Wednesday, March 23, 2005
Senior Life Magazine, March 2005 editionSenior Condo Purchases, Part Five: A World Of Scary Stuff
Senior Life Magazine, March 2005 editionSenior Condo Purchases, Part Five: A World Of Scary Stuff By Donie Vanitzian BA, JD, Arbitrator(c) 2005 Vanitzian Condominiums and townhouses are deceptive facades of worry free idyllic living. Many sales agents are unaware or unwilling to jeopardize their “sale” by painting a true picture of what really goes on in their Venus Flytraps of “affordable” living. It is only after the purchase that unwary buyers realize fees, and other costs, escalate quickly and can rise beyond their means. Without unlimited funds, or a friend or family member with the tremendous stamina, generosity, money, time, intellect and know-how to fight for your interests, purchasing this type of property is a risk. In this environment one cannot afford to be lazy or apathetic about protecting one’s interests or expect “others to take care of them.” All too often, dissatisfied owners become scared of the consequences of standing up for their rights. Instead, they opt to live inconspicuously under the jackboot of an oppressive association. Unless you have the courage to stand up and be counted, particularly senior owners, who are most at risk don’t buy residential deed-restricted property. No owner wants to believe that bad things will happen to them, so they are usually unprepared. Never in a million years did the following owners expect to be faced with the outrageous examples described below.They’re spending your money For millions of California titleholders “workplace theft” occurs inside their homeowner association. Recently, owners at one development who were denied access to association books and records, and never bothered to audit the accounts, lost over $340,000. It turned out that several days a week the association manager was seen dropping as much as $500 on tips, drinks and lap dances at a local topless club. In fact, he was spending embezzled association dues belonging to several hundred owners. Similar fraud on a grand scale has increasingly been uncovered, but only after millions of dollars have gone missing from thousands of California titleholders. Some of those indicted by a Federal Grand Jury serve time, but the money is gone forever. Individuals spending the money often played the socialite at community functions, hosted luncheons, sponsored fundraisers, took fantastic vacations and turned into instant property moguls, while those they stole from scrimped and saved to pay for medications, doctor bills and mortgages. Although no one likes to think of it this way, the truth is that it was the apathetic owners who allowed management to levy bogus fines and late charges, use association funds for personal cars and shopping sprees, and lie about the management company’s financial health (until it filed bankruptcy). And the damage can add up quickly. More than 110 associations recently lost millions, and during a surprisingly short period of time.Dead bolts and alarms won’t protect you As an example of what owners are up against, California court documents revealed that one association had 24-hour security guard patrol and gates, and every house had an alarm system monitored by association security. Yet, one owner, herself a doctor and senior, while in the process of moving out with her elderly mother, despite the fact that she took extraordinary precautions in securing their personal belongings (in addition to the house alarm, she had separate deadbolts installed on closets, and every door inside the house including a “silver closet” was connected to a private alarm system), on the same day, after the owner left, the association manager had a locksmith change the house locks and gave security guards copies of the new keys. The manager’s excuse to the court was concern that the elderly owner might “strip the property and damage it.” Returning to remove her belongings, and finding that the locks had been changed, the owner phoned management explaining her need to get her things but that she was locked out. The manager said, “Call your attorney, make an appointment.” The owner drove to the management office and requested an appointment, but the manager refused, saying, “That’s unacceptable, contact your attorney.” At trial the manager did not remember ever talking to the owner, using the excuse, “the attorneys were handling it.” The manager denied telling the owner that she could not get her belongings out of the house, but admitted the owner’s appointment request was refused because, “security couldn’t accommodate that time of the morning.” The manager did confess that the owner could have come anytime Monday through Friday, between 9 and 5, without an appointment. Employees testified the board and management knew the owner’s personal property remained inside the house, but the board “decided to change the locks anyway.” Finally admitting she knew some “things” remained in the garage, the manager claimed she was unaware property “of any value” was inside. When the owner arrived at the house, a security guard unlocked the front door, finally letting her inside. Hidden keys to locked closets were lying openly on a living room bar. Her valuable rugs, pre- Columbian pottery, and priceless Navajo blankets and serapes were missing, as was an expensive urn containing her father’s ashes. She opened the dead-bolted and alarmed closets to find that all her heirloom Tiffany and gold and silver items were gone. Even though the association interfered with the owner’s possessions, the judges claimed they did it to safeguard the house, saying, “There was simply no evidence of how the owner’s personal property disappeared.”Excuse: We’re just the agents Often, harassment techniques are used to invade an individual’s privacy. One owner suffered from a congenital cardiac condition known as hypertrophic cardiomyopathy, resulting in neurological impairments and multiple strokes. But that wasn’t convincing enough for the board to let him park in a handicapped parking space closer to his unit. He was forced to sue the management company and board for retaliation, intimidation and invasion of privacy for refusing disability accommodation. His name was forged on items, causing him to be billed for unauthorized purchases. He received anonymous threatening and offensive letters, his condo door was spit on, trash was dumped on his car, his tires were punctured, his handicapped parking sign was defaced, and pornographic pictures were left on his doorstep. After plowing snow into his assigned parking spot, the board fined him for overnight parking in a handicapped parking spot. Threats and humiliation escalated when Nazi swastikas were placed on his car and anti-Semitic signs and placards with his name were found lining the building hallways. The management company’s defense, “We’re simply the agent for the association and can’t be liable for violations,” was described as preposterous by the judges. The “board of directors in concert with the management company intentionally ignored this disabled homeowner’s requests for a more accessible parking space,” the court said, “We hold agents, as well as the association liable” for such violations.Excuse: We were just following orders When an owner suffering from Tourette’s Syndrome was victimized at the hands of his association and management company, judges hearing the case said that the “Property Manager did more than follow the Association’s orders, it threatened Mr. and Mrs. Marthon with fines and told Mrs. Marthon she could stay only if her husband left. It issued notices of violation, hired and encouraged expert witnesses to secretly test Mr. Marthon’s disability, sent letters purporting to terminate their rights as unit owners, and then distributed an intentionally deceptive story of this lawsuit to enrage the other owners against the Marthons, all of which are discriminatory acts against the Marthons.” Shamelessly, the management company advanced a “Teflon defense,” using the excuse that it was free from blame, and protected from liability, because all of its actions were taken at board direction. The manager’s excuse, “I was only following orders,” was rejected as a sort of Nuremberg Defense. The court recognized that, “Not only did the Manager avoid speaking up, it did not even question the legality of actions taken against these owners.”I hear you knocking, but you can’t come in When Robert Cunningham bought his association home, he was elderly, single, living alone, and suffering with Hodgkin’s disease. Threatened by letters about his housekeeping inadequacies and tortured by constant reminders to pay association attorney fees of more than $34,000, in response, Cunningham sued his board for violating his right to privacy. His board threatened him with litigation to gain entry to his home and force him to throw out personal belongings it called “debris.” They wanted to inspect his home to “prevent undesirable effects” and “maintain property values,” so Robert opened the door and let them in. They ordered him to clear his bed of all paper and books, remove newspapers, cardboard boxes and magazines from the floor around his bed, dresser, living and dining rooms, not use his downstairs bathroom for storage, and change interior lighting. Part of their letter read, “The Association suggests that all outdated clothing that has not been worn in the last five years be removed and/or donated to the Salvation Army or similar organization. This would allow the upstairs bathroom to be used for what it was designed for. Any other remaining clothes could be stored in a walk-in closet. Books that are currently shelved, and which are considered standard reading material, can remain in place.” Outraged, the judges seriously doubted when Robert purchased his home he contemplated an association “would ever tell him to clean up his own bedroom like some parent nagging an errant teenager. Here, we have a clear cut case of a ‘nanny state,’ nanny in almost a literal sense of the association going too far.”Knock, knock. Who’s there? Vera Armstrong Cherry never expected to answer her front door and be met by two unannounced ambulance workers that heavily sedated her, forcibly strapped her to a gurney, and carted her off to a county psychiatric institution. No one told her where she was going, but they left her two children alone in the house without their mother for five days. Vera’s crime? She felt patriotic on Election Day and flew her “Missing In Action” flag alongside the American Flag in honor of her missing husband who had been shot down over Vietnam in 1967. But since she flew it from a flagpole belonging to her association, someone in authority at the association authorized the action to have Vera declared “5150” (grounds for detention due to a mental disorder). The Public Defender filed a writ of habeas corpus to get Vera released. She cries because her children’s college fund of over $75,000 was depleted due to this incident, “They say I am crazy because it’s a good way to discredit me.”The cat’s meow Out of 1300 residents, it only took one neighbor nosey enough to peer into someone else’s unit and allegedly spot ailing, housebound kitties, to jumpstart a costly litigation nightmare for the unit owner. After the stressful ordeal stole precious years of her life, and tens of thousands of dollars, Natore Nahrstedt was ordered to sell her condo and move because she refused to get rid of her kitty cats. According to her lawyer, Joel Tamraz, “Mrs. Nahrstedt carried the kitties everywhere, their little paws never, not once, touched the common area … ever!” In what has come to be known as “the famous cat case with the famous dissent,” California Supreme Court Justice Armand Arabian memorialized his disagreement with the court by quoting Albert Schweitzer, “There are two means of refuge from the misery of life: music and cats.” Justice Arabian found the court’s siding with the association and its rendition of the facts, as reflecting a “narrow, indeed chary, view of the law that eschews the human spirit in favor of arbitrary efficiency.” In his view, “the resolution of this case well illustrates the conventional wisdom and fundamental truth of the Spanish proverb, ‘It is better to be a mouse in a cat’s mouth than a man in a lawyer’s hands.’” That warning is not lost on Corkey and Noni Eley of Leisure World, Laguna Woods. Flanked by lawyers’ threats, runaway costs, unaccountability with no statutory protections for owners, when asked if they had any advice for seniors wanting to purchase a condo, the sisters immediately chime in, “Don’t.”
SENIOR CONDO PURCHASES, PART FOUR: A WORLD OF PRIVACY INVASIONS
SENIOR CONDO PURCHASES, PART FOUR: A WORLD OF PRIVACY INVASIONSMarch 2005By Donie Vanitzian, BA, JD, Arbitrator(c) Vanitzian
"Privacy is the right to be alone the most comprehensive of rights, and the right most valued by civilized man." When Justice Brandeis penned those words he did not live in a homeowner association.
Owners of deed-restricted homes and property in common interest developments are at the mercy not only of the homeowner association and boards of directors but also third-party vendors hired by the board, including management companies, consultants, and attorneys, all of which can affect the owners' quality of life.
Of the many risks associated with such ownership, rarely are owners warned of the need to protect their personal information from inside theft. Whether knowingly or unknowingly, many condo owners carelessly give away personal information without a second thought. In reality, any types of personal privacy invasions and identity theft occur when others invade "places" or "things" where you or your information has been, is, or might be located. Such invasions are not just about "identity," "tangible documents" and "cash," they include the right to "quiet enjoyment" of your home.
