WBEZ (Chicago): Condo Associations May Be Coming To An End

www.wbez.org/episode-segments/condo-associations-may-be-coming-end

via privatopia.blogspot.com/2010/11/condo-associations-may-be-coming-to-end.html

Smaller municipalities have had a tougher go at bouncing back from economic hardship. Especially those teeny tiny ones called condo associations. Foreclosed units, unpaid dues and costly special assessments have bankrupted some associations and left many buildings in shambles. So, does that mean the end of common-interest housing?

Evan McKenzie authored ‘Privatopia: Homeowner Associations and the Rise of Residential Private Government.’ He teaches at the University of Illinois at Chicago and is an adjunct professor at the John Marshall Law School.

Professor McKenzie told Eight Forty-Eight how the condominium system is flawed, and how to avoid the pitfalls.

download the audio:  www.wbez.org/sites/default/files/segment/audio/2010-November/2010-11-16/84820101116c.mp3

HOA Dues Increase for 2011

According to some fine print included in the budget mailed to the mandatory members of Madison Hill H.O.A. Inc., there will be a "regular assessment increase 1.7% from $161/month to $163.74/month."

Annual Meeting Notice

To:  Membership of Madison Hill Homeowner's Association, Inc.
When:  Thursday, December 2, 2010 - 6:30 PM
             REGISTRATION - 6:00 PM
Where:  Westminster Sports Center, 6051 W 95th Ave.

You are invited as a member of Madison Hill Homeowners Association, Inc. to attend its Annual Meeting of Members.

The purpose of this meeting will be to elect two (2) members to the Board of Directors, to server two (2) year terms.

In addition to candidates that may have submitted their application, candidates may also be nominated from the floor at the meeting.

Attached to this notice is a PROXY POSTCARD.  Please complete the proxy, sign and return it without delay.  If you attend the Annual Meeting, the proxy becomes void and you may vote your ballot.

IT IS ESSENTIAL THAT WE HAVE A QUORUM (19 members present in person or proxy) TO VOTE AND CONDUCT BUSINESS AT THE ANNUAL MEETING.  IF WE DO NOT HAVE A QUORUM OF UNITS REPRESENTED IN PERSON OR BY PROXY, THE ANNUAL MEETING WILL HAVE TO BE RE-SCHEDULED.  YOU CAN ASSIST IN AVOIDING THIS UNNECESSARY EXPENSE OF RESCHEDULING THE ANNUAL MEETING TO THE ASSOCIATION BY COMPLETING THE ENCLOSED PROXY AND RETURNING IT TO US AS SOON AS POSSIBLE.

Editor's note:  That's the official notice sent in the mail.  What is not stated is

• who the current board members are
• which Board members are up for re-election
• that the Board can arbitrarily decide not to count certain votes, per paragraph 7 of the Association's collection policy:  "the Association may elect to suspend the voting rights of any Owner whose account is past due at the time of such voting."  No notice to the Owner is required, and Madison Hill has creative accounting rules about when an "account is past due."
• Those who vote decide nothing. Those who count the votes decide everything.

Annual Meeting Notice

MADISON HILL HOMEOWNERS ASSOCIATION, INC.

ANNUAL MEETING NOTICE

TO: MEMBERSHIP of MADISON HILL HOMEOWNERS ASSOCIATION, INC.

WHEN: Monday, December 7, 2009 - 5:30 PM

REGISTRATION - 5:00 PM

WHERE: Westminster Sports Center, 6051 W. 95th Ave.

You are invited as a member of Madison Hill Homeowners Association, Inc. to attend its Annual Meeting of Members.

The purpose of the meeting will be to elect two (2) members to the Board of Directors, to serve two (2) year terms.

In addition to candidates that may have submitted their application, candidates may also be nominated from the floor at the meeting.

Attached to this notice is a PROXY POSTCARD. Please complete the proxy, sign and return it without delay. If you attend the Annual Meeting, the proxy becomes void and you may vote your ballot.

IT IS ESSENTIAL THAT WE HAVE A QUORUM (19 members present in person or proxy) TO VOTE AND CONDUCT BUSINESS AT THE ANNUAL MEETING. IF WE DO NOT HAVE A QUROUM OF UNITS REPRESENTED IN PERSON OR BY PROXY, THE ANNUAL MEETING WILL HAVE TO BE RE-SCHEDULED. YOU CAN ASSIST IN AVOIDING THIS UNNECESSARY EXPENSE OF RESCHEDULING THE ANNUAL MEETING TO THE ASSOCIATION BY COMPLETING THE ENCLOSED PROXY AND RETURNING IT TO US AS SOON AS POSSIBLE.

PLEASE RETURN YOUR PROXY TODAY TO GUARANTEE A QUORUM FOR THE MEETING!

Submetering

The biggest cost facing Madison Hill is water. About 1/3 of the association's cost is the city water bill, which has been rising.

In an effort to conserve water (and create another fineable offense), the association banned the use of outdoor hoses earlier this year, and xeriscaped the front entrance. In spite of such heroic and creative efforts, the possibility of an increase in H.O.A. dues is very real. The property management company has already recommended increasing the monthly dues this year.

Currently, there is one water meter for the community, with the bill paid for by the H.O.A. as a whole. As a result, units that use less water subsidize units that use more water.

