Matthew Winton's Condo & HOA Blog

information and resources for Oklahoma condo and HOA associations, board members, homeowners, and real estate developers.

Blog Archive

Matt Winton 4/26/05 Matt Winton 4/26/05

Association checklists

Within many written contracts, one finds the provision, "Time is of the essence." While this common contractual clause has a particular legal significance, we all might agree that time is a commodity.

My point in this is: there are many instances where you need not re-invent the wheel. To keep your invention at a minimum, you might take a look at the checklists at the Community Associations Network site. There are several helpful checklists, from association meeting matters to financial issues, for you to review, apply, and adopt as your own.

One particularly useful checklist is the one provided by Orten & Hindman, a Colorado law firm representing common interest communities. This checklist is one geared toward a pro-active association board seeking to educate new owners on living within a common interest community.

Matt Winton 4/26/05 Matt Winton 4/26/05

Bankruptcy Abuse and Consumer Protection Act of 2005

Effective for all bankruptcies filed April 20, 2005 and after, the Bankruptcy Abuse and Consumer Protection Act of 2005 will apply. For those owning property within a condominium or homeowners association, the Act expands the definition of the assessments a debtor may not discharge in bankruptcy. Previously, the Bankruptcy Code required a debtor to remain in residence within a condo or homeowner association lot in order for the association to claim a collection right to assessments. Under the recent amendment, the debtor must retain an ownership right in the lot or association to be liable for assessments.

For most associations, this amendment simply means a clearer picture of what assessments a debtor will be liable for in the event of bankruptcy. Of course, an association board should remain cognizant of the automatic stay as to collection proceedings once a debtor files for bankruptcy relief.

Matt Winton 4/10/05 Matt Winton 4/10/05

Adding value through association

An association may get the reputation for simply collecting dues and mowing common areas. While receiving dues and maintaining common areas are two important functions of an association, a community association can offer much more. There are many ways a community association may add value to a real estate development.

For example, many associations schedule a community-wide garage sale one or more times during a year. The economic concept mirrors the familiar sight of "miles of cars," or competing big-box retailers located across the street from each other. By coordinating a community-wide garage sale on a specific day, the neighborhood increases the total traffic inside the addition, the traffic increase theoretically translating into higher sales. Higher sales means the association has added value to the individual owners' garage sales.

Another way an association may add value is by providing timely and meaningful communication to its members. One method is by publishing an annual directory. A directory is a tangible, meaningful means of communicating what may be important information to the members.

Of course, the few examples cited in this post are not exhaustive, and may not even be the best examples for your association. The best solution for adding value through your association will only arise through creative and collaborative thinking among the board members and owners. One thing is for sure: the wheel has been invented, perhaps even in your addition. This means that it is incumbent on association boards to maintain corporate memory by keeping lists of projects and evaluating where the association has succeeded and where better use of resources might be made.

Along with finding the invented wheel, a board might talk to other associations and municipalities for ideas, or search the Internet for examples of projects (or grant money) that could benefit the association.

Matt Winton 3/11/05 Matt Winton 3/11/05

Bankruptcy reform and assssments

On Thursday, the United States Senate passed the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (S. 256). This bill has received much press due to the credit card company lobby seeking to limit the dischargeability of consumer debts. What has received less press is the important language in the bill pertaining to condominium and homeowner association assessments. Language in the bill, specifically Section 412 of the Act would amend Section 523(a)(16) of the Bankruptcy Code, would provide that a debtor would not receive a discharge of certain community association assessments. Specifically, the bill provides a discharge does not limit a debtor's liability:

(16) for a fee or assessment that becomes due and payable after the order for relief to a membership association with respect to the debtor's interest in a unit that has condominium ownership or in a share of a cooperative corporation, or a lot in a homeowners association, for as long as the debtor or the trustee has a legal, equitable, or possessory ownership interest in such unit, such corporation, or such lot, but nothing in this paragraph shall except from discharge the debt of a debtor for a membership association fee or assessment for a period arising before entry of the order for relief in a pending or subsequent bankruptcy case;

The House will next take up the measure, which President Bush stated he will sign. We will stay tuned to see if the quoted language above makes it through.

Matt Winton 3/6/05 Matt Winton 3/6/05

Neighborhood Associations- What are they?

I am sometimes asked about the differences between "community associations" and "neighborhood associations." First, Oklahoma does not have a standardized terminology pertaining to community associations. So, one person might call a homeowners association a real estate development association, a community association, a deed restricted community, etc. Generally, a community association refers to a real estate development containing some common areas, such as greenbelts or recreational areas, that are owned and operated by a corporate entity whose members are the owners of real property within the development. In my usage, a neighborhood association refers to an entity comprised of voluntary members whose purpose is to provide some value to the development. Often, neighborhood associations will collect dues paid voluntarily by its members. While communities having a neighborhood association may also have covenants filed against the real property within the development, the covenants rarely refer to the association and rarely vest any authority over the owners in the association.

That being said, many neighborhood associations exist and work "behind the scenes" to increase community in their development. I have found voluntary associations whose voluntary membership consistently reaches 95% of the entire development, which is an astounding testament to the importance of associations in real estate development. Fortunately or unfortunately depending on your point of view, scant legislation exists to help neighborhood associations operate and organize. Because of the general lack of formality attendant with neighborhood associations, the success or malaise of a particular neighborhood association usually rests on the few motivated board members of the association.