WHY YOU?Privacy invasions can occur when owners "voluntarily" make their information available to intrusions by others. Because the information frequently requested by associations, management companies, or vendors seems so innocuous, owners usually give it up readily without express assurances of confidentiality and non-disclosure. Unfortunately, owners wrongly assume that their information will not be misused or that it will only be used for a specific purpose. The opposite is true.
Information gathered by boards, management companies and other entities can be disseminated, shared and sold without the owners' knowledge. Such information is all too often the kind of intimate personal information most valuable to identity thieves.
California Penal Code section 530.5 describes "personal identifying information," to include your name, address, telephone number, driver's license number, social security number, place of employment, mother's maiden name, birth date, taxpayer identification, savings and checking account numbers, biometric data, birth and death certificates.
Employees in any workplace including an association can take identifying material about you. With the theft being difficult to prove, such information is easily stolen. Furthermore, you don't have to be rich to be a victim, the sort of nest egg, credit, or substantial equity in property that most seniors have is incentive enough for any opportunist.
The personal nature of such crimes leaves senior victims in particular traumatized. Because many owners become complacent and mechanically accept what goes on in their association, extracting information voluntarily or gaining entry into a home can be easily accomplished. To avoid confrontation or expenditures to enforce their rights, owners are scared into closing their eyes to what goes on around them, creating more victims.
THEFT RIGHT UNDER YOUR NOSEAll information, personal or otherwise, that an association obtains can be copied, sold, borrowed, shared, "lost" or saved for a later date when it can be used against you by the association or those they do business with. Once account information is obtained, accounts can be depleted, owners be sued, or simply die. Because the criminal knows your net worth at death, invoices submitted to your estate are usually paid without question.
"Management walks right into my home, and they have my mailbox keys! I complain but nobody does anything." Harold, Orange.
Associations and their cohorts can invade owner privacies in multiple ways. Perpetual maintenance schemes tend to bring an army of strangers into your environment. The treasure hunt begins when boards and hungry vendors tour the grounds searching for ways to spend your money.
Whether under the pretext of "maintenance" or "in case of emergency," some boards, vendors and management employees request keys to individual homes. Unfortunately, owners wanting to be seen as cooperative not only hand over their keys but may also disclose other confidential information that should not be divulged. Drivers licenses and social security numbers are given to people that seniors describe as, "a very nice person" or merely because someone "told" them to do so. When asked why they gave personal documents or information to a person whose name they weren't sure of, one senior told me, "Because I see him around here all the time."
Easily impressed by a worker's title, another confidently says, "Oh, he's the manager." "When we dial 911, or when an owner dies, management is usually the first to know. They are first to enter our homes if we're taken to the hospital or die. I want to know what right they have to enter our homes like that and what are they doing in there?" Senior, Irvine.
THICK AS THIEVESIn addition to financial consequences, the profoundly personal nature of this type of theft often leaves victims severely traumatized. According to the Santa Clara Public Guardian's Office, older victims of identity theft invasions "suffer a mortality rate that is three times higher than those who are not so abused." Imagine the further impact when learning the association or affiliate, enabled the theft.
There is a great risk for identity theft in developments that attract buyers to what may seem like a friendly, one-stop living environment replete with sales and escrow personnel, travel agencies, and recreational facilities. Communities allowing vendors to operate this type of monopoly are a rich source of clientele for schemes and scams. These exclusive vendors not only collect and share information, but they eliminate competition, driving up costs for owners.
More insidiously, a trusted vendor might place pressure on owners who are least likely to understand the consequences of their actions. Free seminars provided by vendors or so-called "professionals" including attorneys, might be nothing more than calculated adverts convincing owners to part with their money, hire them, or disclose personal information. Some are couched in terms of "improve your health and wealth," while others target impressionable directors or committees on various "How To" topics regarding associations, when in fact they are nothing more than Trojan horses wanting your precious information or a piece of your assets.
A DECEPTIVELY EASYGOING CLIMATE OF FEAR, INTIMIDATION, AND PRIVACY INVASIONSIn the last years of their lives, many senior condo owners who want only to live peacefully while controlling their expenses are forced to adapt to a climate of fear amidst privacy intrusions and trying to tell friend from foe. In the process, many plunge tragically into a state of social dependence.
Predictably, it is only a matter of time before each owner leaves permanently, which may explain why boards frequently respond to senior complaints with "sue us." The National Committee for the Prevention of Elder Abuse explains that "abusers may assume that frail victims will not survive long enough to follow through on legal interventions, or that they will not make convincing witnesses." Owners are reduced to chipping away at the big problems by reporting on the tiniest instances of their discontent because they are simply unable to accomplish much else.
ENTER THE GRANDMA BRIGADEBeing assertive is apparently no longer enough. Tired of being dictated to, and realizing they were in danger of losing all their money and assets, a group of seniors began taking situations into their own hands, forming an underground group called The Grandma Brigade. Like vigilantes, and with the same intensity as bounty hunters tracking criminals, these seniors have been hunting down and checking on protections they wrongly assumed they had.
They learned that laws meant to protect consumers were tucked away in cross-referenced statutes and complicated case law which, once located, were often repealed or overturned. The Brigade ferrets out what little protections remain, and functions as a support group. With limited physical and financial resources, they efficiently divide and assign specific tasks to smaller combat squads. Each squad is given a deadline to deliver a completed task. They are organized for specific purpose, to get accurate information and report back to Brigade Headquarters.
"We don't have a lot of time left, if you know what I mean," one commando explains, "we're not that young and our association knows it, so they take advantage of us."
Another commando adds, "They think they will wear us out and we'll either disappear or die so they can throw our file out, and in some cases they've succeeded." They say, "The other owners don't understand what's going on. By the time they figure it out, it will be too late."
But they are not deterred, "it's do, or die," says another squad member. Members of the Brigade prefer to stay underground for now, because of the great price they might pay if they are exposed. We will continue to track this story and provide more information as it becomes available, and is safe to reveal.
Southern California Senior Life editor's note: Because of an overwhelming response from our readers to this series, there will be a concluding Part FIVE. Most seniors really believe this won't happen to them. It does. It will. It will continue.
"Privacy is the right to be alone the most comprehensive of rights, and the right most valued by civilized man." When Justice Brandeis penned those words he did not live in a homeowner association.
Owners of deed-restricted homes and property in common interest developments are at the mercy not only of the homeowner association and boards of directors but also third-party vendors hired by the board, including management companies, consultants, and attorneys, all of which can affect the owners' quality of life.
Of the many risks associated with such ownership, rarely are owners warned of the need to protect their personal information from inside theft. Whether knowingly or unknowingly, many condo owners carelessly give away personal information without a second thought. In reality, any types of personal privacy invasions and identity theft occur when others invade "places" or "things" where you or your information has been, is, or might be located. Such invasions are not just about "identity," "tangible documents" and "cash," they include the right to "quiet enjoyment" of your home.
WHY YOU?Privacy invasions can occur when owners "voluntarily" make their information available to intrusions by others. Because the information frequently requested by associations, management companies, or vendors seems so innocuous, owners usually give it up readily without express assurances of confidentiality and non-disclosure. Unfortunately, owners wrongly assume that their information will not be misused or that it will only be used for a specific purpose. The opposite is true.
Information gathered by boards, management companies and other entities can be disseminated, shared and sold without the owners' knowledge. Such information is all too often the kind of intimate personal information most valuable to identity thieves.
California Penal Code section 530.5 describes "personal identifying information," to include your name, address, telephone number, driver's license number, social security number, place of employment, mother's maiden name, birth date, taxpayer identification, savings and checking account numbers, biometric data, birth and death certificates.
Employees in any workplace including an association can take identifying material about you. With the theft being difficult to prove, such information is easily stolen. Furthermore, you don't have to be rich to be a victim, the sort of nest egg, credit, or substantial equity in property that most seniors have is incentive enough for any opportunist.
The personal nature of such crimes leaves senior victims in particular traumatized. Because many owners become complacent and mechanically accept what goes on in their association, extracting information voluntarily or gaining entry into a home can be easily accomplished. To avoid confrontation or expenditures to enforce their rights, owners are scared into closing their eyes to what goes on around them, creating more victims.
THEFT RIGHT UNDER YOUR NOSEAll information, personal or otherwise, that an association obtains can be copied, sold, borrowed, shared, "lost" or saved for a later date when it can be used against you by the association or those they do business with. Once account information is obtained, accounts can be depleted, owners be sued, or simply die. Because the criminal knows your net worth at death, invoices submitted to your estate are usually paid without question.
"Management walks right into my home, and they have my mailbox keys! I complain but nobody does anything." Harold, Orange.
Associations and their cohorts can invade owner privacies in multiple ways. Perpetual maintenance schemes tend to bring an army of strangers into your environment. The treasure hunt begins when boards and hungry vendors tour the grounds searching for ways to spend your money.
Whether under the pretext of "maintenance" or "in case of emergency," some boards, vendors and management employees request keys to individual homes. Unfortunately, owners wanting to be seen as cooperative not only hand over their keys but may also disclose other confidential information that should not be divulged. Drivers licenses and social security numbers are given to people that seniors describe as, "a very nice person" or merely because someone "told" them to do so. When asked why they gave personal documents or information to a person whose name they weren't sure of, one senior told me, "Because I see him around here all the time."
Easily impressed by a worker's title, another confidently says, "Oh, he's the manager." "When we dial 911, or when an owner dies, management is usually the first to know. They are first to enter our homes if we're taken to the hospital or die. I want to know what right they have to enter our homes like that and what are they doing in there?" Senior, Irvine.
THICK AS THIEVESIn addition to financial consequences, the profoundly personal nature of this type of theft often leaves victims severely traumatized. According to the Santa Clara Public Guardian's Office, older victims of identity theft invasions "suffer a mortality rate that is three times higher than those who are not so abused." Imagine the further impact when learning the association or affiliate, enabled the theft.
There is a great risk for identity theft in developments that attract buyers to what may seem like a friendly, one-stop living environment replete with sales and escrow personnel, travel agencies, and recreational facilities. Communities allowing vendors to operate this type of monopoly are a rich source of clientele for schemes and scams. These exclusive vendors not only collect and share information, but they eliminate competition, driving up costs for owners.
More insidiously, a trusted vendor might place pressure on owners who are least likely to understand the consequences of their actions. Free seminars provided by vendors or so-called "professionals" including attorneys, might be nothing more than calculated adverts convincing owners to part with their money, hire them, or disclose personal information. Some are couched in terms of "improve your health and wealth," while others target impressionable directors or committees on various "How To" topics regarding associations, when in fact they are nothing more than Trojan horses wanting your precious information or a piece of your assets.
A DECEPTIVELY EASYGOING CLIMATE OF FEAR, INTIMIDATION, AND PRIVACY INVASIONSIn the last years of their lives, many senior condo owners who want only to live peacefully while controlling their expenses are forced to adapt to a climate of fear amidst privacy intrusions and trying to tell friend from foe. In the process, many plunge tragically into a state of social dependence.
