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Yes because laws regulating how and when the developers disclose HOA C&R will force the developers to reevaluate the powers they have over communities if potential buyers have time to read and question them and/or walk away from the sale. If they want to make sales they'll need to change their C&R to reflect their commitment to quality and the adage that the customer needs to be happy if they want to make money.
So, the goal of this is to encourage people to read something they should have been reading? One would think protecting the ton of money they're about to dish out would be incentive enough. Of course, after reading, surely no one would buy in one of these C&R communities, and that would force developers to change... wait... many people bought even after having read the C&Rs.
Where's the builder's incentive to change anything again?
More emphatic disclosure doesn't do anything other than tighten the noose, people still gloss over the C&Rs or ignore them altogether... and when disaster strikes, I guess we can all say "well, Alabama law specifically required you to look at xyz and you could have backed out... tough luck."
So developers will still go bankrupt. Remaining lots will still get sold to new developers who will do as they please... or else remain vacant assuming developers gave in their ability to change the development (remember, the first developer failed because he could not sell lots under his vision).
So, the goal of this is to encourage people to read something they should have been reading? One would think protecting the ton of money they're about to dish out would be incentive enough. Of course, after reading, surely no one would buy in one of these C&R communities, and that would force developers to change... wait... many people bought even after having read the C&Rs..
People can't read something if they don't have access to it, or aren't given it in a timely manner. All we're asking for is full disclosure to prior to the purchase and not a "it's at the courthouse on file if you want to see it." And a lot of changes can occur without the homeowners knowing they occurred after purchase and closing.
I believe it will make a difference if the developers are asked to provide the documents, in writing, hard copy, at least two weeks prior to closing. Or at time of contract ratification, prior to building. We read them online, what we could find. The C&R were posted, NOT the bylaws. They were added after the fact... because the builder/developer had that power and didn't even have to inform us of the changes.
I know that the community activist who spearheaded this campaign for the area at large ASKED about the builder's total veto power and power to change C&R before closing and was VERBALLY ASSURED that the C&R would not change without consent of the homeowners. Then the builder went bankrupt, the bank took over, and the bank sold the property to a developer who then reneged on that verbal agreement.
I believe forcing hardcopy, full disclosure will force the hands of the developers to cobble out HOA C&R that won't allow that kind of problem to happen in the future. And that's a good thing: for homeowners and developers.
Sometimes people have only days to make their decisions before they move, especially when they have school aged children and they are trying to find home, community, schools that are excellent, and nice neighborhoods. It's a lot to deal with and yes, a house is a huge investment. This is why it's important to protect home buyers when they are vulnerable, time crunched, worrying about bigger investments like the eternal investment of their children's futures and educations.
I know I looked at one thing when I moved here: the schools. I have no regrets with the area I chose based on the excellent schools we have here in Madison. Overall the adjustment has been fantastic for my daughter. And I love my home.
I just don't want to be an income stream for my developer until 2016 or later. That's not what I believed would happen based on the C&R I read on line in January 08. That's not the original intent of C&R for an HOA based community. And that's why I have an issue with the way they are disclosed.
People can't read something if they don't have access to it, or aren't given it in a timely manner. All we're asking for is full disclosure to prior to the purchase and not a "it's at the courthouse on file if you want to see it." And a lot of changes can occur without the homeowners knowing they occurred after purchase and closing.
So why is a new law necessary? If the builder doesn't provide it to you, don't buy from him. I mean, if people will buy from developers who don't provide the C&R up front - I seriously doubt these same people would read the C&Rs if they were provided.
Quote:
Originally Posted by dramamama
We read them online, what we could find. The C&R were posted, NOT the bylaws. They were added after the fact... because the builder/developer had that power and didn't even have to inform us of the changes.
So what will be different with disclosure? I mean hey, I think its a good idea that if the developer changes something, you should be informed, but the developer will still be able to change what they will. In other words, you'd still be in the same pickle.
Quote:
Originally Posted by dramamama
I know that the community activist who spearheaded this campaign for the area at large ASKED about the builder's total veto power and power to change C&R before closing and was VERBALLY ASSURED that the C&R would not change without consent of the homeowners. Then the builder went bankrupt, the bank took over, and the bank sold the property to a developer who then reneged on that verbal agreement.
That's a thing about verbal assurances... THAT developer may have assured you that he'd notify you of any changes he made, but that was him. The new developer made no such agreement. The C&R specifies his rights and he is not bound to anything the previous developer verbally committed to.