Installing municipal water meters to each unit would be prohibitively expense. The figure of $20,000 per unit was mentioned by the board of directors at the members meeting in June.

Fortunately, there is an alternative that has not yet been explored -- submetering. Submetering is a practice in which small meters are placed in each individual unit. Modern submeter units transmit their readings electronically to a master unit (or drive-by unit) over a wireless signal. The readings are then collected, and each individual unit is billed for actual water usage, either by the H.O.A. or directly by the submetering contractor.

Individual water submeter units cost about $100 each. According to the City of Westminster Utilities (Water Bill Payment) department, installation costs per unit would probably be in the hundreds of dollars, with $1,000 per unit being on the high end. *

Once individual units are being billed for the water they actually use, the H.O.A. can reduce the monthly dues by approximately 1/3 (minus the water used for the common areas). Instead of $161 per month (or more), monthly H.O.A dues could be reduced to the $110 range.

Fortunately, when considering what improvements needed to be made, the association decided that new siding -- which cost 5 to 10 times as much as submetering -- was more important. This was at the same time the H.O.A. president put his unit (#43) on the market for sale, about two years ago.

Once the $1.5 million loan for the siding project is paid off in another five years, the Madison Hill Homeowners Association can investigate a project that will save the homeowners money, improve property values, effectively promote water conservation, control the largest single expense for the association, and eliminate the need for at least one finable offense.

* Based on a phone conversation. Nobody has actually come to Madison Hill to make an inspection of the properties for a more accurate estimate.

UPDATE: Corrected figures on water usage and H.O.A. dues above. I had originally typed 2/3 instead of 1/3, thus overestimating the reduction in dues that would result from sub-metering.

Independence Day

"The board positions are unpaid and the members who serve in these positions give of their time in order to benefit all who live at Madison Hill."

The reminder above is printed in the newsletters sent out by LCM Property Management on behalf of the Madison Hill H.O.A. Board of Directors.

While America celebrates the Declaration of Independence today, those who live in and own property in Madison Hill should also celebrate the "Declaration of Covenants, Conditions, and Restrictions," which has a much greater influence on the day-to-day lives of homeowners and residents.

The Declaration of Independence acknowledges our "unalienable Rights" to "Life, Liberty, and the Pursuit of Happiness" *.   Madison Hill's Declaration of Covenants, Conditions, and Restrictions lists the obligations and restrictions that homeowners and residents must live under and abide by.

* The phrase "Life, Liberty, and the Pursuit of Happiness" is derived from the right to "life, liberty and property" in the Declaration of Colonial Rights in 1774, and John Locke's "Second Treatise of Civil Government," which was written in 1690.  The Fifth Amendment to the U.S. Constitution, written by James Madison in 1789, states that "No person shall be...deprived of life, liberty, or property, without due process of law."

Vote Collection, Chicago Style?

As Madison Hill homeowners should be aware, the Board of Directors has proposed some changes to Declaration of Covenants, Conditions, and Restrictions for the complex.

At last week's meeting, H.O.A. Vice President Randy Schneider stated that if enough homeowners did not vote to meet the required quorum *, then a subsequent meeting would be held. If a quorum was not met by the second meeting, votes would continue to be collected in the continuing weeks, and that the H.O.A. would go "door to door" if necessary, until enough ballots are collected.

Whether it was enough ballots to meet the required quorum, or enough ballots to achieve the desired vote count, was not clear.

It was not stated how the units would be selected if it was necessary to go door-to-door to collect ballots. Would the units be selected at random? Would it be all units? Or just the units owned by people who can be counted on to vote the "correct" way?

The possibilities for fraud and voter intimidation abound.


* Currently, a quorum is 60% of the homeowners, and 2/3 of a quorum must vote to approve a change. There are 183 units, and 60% of that is 109.8. Two-thirds of 109.8 is 73.2. Under the proposed rule change, only 51% of a quorum -- or 56 votes-- would be required to approve amendments to the Declaration. The Board can still make other rules -- such as the recent ban on outdoor hose use -- without any vote by the homeowners.

Message To Larry Pixler

onegone
August 09, 2007

Mr. Pixler's unit 43 is currently up for sale.

Hey Larry. Hey Sheryl. How you doing? This is Brian.

Like we talked about before, this is your own personal weblog designed to keep you fully informed on everything that's going to be going on with the sale of your property on Madison Hills.

This isn't going to bypass normal communication like cell phone or email. But what it will do is give you excellent client services so that you're always fully informed on everything that's going to be going on with the sale of your property.

For Sale

The following units are currently for sale at Madison Hill:

• 34, owned by Margarita Rodriguez
• 43, owned by Larry Pixler (the president of the H.O.A.)
• 147, owned by  Blanca Porras

Rental Property at Madison Hill

Are you thinking about renting out your Madison Hill townhouse, or purchasing one as an investment property?

Be advised that the Home Owners Association is working to "preserve the character of the Community as predominantly Owner-occupied" by amending the restrictive covenant so that "the leasing of Lots shall be prohibited."

If the new rules go into effect, leasing will only be permitted with the permission of H.O.A.

FYI:  The president and treasurer of the H.O.A. are not residents of Madison Hill.