Predictably, it is only a matter of time before each owner leaves permanently, which may explain why boards frequently respond to senior complaints with "sue us." The National Committee for the Prevention of Elder Abuse explains that "abusers may assume that frail victims will not survive long enough to follow through on legal interventions, or that they will not make convincing witnesses." Owners are reduced to chipping away at the big problems by reporting on the tiniest instances of their discontent because they are simply unable to accomplish much else.
ENTER THE GRANDMA BRIGADEBeing assertive is apparently no longer enough. Tired of being dictated to, and realizing they were in danger of losing all their money and assets, a group of seniors began taking situations into their own hands, forming an underground group called The Grandma Brigade. Like vigilantes, and with the same intensity as bounty hunters tracking criminals, these seniors have been hunting down and checking on protections they wrongly assumed they had.
They learned that laws meant to protect consumers were tucked away in cross-referenced statutes and complicated case law which, once located, were often repealed or overturned. The Brigade ferrets out what little protections remain, and functions as a support group. With limited physical and financial resources, they efficiently divide and assign specific tasks to smaller combat squads. Each squad is given a deadline to deliver a completed task. They are organized for specific purpose, to get accurate information and report back to Brigade Headquarters.
"We don't have a lot of time left, if you know what I mean," one commando explains, "we're not that young and our association knows it, so they take advantage of us."
Another commando adds, "They think they will wear us out and we'll either disappear or die so they can throw our file out, and in some cases they've succeeded." They say, "The other owners don't understand what's going on. By the time they figure it out, it will be too late."
But they are not deterred, "it's do, or die," says another squad member. Members of the Brigade prefer to stay underground for now, because of the great price they might pay if they are exposed. We will continue to track this story and provide more information as it becomes available, and is safe to reveal.
Southern California Senior Life editor's note: Because of an overwhelming response from our readers to this series, there will be a concluding Part FIVE. Most seniors really believe this won't happen to them. It does. It will. It will continue.
Monday, December 27, 2004
THE TEMPLE OF BLAME AND HIDE THE MEETING
Donie Vanitzian
Arbitrator
December 27, 2004
Mr. Brian Hebert
Assistant Executive Secretary
cc: Mr. Nat Sterling
California Law Revision Commission
3200 5th Avenue
Sacramento, California 95817
Re: Memorandum 2005-7; Recording of Commission Meetings
Your December 8, 2004 and December 21, 2004 correspondence
Dear Mr. Hebert,
I appreciate your taking the time to tape the past CLRC meeting for me on tapes that I provided, and also, thank you for your response to my December 13, 2004 correspondence regarding the CLRC meeting tapes and proposed change in CLRC policy for public access. The letter stated that the CLRC has decided to now record its meetings digitally, with the public making appointments to listen to the recordings on the CLRC computers at either the Sacramento or Palo Alto offices. Please see my comments to this ridiculousness below.
My concerns then, are the same now. Just as the CLRC’s present documents are available to the public on its website for downloading, so too, can digital recordings be made available to the public as downloads.
As I explained to you, that there is no legitimate reason for the CLRC to disenfranchise any citizen that is unable to accommodate the CLRC’s self-imposed stringent viewing requirements. Forcing individuals to fly, drive, or take a train to Sacramento or Palo Alto merely to “listen” to recordings that can range anywhere from three minutes to thirty hours, is unreasonable and will have a chilling affect on public access. Or, perhaps that is what the CLRC intends, given the power your agency wields over people like me and how I will live in my residential deed-restricted albatross.
DIGITAL RECORDING FILES AND ITS CHILLING EFFECT ON THE PUBLIC OR THE CLRC?
What part of “public” does the CLRC not understand? When one attends a public meeting, one intends to be filmed and recorded.
The CLRC’s statement (pg 2) that “In short, the files will be of no use to most members of the public” blah, blah, blah. You, and your CLRC cohorts are hoping such meetings continue to fly under the radar and little if no attention is drawn to the damage you create with respect to injecting yourselves into the laws under the guise of legitimacy, and creating and recommending what the rest of us will live by. That is why you destroy the tapes right at or under 30 days isn’t it? If you truly were above board as a government agency working for the public there would be no need to destroy even one tape. It is however to your advantage, as you say, to make sure that those who influence you are not heard doing just that on tape.
No different than a homeowner association board of directors! I am stunned by comments like this:
Those who participate in Commission deliberations should expect that their comments might be noted and circulated more broadly. However, our deliberative process depends on a free flowing and frank exchange of views. If meeting participants are worried about an unguarded statement being used against them, they may be less forthcoming.
Too bad.
LEGAL REQUIREMENTS
Many statutes and case laws address issues you raise. For example, in the words of one court, Government Code section 54953.5 provides that “[a]ny person attending an open and public meeting of a legislative body of a local agency shall have the right to record the proceedings on a tape recorder. . . .” Section 54953.7 provides that legislative bodies of local agencies “may impose requirements upon themselves which allow greater access to their meetings than prescribed by the minimal standards set forth in this chapter.” Choice-in-Education League v. Los Angeles Unified School District, 17 Cal.App.4th 415 (1993). It says NOTHING about LESS ACCESS.
If I’m not mistaken, the California Law Revision Commission falls under the auspices of the “government.” Your web site is: www.clrc.ca.gov, emphasis on the “gov.” The employees are civil servants who serve at the pleasure of the public. On November 2, 2004, 7,489,682 Californians approved Proposition 59, otherwise known as the Public Records, Open Meetings Act. The California Constitution, Article 1, Section 3 is expressly amended in part to include, “The people have the right of access to information concerning the conduct of the people’s business, and, therefore, the meetings of public bodies and the writings of public officials and agencies shall be open to public scrutiny.” It goes on to say, that this shall be broadly construed if it furthers the people’s right of access, and narrowly construed if it limits the right of access. A statute, court rule, or other authority adopted after the effective date of this subdivision that limits the right of access shall be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.
Mr. Hebert, the CLRC influences the laws that I live by. Therefore, as Joe Public, I want to hear every single utterance, every word from every CLRC meeting - and I don’t want another apology for “jumbled” meetings inclusive of “extraneous material” - I want the entire CLRC meeting - every committee - every speaker - in an audible and comprehensible form.
The CLRC bars what clearly should be permitted in making an accurate record of what takes place at such meetings. The action of this Commission is too arbitrary and capricious, too restrictive and unreasonable. Wollam v. City of Palm Springs, 59 Cal.2d 276 (1963); Alves v.Justice Court, 148 Cal.App.2d 419 (1957); 35 Cal.Jur.2d Municipal Corporations, § 228.
There should be no compromise in accurately reporting transactions of a public governing body, particularly in a democracy where truth is often said to be supreme. Governmental measures based upon police power should always be well defined and reasonably exercised. “If a shorthand record of such a meeting is more accurate than long hand notes, then the use of shorthand is to be approved.” Wrather-Alvarez Broadcasting, Inc. v. Hewicker, 147 Cal.App.2d 509 (1957). “If the making of a tape record is a still better method of memorializing the acts of a public body it should be encouraged.” Nevens v. City of Chino, 233 Cal.App.2d 775 (1965). That was 1965!
THE BROWN ACT
As one court stated, “Intent in enacting the Brown Act, Government Code section 54960(a) is clear: “The Legislature finds and declares that the public commissions, boards and councils and the other public agencies in this State exist to aid in the conduct of the people’s business. It is the intent of the law that their actions be taken openly and that their deliberations be conducted openly.” Los Angeles Times Communications LLC v. Los Angeles County Board of Supervisors, 112 Cal.App.4th 1313, 1321 (2d Dist.2003), review denied (2004).
DISENFRANCHING THOSE OF US WHO NEED ACCESS THE MOST - BUT CAN LEAST AFFORD IT
Let me remind the CLRC that over 4 million Californians are unemployed - yet you remain on the government’s payroll - so it may seem easy for the Commission to place stipulations on others when it does not affect you. This forces individuals to fly, drive, or take a train to Sacramento or Palo Alto merely to “listen” to recordings that can range anywhere from three minutes to thirty hours, and it IS unreasonable. The CLRC is presumably not open on Saturdays and Sundays or evenings. Many of us may have to arrange and pay for babysitters, caretakers, time off from work and other responsibilities, let alone transportation.
For anyone who is immobile, physically challenged and seniors in particular, making arrangements to get to Sacramento or Palo Alto from anywhere in California, is no different than booking a flight to Mars. It is impossible.
Traveling to your offices to listen to tapes every month is unreasonable. It amounts to a penalty for wanting to assert one’s rights.
Your reasoning is flawed and it appears that the only people who will not be inconvenienced by your decisions, are the CLRC and its employees.
Even with the Davis-Stirling Act’s provision for Open Meetings, owners are still unable to enforce it. Why? Because the CLRC refuses to recommend penalties for recalcitrant boards. You will recommend arbitration, mediation, waiting time periods, stipulations on construction defects, architectural control issues, termite control, volunteer status definitions for titleholders, insurance specifications, and a host of other nonsense, but when it comes to penalties against boards, you refuse to touch the topic, instead dancing all around it. Now, those of us who want to see and hear first hand what the hell goes on down there and who and what is responsible for bastardizing these laws, the CLRC is shocked! Surprised! And then unilaterally pulls the plug in hopes it will prevent public access.
CONCLUSION
As a Systems Analyst, I’ll pass on taking apart your preposterous and embarrassingly flawed arguments on File Size and Format Incompatibility. Let it suffice to say, the CLRC was ill informed and I hope you didn’t pay for that advice with taxpayer funds. Even the British and Scottish Parliaments make their sessions available via Internet, some in real time, so too can the CLRC.
Sincerely,
D. Vanitzian
Arbitrator
December 27, 2004
Mr. Brian Hebert
Assistant Executive Secretary
cc: Mr. Nat Sterling
California Law Revision Commission
3200 5th Avenue
Sacramento, California 95817
Re: Memorandum 2005-7; Recording of Commission Meetings
Your December 8, 2004 and December 21, 2004 correspondence
Dear Mr. Hebert,
I appreciate your taking the time to tape the past CLRC meeting for me on tapes that I provided, and also, thank you for your response to my December 13, 2004 correspondence regarding the CLRC meeting tapes and proposed change in CLRC policy for public access. The letter stated that the CLRC has decided to now record its meetings digitally, with the public making appointments to listen to the recordings on the CLRC computers at either the Sacramento or Palo Alto offices. Please see my comments to this ridiculousness below.
My concerns then, are the same now. Just as the CLRC’s present documents are available to the public on its website for downloading, so too, can digital recordings be made available to the public as downloads.
As I explained to you, that there is no legitimate reason for the CLRC to disenfranchise any citizen that is unable to accommodate the CLRC’s self-imposed stringent viewing requirements. Forcing individuals to fly, drive, or take a train to Sacramento or Palo Alto merely to “listen” to recordings that can range anywhere from three minutes to thirty hours, is unreasonable and will have a chilling affect on public access. Or, perhaps that is what the CLRC intends, given the power your agency wields over people like me and how I will live in my residential deed-restricted albatross.
DIGITAL RECORDING FILES AND ITS CHILLING EFFECT ON THE PUBLIC OR THE CLRC?
What part of “public” does the CLRC not understand? When one attends a public meeting, one intends to be filmed and recorded.
