HOAleader.com - Tip of the Week - March 7, 2014
Published: Fri, 03/07/14
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Will the Complications with FHA Certification Never End for HOAs?
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In this week's tip, we discuss a new sticky wicket when it comes to an
association's failure to seek Federal Housing Administration
certification--potentially increased legal risk for discrimination
claims.
Under rules issued in 2009, the FHA guarantees loans for condo purchases
only if the entire association has been approved for FHA financing.
That has required many condo associations to go through a strict FHA
"recertification" process. Many condos haven't been able to pass. Others
have decided not to pursue FHA recertification altogether. It's that
decision that may put the HOA at risk for discrimination claims, with the
argument being that boards are deliberately choosing a path that will
likely reduce the number of minorities in their association.
"I haven't run into situations where our company has been accused of any
discriminatory practices for a lack of action on FHA certification," says
Bill Worrall, vice president of Hollywood, Fla.-based FirstService
Residential, which manages 1,300 condominium and homeowner associations
totaling 310,000 residential units. "Over the years, we were very active in
having associations become FHA certified to help units be salable on the
market, and we were very successful in helping them get approved. But that
was in response to the association's need to convey units when the owners
weren't paying maintenance fees; it was in response to delinquency and
cash-flow problems for the association. In today's world, it looks like
things have changed a lot. FHA certification isn't as important from a
delinquency or cash-flow perspective."
But it's gaining importance considering today's tightened financing
market. "It's probably been 25 years since I closed my last FHA loan," says
Robert Galvin, a partner at Davis, Malm & D'Agostine PC in Boston who
specializes in representing condos and co-ops. "But now they're really
coming back in full swing."
"I haven't heard the rumblings about the potential risk, but I can see why
there is that possibility," says Galvin. "The reason is that agencies that
enforce nondiscrimination in housing laws are not only concerned with
actual, direct discrimination but of landlords, property owners, or condo
associations that--probably without meaning to--take action that on its
face isn't directed to discrimination but can have that effect."
Find out why--and get tips for reducing your HOA's risk--in our new article,
http://www.hoaleader.com/members/966.cfm
Best regards,
Matt Humphrey
President
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Recent articles posted at HOAleader.com:
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FHA Certification: The New Risk of HOA Discrimination Claims
Real estate columnist Ken Harney recently reported that legal experts are
starting to voice concerns that an HOA's failure to seek FHA certification
may later be turned into a discrimination case. The potential argument? The
decision to forego FHA certification likely has a disparate impact on
potential minority buyers.
Click here to read full article:
http://www.hoaleader.com/members/FHA-Certification-The-New-Risk-of-HOA-Discrimination-Claims.cfm
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Recent Trends in HOA State Laws: Colorado, Florida, Massachusetts,
Michigan
Here we continue our occasional series in which our experts tell us the
HOA/condo legislative trends they're seeing--both proposed and actually
passed--with an eye toward educating board members nationwide about
changes they may encounter in their state soon. The latest changes include
interesting developments in Colorado, Florida, Massachusetts, and
Michigan.
Click here to read full article:
http://www.hoaleader.com/members/Recent-Trends-in-HOA-State-Laws-Colorado-Florida-Massachusetts-Michigan.cfm
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It's Review Time: Do You Know Where Your HOA Money Is?
In this week's tip, we brush you up on ways to ensure you're not the latest
victim in a news story like this one, in which a federal judge just sentenced
yet another HOA manager for embezzlement, this time for nearly $1 million
from his company, which manages associations in northern California.
Click here to read full article:
http://www.hoaleader.com/members/Its-Review-Time-Do-You-Know-Where-Your-HOA-Money-Is.cfm
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Complete This 7-Step Checkup on Your HOA's Financial Controls to Prevent
Embezzlement
A federal judge just sentenced yet another HOA manager for embezzlement,
this time for nearly $1 million from his company, which manages
associations in northern California. Consider it a reminder to
double-check your financial controls. Here we offer seven tips to ensure
you're protecting your homeowner association's funds.
Click here to read full article:
http://www.hoaleader.com/members/Complete-This-7-Step-Checkup-on-Your-HOAs-Financial-Controls-to-Prevent-Embezzlement.cfm
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Accommodation Requests Under the Fair Housing Act: Best Practices to Avoid
Discrimination Claims & Lawsuits
Is your HOA or condo board seeing more and more requests for exceptions to
your pet rules? What about requests for specific parking spots or
deviations from your architectural rules? Afraid saying no to any request
will trigger a costly and stressful discrimination complaint against your
HOA? Take charge of the process for handling requests for accommodations!
Join us for an in-depth webinar on March 18 led by two experts in HOAs,
condominiums, and fair housing challenges.
Click here to read full article:
http://www.hoaleader.com/snip/156.htm
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