Quote:
Originally Posted by dramamama
I believe forcing hardcopy, full disclosure will force the hands of the developers to cobble out HOA C&R that won't allow that kind of problem to happen in the future. And that's a good thing: for homeowners and developers.
... but it won't. People were willing to buy without ever having a C&R made available to them, you think they'll read the C&R if provided? and if they read it, you think they'll skip out on buying because a developer can change it?
Quote:
Originally Posted by dramamama
Sometimes people have only days to make their decisions before they move, especially when they have school aged children and they are trying to find home, community, schools that are excellent, and nice neighborhoods. It's a lot to deal with and yes, a house is a huge investment. This is why it's important to protect home buyers when they are vulnerable, time crunched, worrying about bigger investments like the eternal investment of their children's futures and educations.
No offense, but if you take only days to decide on how to invest a few hundred thousand dollars, that's a hard position to defend. I mean, I guess some people can't be bothered to arrange for temporary living space - say a long term hotel or short lease apartment.
Quote:
Originally Posted by dramamama
I just don't want to be an income stream for my developer until 2016 or later. That's not what I believed would happen based on the C&R I read on line in January 08. That's not the original intent of C&R for an HOA based community. And that's why I have an issue with the way they are disclosed.
Totally understandable. But being honest with yourself, you think disclosure would have saved you (or others) from this fate? The way I see it, buying in a new development is similar to investing in a startup company. You may think its great - but the market will really decide. It could be the company fails or is bought out by another company who wants to do something entirely different. It might not be what you really wanted to invest in in the first place, but you're only choice is to sell and recoup what you can or hold and see what happens. You don't know how things will really turn out when buying new. It's much riskier than buying in an established neighborhood.
Additional disclosure isn't going to change that. If you don't want to be an income stream, then push for HOA/Builder accounting regulations... or something to help you understand the financial risk position of a developer before you buy. I just don't think some special "I acknowledge receiving and reading my C&Rs" is gonna cut it.
I think dislosure is a first good step in developer/builder/declarent transparency. Do they have to do it? Apparentlyin Alabama there is no guidance whatsoever, and more people are starting to realize this including our elected officials. The fight against transparency, though, reminds me of the old saying: "if you have nothing to hide..." I get the feeling that many of the people were not aware of the useless home owner's rights they have (or have not) when they think they are buying into a "community" as things stand right now. As a matter of fact, I believe that full disclosure would likely yield more information as to the fact that homeowner's dues and funds can be used for totally unrelated projects by a declarent who is in control of such. Should that be allowed to be carried on the homeowner's back when it doesn't even relate to the community he or she is living in? It will be interesting as it has been apparent that the people who have been kept in the dark, and those who are finally starting to network, may come up with many good solutions beneficial to all rather than the sloutions of a select few whose main object is to lobby in their own best self-interests. Is that a bad thing? I went to www.alabamahoa.org and researched what they said again. It's interesting reading. I can not see where developers/builders/or declarents would have problems if they are above board...99% of which I am sure are. Unfortunately, it only takes the 1% to give them a black mark, and as more stories are starting to come out, I believe that only good can come from everyone working together. Advc8, what say you?
fight against transparency... Advc8, what say you?
There are a lot of issues here. I certainly don't oppose transparency - while it may appear I'm attacking the effort, that's not the case. I just don't see the value in relatively useless regulations. At some point, people have to take personal responsibility for reading their C&R's - demanding them if not provided - and going elsewhere if there is something they don't like.
The truth of the matter IMO, is that many people fall in love with a house, neighborhood and price - and little matters after that. People who don't have due diligence ought not complain when the proverbial poo hits the fan.
1) C&R disclosure rules won't change anything.
2) HOA accounting transparency and regulations governing the use of HOA funds - I'm all for it.
3) Preventing a developer from changing the C&R - absolutely not. The market already provides huge incentive against this being done by the original developer - so the only real issue is when this is done by a developer who purchased it after backruptcy. Unfortunate for the existing homeowners, but whether they truly understand or not their value is already affected. Leaving the development unfinished won't help, and no developer will buy the lots if he can't alter the C&Rs to allow for something that will sell. Further, doing so will increase the risk to the bank (greater difficulty selling property in the event of bankruptcy) - which they will cover through higher rates adding greater burden to the developer, who will just try to pass those costs down to buyers. So how about that for an unintended outcome? Pay more for the house, the developer has an increased chance of going bankrupt, and the neighborhood remains unfinished for years to come.
So the only good solution I've heard deals with developers using HOA fees as cash cows - which I wonder if that even holds true. My wife worked for a bank some time back and the truth is, banks often spend a ton of money covering the difference between the costs of maintaining a community after developer bankruptcy and the actual dues received.