The CLRC’s statement (pg 2) that “In short, the files will be of no use to most members of the public” blah, blah, blah. You, and your CLRC cohorts are hoping such meetings continue to fly under the radar and little if no attention is drawn to the damage you create with respect to injecting yourselves into the laws under the guise of legitimacy, and creating and recommending what the rest of us will live by. That is why you destroy the tapes right at or under 30 days isn’t it? If you truly were above board as a government agency working for the public there would be no need to destroy even one tape. It is however to your advantage, as you say, to make sure that those who influence you are not heard doing just that on tape.
No different than a homeowner association board of directors! I am stunned by comments like this:
Those who participate in Commission deliberations should expect that their comments might be noted and circulated more broadly. However, our deliberative process depends on a free flowing and frank exchange of views. If meeting participants are worried about an unguarded statement being used against them, they may be less forthcoming.
Too bad.
LEGAL REQUIREMENTS
Many statutes and case laws address issues you raise. For example, in the words of one court, Government Code section 54953.5 provides that “[a]ny person attending an open and public meeting of a legislative body of a local agency shall have the right to record the proceedings on a tape recorder. . . .” Section 54953.7 provides that legislative bodies of local agencies “may impose requirements upon themselves which allow greater access to their meetings than prescribed by the minimal standards set forth in this chapter.” Choice-in-Education League v. Los Angeles Unified School District, 17 Cal.App.4th 415 (1993). It says NOTHING about LESS ACCESS.
If I’m not mistaken, the California Law Revision Commission falls under the auspices of the “government.” Your web site is: www.clrc.ca.gov, emphasis on the “gov.” The employees are civil servants who serve at the pleasure of the public. On November 2, 2004, 7,489,682 Californians approved Proposition 59, otherwise known as the Public Records, Open Meetings Act. The California Constitution, Article 1, Section 3 is expressly amended in part to include, “The people have the right of access to information concerning the conduct of the people’s business, and, therefore, the meetings of public bodies and the writings of public officials and agencies shall be open to public scrutiny.” It goes on to say, that this shall be broadly construed if it furthers the people’s right of access, and narrowly construed if it limits the right of access. A statute, court rule, or other authority adopted after the effective date of this subdivision that limits the right of access shall be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.
Mr. Hebert, the CLRC influences the laws that I live by. Therefore, as Joe Public, I want to hear every single utterance, every word from every CLRC meeting - and I don’t want another apology for “jumbled” meetings inclusive of “extraneous material” - I want the entire CLRC meeting - every committee - every speaker - in an audible and comprehensible form.
The CLRC bars what clearly should be permitted in making an accurate record of what takes place at such meetings. The action of this Commission is too arbitrary and capricious, too restrictive and unreasonable. Wollam v. City of Palm Springs, 59 Cal.2d 276 (1963); Alves v.Justice Court, 148 Cal.App.2d 419 (1957); 35 Cal.Jur.2d Municipal Corporations, § 228.
There should be no compromise in accurately reporting transactions of a public governing body, particularly in a democracy where truth is often said to be supreme. Governmental measures based upon police power should always be well defined and reasonably exercised. “If a shorthand record of such a meeting is more accurate than long hand notes, then the use of shorthand is to be approved.” Wrather-Alvarez Broadcasting, Inc. v. Hewicker, 147 Cal.App.2d 509 (1957). “If the making of a tape record is a still better method of memorializing the acts of a public body it should be encouraged.” Nevens v. City of Chino, 233 Cal.App.2d 775 (1965). That was 1965!
THE BROWN ACT
As one court stated, “Intent in enacting the Brown Act, Government Code section 54960(a) is clear: “The Legislature finds and declares that the public commissions, boards and councils and the other public agencies in this State exist to aid in the conduct of the people’s business. It is the intent of the law that their actions be taken openly and that their deliberations be conducted openly.” Los Angeles Times Communications LLC v. Los Angeles County Board of Supervisors, 112 Cal.App.4th 1313, 1321 (2d Dist.2003), review denied (2004).
DISENFRANCHING THOSE OF US WHO NEED ACCESS THE MOST - BUT CAN LEAST AFFORD IT
Let me remind the CLRC that over 4 million Californians are unemployed - yet you remain on the government’s payroll - so it may seem easy for the Commission to place stipulations on others when it does not affect you. This forces individuals to fly, drive, or take a train to Sacramento or Palo Alto merely to “listen” to recordings that can range anywhere from three minutes to thirty hours, and it IS unreasonable. The CLRC is presumably not open on Saturdays and Sundays or evenings. Many of us may have to arrange and pay for babysitters, caretakers, time off from work and other responsibilities, let alone transportation.
For anyone who is immobile, physically challenged and seniors in particular, making arrangements to get to Sacramento or Palo Alto from anywhere in California, is no different than booking a flight to Mars. It is impossible.
Traveling to your offices to listen to tapes every month is unreasonable. It amounts to a penalty for wanting to assert one’s rights.
Your reasoning is flawed and it appears that the only people who will not be inconvenienced by your decisions, are the CLRC and its employees.
Even with the Davis-Stirling Act’s provision for Open Meetings, owners are still unable to enforce it. Why? Because the CLRC refuses to recommend penalties for recalcitrant boards. You will recommend arbitration, mediation, waiting time periods, stipulations on construction defects, architectural control issues, termite control, volunteer status definitions for titleholders, insurance specifications, and a host of other nonsense, but when it comes to penalties against boards, you refuse to touch the topic, instead dancing all around it. Now, those of us who want to see and hear first hand what the hell goes on down there and who and what is responsible for bastardizing these laws, the CLRC is shocked! Surprised! And then unilaterally pulls the plug in hopes it will prevent public access.
CONCLUSION
As a Systems Analyst, I’ll pass on taking apart your preposterous and embarrassingly flawed arguments on File Size and Format Incompatibility. Let it suffice to say, the CLRC was ill informed and I hope you didn’t pay for that advice with taxpayer funds. Even the British and Scottish Parliaments make their sessions available via Internet, some in real time, so too can the CLRC.
Sincerely,
D. Vanitzian
Thursday, December 23, 2004
Senior Condo Purchases, Part Three: A World Of Financial Exploitation
Senior Condo Purchases, Part Three: A World Of Financial Exploitation By Donie Vanitzian, BA, JD, Arbitrator Special to Senior Life
“We pay our money and keep our mouths shut. Never in a million years did we think we would be spending our golden years mired in paperwork and excessive fees, and under constant threat of being sued,” Corkey Eley, Leisure World, Laguna Woods.
Persons over the age of 50, who are looking for stable, uncomplicated living arrangements, make attractive targets for the financial schemes of condominium developers and operators. Even when seniors are determined to protect themselves and their purchases, they can easily become sidetracked from focusing on the property transaction itself. Events like social gatherings, parades and travel clubs, flanked by riding trails, tennis courts and hot tubs, throw the buyer off the scent of consequences linked to deed-restricted purchases.
Behind the façade of conforming buildings and well-maintained greenbelt beautification areas that may have originally helped qualify the developer for millions of dollars in state subsidies, homeowner associations are not the idyllic places they appear to be. Instead, they represent a restricted living situation that often turns predatory. The quality of life is dependent on how much power the board and management wish to assert over the owner, and how much money they can arbitrarily demand. The wrong mix can make life a living hell and create personal financial devastation.
These risks continue to be largely underestimated, undisclosed and unabated. While some seniors are happy to pay what they are told, shut the door and go shopping, others, like Carol Murata of Irvine, who want to know what is going on, complain of harassment and sabotage bymanagement companies and association representatives intended to, “silence and prevent us from seeing all the records. It just burns me up,” Carol fumes.
That frustration leads to desperation in communities where owners describe experiences with management as meting out terror. Noni Eley describes her golden years retirement in a condo as, “the biggest nightmare I’ve ever experienced where seniors have no rights.” Still, seniors are hesitant to report abuse. Hand over your money or move “Sadly, many investment advisors who are unfamiliar with the pitfalls of deedrestricted property include a condo purchase as part of the senior’s investment diversification planning,” explains Real Estate Broker and Personal Financial Planner, Thomas Foster. “Most senior condo purchases are solicited using the lure of a variety of activities and promises of a better quality of life. Little thought is given to one’s actual income versus costs controlled by an entity called the ‘association,’ or to the fact that owners must continue to pay for all association amenities whether they use them or not. Such outflows can include fees, assessments and other costs that can be arbitrarily increased at any time without limitation. When purchasing into an association or community environment, seniors requiring financial stability have no guarantees.”
Without meaningful laws protecting owners, many associations have become the last free bastion of no accountability while they methodically deplete seniors of their resources. There is no other type of home ownership where owners have the privilege of handing over their money whenever asked, and not having an “absolute” right to know where that money is going. The money taken belongs to those who can least afford to lose it, and are too frail or incapacitated to effectively protect themselves against victimization.
These days, there are seniors and then there are seniors
One octogenarian recalls when “being a senior meant you had to be over 65 years old and housing was affordable for fixed income seniors. But the qualifying age for many senior developments has been lowered to age 50, to attract wealthier baby boomer buyers. As a result, our costs have gone up.”
If the association has a “trust-fund-baby” board of directors, finances are the last thing on that board’s mind. The younger generation’s seemingly diminished concern for money may be due to the ease with which they can make or borrow money when needed. Numerous older residents, however, are not as fortunate, and many wind up moving from one community to another seeking a mix of demographics and affordability. Unfortunately, with each move comes an additional depletion of usually irreplaceable funds. Because these perils of deed-restricted living are not fully disclosed in condo sales brochures or during escrow, it is understandable that buyers, but seniors in particular, fail to comprehend that situations might get so bad as to force them to move overnight. They want to believe this will never happen to them or, if it does, they will be able to quickly sell and move. Not so. Owners are finding themselves in positions where they must suddenly empty the contents of their home and move. Seniors told me they “hope they die first.”
Elder abuse, or keep quiet and keep paying
Although owners personally bankroll the association, an association’s funding and spending philosophy can often change from board to board. Accountability is a problem. It easily becomes irrelevant whether money collected for a particular reason can be diverted for another purpose or not used at all. However, when you move, your monetary contributions stay in the association’s coffers.
The American Psychological Association (APA) warns that elder abuse includes just this kind of financial exploitation. The National Committee for Prevention of Elder Abuse (NCPEA) warns of unscrupulous professionals and businesspersons, or anyone posing as such. They may overcharge for services or products, use deceptive or unfair business practices, or “use their positions of trust or respect” to gain access or compliance. Those who are ill, frail, disabled or depressed are at greater risk of abuse. Because most seniors don’t want to make waves, intimidation and financial exploitation are achieved with little effort.
“When we question invoices we don’t owe, we’re told, ‘pay it and argue later.’” Dorothy, Riverside. For older seniors, there may not be a “later.” Many fail to realize they may not owe money, but pay the bill anyway.
“We ask for information regarding finances and accounting anomalies; the board stalls, ignores us and says ‘we’re looking into it,’ but we never get anywhere. It doesn’t matter if we write three or three hundred letters, we get no response.” Helen and Frank Schroeder, Torrance.
