

"This goes on, no question," says Virginia real estate attorney Fredrick H. Goldbecker. "It's usually done legally, so it's bulletproof, but that doesn't make it right." When the roof needs repairing, for example, "the board says the work needs to be done a certain way, and the only roofer in town who can do it that way is related to a board member," Goldbecker says. Because many associations have no formal system of checks and balances, homeowners often have no idea how their boards make decisions about contractors. About all you can do is keep a careful eye on the board. Big expenditures, no matter how mundane, are worth looking into.

10. "We're Incredibly Petty."

In many associations being hard-nosed about the rules is practically the board's raison d'etre. "Some of these board members have nothing better to do. So instead of taking care of the property, they censor people's lifestyles," says Vicki Satern of Common Ownership Alliance. She needn't tell Allen Warshaw. To ward off a neighbor who had attacked him with a log, he asked his Rockville, Md., board to bend the rules. He wanted a six-foot fence, two feet taller than allowed. When the application was denied, he sued -- and lost. Warshaw wound up with the association's bills, too. The total: $23,000 in legal fees, court costs and interest.

Humbled but determined, he built a shorter fence. "I wasn't really worried because the board had told me that they don't go out and measure fences," he says. As soon as the fence was up, several board members walked over to Warshaw's yard and measured it. And indeed, in some areas the fence was a few inches over four feet. The dispute continued. "They put a lien on my property," Warshaw says. "They took all my savings, and they're garnishing my paycheck. It's like I am a common criminal. It has been devastating." Says Jeffrey Van Grack, the association's attorney: "The board made numerous offers to try to work out the payments, but Mr. Warshaw refused."

Sometimes the pettiness is more subtle. When one Virginia homeowner asked for permission to hang Christmas tree lights in 1992, the board didn't like the idea but didn't know how to prevent it. "We struggled with this one," says lawyer Benny Kass, who represented the association. "But we finally concluded that the restriction against hanging lights was valid because you were pounding nails into the wood, and that was a fire hazard." Ho-ho-ho.

This article is not intended to be specific legal advice. It only provides general legal information. You should consult a licensed attorney if you have a legal issue.