Author Archives: Beanie

ARIZONA – Trying to close enforcement gap: Condos live under own rules; compliance mixed

arizona.newszap.com:  Trying to close enforcement gap: Condos live under own rules; compliance mixed
March 4, 2015
By Rusty Bradshaw
Independent Newsmedia, Inc. USA
SUN CITY, Ariz. — Sun City resident Richard LeBass looks across the street from his condominium property and sees a neighboring property in poor shape.
He has talked to the owner about cleaning it up, but is rudely rebuffed, even when reminded there are codes, covenants and restrictions that regulate how properties should be kept in the community.
“He tells me it is his property and he can do what he wants with it,” Mr. LeBass said.
Mr. LeBass’s neighbor is known to the two community property associations — Sun City Home Owners Association and the Sun City Condominium Owners Association.
“I’ve been over there to talk to him about it, but he saw me coming and told me to get off his property,” said Sam Estok, COA board president. “And that was the end of that.”
While he mentioned no direct dealings with Mr. LeBass’s neighbor, the situation is familiar to Tom Wilson, SCHOA general manager. It is not an isolated case. Read more:

Nevada – Witness describes payoffs, rigging elections in HOA fraud trial

Las Vegas Review-Journal: Witness describes payoffs, rigging elections in HOA fraud trial
March 2, 2015
By Jeff German

Ralph Priola was a busy man during the height of the massive scheme to take over and defraud Las Vegas-area homeowners associations between 2006 and 2008.

The onetime casino executive and right-hand man of the scheme’s mastermind, former construction company boss Leon Benzer, testified Monday how he paid off lawyers and HOA board members and spearheaded election rigging at more than a half-dozen HOAs targeted in the multimillion-dollar scheme.

Priola, who has pleaded guilty in the scheme with Benzer and 35 other conspirators, testified that dozens of straw buyers and board members were on Benzer’s payroll at the time.

Federal prosecutors showed a jury ledgers kept by Priola that revealed he was paying thousands of dollars a month to the recruited straw buyers and HOA board members, mostly in cash, on Benzer’s behalf to keep the scheme alive.

His efforts, he repeated over and over again on the witness stand, were aimed at packing HOA boards to get Benzer lucrative construction defect contracts. The scheme paid off in a big way at the Vistana HOA, which awarded Benzer’s Silver Lining Construction Company more than $8 million in repair work.

Priola testified that he ended his employment with Benzer after the FBI and Las Vegas police raided Benzer’s operation a various sites across the valley in September 2008.

His testimony came in the second week of the trial of four remaining defendants in the courtroom of U.S. District Judge James Mahan

Among those facing conspiracy and fraud charges are former Benzer lawyer Keith Gregory, who prosecutors say doubled as general counsel for two victim HOAs, Vistana and Sunset Cliffs.

The other defendants are Benzer’s half-sister Edith Gillespie, a ballet teacher who prosecutors say was a straw buyer recruiter in the scheme; Salvatore Ruvolo, who is accused of being a straw buyer and controlled HOA board member at Park Avenue and Chateau Nouveau; and David Ball, a real estate agent Benzer is alleged to have gotten elected to the Chateau Nouveau board.

Defense lawyers contend the four defendants were not part of the scheme and consider themselves victims of Benzer.

When lead Justice Department prosecutor Charles LaBella asked Priola on Monday whether he engaged in election rigging, he responded, “Yes I was, absolutely.” Later, he added, “I manipulated all of them.”

On Friday, Priola’s niece Angela Esparza testified that she helped stuff ballots at HOA elections at Vistana, Park Avenue, Chateau Nouveau and Chateau Versailles in 2007 and 2008.

Priola testified Monday about several other efforts to rig elections, including two failed efforts at Jasmine in 2006 and Mission Pointe in 2008.

The Jasmine takeover attempt was foiled after one of the conspirators, Maria Limon, “outed” the ballot stuffing scheme at an HOA meeting, Priola said. Limon, who had a falling out with Benzer at the time, told the audience one of the people running for a seat on the Jasmine board, the late Arnold Myers, was a paid Benzer plant.

Priola said he later took Myers to Gregory’s office in the hopes of filing a lawsuit against the Jasmine board to get the election back on track.

An attempt to rig an HOA election at Mission Pointe in 2008 was foiled by an undercover FBI sting, Priola testified.

As it turned out, Priola said, he unknowingly paid an undercover FBI informant $20,000 in cash to help him fix the Mission Pointe election. The election was canceled after the 2008 FBI raids.

Priola said at least three lawyers — David Amesbury, Brian Jones and Barry Levinson — were helpful in the election rigging process. He recalled Amesbury and Jones were paid to serve as special election masters and secretly give him access to the ballots.

Amesbury pleaded guilty in the scheme in October 2011, admitting he participated in election rigging at Chateau Nouveau and Pebble Creek. He later committed suicide. Jones in his 2012 guilty plea agreement admitted to helping fix elections at Chateau Nouveau and Vistana.