After stalling tactics run out, seniors are hit where it hurts the most, their wallets. Owners who pursued their statutory rights to inspect books and records reported that boards and management destroyed or fabricated documents and then lied to cover up their actions and mislead law enforcement. Retaliation against owners followed. Seniors who persist on enforcing their rights can be ostracized, labeled “troublemakers,” given the silent treatment, and ignored by management and boards. These are painful and unhealthy experiences. Seniors who are intentionally excluded or shut out by their peers, or those in control, lose friendship and the ability to exercise direction over their home, finances and living conditions.
When seniors become sitting ducks Some seniors do not realize the true value of their total assets and fail to adequately protect themselves. The APA and NCPEA recognize that many seniors are dependent on others for help. They warn of so-called “helpers” or those perceived to be “in charge” or “running the place.” With nothing more than status and trust, these individuals gain access to homes and assets where they can exercise significant influence over the older person. In fact, community environments encourage such “dependence.” Instantly in many cases, because of their position of trust, board directors and management vendors are given access to cash, checks, accounts and personal information about residents. The relationship becomes personal because these entities are on a first name basis with residents. Those most adept at perpetrating abuse and deceit are usually found in positions of trust, and they are also typically “very nice.”
Even when minimal protections exist, owners are unable to enforce them. One senior was injured late at night when he returned from work. He was brutally assaulted and battered by association directors in his own driveway. Bloody, he dialed 911 on his cell phone. His crime? He exercised his legal right to obtain copies of the association’s insurance policies. The board’s personally delivered pugilistic message: don’t ever send the agent or board a signed, return receipt for insurance policies again, you’re not getting them, so stop asking! The failure of seniors to effectively assert their rights results in the elevation of power, control and domination by boards and management, culminating in a sanctioned exploitation of those who are most defenseless. Collectively, this ruling elite disenfranchises those in the minority while constituting an overt and unlegislated force of domination.
Betrayal by peers All too often seniors sitting on governing boards are themselves incapable of conducting meaningful business or comprehending documents and commitments that will bind all owners forever. Still, they cling to the seat of power by getting elected to the board. This presents an opportunity for unscrupulous vendors and advisors to deviously control the association from the sidelines. One owner makes sure her husband is on the board, “playing CEO with the other nonviable, unemployed, and retired, ex-CEOs. It makes him feel good and gets him out of the house,” she says. The wife of an unsuccessful retired used boat salesman turned career board member, says, “He’s always wanted to be a CEO but never had the education.” Another senior admits her husband “is in the first stages of Alzheimer’s disease, but being on the board gives him something to do.” Unapologetically, she says, “He votes however the management company or directors tell him to vote.” Actions of directors like these are financially devastating to owners and can erode equity that can never be recovered.
In the process, a once revolutionary bastion of so-called “affordable” housing has degenerated to an embarrassing and shameful ruling class of boards, management, vendors and toothless legislation. That governance is sustained not by popular acceptance, but by the agency of terror over those who can least afford it. ~*~
“We pay our money and keep our mouths shut. Never in a million years did we think we would be spending our golden years mired in paperwork and excessive fees, and under constant threat of being sued,” Corkey Eley, Leisure World, Laguna Woods.
Persons over the age of 50, who are looking for stable, uncomplicated living arrangements, make attractive targets for the financial schemes of condominium developers and operators. Even when seniors are determined to protect themselves and their purchases, they can easily become sidetracked from focusing on the property transaction itself. Events like social gatherings, parades and travel clubs, flanked by riding trails, tennis courts and hot tubs, throw the buyer off the scent of consequences linked to deed-restricted purchases.
Behind the façade of conforming buildings and well-maintained greenbelt beautification areas that may have originally helped qualify the developer for millions of dollars in state subsidies, homeowner associations are not the idyllic places they appear to be. Instead, they represent a restricted living situation that often turns predatory. The quality of life is dependent on how much power the board and management wish to assert over the owner, and how much money they can arbitrarily demand. The wrong mix can make life a living hell and create personal financial devastation.
These risks continue to be largely underestimated, undisclosed and unabated. While some seniors are happy to pay what they are told, shut the door and go shopping, others, like Carol Murata of Irvine, who want to know what is going on, complain of harassment and sabotage bymanagement companies and association representatives intended to, “silence and prevent us from seeing all the records. It just burns me up,” Carol fumes.
That frustration leads to desperation in communities where owners describe experiences with management as meting out terror. Noni Eley describes her golden years retirement in a condo as, “the biggest nightmare I’ve ever experienced where seniors have no rights.” Still, seniors are hesitant to report abuse. Hand over your money or move “Sadly, many investment advisors who are unfamiliar with the pitfalls of deedrestricted property include a condo purchase as part of the senior’s investment diversification planning,” explains Real Estate Broker and Personal Financial Planner, Thomas Foster. “Most senior condo purchases are solicited using the lure of a variety of activities and promises of a better quality of life. Little thought is given to one’s actual income versus costs controlled by an entity called the ‘association,’ or to the fact that owners must continue to pay for all association amenities whether they use them or not. Such outflows can include fees, assessments and other costs that can be arbitrarily increased at any time without limitation. When purchasing into an association or community environment, seniors requiring financial stability have no guarantees.”
Without meaningful laws protecting owners, many associations have become the last free bastion of no accountability while they methodically deplete seniors of their resources. There is no other type of home ownership where owners have the privilege of handing over their money whenever asked, and not having an “absolute” right to know where that money is going. The money taken belongs to those who can least afford to lose it, and are too frail or incapacitated to effectively protect themselves against victimization.
These days, there are seniors and then there are seniors
One octogenarian recalls when “being a senior meant you had to be over 65 years old and housing was affordable for fixed income seniors. But the qualifying age for many senior developments has been lowered to age 50, to attract wealthier baby boomer buyers. As a result, our costs have gone up.”
If the association has a “trust-fund-baby” board of directors, finances are the last thing on that board’s mind. The younger generation’s seemingly diminished concern for money may be due to the ease with which they can make or borrow money when needed. Numerous older residents, however, are not as fortunate, and many wind up moving from one community to another seeking a mix of demographics and affordability. Unfortunately, with each move comes an additional depletion of usually irreplaceable funds. Because these perils of deed-restricted living are not fully disclosed in condo sales brochures or during escrow, it is understandable that buyers, but seniors in particular, fail to comprehend that situations might get so bad as to force them to move overnight. They want to believe this will never happen to them or, if it does, they will be able to quickly sell and move. Not so. Owners are finding themselves in positions where they must suddenly empty the contents of their home and move. Seniors told me they “hope they die first.”
Elder abuse, or keep quiet and keep paying
Although owners personally bankroll the association, an association’s funding and spending philosophy can often change from board to board. Accountability is a problem. It easily becomes irrelevant whether money collected for a particular reason can be diverted for another purpose or not used at all. However, when you move, your monetary contributions stay in the association’s coffers.
The American Psychological Association (APA) warns that elder abuse includes just this kind of financial exploitation. The National Committee for Prevention of Elder Abuse (NCPEA) warns of unscrupulous professionals and businesspersons, or anyone posing as such. They may overcharge for services or products, use deceptive or unfair business practices, or “use their positions of trust or respect” to gain access or compliance. Those who are ill, frail, disabled or depressed are at greater risk of abuse. Because most seniors don’t want to make waves, intimidation and financial exploitation are achieved with little effort.
“When we question invoices we don’t owe, we’re told, ‘pay it and argue later.’” Dorothy, Riverside. For older seniors, there may not be a “later.” Many fail to realize they may not owe money, but pay the bill anyway.
“We ask for information regarding finances and accounting anomalies; the board stalls, ignores us and says ‘we’re looking into it,’ but we never get anywhere. It doesn’t matter if we write three or three hundred letters, we get no response.” Helen and Frank Schroeder, Torrance.
After stalling tactics run out, seniors are hit where it hurts the most, their wallets. Owners who pursued their statutory rights to inspect books and records reported that boards and management destroyed or fabricated documents and then lied to cover up their actions and mislead law enforcement. Retaliation against owners followed. Seniors who persist on enforcing their rights can be ostracized, labeled “troublemakers,” given the silent treatment, and ignored by management and boards. These are painful and unhealthy experiences. Seniors who are intentionally excluded or shut out by their peers, or those in control, lose friendship and the ability to exercise direction over their home, finances and living conditions.
When seniors become sitting ducks Some seniors do not realize the true value of their total assets and fail to adequately protect themselves. The APA and NCPEA recognize that many seniors are dependent on others for help. They warn of so-called “helpers” or those perceived to be “in charge” or “running the place.” With nothing more than status and trust, these individuals gain access to homes and assets where they can exercise significant influence over the older person. In fact, community environments encourage such “dependence.” Instantly in many cases, because of their position of trust, board directors and management vendors are given access to cash, checks, accounts and personal information about residents. The relationship becomes personal because these entities are on a first name basis with residents. Those most adept at perpetrating abuse and deceit are usually found in positions of trust, and they are also typically “very nice.”
Even when minimal protections exist, owners are unable to enforce them. One senior was injured late at night when he returned from work. He was brutally assaulted and battered by association directors in his own driveway. Bloody, he dialed 911 on his cell phone. His crime? He exercised his legal right to obtain copies of the association’s insurance policies. The board’s personally delivered pugilistic message: don’t ever send the agent or board a signed, return receipt for insurance policies again, you’re not getting them, so stop asking! The failure of seniors to effectively assert their rights results in the elevation of power, control and domination by boards and management, culminating in a sanctioned exploitation of those who are most defenseless. Collectively, this ruling elite disenfranchises those in the minority while constituting an overt and unlegislated force of domination.
Betrayal by peers All too often seniors sitting on governing boards are themselves incapable of conducting meaningful business or comprehending documents and commitments that will bind all owners forever. Still, they cling to the seat of power by getting elected to the board. This presents an opportunity for unscrupulous vendors and advisors to deviously control the association from the sidelines. One owner makes sure her husband is on the board, “playing CEO with the other nonviable, unemployed, and retired, ex-CEOs. It makes him feel good and gets him out of the house,” she says. The wife of an unsuccessful retired used boat salesman turned career board member, says, “He’s always wanted to be a CEO but never had the education.” Another senior admits her husband “is in the first stages of Alzheimer’s disease, but being on the board gives him something to do.” Unapologetically, she says, “He votes however the management company or directors tell him to vote.” Actions of directors like these are financially devastating to owners and can erode equity that can never be recovered.
In the process, a once revolutionary bastion of so-called “affordable” housing has degenerated to an embarrassing and shameful ruling class of boards, management, vendors and toothless legislation. That governance is sustained not by popular acceptance, but by the agency of terror over those who can least afford it. ~*~
SENIOR CONDO PURCHASES, PART TWO: A World of Hidden Problems
SENIOR CONDO PURCHASES, PART TWO: A World of Hidden Problems
December, 2004
By Donie Vanitzian Copyright Donie Vanitzian
Los Angeles, California - "I had no idea what all those papers meant when I bought this condo. I've meager means and little energy for this homeowner association nonsense and I can't keep up with it. It just wears me out," David - Encino, California
There is more to buying a condo than agreeing to pay a monthly fee. On top of mortgage payments and regular maintenance fees, the speed with which special assessments are charged to owners exacts a ruthless reality, particularly on seniors who never expected to be hit with rapid motion bank withdrawals from their account and into the association's coffers. Without meaningful consumer protections and readily verifiable accountability of these items, the equity in your home is at risk.
