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A place to call home: Americans favor homeownership over renting

Despite a competitive housing market and current concerns about housing affordability, 70% of Americans still see owning a home as a clear sign of success in adulthood, according to Wells Fargo’s 2019 “How America Views Homeownership” survey.

Seven in 10 respondents of the survey of 1,004 adults 21 years and older say that owning a house is on par with having a career as a sign of a successful adult. Those surveyed note that they see homeownership as a clearer sign of success over getting married (32%) or having children (34%).

Close to 90% of the respondents say that the benefits of homeownership outweigh the drawbacks. If they could do it all over again, current homeowners say they would still choose to buy their home (93%) instead of continuing to rent, and nearly all (95%) note that owning a home is a better financial decision in the long run than renting.

Affording a down payment is seen as the primary hurdle to buying a home, according to 27% of those surveyed, with 38% of aspiring millennial homeowners naming it their biggest challenge to achieving homeownership. Wells Fargo notes, however, that some mortgage lenders allow qualified buyers to put as little as 3% down on a home.

Nearly 8 in 10 homeowners would be willing to move to a smaller city or town to afford their home, and 74% say that they would consider buying a smaller home with fewer amenities.

First-time homebuyers frequently look to condominiums as a lower-cost housing option. Roughly 40% of the 347,000 community associations in the U.S. are condominiums, according to the 2018-2019 National and Statistical Review for Community Association Data from the Foundation for Community Association Research. Recently updated requirements from the Federal Housing Administration should make lending easier for condominium unit buyers.

More than 73 million U.S. residents currently live in a community association—up from 62 million in 2010. Community associations are growing due to the value of collective management, privatization of public maintenance services, and the expansion of affordable housing options.

The post A place to call home: Americans favor homeownership over renting appeared first on Ungated: Community Associations Institute Blog.

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BiggerPockets Podcast 344: “No Money” Real Estate Investing with Gabriel Hamel

Over 25 seller financed deals in a few short years! Today’s guest, former service member (and diamond pushup world record holder) Gabriel Hamel, sits down with Brandon and David to share how he built a portfolio of over 140 units (in an expensive market) using creative methods and seller financing to make deals where other investors miss them!

Gabriel shares how he started investing in a tough market and used sub-prime lending (successfully) to house hack his first few properties. He gives some awesome advice on approaching sellers with seller financing proposals, structuring the offers, and showing them how it’s a win-win. He also gives great advice on finding gentrifying markets, walking away from closings with money in his pocket, and applying a mindset to real estate investing that helps him succeed in all aspects of life! Gabriel has very practical, down-to-earth, useful advice and shares it willingly.

This is an episode for both newbies and experienced investors to download today!

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Safeguarding finances: 9 steps to prevent fraud and embezzlement in your HOA

Community associations fall victim to theft and embezzlement too frequently. Board members should know the warning signs and institute preventive measures before the community is left with a difficult recovery. Combining these safeguards should help to keep your association and homeowners from being victimized.

1. Know the association’s Federal Tax Identification (FTI) number. Use it to obtain periodic listings of all bank accounts and account numbers, and make sure they are all under the association’s name and FTI number.

2. Use a lock box system for deposits. A lock box allows owners’ payments to be mailed or transferred directly to the association’s bank accounts. This reduces the chance that the association’s money will be deposited into the wrong account.

3. Safeguard your association’s reserves. Like checking accounts, the reserve account(s) should be under the control of at least two people. Do not give one board member total control over reserve accounts.

4. Require duplicate operating and reserve accounts statements be sent every month. One statement should be sent to the management company (or, if self-managed, to the treasurer or bookkeeper) and the duplicate to a board member who does not have authority to sign the checks or make any type of transfer or withdrawal.

5. Check invoices against checks paid and the original receipts for credit card accounts, if any. If the association has professional management or a bookkeeper, the board treasurer should conduct this review. If self-managed, a board member without access to the bank accounts or credit card privileges should check for any unauthorized use.

6. Shop around for bank services. Unfortunately, some banks do not enforce dual-signature requirements or prohibit electronic transfers between accounts, despite being under different FTI numbers. If the bank wants your business, demand that it demonstrates the safeguards it has in place to minimize theft, especially through electronic transfers.

7. Insure the association’s money. Obtain fidelity coverage on the board members and the management company or bookkeeper, if any, in an amount that equals or exceeds the association’s reserve fund and several months of operating funds. Even with coverage through the association’s insurance carrier, the board should require evidence that the management company carries its own fidelity coverage, which would provide the first line of recovery in the event of theft by one of its employees.

8. Make sure the management agreement includes specific terms to require these safeguards. A professionally managed association should have its legal counsel review the original agreement and any renewal prior to execution, so the agreements are not riddled with lopsided terms that are detrimental to the association.

