Thursday, August 2, 2012

HOA Foreclosure Ratio of 36 Times, Violates the 14th Amendment Against Cruel and Unusual Punishment

Matt Tomsic wrote an important article in the Charleston Region Business Review on HOA foreclosures with some revealing statistics.  SPECIAL REPORT: YOUR HOME, THEIR RULESFor example, 68% of the foreclosures were for $5,000 or less in Charleston County, SC.
What Tomsic researched and found was just median values for debt owed the HOA and home value, which were $4,500 and $160,000, respectively.

That amounts to a punishment of 36 times the debt owed. The US Supreme Court in State Farm v. Campbell, 538 U.S. 408 (2003) set criteria of punitive damages exceeding 10 times actual damages constitutes a violation of the 14th Amendment against cruel and unusual punishment. 

In the jargon of today, HOA foreclosure is the iconic instance of cruel and unusual punishment. And the HOA did not advance any hard cash like a bank to justify foreclosure rights. BUT, your elected representatives see no evil and continue to support the real estate industry’s business interests, with the people being the pawns and “marks” in the con game.

Courtesy: http://pvtgov.wordpress.com/2012/08/02/hoa-foreclosure-ratio-of-36-times-violates-the-14th-amendment-against-cruel-and-unusual-punishment/

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.

Thursday, July 26, 2012

Complaint Rebuttal Statement (Submitted: July 25, 2012)

Anshel Bomberger, Complainant
1015 Griffith Street, P.O. Box 1126,
Georgetown, CO 80444-1126
AnshelSBomberger@gmail.com
303-569-7933 Home/Fax

Department of Regulatory Agencies
Division of Civil Rights
Linsay Huusko, Housing Investigator
1560 Broadway, Suite-1050,
Denver, CO 80202
303-894-7830 Fax

Charge Number: H20120129

Anshel Bomberger vs. Highline Court Homeowner's Association

25 July 2012

Dear Investigator Huusko:

This communication is to serve as acknowledgement of the correspondence received from your office, dated July 17, 2012 and to serve as my formal rebuttal.

I reiterate and re-emphasis every word in my complaint. I re-emphasize that Sue Johnston is a serial bully, a narcissist, and a control freak; based on her statements to myself while living at:15437 East 7th Circle, Auroras, CO 80011; specifically, "I can see why Kathy left you, if my husband was doing what you are doing, I would leave him too, and we have been married for over thirty years."  For the record, my remark back to her was, "So that tells me you are only in love with your husband's genitals and his hairdo, what about his soul?" As well as, Johnston's remark of; "Real men shovel the walk this way." My response was, "Really, so that is why you are here doing this and your husband is somewhere else?"

As of July 20, 2012, I no longer own property in the Highline Court HOA subdivision. It was sold for $200,000 and at a significant loss to my family and I (original purchase price $287,000). I look as if I am finally free from Sue Johnston and Ina Myers and their abuse of powers. 

Living there was the most expensive unplanned learning experience of my life. Had I known what was going to take place, I never would have purchased property there. I am now an advocate against any HOA abuse (See: http://hoaabuseofpowers.blogspot.com/2012/05/hoa-syndrome.html).  No one should ever be at the mercy of another and their abuses, especially where they reside.

I realize this matter is a legal issue of my word against Sue Johnston. For the record, and in my OPINION, Sue Johnston is a pathological serial bully, a liar, and a narcissist putting the needs of her property value (and using the HOA bylaws as a vehicle to control homeowners),  above and beyond the emotional, psychological needs of the people living there. No one should have rude remarks stated to them from someone that has a fiduciary responsibility to keep her mouth shut and just be kind while in the role of President of the Board. Sue has broken the laws as it pertains to my right (and other families rights) to not have to replace their lawn during a drought. That all is in writing to not be disputed. There are statutes in place to protect homeowners from having HOA's enforce outrageous bylaws during a drought or instill fear if they don't play by the HOA's rules and abuse of power. 

As for the letter signed by Ina Myers requesting me to go before their Board at a Hearing on: 10 July 2012; stating "Your lawn looks like it has improved," that is a lie and them panicking in response to this investigation. I turned off my water and moved full time up to Georgetown, CO; April 28, 2012. That is on record with the City of Aurora, Water Department.  The lawn was worse than when they sent the notice of violation during the drought in the first place. I left because it was no longer safe for me to live there. 

I retreated to where I do feel safe and I am much happier living in Georgetown and not having to live within the abuses of Sue Johnston and Ina Myers. Free at last, free at last, thank G-d I am free at last.

My intent is to make Sue Johnston and Ina Myers culpable for their inappropriate abuse of powers. They started with the Vietnamese family on the corner, nickeled and dimed them out of the equity of their property, abused them in the process; all with the hope that they would one day leave, and then moved on to protected classes that they did not like being there (my family included). I am not the only homeowner that endured abuse of powers and HATES their behavior for what they have done to people. 