Condo buyers must agree to all terms in piles of paperwork presented to them during escrow whether they like it or not, or they can't buy. Paperwork can be a foot thick, taking competent lawyers weeks to research, yet most buyers agree to terms without ever reading them, that is, if they are provided copies at all. Many buyers don't realize that everything they agree to, including monthly fees, can change overnight without their knowledge or consent, and the law permits it. These purchases are convoluted and buyers cannot afford to be intimidated.
For each master and sub-association where the property is located, buyers must:
1. Learn of any lawsuits.
2. Demand copies of covenants, conditions, and restrictions; articles of incorporation; bylaws; rules and regulations; association insurance policies; financial records, and board meeting minutes for several years.
3. Read and understand everything. If you have problems getting any information, or if documents look suspicious, don't buy.
A common misconception about homeowner associations is that they are a democracy. They aren't. Instead, this type of purchase makes a mockery of the concept of choice.
POWER OF THE BOARD OF DIRECTORS
"Our budget is $80 million a year. The management company commandeers our board of directors' election procedure, which is a 'conflict of interest.' This violates our bylaws election process 'secrecy and integrity' rule. Elections should never be in the hands of a management company employed by the board." Alice, owner, Leisure World, Laguna Woods.
Election of a board of directors is an election for control of money, contracts, foreclosure, and titleholders. Make no mistake directors have political and social control of the association and run it as they see fit. Unfortunately, too many seniors will automatically reelect existing board members because they fail to understand this is a business not a popularity contest.
Power over meetings, motions and lives "If I ask a question the board doesn't like, they tell me, 'sit down you're out of order!'" fumes co-op owner Helen Schroeder of Torrance. "Boards treat seniors as if we are senile, dumb and not knowledgeable."
In addition to creative accounting methods, often boards will alter the way "notice" is delivered to owners by hiding it in announcements, bulletins, or newsletters. When monthly fees go up and you complain, a board's typical response is, "we put notice in the flyer we sent out, if you didn't get it or read it, that's your problem."
All motions and rules passed by the board, even if owners disagree, bind everyone. Challenging board actions means inevitably that owners must sue and pay for their own lawsuit. In homeowner associations, nothing is "free" and nearly every avenue an owner chooses to pursue requires money, time, attorney advice, or the filing of a lawsuit. Arbitration is no better. Much time is wasted on the process itself and because boards receive legal advice and retain lawyers, seniors need to hire an attorney.
---Problems arise because association funds or insurance policies pay board attorney fees, yet owners can't utilize that attorney or access invoices they pay for
---When a board sues an owner, that lawsuit becomes an association expense, meaning all owners pay for costs, but owners finance their own lawsuits Owners wanting to stop an existing lawsuit against the board's wishes . can't. All owners must continue to pay for it and the lawyers. If the association loses, owners may have to pay the judgment award and also risk paying attorney fees for the other side.
POWER TO DENY HEIRS
Real Estate Broker and Personal Financial Planner Thomas Foster warns seniors, "Be aware that even if you don't have a mortgage and don't owe taxes, boards have the power to lien and nonjudicially foreclose for money they allege is owed."
---Boards have the power to make arbitrary demands on individual owners, raise monthly fees, sell property, enter into contracts, fine, penalize, charge interest, lien, foreclose, and keep owners mired in debt they won't live long enough to pay off.
---If the owner doesn't pay, when they die, their estate will pay.
Such unrestrained actions can prevent or hold up a person's purchase or sale, increasing escrow costs and chances of litigation. An association can prevent the purchase or sale of your property, and some include an "option to buy" clause or "right of first refusal" in their governing documents. Others exercise rights to decide whether they "like" the prospective buyer or not, before allowing them to move intothe community. Some boards have prevented heirs from occupying the unit until they have been interviewed and approved by the board, and only after the board receives proof the heir has a right to inherit the unit. Deciding whether the association will exercise such options could take months. If none of these options sound fair or equitable, they don't have to be. Purchasers voluntarily buy into private communities and are free to contract regardless of the terms.
"I won't let my mother buy a condo, it's too risky," Foster cautions. "Owners are nothing more than cash dispensers for associations."
WARNING: THOSE "PAPERS" ARE "LEGAL DOCUMENTS"
Many owners do not know the difference between petitions, proxies or ballots, and this can be dangerous. Depending on the printed language, once signed you have voted and often cannot revoke your signature.
Unfortunately, seniors usually comply with board requests for their signed proxy. Not understanding the consequences of signing any of those documents without prior legal advice can be devastating.Your signature on any one of those "papers" could allow the association to do just about anything including amending its governing documents giving it more control over money, owner assets and quality of life. You may have unwittingly agreed to pay more or allow the board to charge higher assessments. Or, it can cause the assets of the association to be sold out from under the owners with the money going to third parties; elect a board of directors which has conflicting interests; allow the board to hire a management company without consent of owners; and a host of other actions that will seriously impact, if not destroy, the living environment. This can be done in numerous ways.
Owners refusing to cooperate, or give the board their votes and proxies, can be targeted, portrayed as non-team players, and easily retaliated against. Examples include doorbells ringing mysteriously in the middle of the night, phantom phone calls, sudden disappearance of pets, additional charges, veiled threats, disregarded letters and maintenance requests, all geared to inconvenience, silence, and frighten owners into compliance.
The American Psychological Association (APA) describes emotional or psychological abuse as ranging from name-calling or being given the "silent treatment," intimidating, insulting, and threatening the individual. By APA standards, isolating or preventing the owner from partaking in their regular activities or seeing their friends, either by force, threats or through manipulation, is also abuse. Since there are no statutory penalties for errant boards, democracy fails.
REPAIRS AND MAINTENANCE PROBLEMS
While funding the association business and paying for repairs and maintenance of common property, each owner is also responsible for their own home's upkeep. This means instead of paying for only one roof (your roof), you may have to share the cost of paying for 100 or 1,000 roofs. You cannot pick your roof vendor, the board does. If the board and management keep the association mired in unnecessary or costly perpetual maintenance schemes, all owners must pay for those schemes, even if they disagree with the board's decision.
AMENITIES ARE LIABILITIES
Louise, owner in an age-restricted association, complains that the trust foundation at her leisure community, "is supposed to hold all our amenities in 'trust' for owners here, but they just sold one of our buildings without owner vote. That's against the law, but they know we can't afford to hire an attorney to stop them, so they do whatever they please. They tell us, 'when you pay your dues, you have no say on where they go. So, once it leaves your hands, we do what we want.'"
Many buyers do not realize that amenities are costly liabilities. Once all units in a complex are sold, the very amenities luring buyers to purchase, can be sold out from under them at any time, not unlike "corporate raiding" of assets. Brochures boasting fancy amenities not yet built, may never be built. Existing amenities may be in such poor condition that, soon after purchase, buyers are saddled with thousands of dollars in special assessments for insurance, maintenance, repair or replacement costs. Failure to pay can result in foreclosure. If the board sells common assets, there is no guarantee that proceeds will be shared amongst the owners who sunk their money into that association. The board decides what to do with the money.
SENIORS MUST HAVE A GUARANTEED GROWING INCOME
"I can't afford to stay, and I can't afford to move," cries a Santa Monica octogenarian, and Dennis Hlavaty of San Pedro, agrees, "I'd leave here in a New York minute if I could only afford it."
All the cash capital in the association's operating funds is generated from owners. Just because you can afford to move in does not mean you can afford to stay, or that you can afford to move out.
Prior to buying a deed-restricted property, most owners are not advised that they must have a steadily increasing income to keep their home and pay trumped up fees to close escrow or refinance. Owners who cannot afford to pay their association's demands for increased fees and instant assessments that can cost thousands of dollars per owner, cannot stay (one association specially assessed each owner $1 million). Whether $1 or $1 million, seniors who cannot pay, must sell and move. Those who cannot sell quickly enough may face foreclosure, or simply have to leave their homes behind.
NOTES
This article was published in the December 2004 edition of Southern California Senior Life. Click here for more information about the author.
December, 2004
By Donie Vanitzian Copyright Donie Vanitzian
Los Angeles, California - "I had no idea what all those papers meant when I bought this condo. I've meager means and little energy for this homeowner association nonsense and I can't keep up with it. It just wears me out," David - Encino, California
There is more to buying a condo than agreeing to pay a monthly fee. On top of mortgage payments and regular maintenance fees, the speed with which special assessments are charged to owners exacts a ruthless reality, particularly on seniors who never expected to be hit with rapid motion bank withdrawals from their account and into the association's coffers. Without meaningful consumer protections and readily verifiable accountability of these items, the equity in your home is at risk.
Condo buyers must agree to all terms in piles of paperwork presented to them during escrow whether they like it or not, or they can't buy. Paperwork can be a foot thick, taking competent lawyers weeks to research, yet most buyers agree to terms without ever reading them, that is, if they are provided copies at all. Many buyers don't realize that everything they agree to, including monthly fees, can change overnight without their knowledge or consent, and the law permits it. These purchases are convoluted and buyers cannot afford to be intimidated.
For each master and sub-association where the property is located, buyers must:
1. Learn of any lawsuits.
2. Demand copies of covenants, conditions, and restrictions; articles of incorporation; bylaws; rules and regulations; association insurance policies; financial records, and board meeting minutes for several years.
3. Read and understand everything. If you have problems getting any information, or if documents look suspicious, don't buy.
A common misconception about homeowner associations is that they are a democracy. They aren't. Instead, this type of purchase makes a mockery of the concept of choice.
POWER OF THE BOARD OF DIRECTORS
"Our budget is $80 million a year. The management company commandeers our board of directors' election procedure, which is a 'conflict of interest.' This violates our bylaws election process 'secrecy and integrity' rule. Elections should never be in the hands of a management company employed by the board." Alice, owner, Leisure World, Laguna Woods.
Election of a board of directors is an election for control of money, contracts, foreclosure, and titleholders. Make no mistake directors have political and social control of the association and run it as they see fit. Unfortunately, too many seniors will automatically reelect existing board members because they fail to understand this is a business not a popularity contest.
Power over meetings, motions and lives "If I ask a question the board doesn't like, they tell me, 'sit down you're out of order!'" fumes co-op owner Helen Schroeder of Torrance. "Boards treat seniors as if we are senile, dumb and not knowledgeable."
In addition to creative accounting methods, often boards will alter the way "notice" is delivered to owners by hiding it in announcements, bulletins, or newsletters. When monthly fees go up and you complain, a board's typical response is, "we put notice in the flyer we sent out, if you didn't get it or read it, that's your problem."
