HOAleader.com - Tip of the Week - April 21, 2023
Published: Fri, 04/21/23
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HOAleader.com - Tip of the Week - April 21, 2023
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You've heard our experts raise this issue before, but a new report has put the issue back in front of our experts.
In this week's tip, we ask our experts about a new The New York Times report on yet another condo community that was gobbled up by investors and eventually deconverted, pushing the final owner holdout to sell, which they claim would be at a big loss from their fair market value.
One of our experts, Scott D. Weiss, CCAL, a community association lawyer at Ortale Kelley in Nashville, Tenn., who represents more than 650 condos/HOA communities throughout the state, has been raising the alarm of the risk of investors taking over communities.
"When I read that article, I thought, 'Oh, my gosh. That's crazy,'" he says. "That's a pretty extreme example, but it's exactly what I'm warning against. Investors started buying, they'd been in a number of years and were off the radar, and then these owners said, 'How did this happen?'"
Should you be acting sooner rather than later to better protect your community from what's essentially a hostile takeover?
According to The New York Times, Howard Fellman bought his Boca Raton, Fla., condo in 1992 for $65,000. In 2004, Fellman and his wife bought a home but kept and rented out their Boca Raton condo, planning to use it in retirement.
However, the Crystal Palms condo, with 176 units, was in the sights of an investor, who in 1997 bought all but Fellman's unit. With the investor, Pennsylvania-based Scully Co., in control of the condo board, the board voted to reduce the percentage of owners required for the condo to be terminated from 100 percent to 80 percent.
In February, Scully's shares voted to terminate the condo altogether, pushing the Fellmans into a forced sale. Scully offered the Fellmans $200,000, but they claim an online estimate puts their condo value at $323,500.
The Fellmans sued but have so far lost at the trial level, where the judge essentially told them they should have known such an outcome was possible. Scully, according to the report, notes that it kept the condo operating for 25 years after its purchase of all but the Fellmans' unit and repeatedly asked the Fellmans if they were interested in selling.
The number of investors purchasing homes in the United States is sharply increasing. According to Pew Trusts, the number of investor owners held steady at 15-16 percent from about 2012 until 2021, when their numbers spiked to 24 percent.
Weiss says he's encouraged by the growing interest in his alarms over this issue. Read more in our new article Is Your Condo/HOA Board Taking the Investor-Control Risk Seriously Enough?, https://www.hoaleader.com/members/4689.cfm, including a new tactic corporate investors are using to dodge HOAs' rental restrictions.
Best regards,
Matt Humphrey
President
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Recent articles posted at HOAleader.com:
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Is Your Condo/HOA Board Taking the Investor-Control Risk Seriously Enough?
The New York Times reports on yet another condo community that was gobbled up by investors and eventually deconverted, pushing the final owner holdout to sell, which they claim would be at a big loss from their fair market value...
Click here for more:
https://www.hoaleader.com/members/Your-Condo-HOA-Board-Taking-InvestorControl-Risk-Seriously-Enough.cfm
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Giant Trucks Are Increasingly Ramming Into Condo/HOA Parking Restrictions
In this week's tip, we cover the latest corporation to take aim at the hard-working and dedicated volunteers who oversee condo and HOA communities. First it was HOA Cynthia, a Geico ad poking fun at an HOA president who was all up in her neighbors' business. We can't find that original video on any of Geico's online channels, but you can watch it here...
Click here for more:
https://www.hoaleader.com/members/Giant-Trucks-Are-Increasingly-Ramming-Into-CondoHOA-Parking-Restrictions.cfm
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Condo/HOA Bylaws Require Certified Mail Notice: Not as Rare as You Might Think
An HOAleader.com reader asks: "If an HOA in Florida has the below provision in their CC&Rs, does this really mean that every notice must be certified mail? If so, what happens to past mailings such as annual meeting notices that were sent out via standard mail?...
Click here for more:
https://www.hoaleader.com/members/Condo-HOA-Bylaws-Require-Certified-Mail-Notice-Not-as-Rare-as-You-Might-Think.cfm
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Motor Trend Takes Aim at Condo/HOA Truck Rules
First it was HOA Cynthia, a Geico ad poking fun at an HOA president who was all up in her neighbors' business. We can't find that original video on any of Geico's online channels, but you can watch it here...
Click here for more:
https://www.hoaleader.com/members/Motor-Trend-Takes-Aim-at-CondoHOA-Truck-Rules.cfm
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Why Board Members' Loose Lips Can Sink Condo/HOA Litigation Ships [HOAleader.com Video]
In this week's tip, we help an HOAleader.com reader navigate the treacherous path board members often tread between transparency and protecting confidential information...
Click here for more:
https://www.hoaleader.com/members/Why-Board-Members-Loose-Lips-Can-Sink-CondoHOA-Litigation-Ships-HOAleadercom-Video.cfm
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