It is my hope that the State of Colorado or the Federal Government (HUD), will do a comprehensive investigation of the coercion and what I believe is extortion of many homeowners, not just myself within this HOA and subdivision. The turnover rate of home ownership in the past ten years, along with the fact that no one wants to volunteer for the Board, speaks volumes as to what is going on there. I am out of there and no longer at the mercy or Sue Johnston, Ina Meyers, or HOA abuses.

I stand by my original complaint.

Signed,



Anshel Bomberger
Complainant


Tuesday, June 26, 2012

Managers Practicing Law?

QUESTION: Our association has no legal representation and the board relies solely on our management company for legal advice. Is that legal?

ANSWER: Managers are often quite knowledgeable when it comes to the law, which makes them invaluable to associations. Their experience and knowledge gives them the ability to spot problems and sound warnings when boards stray into areas of risk. But, all managers can do is raise red flags. They cannot give legal advice.

Practice of Law Defined. California has a expansive standard for defining the practice of law. It does so to protect citizens from the damage and wrongs committed by unlicensed practitioners. California broadly defines the "practice of law" as dispensing legal advice or service, even if the advice or service does not relate to any matter pending before a court. (Mickel v. Murphy (1957) 147 Cal.App.2d 718, 721.) California's Office of the Attorney General deems the unlicensed practice of law as a form of fraud and those engaged in it can be criminally prosecuted. Business and Professions Code §6126(a) was amended in 2003 to stiffen the penalties for those who dispense legal advice without a license:

Any person . . . practicing law who is not an active member of the State Bar . . . is guilty of a misdemeanor punishable by up to one year in a county jail or by a fine of up to one thousand dollars ($1,000), or by both that fine and imprisonment.

No Insurance Protection. Because the unlicensed practice of law is a crime, insurance will not protect a manager from prosecution for such activity. As provided for in Civil Code §2773, "An agreement to indemnify a person against an act thereafter to be done, is void, if the act be known by such person at the time of doing it to be unlawful." For example, if you intentionally set your house on fire, don't expect your insurance company to pay for it. The same applies to dispensing legal advice. If a manager dispenses legal advice and the association is damaged as a result--an insurance company owes no coverage or defense for acts or damage arising out of any illegal act committed by or at the direction of an insured. (20th Century Ins. Co. v. Stewart (1998) 63 Cal.App.4th 1333.)

No Indemnity Protection. The statute cited above also affects management agreements. An indemnity provision in a management contract will not protect a manager from fines and jail time nor will it protect him from lawsuits by third parties or the association when it comes to the unlicensed practice of law.

Unlicensed Practice of Law. Many managers engage in the practice of law without realizing it. Following are examples of what a court would likely deem the unlicensed practice of law:

1.  Advising boards about rights, duties and liabilities. That includes but is not limited to:

    Proper handling of recall elections,
    Voting rights and requirements in election disputes,
    Borrowing from reserves,
    Emergency assessments,
    Proper collection procedures,
    Interpreting the Davis-Stirling Act,
    ADA compliance issues,
    Interpretation of contract provisions,
    Disputed maintenance and repair issues,
    Disputed water damage and mold issues, and
    Settlement issues.

2.  Preparing documents that alter rights, duties and liabilities. Managers and management companies can prepare documents that are incidental to the regular course of their business. Anything beyond that must be prepared by legal counsel. That includes but is not limited to:

    Amendments to CC&Rs, Bylaws, and Articles of Incorporation,
    Contracts and contract provisions,
    Collection policies,
    Election rules,
    Rules enforcement policies,
    Settlement agreements, and
    Hold harmless and indemnity agreements.

Violation of the BJR. The hourly rates for HOA lawyers typically range from $175 to $350 whereas legal advice from a manager is free. In the current economic climate, it's understandable that boards would try to save money by seeking free legal counsel from their managers. However, doing so exposes directors to significant risk. By statute, directors are protected from personal liability for errors in judgment if they follow the Business Judgment Rule, which requires that decisions by directors be:

In good faith,

In a manner which the director believes to be in the best interests of the corporation, and

With such care, including reasonable inquiry, as an ordinarily prudent person in a like position would use under similar circumstances. Corp. Code §7231(c).

Directors will have difficulty convincing a jury that seeking legal advice from a manager was prudent.

RECOMMENDATION: Managers often have enough training to recognize when boards wander into areas of legal peril. When that happens, they should alert directors to the danger and advise them to seek legal counsel. Boards should not put themselves and their managers at risk by pressing their managers for legal advice. It's not fair to the manager and potentially costly to the association and its directors. When asked for legal advice, a manager should always recommend that the board seek legal counsel. Doing so protects both the manager and the board.

Read more: Managers Practicing Law http://www.davis-stirling.com/Newsletters/2012Newsletters/ManagersPracticingLaw/tabid/3571/Default.aspx#ixzz1ywQx8Zjb
from Davis-Stirling.com, by Adams Kessler PLC.