All motions and rules passed by the board, even if owners disagree, bind everyone. Challenging board actions means inevitably that owners must sue and pay for their own lawsuit. In homeowner associations, nothing is "free" and nearly every avenue an owner chooses to pursue requires money, time, attorney advice, or the filing of a lawsuit. Arbitration is no better. Much time is wasted on the process itself and because boards receive legal advice and retain lawyers, seniors need to hire an attorney.
---Problems arise because association funds or insurance policies pay board attorney fees, yet owners can't utilize that attorney or access invoices they pay for
---When a board sues an owner, that lawsuit becomes an association expense, meaning all owners pay for costs, but owners finance their own lawsuits Owners wanting to stop an existing lawsuit against the board's wishes . can't. All owners must continue to pay for it and the lawyers. If the association loses, owners may have to pay the judgment award and also risk paying attorney fees for the other side.
POWER TO DENY HEIRS
Real Estate Broker and Personal Financial Planner Thomas Foster warns seniors, "Be aware that even if you don't have a mortgage and don't owe taxes, boards have the power to lien and nonjudicially foreclose for money they allege is owed."
---Boards have the power to make arbitrary demands on individual owners, raise monthly fees, sell property, enter into contracts, fine, penalize, charge interest, lien, foreclose, and keep owners mired in debt they won't live long enough to pay off.
---If the owner doesn't pay, when they die, their estate will pay.
Such unrestrained actions can prevent or hold up a person's purchase or sale, increasing escrow costs and chances of litigation. An association can prevent the purchase or sale of your property, and some include an "option to buy" clause or "right of first refusal" in their governing documents. Others exercise rights to decide whether they "like" the prospective buyer or not, before allowing them to move intothe community. Some boards have prevented heirs from occupying the unit until they have been interviewed and approved by the board, and only after the board receives proof the heir has a right to inherit the unit. Deciding whether the association will exercise such options could take months. If none of these options sound fair or equitable, they don't have to be. Purchasers voluntarily buy into private communities and are free to contract regardless of the terms.
"I won't let my mother buy a condo, it's too risky," Foster cautions. "Owners are nothing more than cash dispensers for associations."
WARNING: THOSE "PAPERS" ARE "LEGAL DOCUMENTS"
Many owners do not know the difference between petitions, proxies or ballots, and this can be dangerous. Depending on the printed language, once signed you have voted and often cannot revoke your signature.
Unfortunately, seniors usually comply with board requests for their signed proxy. Not understanding the consequences of signing any of those documents without prior legal advice can be devastating.Your signature on any one of those "papers" could allow the association to do just about anything including amending its governing documents giving it more control over money, owner assets and quality of life. You may have unwittingly agreed to pay more or allow the board to charge higher assessments. Or, it can cause the assets of the association to be sold out from under the owners with the money going to third parties; elect a board of directors which has conflicting interests; allow the board to hire a management company without consent of owners; and a host of other actions that will seriously impact, if not destroy, the living environment. This can be done in numerous ways.
Owners refusing to cooperate, or give the board their votes and proxies, can be targeted, portrayed as non-team players, and easily retaliated against. Examples include doorbells ringing mysteriously in the middle of the night, phantom phone calls, sudden disappearance of pets, additional charges, veiled threats, disregarded letters and maintenance requests, all geared to inconvenience, silence, and frighten owners into compliance.
The American Psychological Association (APA) describes emotional or psychological abuse as ranging from name-calling or being given the "silent treatment," intimidating, insulting, and threatening the individual. By APA standards, isolating or preventing the owner from partaking in their regular activities or seeing their friends, either by force, threats or through manipulation, is also abuse. Since there are no statutory penalties for errant boards, democracy fails.
REPAIRS AND MAINTENANCE PROBLEMS
While funding the association business and paying for repairs and maintenance of common property, each owner is also responsible for their own home's upkeep. This means instead of paying for only one roof (your roof), you may have to share the cost of paying for 100 or 1,000 roofs. You cannot pick your roof vendor, the board does. If the board and management keep the association mired in unnecessary or costly perpetual maintenance schemes, all owners must pay for those schemes, even if they disagree with the board's decision.
AMENITIES ARE LIABILITIES
Louise, owner in an age-restricted association, complains that the trust foundation at her leisure community, "is supposed to hold all our amenities in 'trust' for owners here, but they just sold one of our buildings without owner vote. That's against the law, but they know we can't afford to hire an attorney to stop them, so they do whatever they please. They tell us, 'when you pay your dues, you have no say on where they go. So, once it leaves your hands, we do what we want.'"
Many buyers do not realize that amenities are costly liabilities. Once all units in a complex are sold, the very amenities luring buyers to purchase, can be sold out from under them at any time, not unlike "corporate raiding" of assets. Brochures boasting fancy amenities not yet built, may never be built. Existing amenities may be in such poor condition that, soon after purchase, buyers are saddled with thousands of dollars in special assessments for insurance, maintenance, repair or replacement costs. Failure to pay can result in foreclosure. If the board sells common assets, there is no guarantee that proceeds will be shared amongst the owners who sunk their money into that association. The board decides what to do with the money.
SENIORS MUST HAVE A GUARANTEED GROWING INCOME
"I can't afford to stay, and I can't afford to move," cries a Santa Monica octogenarian, and Dennis Hlavaty of San Pedro, agrees, "I'd leave here in a New York minute if I could only afford it."
All the cash capital in the association's operating funds is generated from owners. Just because you can afford to move in does not mean you can afford to stay, or that you can afford to move out.
Prior to buying a deed-restricted property, most owners are not advised that they must have a steadily increasing income to keep their home and pay trumped up fees to close escrow or refinance. Owners who cannot afford to pay their association's demands for increased fees and instant assessments that can cost thousands of dollars per owner, cannot stay (one association specially assessed each owner $1 million). Whether $1 or $1 million, seniors who cannot pay, must sell and move. Those who cannot sell quickly enough may face foreclosure, or simply have to leave their homes behind.
NOTES
This article was published in the December 2004 edition of Southern California Senior Life. Click here for more information about the author.
Tuesday, November 23, 2004
SENIOR CONDO PURCHASES, PART ONE: A WORLD OF HIDDEN RISK, LIABILITY AND ABUSE
SENIOR CONDO PURCHASES, PART ONE: A WORLD OF HIDDEN RISK, LIABILITY AND ABUSE
November 2004
By Donie Vanitzian Copyright Donie Vanitzian
"Well kept grounds, beautiful trees, blooming flowers, blue pools, jacuzzis, shuffleboard courts and walking trails. Not a dandelion in sight. All this can be yours for the payment of one small monthly fee. You'll never have to lift a bag of fertilizer or mow your lawn again," the salesperson explains. "These amenities would cost you a fortune if you had to pay for it all yourself, but here, it's so simple because everyone shares in the cost. Simply buy a condominium unit in our homeowner association and all this can be yours."
Without understanding the ramifications of their advice, well-meaning family and friends all too often take this sales pitch on good faith and unwittingly convince retired or soon to retire loved ones to "buy a condo and make only one payment a month."
The rationalization of course, is that the tedious chores and upkeep most often equated with ownership of a traditional home do not exist when a condo in what is technically known as a common interest development is purchased. However, with a condo purchase, although many chores and upkeep are reduced to a "monthly fee," unexpected and incalculable risk and liability await those who are unaware.
Most new owners don't realize they have little or no control over their living environment because their board of directors makes all the decisions. Often these boards are incompetent and have little or no business experience, yet they can use their positions to squander money and victimize homeowners. In California they can do this with impunity, as the law provides no penalties for errant boards. More often than not, boards are prime targets for manipulation by the management companies, advisors, and vendors they hire, whose main motivation is profit and contract renewal, thus influencing a board's agenda.
Adding to the problems of seniors when buying into this type of home ownership is the amount of paperwork involved, not only during purchase, but after one moves in. Often decisions are made under intense pressure, and this requires an ability to absorb information quickly that even an experienced lawyer might find daunting. Not to mention that, for most, growing older can mean one's coping skills in these areas are to some degree going to be impaired.
Condo laws in a nutshell
Since condominiums are located in common interest developments, they are subject to governance by a homeowner association and a board of directors. Some developments have more than one homeowner association, which means they have more than one board of directors and more than one monthly fee. Documents signed at escrow will include some type of statement that the buyer is aware and has notice that the property they are purchasing has a homeowner association and board of directors, and that the buyer is responsible for all costs associated with that purchase.
In California, residential common interest developments have mandatory deed restrictions recorded on the title of your home whether it is a condo, detached dwelling, or stock cooperative. The California Civil Code Section 784 describes a deed restriction as "a limitation on, or provision affecting, the use of real property in a deed, declaration, or other instrument, whether in the form of a covenant, equitable servitude, condition subsequent, negative easement, or other form of restriction."
What this means is that serious conditions with potentially far reaching consequences are imposed on your use of your own home, conditions that you may have no control over.
Remember those blue pools and walking trails? In a common interest development, those amenities can suddenly turn into risks and liabilities. For example, seniors who purchase condominiums will be in for a shock when all of a sudden, for no apparent reason and with no warning, a lawsuit is filed and monthly fees go up, and up, and up. They are shocked again when they learn their board has signed a contract they never knew existed but must now pay, causing fees to rise yet again. The shocks continue when roads are repaved, pools resurfaced, tennis courts updated, clubhouses refurbished, structures painted, and new landscape installed, each with its own high dollar sticker shock.
Life in a corporate nightmare
Because a condo, as defined by the California Civil Code, is both a business and a residence, its governance is dominated mostly by corporate laws.
Seniors often fail to realize they are not just buying a place to live, but are buying a business run by third parties they have either never met, or have met but don't trust. The result is that a condo owner virtually has no say in how the "business" where they live, will be run.
Through that supposedly simple condo purchase, the owner instantly becomes a member of the association. That means they are responsible for funding the business bank accounts, and paying for repair and maintenance of all corporate property. The owner becomes responsible for paying association expenses and liable for all the association's risks and liabilities. This means, if the board chooses to overspend, or if they slander or libel someone, the owners are responsible for rectifying both actions, even if the board is insured.
For instance, many laws mandate that associations carry insurance, but that does not mean they do. Even though California Civil Code Section 1364(e)(4) states that "Any association member may, upon request and provision of reasonable notice, review the association's insurance policies and, upon request and payment of reasonable duplication charges, obtain copies of those policies," owners who have requested copies and proof that association insurance policies exist have been informed by the California Department of Insurance that "The Department does not regulate, nor have jurisdiction or authority over your homeowners association. Therefore, we are unable to force them to provide you with a copy of your insurance policies. You may wish to consult with an attorney for advice and guidance."
Revealing an Alice in Wonderland world of non-existent responsibility, the Department also notified owners who complained about management companies and other third-party vendors who were transacting insurance without a license that the Department has "no jurisdiction over unlicensed transactors." Owners who asked where to file a complaint against management and vendors transacting insurance without a license reported that the Department would not answer the question.
Grim reality
So, although owners complain they are prevented from unrestrained access to books, records and accounts, they still remain liable for all debts incurred by their board and association. Owners are required to pay because the law states that if they do not, their home can be foreclosed upon.