9. Regularly have an independent certified public accountant conduct an audit. While it may be too costly to conduct an audit every year, the board should commit to having one performed every few years. In the interim, the association should have an annual review performed, with the stipulation that the bank balances be independently verified.

This article was originally published on HOAResources.com, which provides information and tools to community association members living in condominiums, homeowners associations, and housing cooperatives. Read the full version here.

The post Safeguarding finances: 9 steps to prevent fraud and embezzlement in your HOA appeared first on Ungated: Community Associations Institute Blog.

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ADA Website Case Dismissed

An SDNY court dismissed an ADA website lawsuit filed by NY plaintiff against an Ohio based grocery chain based on mootness and lack of personal jurisdiction.
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Employment Practices Legal Hotline

EPL Assist™ is a set of risk management resources and tools, including live online and telephone access to expert legal advice. Coverage under the NAR Insurance Program now includes access to this valuable resource.
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BiggerPockets Podcast 343: Using Checklists and Systems to Get More Done in Less Time with Pilot/Investor Steve Rozenberg

Want to build a cash flowing portfolio while working a full time job?

Today’s guest did just that! Steve Rosenberg shares his incredible story of how he built a huge property management company (along with several cash flowing rental properties) while working as an airline pilot and travelling the country! Steve has a genuine, straight forward style and shares what he did wrong buying real estate, where he learned what his strengths are, and how he and his partner resurrected a dying business. Steve also shares how he learned why systems are so important, how he learned to build them, and which systems he uses in his own business to save time, make money, and scale! Steve shares some of the most painful lessons he learned through failure so you don’t have to learn them yourself.

This is an episode you definitely want to download today!

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Elevator safety: Deadline looming for NYC condos and co-ops

Condominiums and cooperatives in New York City have until Jan. 1 to comply with a safety regulation from the city’s Department of Buildings that requires installation of door-lock monitoring systems to prevent an elevator from moving if the doors are not fully closed, The New York Times reports.

This safety regulation, adopted in 2014, was prompted by a fatal 2011 incident. It’s estimated that about 44,000 automated elevators in the city need to be fitted with door-lock monitoring systems, says Donald Gelestino, president of elevator maintenance company Champion Elevator.

The installation cost of the door-lock safety systems depends on the elevator’s age, with newer ones needing only an activation of the device that is likely already in place or a software update compared to elevators that are at least 5 years old, which would either need to go through a retrofit or a complete upgrade.

Dennis DePaola, an executive vice president and director of compliance at New York City-based management company Orsid Realty, says the company communicated early on with approximately 170 condo and co-op clients in the city to let them know about updating the systems.

“The cost could be anywhere from $15,000 to $25,000 per elevator, and many of our buildings have four, five, or six elevators, so it could be a costly endeavor,” explains DePaola. He adds that because the safety devices do not contribute to the operating life of the elevators, Orsid provided boards with evaluations about the remaining useful life of the equipment before they decided whether to either retrofit or upgrade.

Orsid got the discussion started early at each of its properties, but DePaola says that there has been “a lot of anxiety through the management community in New York City about the ability of elevator maintenance companies to go and retrofit all the elevators in the city. There’s only so much personnel and equipment to go around.”

Several trade groups have been in talks with the Department of Buildings to request an extension for some buildings that cannot complete retrofits or upgrades before the Jan. 1 deadline.

The city’s Department of Buildings also is requiring elevators to have a secondary emergency brake installed by 2027, which is prompting many boards to contemplate a complete elevator modernization project for systems that are more than 20 years old, according to The New York Times.

DePaola recommends that condo and co-op boards looking to modernize their systems hire an elevator consultant to find out what specifically needs to be upgraded or brought up to code. The consultant will typically suggest that boards get bids from three or four maintenance companies before undergoing a modernization project.

The post Elevator safety: Deadline looming for NYC condos and co-ops appeared first on Ungated: Community Associations Institute Blog.

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BiggerPockets Podcast 342: From Duplexes to a 64-Unit and Self-Storage Millions with Kris Benson

From buying duplexes to a self-storage empire! Today’s guest Kris Benson sits down with Brandon and David to talk about his remarkable journey across all kinds of different real estate asset classes.

Kris began with a successful sales career and explains why he transitioned into owning real estate instead. You’ll love Kris’s story about how he built a 64-unit apartment complex (in a cornfield), how he found partners to bring the project to life, and how it all started with one phone call! He also shares why he now invests in self-storage, how he evaluates properties, and why he believes this asset is recession-proof!

Kris provides great advice for raising money and finding your niche, and explains his theory that “deals create deals” as he walks through his journey. This is a fantastic show full of great content.

Download today!