Colorado UPL: 
http://www.cobar.org/docs/Nancy%20Cohen%20handout%20in%20pdf%20format.pdf?ID=3042

http://www.coloradosupremecourt.com/pdfs/Regulation/Unauthorized%20Practice%20%28English%29.pdf

Courtesy: Davis-Stirling.com
http://www.davis-stirling.com/Newsletters/2012Newsletters/ManagersPracticingLaw/tabid/3571/Default.aspx#axzz1yf7Lt4dO

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.

Wednesday, June 20, 2012

Private Community Associations: Boon or Bane for Local Governance?


Urban Institute.   June 30, 2011

 The speakers are Robert Nelson, author of "The Private Neighborhood" (2004),  "Privatizing the Neighborhood" (1999) and Private Neighborhoods And The Transformation Of Local Government (2005), and Evan McKenzie, a former HOA lawyer and author of Privatopia (1996), Beyond Privatopia (2011), and the "Privatopia Papers" blog.

Courtesy: Urban Institute (http://urban.org)
http://www.ustream.tv/recorded/15712398

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.

When Can Private Security Stop and Detain?

Today we begin a new feature for Appellate Strategist -- detailed previews of civil cases just granted review in the latest term of the Illinois Supreme Court. This week we will review the late May grants, and the feature will continue shortly after the end of each term of the Court.

Poris v. Lake Holiday Property Owners Association [pdf] brings several questions before the Court about the powers of private security forces. Plaintiff owns property in the Lake Holiday Development, and is a member of the defendant Association. The Association Board of Directors has adopted rules and regulations for the governance of Association property, including speed limits. The Board hired private security officers to enforce the limits, bought vehicles and equipped the vehicles with oscillating and flashing lights, radar units and audio and video recording equipment. Officers were empowered to issue citations to homeowners for violations.

Plaintiff was stopped by a security officer for speeding on Association property. The encounter played out pretty much like any traffic stop with a policeman would: officer takes driver's license, driver waits, officer writes citation.

Plaintiff sued the Association, every member of its Board, the chief of security and the officer . Count I sought a declaratory judgment that the practices of the Association's security department were illegal. Counts II and III alleged breach of fiduciary duty and willful and wanton conduct. Count IV alleged false imprisonment. Counts V through XII alleged breach of fiduciary duty and willful and wanton conduct by each board member, and the Chief of Security. Count XIII alleged nuisance and Count XIV sought an accounting. The Circuit Court wasn't impressed, tossing the whole thing on summary judgment.

But the Appellate Court held that the driver had stated certain claims after all. The Illinois Code of Criminal Procedure, 725 ILCS 5/107-3, gives private citizens -- and a private security officer is nothing more than a private citizen in this state -- the authority to make an arrest when he or she has "reasonable grounds to believe than an offense other than an ordinance violation is being committed." But hold on, the Court said -- the officer wasn't stopping the plaintiff for committing an "offense" -- plaintiff got stopped for violating the Association's speeding-on-Association-property rule. So the Association's stop-and-detain rule may be a problem.

Ever wonder who gets to flash red lights on the highways? Under Illinois law, the answer is "[v]ehicles used by a security company, alarm responder, or control agency." 625 ILCS 5/12-215(b)(13). Well, the parties agreed that the Association wasn't an "alarm responder" or "control agency" -- but the Association claimed it was a "security company." Not so fast, the Appellate Court said, quoting from the Association's articles of incorporation. So back goes that claim too.

The Court then reviewed several less controversial claims -- the Association could use its recording equipment since officers turned it off whenever anyone objected, and it could continue to use the radar gun -- the Court turned to the plaintiff's false imprisonment claim. The result of this one was pretty much a foregone conclusion after the holding on stop-and-detain -- the Association clearly had a problem. And so it did: reverse with instructions to enter judgment against the Association with respect to liability.

So what comes next? It's difficult to predict. There is no obvious conflict in authority in the Appellate Court opinion, so the Supreme Court likely concluded that this was a sufficiently common problem across the state to justify its intervention. Also, note how interconnected the claims are. Speeding is both an Association rule and a commonplace offense; if the Court blurs the distinction, the first declaration and the reversal on false imprisonment fall. Although the Association isn't a security company, perhaps the security force is -- if that's so, then the declaration regarding those flashing red lights might be overturned too.

Courtesy: Kirk Jenkins 
http://www.appellatestrategist.com/2012/06/articles/jurisdictions/illinois/when-can-private-security-stop-and-detain/

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.

HOA Fraud and Embezzlement

The HOAx Film

About the Film

"The HOAX" is an independent examination of the abuse of power and lack of regulation in the homeowners' association (HOA) industry; a business whose key selling point is the protection of property values.

The film follows an investigative reporter, homeowners, and HOA reform activists as they illustrate shocking evidence of financial and psychological hardships throughout Texas and Nevada. A few of these people, including the filmmaker, are the subject of adverse actions from the very Homeowners Associations created to help them.