There is no other type of home ownership where anyone must pay what they are told to pay, and not be able to confirm the validity of the amount demanded without being forced to sue. In essence, the law compels those in a weakened position and least able to afford to protect themselves, which in many if not most cases means seniors, to sue. The senior may be paying for non-existent insurance policies yet is not allowed to question the actions of a board that allows this to occur, or question the management company who sold them insurance or caused the cancellation of existing policies, all without a license. Happening in California at an alarming rate, situations like these pose grave risks for all condominium owners, and for seniors in particular.
The forgotten citizens
Most government agencies overlook the severity and scope of actions against seniors that occur in homeowner associations. As one longtime enforcement agency employee once told me, "Look, it's only a homeowner association, we are after real corporate crime with big bucks." This was followed by, "Why don't they move?" However, with approximately 47 million homeowners living in common interest developments throughout America, this deceptively simple lifestyle can cost seniors billions of dollars nationwide. To give you an idea of just how big the financial impact of these residential deed-restricted purchases are, assume the regular dues of each homeowner averages $200 per month (in reality monthly averages are much higher).
This conservative estimate creates an industry with an estimated value of $9.4 billion Continued on page 10 per month, or more than $100 billion a year. And asking why seniors don't just move reveals a further lack of understanding on the part of law enforcement.
For seniors, with their frequently limited options due to age and limited financial resources, moving out of a bad condo situation might not be possible. Not to mention that, in a homeowner association, nothing is quick, nothing is easy, and everything costs more.
What happens when a seemingly affordable, simple, and uncomplicated condo purchase, morphs into the ugly reality of, "We bought a nightmare," or, "We bought a lawsuit"? Along with the buyer's anxiety level, up goes the "For Sale" sign and a game of beat-the-escrow-clock starts to tick, and the rule of law is invoked.
So you want to sell your condo
Each state has its own statutes and laws that govern deed-restricted development purchases. While there are laws on the books to protect consumers, the laws in this area often lead to a maze of yet other laws that are complicated, confusing, and often detrimental to consumers trying to make informed choices. Nearly all such laws will require an attorney to interpret or to recommend a course of action.It should surprise no one that, due to the complexity and uncertain nature of these laws, seniors and other owners can receive wrong or bad advice.
Unfortunately, in this environment, owners on a fixed income or sparse allowance cannot afford a mistake in judgment at this stage of the game.
Whereas at one time a condo purchase used to be simple and uncomplicated, it is no more. To enforce their rights, buyers must learn quickly what disclosures they are entitled to before they sign the purchase agreement because by the time they get into escrow they will not be able to accomplish much of anything.
In the business of selling residential deed-restricted property, an art form teeming with insiders' buzzwords and sophisticated age profiling, buyers learn too late that disclosure laws are either poorly written or difficult and costly to enforce. Because homeowner associations, boards of directors, management and vendors have injected themselves into the sales process, present disclosure laws are inadequate and do not fully protect consumers. As if they were fair game to the unscrupulous, buyers are allowed to know only what those in control of the information wish them to know.
NOTES
This article was first published in November 2004 issue of Senior Life. Coming next month: Drilling down into the details in search of the truth.
November 2004
By Donie Vanitzian Copyright Donie Vanitzian
"Well kept grounds, beautiful trees, blooming flowers, blue pools, jacuzzis, shuffleboard courts and walking trails. Not a dandelion in sight. All this can be yours for the payment of one small monthly fee. You'll never have to lift a bag of fertilizer or mow your lawn again," the salesperson explains. "These amenities would cost you a fortune if you had to pay for it all yourself, but here, it's so simple because everyone shares in the cost. Simply buy a condominium unit in our homeowner association and all this can be yours."
Without understanding the ramifications of their advice, well-meaning family and friends all too often take this sales pitch on good faith and unwittingly convince retired or soon to retire loved ones to "buy a condo and make only one payment a month."
The rationalization of course, is that the tedious chores and upkeep most often equated with ownership of a traditional home do not exist when a condo in what is technically known as a common interest development is purchased. However, with a condo purchase, although many chores and upkeep are reduced to a "monthly fee," unexpected and incalculable risk and liability await those who are unaware.
Most new owners don't realize they have little or no control over their living environment because their board of directors makes all the decisions. Often these boards are incompetent and have little or no business experience, yet they can use their positions to squander money and victimize homeowners. In California they can do this with impunity, as the law provides no penalties for errant boards. More often than not, boards are prime targets for manipulation by the management companies, advisors, and vendors they hire, whose main motivation is profit and contract renewal, thus influencing a board's agenda.
Adding to the problems of seniors when buying into this type of home ownership is the amount of paperwork involved, not only during purchase, but after one moves in. Often decisions are made under intense pressure, and this requires an ability to absorb information quickly that even an experienced lawyer might find daunting. Not to mention that, for most, growing older can mean one's coping skills in these areas are to some degree going to be impaired.
Condo laws in a nutshell
Since condominiums are located in common interest developments, they are subject to governance by a homeowner association and a board of directors. Some developments have more than one homeowner association, which means they have more than one board of directors and more than one monthly fee. Documents signed at escrow will include some type of statement that the buyer is aware and has notice that the property they are purchasing has a homeowner association and board of directors, and that the buyer is responsible for all costs associated with that purchase.
In California, residential common interest developments have mandatory deed restrictions recorded on the title of your home whether it is a condo, detached dwelling, or stock cooperative. The California Civil Code Section 784 describes a deed restriction as "a limitation on, or provision affecting, the use of real property in a deed, declaration, or other instrument, whether in the form of a covenant, equitable servitude, condition subsequent, negative easement, or other form of restriction."
What this means is that serious conditions with potentially far reaching consequences are imposed on your use of your own home, conditions that you may have no control over.
Remember those blue pools and walking trails? In a common interest development, those amenities can suddenly turn into risks and liabilities. For example, seniors who purchase condominiums will be in for a shock when all of a sudden, for no apparent reason and with no warning, a lawsuit is filed and monthly fees go up, and up, and up. They are shocked again when they learn their board has signed a contract they never knew existed but must now pay, causing fees to rise yet again. The shocks continue when roads are repaved, pools resurfaced, tennis courts updated, clubhouses refurbished, structures painted, and new landscape installed, each with its own high dollar sticker shock.
Life in a corporate nightmare
Because a condo, as defined by the California Civil Code, is both a business and a residence, its governance is dominated mostly by corporate laws.
Seniors often fail to realize they are not just buying a place to live, but are buying a business run by third parties they have either never met, or have met but don't trust. The result is that a condo owner virtually has no say in how the "business" where they live, will be run.
Through that supposedly simple condo purchase, the owner instantly becomes a member of the association. That means they are responsible for funding the business bank accounts, and paying for repair and maintenance of all corporate property. The owner becomes responsible for paying association expenses and liable for all the association's risks and liabilities. This means, if the board chooses to overspend, or if they slander or libel someone, the owners are responsible for rectifying both actions, even if the board is insured.
For instance, many laws mandate that associations carry insurance, but that does not mean they do. Even though California Civil Code Section 1364(e)(4) states that "Any association member may, upon request and provision of reasonable notice, review the association's insurance policies and, upon request and payment of reasonable duplication charges, obtain copies of those policies," owners who have requested copies and proof that association insurance policies exist have been informed by the California Department of Insurance that "The Department does not regulate, nor have jurisdiction or authority over your homeowners association. Therefore, we are unable to force them to provide you with a copy of your insurance policies. You may wish to consult with an attorney for advice and guidance."
Revealing an Alice in Wonderland world of non-existent responsibility, the Department also notified owners who complained about management companies and other third-party vendors who were transacting insurance without a license that the Department has "no jurisdiction over unlicensed transactors." Owners who asked where to file a complaint against management and vendors transacting insurance without a license reported that the Department would not answer the question.
Grim reality
So, although owners complain they are prevented from unrestrained access to books, records and accounts, they still remain liable for all debts incurred by their board and association. Owners are required to pay because the law states that if they do not, their home can be foreclosed upon.
There is no other type of home ownership where anyone must pay what they are told to pay, and not be able to confirm the validity of the amount demanded without being forced to sue. In essence, the law compels those in a weakened position and least able to afford to protect themselves, which in many if not most cases means seniors, to sue. The senior may be paying for non-existent insurance policies yet is not allowed to question the actions of a board that allows this to occur, or question the management company who sold them insurance or caused the cancellation of existing policies, all without a license. Happening in California at an alarming rate, situations like these pose grave risks for all condominium owners, and for seniors in particular.
The forgotten citizens
Most government agencies overlook the severity and scope of actions against seniors that occur in homeowner associations. As one longtime enforcement agency employee once told me, "Look, it's only a homeowner association, we are after real corporate crime with big bucks." This was followed by, "Why don't they move?" However, with approximately 47 million homeowners living in common interest developments throughout America, this deceptively simple lifestyle can cost seniors billions of dollars nationwide. To give you an idea of just how big the financial impact of these residential deed-restricted purchases are, assume the regular dues of each homeowner averages $200 per month (in reality monthly averages are much higher).
This conservative estimate creates an industry with an estimated value of $9.4 billion Continued on page 10 per month, or more than $100 billion a year. And asking why seniors don't just move reveals a further lack of understanding on the part of law enforcement.
For seniors, with their frequently limited options due to age and limited financial resources, moving out of a bad condo situation might not be possible. Not to mention that, in a homeowner association, nothing is quick, nothing is easy, and everything costs more.
What happens when a seemingly affordable, simple, and uncomplicated condo purchase, morphs into the ugly reality of, "We bought a nightmare," or, "We bought a lawsuit"? Along with the buyer's anxiety level, up goes the "For Sale" sign and a game of beat-the-escrow-clock starts to tick, and the rule of law is invoked.
So you want to sell your condo
Each state has its own statutes and laws that govern deed-restricted development purchases. While there are laws on the books to protect consumers, the laws in this area often lead to a maze of yet other laws that are complicated, confusing, and often detrimental to consumers trying to make informed choices. Nearly all such laws will require an attorney to interpret or to recommend a course of action.It should surprise no one that, due to the complexity and uncertain nature of these laws, seniors and other owners can receive wrong or bad advice.
Unfortunately, in this environment, owners on a fixed income or sparse allowance cannot afford a mistake in judgment at this stage of the game.
Whereas at one time a condo purchase used to be simple and uncomplicated, it is no more. To enforce their rights, buyers must learn quickly what disclosures they are entitled to before they sign the purchase agreement because by the time they get into escrow they will not be able to accomplish much of anything.
In the business of selling residential deed-restricted property, an art form teeming with insiders' buzzwords and sophisticated age profiling, buyers learn too late that disclosure laws are either poorly written or difficult and costly to enforce. Because homeowner associations, boards of directors, management and vendors have injected themselves into the sales process, present disclosure laws are inadequate and do not fully protect consumers. As if they were fair game to the unscrupulous, buyers are allowed to know only what those in control of the information wish them to know.
NOTES
This article was first published in November 2004 issue of Senior Life. Coming next month: Drilling down into the details in search of the truth.
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