Earlier Monday, Benzer’s former girlfriend and employee, Marcella Triana, testified that she helped stuff ballots at Park Avenue. She recalled how she was among a “bunch of people” who dropped off fake ballots at Platinum Community Services, the HOA’s community management firm, which was in cahoots with Benzer.

Triana said she also recalled seeing a regular parade of Benzer-controlled HOA board members, known as “politicians” to the conspirators, picking up envelopes of cash at Silver Lining Construction.

She said Benzer and Priola often met with the corrupt HOA members at the company’s office before board meetings to give them instructions on how to vote on matters that affected Benzer.

Under cross-examination from defense lawyer Chris Rasmussen, Triana acknowledged that she told the FBI Benzer bragged to her that he had “special relationships and benefits” with local judges.

Rasmussen did not press her for names, and no judges were charged in the long-running HOA investigation.

Read more:

CANADA – The Real Cost of Living in a Condominium

Miller Thomson Lawyers: The Real Cost of Living in a Condominium
A balancing act is what boards facekeeping common expenses low for the purpose of increasing the market value of units will benefit those who are going to sell in the short term.  It is, however, unfair to the community in the long term.
March 2, 2015
Toronto
Audrey M. Loeb, LSM, B.A., LL.B., LL.M

MT Condominium Group responds to Toronto Star article “Killer Condo Fees:We read with interest the article about Craig Gagliano, his views on condominium fees and how they lowered them by 30% in his building. While we understand the concern about high common expenses we were concerned by the approach taken by this board.

We have over 30 years of experience working in the industry as lawyers for condominium corporations and feel that the suggestion that common expenses can be “kept down” to make the units more marketable is a short-sighted approach to the issue of ever-increasing condominium fees. It should be noted that the same increases are being incurred by house owners, as all costs are rising. If all other condominiums have fees that are double the Toy Factory’s then there must be a good reason. The board of the Toy Factory Lofts cannot be the only smart condominium board in the GTA.

Condominiums are an expensive way to live. The convenience of this style of living means that owners must pay for everything that needs to be done on the property and must, according to the Condominium Act, save for the inevitable rainy day. We worry that artificially keeping common expenses low for the purpose of increasing the market value of units will benefit those who are going to sell in the short term. It is, however, unfair to the community in the long term.

People who buy condominiums that offer “services” often buy for that reason and to arbitrarily cut back the hours or levels of these services may not benefit those who live there. Currently under the Condominium Act, owners’ approval is only required when a service is added or modified and there is an added cost for same.  Individuals who view condominiums as speculative investments will, of course, be happy with decisions to cut back. Their common expenses will be reduced and their income streams improved. But what about the owners who live in their units as their primary residences and are less concerned with immediate return on investment? How will their lives be affected?  Read more:

TENNESSEE – $28K missing from Murfreesboro Homeowners Association

WKRN.com:  $28K missing from Murfreesboro Homeowners Association
By WKRN web staff
February 25, 2015
MURFREESBORO, Tenn. (WKRN) – The homeowners association of the Villages at Hazelwood reported to Murfreesboro police that nearly $28,000 is missing from their account. The Villages at Hazelwood is located on North Thompson Lane.
According to a police report, a board member for the HOA filed a complaint Monday afternoon that several unauthorized withdrawals had been made totaling $27,913.84.  Read more:

CALIFORNIA – HOA board could be liable for disclosure of owners’ personal data

LATIMES: HOA board could be liable for disclosure of owners’ personal data
Q&A: Reining in HOA management company’s inappropriate self-promotion
By Donie Vanitzian
March 1, 2015

“…Homeowner associations, their directors and third-party vendors are subject to statutory requirements governing personal information disclosures, including Civil Code sections 1798.15 to 1798.84. Associations that encourage broad distribution of information to managers, agents, even board directors, run the risk of serious violations and civil penalties.

Even if directed by the board, titleholders should NOT voluntarily provide any entity — agent or otherwise — personal information without written assurances of a chain of custody for confidentiality and use of their information.”  Read article:

NEVADA – Greed motivated HOA defraud scheme, prosecutor says

Las Vegas Review Journal:  Greed motivated HOA defraud scheme, prosecutor says
By Jeff German
February 25, 2015

The four defendants standing trial on charges tied to a massive scheme to defraud homeowners associations of millions of dollars did it for “greed,” a federal prosecutor told a jury Wednesday.

“This is a case about taking over HOAs in Las Vegas and getting rich doing it,” Justice Department lawyer Thomas Hall said in his opening statement. “The evidence will show that all four of these defendants lined their pockets.”

Hall said former construction company boss Leon Benzer “paired up” with the late construction defects lawyer Nancy Quon to lead the scheme, which authorities once estimated had nearly 100 co-conspirators between 2003 and 2009.