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Be flexible: Steps for effective and consistent board governance

By Katie Anderson, CMCA, AMS, PCAM

Community associations have rules and regulations to provide certainty, order, and safety. Regardless of size or shape, every community association should strive to enforce its rules properly. And if they’re necessary and reasonable, they promote community harmony.

The goal is simple for association boards: Follow the rules and enforcement procedures detailed in the governing documents. Yet conflicting views and misaligned expectations can create complications. If your association is too rigid or too flexible, your board can follow a few steps to ensure your governing process is effective and consistent.

Transparency. If the board is to be taken seriously, it needs to be inclusive and transparent. You should hold public board meetings and annual elections, add open forums to agendas for owner feedback, and be available and visible in the community.

Clear guidelines. The governance process typically requires the board to develop policies related to enforcement and fines. It is extremely important that these policies are clear about what happens when a violation exists—from communication steps, grace periods, and the process to request exceptions to what the owner needs to do to reach compliance.

Communication. Different people require different forms of communication. Be dynamic in your approach. Sending a letter meets the requirements in most states for communication, but if compliance is the goal, don’t be afraid to pick up the phone or send a text message. It instills trust between the association and the owner. Additional communication tips include:

  • Kind language. The first communication an owner receives about a potential compliance issue should emphasize that it is a courtesy notice and you are just reaching out to help educate them about the guidelines. Offer to discuss the issue in person and be open to answering questions.
  • Newsletters. If you’re seeing an increase in a specific violation throughout the community, send out an e-newsletter to educate homeowners on the issue.
  • Town halls. If the board is seeing an increase in neighbor-to-neighbor issues or a spike in noncompliance, hold a town hall meeting and talk it through. This will engage residents in finding a solution and create some responsibility in solving the problems.

Hearings. In many states, the requirement for a hearing may be mandatory before fines can be assessed. This process must be conducted impartially, and all parties need to be respectful. Each party needs know what information should be prepared prior to the meeting, given equal time to speak, and know when to expect a decision will be reached. The board or hearing panel should not favor a one-size-fits-all approach, as it creates more conflict in the long run.

Compromise. Having these foundations is important, but they will not prevent compliance issues in your community. So how does the board move toward a consistent but flexible process? By having face-to-face conversations with owners who are noncompliant and coming to a compromise—one that works for the owner but also meets the community’s guidelines.

Katie Anderson is founding owner of Aperion Management Group, AAMC, in central Oregon.

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Breathing clear: Adopting smoke-free policies in your high-rise community

Smoking bans in the U.S. have become commonplace over the past three decades. Policies have been adopted by local and state governments to make workplaces and public spaces completely devoid of smoke from cigarettes and, more recently, vaping devices. Secondhand smoke concerns have ignited efforts to completely ban smoking in high-rise residential buildings too.

Of the estimated 80 million people in the U.S. who live in multiunit housing, including high-rise condominiums and cooperatives, the Centers for Disease Control and Prevention note that each year, approximately 28 million of them are exposed to secondhand smoke in their homes, inhaling many of the substances that can cause emphysema, heart disease, and lung cancer.

“The problem is that even when smoking outside, if you’re close to the building, the smoke is actually pulled into nearby windows and doors. Even if they are closed, the smoke still comes in because buildings are not air-tight,” explains Esther Schiller, executive director of California-based nonprofit Smokefree Air For Everyone. The CDC adds that secondhand smoke also can spread through cracks in walls, electrical lines, ventilation systems, and plumbing.

Many condominiums have opted to adopt no-smoking amendments in their covenants, conditions, and restrictions to eliminate smoking in all indoor and outdoor common areas and inside individual units. Schiller’s organization provides resources, such as survey templates, to find out if most residents “want the whole complex to be smoke-free.”

If a community association’s documents do not have a stance on smoking, a unit owner may be left with a remedy of a claim for “nuisance” against neighbors who smoke and act against the board to stop the smoking, says Stephen Marcus, a partner at Marcus Errico Emmer & Brooks in Braintree, Mass., and a fellow in CAI’s College of Community Association Lawyers.

Schiller says that tobacco smoke qualifies as a nuisance because it interrupts an owner’s enjoyment of their home. While condominium board members may know that tobacco smoke is dangerous, “they may not understand how dangerous it is, and they don’t understand the fact that they have liability,” she notes.

Liability insurance frequently has pollution exclusions—including tobacco smoke—in its coverage, Schiller adds. “So if there’s a lawsuit and the condominium loses, they have to pay out of their reserves.”

When determining if a no-smoking amendment is the right decision for a community, Ken Jacobs, a partner at Smith Buss & Jacobs in Yonkers, N.Y., explains that it’s important to consider residents’ complaints and the problems regarding secondhand smoke, the potential costs to the association if the building’s HVAC system needs to be revamped, and the latest government and medical studies regarding secondhand smoke.

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