Personally, I favor a Virginia style voting system where the declarant receives a certain number of votes for each unsold lot to go along with transparent HOA accounting.
I think dislosure is a first good step in developer/builder/declarent transparency. Do they have to do it? Apparentlyin Alabama there is no guidance whatsoever, and more people are starting to realize this including our elected officials. The fight against transparency, though, reminds me of the old saying: "if you have nothing to hide..." I get the feeling that many of the people were not aware of the useless home owner's rights they have (or have not) when they think they are buying into a "community" as things stand right now. As a matter of fact, I believe that full disclosure would likely yield more information as to the fact that homeowner's dues and funds can be used for totally unrelated projects by a declarent who is in control of such. Should that be allowed to be carried on the homeowner's back when it doesn't even relate to the community he or she is living in? It will be interesting as it has been apparent that the people who have been kept in the dark, and those who are finally starting to network, may come up with many good solutions beneficial to all rather than the sloutions of a select few whose main object is to lobby in their own best self-interests. Is that a bad thing? I went to www.alabamahoa.org and researched what they said again. It's interesting reading. I can not see where developers/builders/or declarents would have problems if they are above board...99% of which I am sure are. Unfortunately, it only takes the 1% to give them a black mark, and as more stories are starting to come out, I believe that only good can come from everyone working together. Advc8, what say you?
Thank you for truly looking at the big picture. I appreciate it and it is absolutely true that if people have nothing to hide, then there shouldn't be a problem disclosing all the information to buyers BEFORE they sign the dotted line and in hard copy with ample time to read it. If, after that, they sign and find out they aren't happy, then, the buyer has no one to blame but himself. Frankly, sometimes people really only have days to make a decision. They fly in for a weekend, they look at dozens of houses and subdivisions, they evaluate the neighborhoods and schools, and they have to go home and sell the houses they have. Making it EASIER for them to understand and know what they are buying into is only fair.
For some reason, a few people think we should only focus on the biggest investment being the house and if we aren't spending literally HOURS (that's how long it took one person who isn't even here yet and who had time) to find the necessary information, then sad too bad. We deserve our pain.
I respectfully find that attitude incorrect. But until someone has walked in another person's shoes, I guess I can't expect any more than judgment along with the many other homeowners in similar or worse situations than merely being an income stream.
If people really read the HOA docs as posted by many developers, and if they truly understand how much control the developer has over the HOA dues and money, then they'd realize how much the dues are used as income streams.
I've done my research, I know where I stand and why. I don't want to argue about semantics. Nor do I think it is fair to judge many people for making the BEST POSSIBLE DECISION THEY COULD MAKE at the time BASED ON THE INFORMATION THEY COULD DERIVE FROM THE DEVELOPERS in a state where non-disclosure rules the day.
No offense, but if you take only days to decide on how to invest a few hundred thousand dollars, that's a hard position to defend. I mean, I guess some people can't be bothered to arrange for temporary living space - say a long term hotel or short lease apartment.
We were in a short term residence in VA while we waited for our daughter to finish school. We did everything possible long distance that we could between ratifying the contract and researching the website. I felt we had all the information available and at the time, based on what was posted, I was sure we made a good decision.
I was referring to others who had less time, not myself. To clarify, we did try to get all the pertinent info. Others did as well. One person ASKED outright about the POSSIBILITY of the developer vetoing or changing the C &R and was reassured by ALL involved, that would not be a problem.
People do the best they do with what they know at the time they make decisions. All we're asking is to MAKE THE DECISION MAKING EASIER by MAKING IT EASIER TO OBTAIN THE RELEVANT INFO.
Why is this a problem? I think it's a win win for developer and the buyer. If the developer has nothing to hide, he should be HAPPY to disclose all info honestly and above aboard.
Sorry, I wasn't referring to *you* specific, but the generic *you*... as in "one ought to/not". I stand by my point though, that if *one* has only days to decide on a house - one is the cause of one's problems.
Quote:
Originally Posted by dramamama
People do the best they do with what they know at the time they make decisions. All we're asking is to MAKE THE DECISION MAKING EASIER by MAKING IT EASIER TO OBTAIN THE RELEVANT INFO.
Unnecessary. If the developer doesn't make it easy to obtain relevant info - *gasp* don't choose that developer. Isn't that kind of like "duh?" If you don't like what's in the C&R, don't buy from that developer... if you don't like any developer's C&R, don't buy in a new neighborhood.
You'll spend forever if you try to legislate common sense.
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