Straw buyers were recruited to obtain condominiums at targeted developments and then were elected to HOA boards through ballot stuffing and dirty tricks so they could help Quon and Benzer obtain lucrative legal and construction contracts, Hall said. Lawyers, private investigators, real estate agents and community management firms were all brought into the elaborate scheme.  Read more:

FLORIDA – Ft. Caroline club owners propose forced membership fee

First Coast News:  Ft. Caroline club owners propose forced membership fee
By Shelby Danielsen
February 23, 2015

JACKSONVILLE, Fla. — Since a neighborhood newsletter left Ft. Caroline homeowners with questions over what would happen to their community golf course, some anonymous residents reached out to First Coast News to say they strongly believe “it was all a scare tactic to get more money” and to not be taken seriously.

They also clarified that it is the club’s owners, not the Homeowner’s Association, threatening to enforce a new membership fee for 100% of the homeowners there to possibly save the golf course.

A 30-year zoning ordinance for the Hidden Hills Golf Course expires this July. It is that impending date that sparked Paul Franks, the HOA president, to publish his latest message, saying “the land could convert to anything, including low income multi-family housing.

To avoid this, he says the only option the owners presented is to “add a monthly $96 membership fee for all homeowners.” Read more:

FLORIDA – Developers force condo owners out of homes

CCFJ.NET:  Developers force condo owners out of homes

Condo owners “divested” of their homes — Legislation would limit condo termination

 

 

Article Courtesy of The Orlando Sentinel

By Mary Shanklin   

Published February 28, 2015

 

WINTER SPRINGS — Shirley Lofgren, 85, is being forced to sell the sun-filled, waterfront condo she and her husband bought nine years ago for less than a third of the $217,000 they paid for it.
The sale is allowed under a “condominium termination” law passed by the Legislature in 2007.
“Nobody can believe this is legal — that they can just take your home and they’ll give you what they want to give you,” said the former Chicago resident, whose husband now lives in a nearby Alzheimer’s treatment center.
Rep. Chris Sprowls, R-Clearwater, said Lofgren and condo owners across Florida are being “divested” of their own homes.
Winter Springs condo owner Shirley Lofgren, 85, expects to be forced out of her home under a Florida law that allows developers to strip owners of their homes. (George Skene, Orlando Sentinel)
Under the law, developers must get an appraisal to determine the value of a home. But Sprowls said owners are left with little negotiating leverage.
“In this situation, these people are not being permitted to stay in their homes, and that’s just wrong,” said Sprowls, who has proposed a reform bill that would pay relocation fees and above-market value for condo owners who live in their units.  Read more:

 

http://www.ccfj.net/condoDevForceOut.html

FLORIDA: Former board president at Hallandale Beach condo faces spending inquiry

CCFJ.NET: Former board president at Hallandale Beach condo faces spending inquiry
Article and Video Courtesy of The Sun Sentinel

By Amy Shipley  

Published February 24, 2015

State regulators ordered a Hallandale Beach condo president to resign immediately after learning he was a convicted felon. Robert Picerno refused.


When a state investigator told Picerno to reinstate two owners improperly kicked off the De Soto Park Condominium board, he said no. When regulators demanded association records, he declined. And when they served him with a subpoena, he ignored it.

Picerno’s defiance eventually cost residents of the seven-building, 549-unit complex in the Three Islands neighborhood a total of more than $16,000 in fines.

    

Now state regulators are looking into owners’ allegations that Picerno misspent $177,000 in condo money while Hallandale Beach Police investigate possible embezzlement, grand theft and fraud, a detective told the newspaper.  Read more:

NATIONAL – The Hidden Impact of HOA Delinquencies

Mortgage Servicing News: The Hidden Impact of HOA Delinquencies
By Rosie Biundo
February 26, 2015

Homeowners association claims pose serious threats to servicers and investors. The number of associations in the U.S. is estimated to be between 300,000 and 350,000 and more than 80% of new construction homes are part of an HOA.

Since one out of every five households belongs to an HOA, lenders and servicers must understand the necessary rules and regulations and exercise extreme caution when processing these delinquent properties

Successfully managing delinquencies has always presented a challenge for servicers, but recently the process has an added layer of complexity, as more borrowers also become delinquent on homeowner association fees.

Portfolios with high volumes of real estate owned, underwater or foreclosed properties can be riddled with HOA liens, burdening the servicer with the task of identifying the appropriate parties and negotiating a series of individual deals to free properties up to market or sell.

Data from Sperlonga shows the portfolio risk nationwide, and the scope of the uphill battle is evident: out of 1 million homes in HOAs, 200,000 of those are in delinquency, and the average amount of delinquency is $7,200.

This might seem like a relatively minor issue, but there are instances where money due to an HOA actually takes priority over that of the principal mortgage — effectively halting a short sale, foreclosure or preventing the property from entering REO status. Currently, 21 states have what is known as “super-lien” status, giving past-due amounts priority over any existing mortgage, and according to Sperlonga, 42% of all delinquent loans are located in these states. Read more: